Market analysis and trade recommendations by FBS

[riki143]

Market News
12 June 2014

BoJ meeting: what to expect?

The Bank of Japan will announce its policy meeting decision on Friday. The regulator is widely expected to refrain from adding stimulus this month. All 33 economists surveyed by Bloomberg forecast the central bank to keep policy unchanged with 60-70 trillion yen QE per year. 9% of the economists expect additional monetary stimulus in July, down from 38% in the previous survey.

Japanese inflation data and the Q1 growth numbers persuaded the investors that the economic recovery remains on track without additional stimulus. Societe Generale analysts go even further, pointing that on the previous meeting on April 30 the Bank revised growth forecasts down without any hints on stimulus to come.

The Bank of Japan may slightly raise its outlook for the overseas economies due to receding geopolitical risks from Ukraine, rises in China's May exports and a surge in U.S. imports. This could signal that the bank remains confident that sluggish exports will pick up and help Japan's economy achieve a sustained recovery.

More:
http://fxbazooka.com/en/news/show/1352

 

[riki143]

Market News

June 12: American session

Tatiana Norkina, an analyst at FBS

Negative statistics from the U.S. has given a negative effect to the American dollar. According to published data, in the last week the number of applications for unemployment benefits increased to 317 thousand, against expectations of 310 thousand. In addition, retail sales increased only by 0.3% last month, while analysts predicted a positive trend to 0.6%. As a result, the U.S. dollar index fell to around 80.70, after losing at the moment about 0.10%.
The second day of fall and stock indices: DJIA - 0.25%, while the S & P500 - 0.35%.
There are no strong movements in currency markets. Euro is steady against the dollar - the currency pair EUR/USD grew to 1.3540 after testing 1.3510 support. GBP/USD is rising again, supported by positive data on the housing market. Daily maximum was formed at 1.6840. Currency pair USD/CHF remains under 0.9000 figure, but with the support 0.8985/0.8990. Pair USD/JPY, apparently, could not resist over 102.00 - bears continue the offensive.

More:
http://fxbazooka.com/en/news/show/1353

 

[riki143]

Market News

June 13: Asian session

MSCI Asia-Pacific Index of stocks erased declines, with oil producers surging on the highest crude prices in eight months as violence in Iraq spurred supply concerns.

USD/JPY rose from 101.70 to 102.00. The Bank of Japan left its policy unchanged, but the policymakers upgraded their assessment of overseas markets. Now investors are waiting for Kuroda’s press conference (06:00 GMT).

Commodity currencies retraced lower in the Asian trade following the yesterday’s rally. AUD/USD weakened to $0.9410 before recovering to $0.9415. NZD/USD corrected from the $0.8700 resistance to $0.8665. New Zealand business manufacturing index lowered from 54.4 to 52.7. Gold is trading under a slight bearish pressure around $1271.8.

EUR/USD is trading on the upside in the $1.3550 area. GBP/USD rose to $1.6970. Fitch affirmed the UK’s AA+ with stable outlook. Bank of England’s Governor Carney says interest rates could rise sooner than markets expects.

More:
http://fxbazooka.com/en/news/show/1354

 

[riki143]

Market News
13 June 2014

Euro's falling again

EUR/USD has made a U-turn down, while USD/CHF reversed up.

Resistance at $1.3580 proved to be too strong for the bulls and it took minutes for the bears to retrace the recent bounce. Bigger than expected trade surplus didn’t help the single currency.

Support is at $1.3510, $1.3500, $1.3476. Resistance is at $1.3580, $1.3600 and $1.3620.

Chart. H1 EUR/USD

More:
http://fxbazooka.com/en/news/show/1355

 

[riki143]

Market News

June 13th: American Session

Tatiana Norkina, FBS analyst

The dollar index recovered today after two days of falling before the data from the United States. However, the statistics showed a decrease in the producer price index for the last month to 0.2%. Analysts had expected an increase of 0.1%. This put pressure on the American, which is in the green zone (+0.08%), suspending growth slightly below 80.70. On major U.S. stock exchanges, there is some encouragement: DJIA and S&P500 add 0.30% each.

Against this background, the currency pair EUR/USD is in support of 1.3530 again and USD/CHF pair raised to 0.9000 figure. GBP/USD pair is consolidating in 1.6950 area after the explosive growth provoked yesterday by evening statements of Mark Carney about the imminent increase in interest rates. USD/JPY pair has returned to the figure of 102.00, sensing support at 101.60.

More:
http://fxbazooka.com/en/news/show/1356

 

[chicken]

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[riki143]

MARKET NEWS

June 16: Asian session

USD/JPY slid to 101.72. Yen strengthened as violence in Iraq boosted speculation that oil supplies will be disrupted and increased the appeal of haven assets. The MSCI Asia Pacific Index lost 0.2%. Japanese Nikkei 225 lost more than 1%.

