Daily Fundamental Dose

Trading Discussion News and Economy
549

[B]Daily Fundamental Dose: 1-June-2016[/B]

Hello Traders,

Slew of economic data-points, coupled with polls on EU referendum propelled the US and UK markets on Tuesday after observing a holiday on Monday. However, the greenback managed to complete the May month with highest gains in two years as speculations governing June rate-hike mounted after US Spending details surprisingly grew fastest in more than seven years. Additionally, a drop in Chicago PMI and Consumer Confidence were overshadowed by the improvement in Housing price numbers and provided the first daily closing of the week to greenback. The EUR remained lackluster while GBP plunged heavily against all of its counterparts due to recent polls showing the “Brexit” popularity. The JPY remained strong on expectations of delayed sales tax hike and better than expected Industrial production number while the AUD, NZD and CAD remained uplifted. Moreover, the Crude weakened for second consecutive day as comments from UAE signaled that the OPEC, in its bi-annual meeting on Thursday, wouldn’t promote oil-production freeze.

On early Wednesday, Chinese Manufacturing PMI and AU GDP numbers were became the market hits. Caixin/Markit Manufacturing PMI showed activity at China’s factories shrank for a 15th straight month in May while official Manufacturing remained unchanged at 50.1 and the AU GDP registered unexpected high growth number of 1.1% due to higher export numbers.

In addition to the data-points, comments from Japanese PM, Shinzo Abe, matched market consensus that the Sales Tax hike will be delayed. He announced that now the Sales Tax hike will take place in 2019 against earlier planned at April 2017. The PM also mentioned that the Japanese policymakers will take help of structural reforms and fiscal stimulus to achieve strong growth, which in-turn propelled the JPY across the board.

Having witnessing such a volatile day-start, the UK Manufacturing PMI and US ISM Manufacturing PMI are some other details that could continue providing market liquidity. As the USD have registered noticeable gains in May, as it historically has been, chances are higher that weaker US numbers might dampen cues to June-hike and can pare recent USD gains. Hence, it would be better to have patience till the Friday’s job numbers prior to taking any big USD longs while GBP is more likely to decline with Brexit polls and JPY could extend its recent up-move after Japanese PM’s comment.

Have a nice trading-day……

550

[B]Daily Fundamental Dose: 2-June-2016[/B]

Hello Traders,

As the global markets entered in the crucial June month, which includes meetings of OPEC and ECB, coupled with Brexit vote and a possible rate-hike by the US Federal Reserve, safe-havens like JPY marked strong upside on Wednesday. Another reason for the Japanese currency’s rally was the statement from PM backing fiscal measures and a delayed sales-tax hike to 2019. The US Dollar became the victim of fastest contraction in Construction Spending in ten months and ignored better than forecast ISM Manufacturing print. The EUR remained uplifted ahead of the ECB meeting today while the GBP kept declining, even after upbeat Manufacturing PMI, as the UK PM is scheduled to speak on the EU referendum in a Sky News television program. Further, commodity currencies remained jittered with mixed clues as a bit up-move in Crude ahead of the OPEC meeting resulted minor strength to the AUD, CAD and the NZD.

Today can also be another “Super Thursday” as ECB, OPEC and comments from UK PM are scheduled to trigger wild moves in the Forex market. During the early day trading, the USD maintained its yesterday’s downside while GBP and Crude remained a bit up. Moreover, the Crude prices also held yesterday’s gains and the Gold prices signal another positive day. At the economic front, AU Retail Sales grew lesser than forecast while the Trade deficit also shrank. The UK Construction PMI, US ADP, Jobless and Crude Inventories are some other data-points that needs to be observed in addition to headline events mentioned above.

Looking at the details, the ECB is more likely to provide dovish statements considering recent drift of data-points while the OPEC will be crucial as Saudi-Arabia plays hard to get individual quota limits for the participants and the Iran is favoring more supply. On the UK front, the PM may promote the idea of UK remaining in the EU while weaker data-points from US & on-going risk-on market environment can continue favoring the Gold and JPY while punishing the USD. Hence, it would be better to wait for the top-tier releases prior to taking any major trade entries.

Have a profitably volatile-day ahead……

551

[B]Daily Fundamental Dose: 3-June-2016[/B]

Hello Traders,

Having witnessed some wild moves in EUR, mainly due to the ECB President’s dual comments, together with OPEC’s failed attempt to agree on output targets and Saudi Arabia’s pledge to not flood the market with more fuel, the US Dollar Index (I.USDX) pared some of its early day losses. Additionally, US Jobless Claims dropped to four weeks low while ADP Employment Change also remained ahead of upwardly revised prior and helped the greenback. The EUR, which initially remained too volatile during ECB press conference, closed on the negative side as market players focused more on the downwardly revised Core inflation forecasted than the improved consensus for near-term Inflation mark. The ECB President also marked dual comments as on the one hand he said that March month measures are getting positive responses and on the other hand he said it was only the half of what the central bank stands ready to do, if needed. The JPY maintained its upside due to global market uncertainty while Crude prices also grew with OPEC result and another decline in US inventories. Furthermore, the AUD, NZD and CAD remained weaker against the USD due to looming concerns of Chinese weakness.

On Friday, the New-Zealand ANZ Commodity Price Index rallied to the highest since October 2015 and Growth in China’s services sector, as indicated by Caixin Services PMI, cooled to a three-month low. As the ECB and OPEC failed to have lasting impact on global markets, investors have turned towards US Job reports, scheduled for release during the later Friday, which would affect the speculations concerning June rate-hike.

Fading the recent trend of expectations governing June rate-hike, the Fed Board Governor, Daniel Tarullo, indicated probable risks from EU referendum, signaling that the Fed might refrain to alter interest-rates ahead of this crucial decision. However, Fed Governor, Lael Brainard, will be the first U.S. central bank official to speak after the NFP, while Chicago Fed chief Charles Evans will speak ahead of the report. Also, the Fed Chair is scheduled to speak on Monday after she favored rate-hike decision in near-future during her last week’s public appearance.

Considering the recent turmoil surrounding the EU referendum and US Fed rate-hike, today’s jobs report will be crucial to observe. Even if the NFP is likely to remain weak and the Earnings aren’t expected to provide too-good-to-hear numbers, the Unemployment rate bears the forecast of tick-down and could rejuvenate expectations of June hike, which in-turn would be a happy news for the US Dollar. Though, it would be advisable to not take this as strong positive and enjoy only intraday long targets, except drastically positive numbers, which are hard to find due to Verizon incident. Further, the on-going slew of global market uncertainty, together with comments from Japanese PM, makes it clear for the JPY to rise ahead.

Have a nice trading-day and a great weekend…

552

[B]Daily Fundamental Dose: 6-June-2016[/B]

Hello Traders,

Friday’s highly disappointing US job report threw cold water on USD bulls that were expecting a June rate-hike as NFP dropped to nearly five year low and the previous readings were also downwardly revised. Market players totally ignored the least Unemployment since late 2007 and dragged the US Dollar Index (I.USDX) towards marking the first weekly closing in previous five weeks. On the other hand, the EUR witnessed strong counter-strength as dimming chances of Fed’s rate-hike funneled down the monetary policy divergence between the US and the rest of the major central bankers while the JPY registered strong up-move as growing uncertainty across the globe favored its safe-haven demand. Further, the GBP, in contrast to many other major currencies, failed to strengthen against the USD, together with registering across the board declines, became the victim of rising EU referendum polls favoring Brexit. The AUD, NZD and CHF also remained strong even with not so happy details while gains of Canadian Dollar remained under check after the Crude prices noted down its first weekly decline in prior four as successful OPEC meeting, without any clashes, signaled that the global oil producers are ready to further fuel the macro oil market.

On early Monday, the USD witnesses a bit of short-covering after the top Fed member said that the U.S. economy’s rebound from a weak winter has moved the Federal Reserve closer to raising rates, though last month’s poor employment report might give it pause. The EUR also dipped from its recent highs as German Factory Orders dropped to the lowest since March 2015 while the JPY also trimmed some of its recent gains on profit-booking.

Having faced a huge disappointment during last Friday, market players have now curtailed expectations for June rate-hike and any additional weakness in US data-point might further drag the US Dollar towards south. However, with fewer details scheduled for release during the current week, chances of great momentum are fewer. Today’s speech by the US Fed Chair, the final ahead of the 14-15 June FOMC meeting, would be important for the USD traders to watch.

Have a nice-day……

553

[B]Daily Fundamental Dose: 7-June-2016[/B]

Hello Traders,

Even if the US Fed Chair omitted her hawkish statement of “witnessing a rate-hike in coming months”, and held off from specifying any time-frame, in addition to terming last week’s jobs report was “disappointing”, the short-covering helped US Dollar to start the week with a positive closing. However, the same couldn’t be sustained on Tuesday when the greenback again obeyed its southward trajectory. The EUR remained a bit weaker with decline in German Factory Orders on Monday while the NZD remained sluggish when AUD and CAD managed to close in positive territory against the US Dollar on improving Crude prices due to crippling attacks on Nigeria’s oil industry and fresh signs of draws in U.S. crude stockpiles. Moreover, the GBP kept being too volatile due to swift in polls showing “Brexit”.

On early Tuesday, the Reserve Bank of Australia refrained from cutting down its benchmark rates further, which was much expected; however, the bank remained silent on its future course and went against the market expectations of hinting another rate-cut, which in-turn fueled the Aussie. The GBP spiked with more than 2.0% gains against USD in a surprise move while a rebound in German Industrial Production helped the EUR a bit. Further, a bomb attack in Istanbul strengthened the JPY and advancing Crude helped NZD, CAD and other commodity currencies.

For the rest of the day, UK Halifax HPI and Canadian Ivey PMI, together with World Bank’s update on the global economic outlook, are likely events that could govern the market moves. With the market already quelled chances of June rate-hike and also smashed the July hike, the USD is more likely to maintain its southward trajectory unless any strong positives from Friday’s consumer sentiment index. The same would help JPY and Gold while the JPY might react a bit slower as further strength of the Japanese currency increases the headache for the BoJ for need of additional stimulus to help the exporters from weaker currency. Hence, it would be better to have USD as a short while going long on Gold and Crude can be a good decision. Also, the GBP should be avoided trading ahead of the EU poll results.

Have a nice trading-day……

554

[B]Daily Fundamental Dose: 8-June-2016[/B]

Hello Traders,

With the on-going disappointment from Friday’s NFP, the Tuesday’s U.S. nonfarm productivity provided additional scar on the USD Bulls’ face as it registered the whole quarter decline, indicating the Fed would take too long to announce the much awaited rate-hike. The EUR enjoyed German Industrial Production and the GBP also stopped its plunge with better than forecast Halifax HPI while the AUD, NZD and CAD rallied considerably with Crude prices marking fresh eight month high. The Crude prices closed at the highest levels since October 2015 as US API showed larger-than-expected drawdown in crude inventories while geo-political tensions on Nigeria kept hurting the supply side. Moreover, Chinese data released a hefty Crude consumption numbers and gifted extra strength to the energy products. Furthermore, the JPY regained its strength with global uncertainty, as also indicated by World Bank, and Fed’s disappointment which also propelled the Gold prices.

On early Wednesday, Chinese Trade balance details, the last from dragon nation during the week as it will obey two-day holidays on Thursday and Friday, revealed that the import numbers surpassed expectations, signaling that the world’s largest industrial producer is slowly coming on track, which in-turn helped the AUD, NZD and CAD, its big trading partners. Also, the final reading of Q1 2016 Japanese GDP matched its 0.5% forecast against 0.4% initial consensus and helped the JPY extend its recent upward trajectory.

For the rest of the day, the UK Manufacturing Production and monetary policy meeting of the RBNZ will provide noticeable moves to the Forex market as market forecasts have been shifted for the RBNZ. The Central bank was previously expected to cut its benchmark interest-rate, which seems absent now and if there are rate-cuts the NZD can plunge while GBP is more likely to maintain its downturn on expected weaker numbers for Manufacturing. Additionally, the USD is less likely to pare its recent losses and might further drop towards south unless there are drastic negative from the rest of the major economies.

Have a safe trading-day…….

555

[B]Daily Fundamental Dose: 9-June-2016[/B]

Hello Traders,

With the Wednesday’s US Job Openings and Labor Turnover Survey, or JOLTS, which dropped to the lowest since August 2014, speculation concerning another rate-hike by the Federal Reserve got another shock that in-turn dragged the greenback towards south for second consecutive day. The EUR remained strong enough as ECB began buying corporate debt for its bond purchase program while the JPY maintained its up-move with macro uncertainty favoring its safe-haven demand. The NZD was the biggest gainer of the day as the Reserve Bank of New-Zealand (RBNZ) not only stood pat with the current Official Cash Rate but also said it expects the inflation to accelerate via quarterly Monetary Policy Statement and the GBP ignored upbeat Manufacturing and Industrial numbers with a dip across the board. Further, the AUD and CAD remained on buying spree as early day release of Chinese imports fueled commodity basket and growing tensions in Nigeria further strengthened the Crude to mark the highest print since July 2015.

The on-going raft of details, favoring the Ex-USD currencies, extended on early Thursday with Chinese CPI growing lesser than forecast; however, the highest point since December 2014 by the PPI overshadowed the pessimism and further propelled the commodities basket.

For the rest of the day, a speech by the ECB President and the US Jobless Claims are likely to govern the market moves. As the Jobless is more likely to extend its recent dip, chances of the USD to recover of its losses can’t be denied. Moreover, a dovish statement by the ECB President can also provide counter-strength note to the greenback. Additionally, the BoJ Deputy Governor, Hiroshi Nakaso, said during early trading hours that he sees additional risks from global economy which might push the central bank towards further easing. Should there be a good US side details, or a weaker rest of the globe announcements, the JPY might adhere to short-term profit-booking. Hence, it would be better to stay alert.

Have a nice trading-day……

556

[B]Daily Fundamental Dose: 13-June-2016[/B]

Hello Traders,

Even if the no immediate rate-hike woes damaged US Dollar during early trading days of last week, five week low Jobless Claims, followed by better than forecast UoM Consumer sentiment, helped the US Dollar to pare losses and close the week on a positive side. Additionally, recent polls showing a lead of Brexit supporters ahead of June 23 referendum provided counter-strength to the greenback against EUR & GBP. The GBP dropped to the eight week lows while EUR also witnessed downside due to the same poll outcomes. Though, commodity currencies, namely AUD, CAD and NZD remained strong with rising Crude price. The Crude which rallied heavily during early week-days had to trim some of the gains as rigs targeting crude in the U.S. rose by three to 328 last week, capping the longest run of weekly gains since August. The JPY managed its strength against majority of its counterparts, except the USD, as rising global uncertainty forced market players towards safe-havens, the same also helped the Gold prices to test the monthly high.

On Monday, markets kept punishing the EUR and GBP due to nearness of EU referendum while the JPY kept rallying on the same news. Moreover, the USD also pared some of its last weekly gains as heavy load of economics, coupled with FOMC, makes market players worried and happy with their cash. Moreover, Chinese Industrial Production remained at the prior level and the Retail Sales also didn’t reveal pessimism, which helped the AUD, NZD and CAD to extend their recent upside.

As the Australian markets are closed for the day, and there are fewer releases to observe, chances are higher that the early moves can be stretched for the rest of the day. Though, any news on the EU referendum, coupled with speculations for FOMC and BoJ could continue driving the world’s largest financial market.

Have a nice trading-day……

557

[B]Daily Fundamental Dose: 14-June-2016[/B]

Hello Traders,

On first trading day of the crucial week risk aversion kept ruling the market moves as nearness to EU referendum and scheduled monetary policy meetings of the FOMC, BoJ, SNB & BoE kept forcing the traders toward safe-havens, providing considerable strength to the JPY while lack of economics punished the US Dollar. The plunged heavily, together with some weakness on the part of the EUR, while Crude prices also retraced a bit, paring some of the gains by AUD, NZD and CAD. The OPEC said on Monday that global oil supply-glut is likely shrinking during the later 2016 due to recent disruptions at Canada and Nigeria; though, the energy prices ignored it.

On Tuesday, when the Australian markets are back after holidays on Monday, there are slew of economic releases scheduled for publish. Among which US Retail Sales and UK CPI are likely to generate headlines. During early-day, the IMF warned China to implement structural reforms to safeguard their economy which now has fewer buffers if it jitters again.

With the UK CPI likely to print welcome numbers, chances of its GBP to provide another sell opportunity become brighter as overall trend remains weaker while expected dip in US retail sales could provide further damages to the USD. Hence, it would be better to have JPY as long and EUR, GBP and USD on the short-side ahead of this week’s crucial releases like FOMC, BoJ and US & EU CPI.

Have a nice trading-day.……

558

[B]Daily Fundamental Dose: 15-June-2016[/B]

Hello Traders,

Following the US Retail Sales registered best back-to-back monthly gain in two years and surpassed market consensus, the USD bears took a halt on Tuesday and doubted that the pessimism spread by latest NFP number might not defeat the upbeat US retail sales, which in-turn could help the US Fed to announce a rate-hike soon. The news propelled US Dollar Index (I.USDX) towards closing at the highest levels in more than a week ahead of the crucial FOMC meeting outcome today. The GBP and the EUR remained jittered with Brexit woes while a stronger Dollar and global market uncertainty dragged the commodity basket towards south, which also provided weakness to the AUD, NZD and the CAD. Moreover, JPY and Gold held their gain series intact while higher than inventory build by the API caused Crude prices to dip towards three week low.

As we enter the crucial FOMC day, markets have started being cautious with liquidating their recent USD longs ahead of the decision which is likely to held the Fed rate unchanged. Additionally, U.S. index provider MSCI’s decision not to include domestic Chinese equities in its indexes provided a shock to mainland Chinese markets while a bounce from Crude helped commodity currencies recover some of their yesterday’s losses.

Moving on, today’s FOMC meeting is undoubtedly the most important event of the day even if the central bank isn’t expected to alter its monetary policy. The reason is presence of press conference by the Fed Chair and quarterly economic projection report by the Federal Reserve. Also, UK labor market numbers, US PPI, Empire Manufacturing and Industrial Production, coupled with Canadian Manufacturing Sales, are some of the second-tier details that would make the markets active.

Although the Fed isn’t likely to announce a rate-hike today, recently published US retail sales and spending details might cause the Fed Chair to maintain its hawkish statement. Further, the economic projections, which cut down 2016 growth and inflation forecasts in its previous release in March, might also refrain from spreading further disappointment and can cause the USD up-move. However, NFP continue to act as a drag for the US policymakers and hence it would be in the best interest of the market players to remain out of the USD ahead of the FOMC while keep building the JPY as it is less likely go further in its recent bounce direction.

Have a nice and safe trading……

559

[B]Daily Fundamental Dose: 16-June-2016[/B]

Hello Traders,

Finally, the Federal Reserve came out as expected and dragged the US Dollar down on Wednesday. The US central banker held its monetary policy unchanged during the meeting announcement late-yesterday; however, the main point was now around 6 FOMC members see only 1 rate-hike in 2016 unlike the previous being one and the Fed Chair also played down the optimism for rate-hike by saying the upcoming Brexit decision and global uncertainty creates major risk for the US economy. Further, the Fed also cut down its GDP projection while upgrading the Inflation forecast for 2016. The EUR gained on the counterattack while the GBP kept on declining with majority of the UK nationals now favoring the Brexit. Moreover, the JPY gained heavily with the macro uncertainty favoring its safe-haven demand while the commodity currencies and Gold running up with Crude remaining on its down-streak as the return of Canadian output offset a U.S. crude stockpile drop.

Thursday became even more volatile day than the Wednesday as it started with the Australian job numbers which showed higher than forecast Employment Change, helping the AUD for a short-time as a dip in Crude prices, coupled with Chinese pessimism dragged its down after a while. The most important even was monetary policy decision by the Bank of Japan (BoJ) which again went against the market expectations and held the monetary policy intact, providing considerable strength to the already heavy JPY. The BoJ avoided any monetary policy change ahead of its general election next month. Furthermore, the Swiss National Bank also announced its monetary policy decision and said that the economy faced downside risk due to weaker EU; however, it left the ni-annual projections unchanged with expected GDP growth of 1.4% this year and 1.8% in 2017.

Having received too much information and a volatile start, markets now seem taking a breath ahead of the UK Retail Sales, EU Final CPI and BoE. Moreover, US CPI and Philly Fed Manufacturing Index will be additionally important to observe.

As the BoE meeting will be last ahead of the EU referendum, a pessimistic outlook is most likely and can further hurt the GBP while weaker Retail Sales could add fuel to its southward trajectory. The US CPI will also be crucial as a dip in inflation might favor the latest outcomes from Fed which forecast only one hike a year and can punish the USD. Also, the JPY might retrace a bit from its recent strength; however, overall strength will remain intact and it would be better to have JPY long in your trading basket.

Have a volatile and profitable day……

560

[B]Daily Fundamental Dose: 17-June-2016[/B]

Hello Traders,

Thursday became the most volatile day of the week, as expected, not because of any action from major central bankers, including FOMC, BoJ, SNB & BoE, but because they stood pat with their current monetary policies. Even though, the FOMC, SNB and BoE were largely expected not to alter their monetary policy but the Bank of Japan disappointed markets without any change, which was expected to happen either in June or in July. The BoJ inaction fuelled the JPY across the board, which was also favored by Brexit concerns and were favorable to Gold as well. The USD, even after witnessing a soft-up to Core CPI and a positive Philadelphia Fed Manufacturing Index, could only gain a bit while the GBP and the EUR fluctuated between gains and losses as murder of a British lawmaker, Jo Cox, a fervent advocate of UK remaining in Europe, stopped Brexit campaign and also fueled expectations that the Bremain may now gain support. The AUD surprisingly left on its downside even after upbeat jobs report while the NZD remained a bit up. Moreover, the Crude prices didn’t rise for sixth consecutive day on expectations that this month supply will be higher after Canadian oil production will restore after wildfire.

On Friday, the markets reversed some of the JPY gains after Japanese Finance Minister Taro Aso escalated his concern about the surge in the yen to his counterparts in G7 and G20. The Japanese cabinet also said in its monthly economic report that the inflation is rising at a slower pace and provided additional damage to the JPY. The Crude gained for the first time in seven days as a halt in Brexit woes, coupled with weaker USD, helped the energy prices to rise.

Moving on, Canadian CPI and US housing market numbers are likely to govern today’s market moves. However, the market might respond to them with a slower pace after yesterday’s volatile day might have stopped-out many. Though, an upbeat housing market readings from US, which is more likely, can help the USD to pare some of its recent losses while CAD might adhere to advance further if the CPI registers welcome mark due to rise in Crude prices. Furthermore, overall market sentiment will turn towards the EU referendum polls and any announcement by the government, which already stopped campaigns for second consecutive-day, might give another shocking-day to the market players.

Have a nice-day and a great weekend……

561

[B]Daily Fundamental Dose: 20-June-2016[/B]

Hello Traders,

In a week of heightened anxiety over the desire to witness how the Federal Reserve would reflect to recently pessimistic NFP number, the US Dollar Index (I. USDX) tumbled for the second time in three weeks as the US central banker cut its employment outlook and talked down the necessity of a rate-hike soon while promoting the Brexit fears. Moreover, weaker Inflation, coupled with six FOMC members seeing only one rate-hike in 2016, provided additional weakness to the greenback. Furthermore, dovish comments from St. Louis Fed President, James Bullard, on Friday also weighed down the USD. The EUR and GBP remained strong against the US Dollar due to a murder of UK lawmaker, favoring the Bremain campaign, followed by two-day suspension of campaigns for EU referendum in UK. The JPY held strong as the market players Investors sought refuge before the June 23 British referendum sought refuge before the June 23 British referendum while the AUD and NZD helped with commodity basket and the Crude dragged down, taking the CAD on the negative weekly closing as well. The Gold rallied to nearly two-year highs with global uncertainty favoring the safe-havens.

On early Monday, Japan’s exports fell for an eighth consecutive month in May as shipments to China, the U.S. and Europe slumped, undermining Prime Minister Shinzo Abe’s efforts to revive the economy. Moreover, the International Monetary Fund (IMF) also urged the Japanese government to move income policies and labor market reform to the forefront, supported by more monetary and fiscal stimulus. Hence, the JPY pared some of its recent gains on the first-day of crucial week while the EUR and GBP rallied considerably as weekend polls showed that the Bremain has gained more fame in recent-days. The USD swung between gains and losses while the AUD also adhered to some gains with its perceived risk-safety rank after the JPY and Gold.

Moving on, the market has only Canadian Wholesale Sales to be released during the rest of the day and as the UK markets will be opened, the investors will seek how UK nationals respond to the death of lawmaker supporting Bremain campaign. Hence, any clues relating to the Bremain polls, which are now taking a lead against Brexit, could continue supporting the EUR and GBP to extend their recent rallies while the JPY might refrain from registering further gains as additional advances might lead the Bank of Japan towards further monetary easing. Additionally, the Crude prices, which has now responded to the Bremain campaign can stretch its upside but a third weekly advance in US oil rigs can restrict further upside of the Energy prices.

Have a nice trading-day……

562

[B]Daily Fundamental Dose: 21-June-2016[/B]

Hello Traders,

On Monday, with a surprise swing in polls favoring the Bremain campaign, the GBP registered highest daily gains since 2008 while European shares also marked biggest rallies since August. However, the JPY still remained strong as nearly 40% respondent were still supporting the UK to leave European Union and the US Fed is scheduled to provide bi-annual Testimony during Tuesday and Wednesday. The AUD, NZD and CAD were all on the positive trajectory as fading tensions over the Brexit helped fueling the commodity demand, including Crude prices. Moreover, the Saudi Arabia’s crude oil exports dropped in April despite high production levels, soothing the global oil supply-glut. At last, the USD dropped heavily after the sudden spurt in EUR and GBP forced market players to further punish the greenback ahead of the Fed Chair’s testimony.

Early today, the Reserve Bank of Australia, in the minutes of recent monetary policy meeting when the central banker stood pat with present monetary policy, said that the economic growth increased to be a bit above estimates of potential growth but showed concerns for Inflation. The same helped the Australian Dollar to extend its up-move. The Japanese Finance Minister, Taro Aso, again said on Tuesday that the Japan would respond to rapid currency moves, although he said the country would not intervene in the market so “easily” and triggered a bit of profit-booking in JPY.

Given the recent optimism at EU & UK walking with the uncertainty over the US, the JPY can continue holding its up-move; though, a bit hawkish than expected statement from Fed Chair might extend its recent correction a bit. Moreover, the ZEW economic sentiment from EU & Germany can helped determine the EUR moves while German Constitutional Court Ruling can cause some profit-booking in EUR if it opts to alter the ECB’s present monetary actions.

Have a nice trading-day….

563

[B]Daily Fundamental Dose: 22-June-2016[/B]

Hello Traders,

Tuesday, as per me, was the day of profit-booking for the global markets as trader fraternity neglected upbeat ZEW numbers from EU and avoided another cautious note from the Fed Chair. The US Dollar ended up registering its first positive daily closing in previous three while the EUR and GBP remained on the lower side ahead of the crucial referendum polls on Thursday. The JPY also corrected its strong rally gains a bit while the commodity currencies couldn’t maintain their early day advances due to commodity basket weakness and an unexpected decline API stockpiles helped Crude prices extend its north-run.

As we area a day closer to EU referendum polls, global markets remained cautious; however, the previous week trend of weaker USD and strong JPY, GBP & EUR was reestablished during early-day trading while receding tensions of Brexit kept hurting the Gold and favored Crude prices.

With no major releases scheduled for publish, except second testimony by Fed Chair, Canadian Retail Sales and US Existing Home Sales, the broader sentiment will continue focusing on tomorrow’s referendum. Recently, some of the global leaders, like British PM, have openly urged UK nationals not to vote for Brexit as it would harm their children’s’ future while some others like ECB & Fed superimos kept spreading words that Brexit would be detrimental for the global economy.

Hence, it would be in the best interest of the market players to not jump on any BIG trades, except favoring a bit of JPY buying and Gold selling ahead of Friday’s results which is likely to provide noticeable gains to the GBP and EUR.

Have a nice trading-day……

564

[B]Daily Fundamental Dose: 23-June-2016[/B]

Hello Traders,

At last, we reached the crucial EU Referendum-Day, which will decide the fate of UK in EU as 65 million UK citizens will vote on the aspect for the whole of Thursday. The GBP have started responding to it by rising to the highest levels in six months while JPY remained upbeat and the EUR also gained a bit. The USD went on south again as Fed Chair, during her second day of testimony, said that she is more concerned about the fall in productivity which needs to be nurtured. Commodity currencies also remained volatile as Crude dipped on lesser than expected shrink in US stockpiles while Gold remained a bit weaker on Wednesday and rallied during early Thursday.

Ahead of the voting start, the Bremain, which signals UK to remain in EU, is only a small step ahead than it Brexit counterpart which forces the UK to leave the Union. Hence, the global markets are on their edge and almost all of the brokers have either propelled margin on GBP positions or cut down the position by force in some cases. The JPY started the uncertain day with initial gains but a fourth-month contraction in Manufacturing pared some profits, which should be recovered during the later part of the day.

For the rest of the day, headline Flash PMIs from US and EU, coupled with US Jobless Claims, are likely to provide intermediate moves to the market which is now on-the-edge to see Britain remaining in EU because a Brexit would be detrimental for the current government of the UK and the will be harsh on EU as well. While remaining in EU, the UK can enjoy its deal benefits, received in February summit, and can become stronger than now. Hence, it would be better not to take any trade positions concerning EUR or GBP until the results come out tomorrow morning.

Have a Safe-day…….

565

[B]Daily Fundamental Dose: 24-June-2016[/B]

Hello Traders,

Result of EU referendum shocked the global financial markets when the U.K. voted to quit the European Union after more than four decades relationship as 52% of 65 million population voted to cease the Britain from European Union. The move provided the biggest attack to the European politics since fall of Berlin Wall and echoed sentiments of 2008-09 crisis. The British Pound responded with a crash of 11%, the greatest loss to 1985 lows, also surpassing the “Black Wednesday” plunge of 4.1%. The EUR and commodity currencies also plunged as UK exit will cause global market panic for new trade relationship while the USD gained the counter strength and the Gold, with JPY, rallied due to safe-haven demand.

[B]What next?[/B]

Now the pointer turns on to UK PM, a Bremain supporter, who might need to resign together with some of the influential political leaders, including the Chancellor of the Exchequer-George Osborne. The BoE Governor, Marc Carney, will also address the global world relating to how they would tackle with the plunge in GBP and some of the global economies, like India, China and Japan, have started currency interventions.

The UK needs to invoke Article 50 of the Lisbon Treaty which will trigger a two-year negotiation time for the EU and UK to decide their future relationship and the state of UK in global world. Further, some of the EU members, like German Chancellor and French President, will need to convey other EU members to not obey the UK during their June 28-29 meeting of EU leaders.

[B]Hence, there will be more music to face ahead……[/B]

The Financial industry will be the worst affected due to the Brexit outcome which might force the London to lose its status as a global financial hub. Some of the leading financial companies, like JP Morgan Chase and Goldman Sachs have already told that the Brexit could lead them to leave the London, leading to heavy job-losses in financial industry.

Moreover, Netherland, which was also in-line to announce referendum to leave the EU, announced the same after the Brexit poll results and some other EU nations might also practice the same in future. So, the EU and the ECB will be worst affected due to that. Some of the global central bankers, like BoJ, BoE, RBNZ and Federal Reserve will be forced to announce monetary easing and might add fuel into the global financial market volatility.

Finally, after facing the disappointment markets have started soothing, though for the time being only, and a weaker US Durable Goods Orders might lead to a bit of correction in USD while there are no signs, except a formal announcement from Japan, that can weaken the JPY.

As the global financial markets are witnessing a shockwave, it would be better to stay out of trading for the day at-least, until there can be a new sign from UK mentioning that they might maintain healthy relation with EU.

Have a safe-day……

566

[B]Daily Fundamental Dose: 27-June-2016[/B]

Hello Traders,

Brexit victory triggered market chaos, together with the flight for safe-havens, on Friday. The GBP crashed to the lowest since 1985 while the EUR also plunged heavily while the USD, JPY and Gold were the gainers. The Gold market became hot and registered $4.3 billion surge in holdings in gold-backed funds, the most in a single day in four years, while the JPY strengthened to the highest in three years against the US Dollar. Commodity currencies were in jitters and forced AUD, NZD and CAD to dip while Crude prices also dropped from its recent highs.

During early Monday, the UK Chancellor of Exchequer, George Osborne, said that he accepts the Friday’s result in full and the nation will be strong soon, giving a bit of sigh to the GBP traders; however, the Pound couldn’t stick to the gains for long and started its downward trajectory again ahead of the market opens.

The Germans, Italians and French leaders will hold a meeting today while some of the global head-honchos will get in touch with the UK to start discussing cues about their future relationship. The UK PM, which announced his resignation in October, seems delayed the future talks with EU on their upcoming relationship while a surprise announcement by the Netherlands to seek UK-like referendum triggered uncertainty for the future of EU.

Hence, it would be better not to plunge on any action ahead of strong clues from the UK while some of the global central bankers have already signaled to safeguard their currencies during the aftermath of the Brexit. While there are no important data-points for the day to observe, a speech by the ECB President, at the European Central Bank Forum, would be closely observed to determine further moves of the EUR.

Have a nice-day……

567

[B]Daily Fundamental Dose: 28-June-2016[/B]

Hello Traders,

With the Monday keep punishing GBP and EUR, it seems that the Friday’s wild moves weren’t only the panic and global traders have much more to witness that could rattle the global financial market. The ECB President, during his speech on Monday at annual ECB forum, said that the central bank is feeling sad about the UK’s cessation from EU. There will be EU summit on Tuesday and Wednesday wherein the EU leaders will decide on what to do next about the UK and might ask the UK to submit for Article 50 which would start procedure for its departure from the Union. The USD kept enjoying without any major details, except an unchanged Services PMI, due to the counter-strength while the JPY remained strong with the Gold as market players maintained their likeliness for safe-havens. Further, the commodity currencies were on downstream as Crude prices remained under-pressure.

On Tuesday, the UK witnessed another bad news as S&P reduced its grade by two steps to AA from AAA while Fitch cut its credit rank by one step. Both have negative outlooks on the Britain now. Generally, the EU forum will conclude with a discussion between Fed Chair, BoE head and ECB President but this time the Fed Chair withdrew from it without providing reason, indicating the US Fed is more interested in making new-ties with UK secretly than to have an open relationship.

Market players adhered to profit-booking on Tuesday when they helped the commodity currencies as Crude prices registered gains on looming strike in Norway threatened to cut output in western Europe’s biggest producer. Further, the JPY and Gold also witnessed some profit-booking moves while the USD witnessed mild correction ahead of the crucial GDP and CB Consumer Sentiment Index release by world’s largest economy.

Amidst the global uncertainty about the future status of UK, together with Scotland and Northern Ireland which voted for Bremain, chances are higher that the JPY and Gold can continue moving up; however, a bit of profit booking can’t be denied with upbeat US details. Moreover, Crude prices can also pare some of its recent losses due to the Norway strikes and could help building the market volatility. Hence, it would be better to have USD longs with a bit of JPY while staying away until there are some final words from this week’s EU summit.

Have a nice trading-day……

568

[B]Daily Fundamental Dose: 29-June-2016[/B]

Hello Traders,

After two-days of crash, the market adhered to profit-booking on Tuesday, favoring a bit of pullback in EUR, GBP and some of the commodity currencies, like AUD, NZD and CAD. The US Dollar Index (I.USDX) witnessed first negative daily closing in three-days even if the GDP surpassed 1.0% forecast with 1.1% growth & Consumer Confidence rallied to seven month’s high as Fed Governor, Jerome Powell, said that he sees more downside risk, indicating that the Fed’s next move will be a cut than a rate-hike. The JPY and Gold also pared some of their recent gains while potential strike in Norway and crisis in Venezuela helped Crude price to rise. The on-going European summit also played its crucial role as European Council summit pressed the U.K. to spell out how it wants to move forward after the referendum. They warned that delaying the period before Britain formally activates the EU’s exit mechanism will prevent the start of negotiations over any future relationship.

On early Wednesday, the Japanese Retail Sales fell more than expected and registered a third straight month of annual declines while Japanese PM became loud mouthed by saying the cabinet will take all the available steps to curb the JPY volatily and cut its strength. The JPY declined in response to the news.

For the rest of the day, German Prelim CPI, EU Summit and US Pending Home Sales would take opportunity to fuel the global forex market volatility while the news announcement from UK will also be observed in detail. Given the EU maintains its rough tone against UK and the Britain keep delaying the notification to communicate its cessation, chances of renewed downside of the GBP can’t be denied. However, fresh sentiment favoring that the global central bankers would take bold actions to counter the recent pessimism might help the USD. Hence, it would be better to support the USD and gains in commodity currencies while paring some JPY gains.

Have a nice trading-day……