AUD/USD is testing the $0.9400 resistance to the upside. The pair holds below the last week’s high of $0.9440, however. The RBA Assistant Governor Kent highlighted that the Australian dollar still remains high despite the commodity falls. NZD/USD rose to $0.8690, getting closer to the Thursday’s peak of $0.8700. New Zealand Westpac consumer sentiment lowered from 121.7 to 121.2 in Q2.

EUR/USD is trading in the $1.3540 area. GBP/USD edged up to $1.6980.

More:
http://fxbazooka.com/en/news/show/1357

 

[riki143]

MARKET NEWS
16 June 2014

German growth to be weak in Q2

According to the Bundesbank monthly report from June 16, German economic growth could be lower than everage in the first half of the year. After a very strong start to the year real GDP should increase only slightly in Q2, while the Q3 growth should be much stronger.

Bundesbank raised German 2014 GDP forecasts from 1.7% previous to 1.9% a week ago. Inflation forecast was lowered from 1.3% to 1.1%.

More:
http://fxbazooka.com/en/news/show/1358

 

[riki143]

MARKET NEWS
16 June 2014

Geopolitical risks dominate the markets

Currency markets entered the new week in a risk-negative sentiment. Geopolitical risks increased on the back of social unrest in Iraq. What’s more, the breakdown of gas talks between Ukraine and Gazprom added to market concerns. As a result, market demand on the safe Japanese yen remains strong.

Last week the crude oil prices surged to the levels unseen since autumn 2013 under threat of supply disruptions. If the trend remains in place, risk appetite and the US equity markets could suffer.

Chart: Investing.com

More:
http://fxbazooka.com/en/news/show/1360

 

[riki143]

MARKET NEWS

June 16: American Session

Tatiana Norkina, analyst at FBS

The U.S. dollar index keeps weakening even after the publication of positive statistics on industrial production in the country, and is currently losing about 0.30%. The major stock indexes are also in the red zone: DJIA - -0.20%, S&P500 - -0.15%.

At the same time, the eurobulls have become pretty active, recovering the EUR/USD pair to the Friday's high of 1.3575. The GBP/USD pair, after testing the 1.7000 figure, continues consolidating under it. The dollar has weakend against the franc as well: the USD/CHF currency pair is sliding to the 0.8970 support. As for USD/JPY, the bears are active again, having lowered the rate to the 101.80 mark.

More:
http://www.fxbazooka.com/en/news/show/1361

 

[riki143]

MARKET NEWS

June 17: Asian session

Most Asian stock markets fell on Tuesday as the deepening conflict in Iraq and a gas dispute between Ukraine and Russia sapped investors' appetite for riskier assets. China’s stocks fell after foreign direct investment in the country unexpectedly declined. MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.3%. Japanese Nikkei bucked the trend with rise of a 0.3%, though it was still down on the week so far. USD/JPY is trading on the upside trying to overcome the 102.00 level.

Demand for the commodity currencies was down. AUD/USD fell by almost 50 pips to $0.9350 following the RBA policy minutes release. Australian regulator revealed a slightly more bearish outlook for the national economy and has once again reiterated that the currency is high by historical standards. NZD/USD tracked the AUD’s moves, slipping to $0.8650, but later has recovered some ground. Gold extends the decline for a second day in a row.

EUR/USD slid to $1.3555. GBP/USD dipped below $1.6960.

More:
http://fxbazooka.com/en/news/show/1362

 

[riki143]

MARKET NEWS
17 June 2014

IMF cut US 2014 forecast

The International Monetary Fund cut its forecast for US 2014 economic growth this year by 0.8% to 2%, citing a harsh winter, a struggling housing market and weak international demand for the country's products. Economists say the Federal Reserve will hold its interest rate low even longer than investors expect.

The fund maintained its 3% GDP outlook for 2015, saying a meaningful economic rebound is on the way. Still, the IMF said the US officials must do more to stimulate growth in the near term.

More:
http://fxbazooka.com/en/news/show/1363

 

[riki143]

MARKET NEWS

June 17th: American Session

Tatiana Norkina, FBS analyst

The U.S. dollar strengthened sharply today, after the publication of statistics on inflation. Consumer prices in the past month rose by 0.4%, against expectations of 0.2%. As a result, the U.S. dollar index jumped to around 80.75 mark and currently adds about 0.25% to yesterday's values. At the same time, not so strongly encouraging data on the housing market were published.

Under the conditions of stated mixed data EUR/USD pair stopped falling in 1.3540 area. GBP/USD pair is corrected in 1.6950 area, after a morning testing of 1.6980 resistance. Currency pair USD/CHF broke the powerful level of 0.8990, recovering slightly above the figure of 0.9000. The yen weakened against the dollar: USD/JPY soared to 102.20, bulls show their confidence.

More:
http://fxbazooka.com/en/news/show/1364

 

[riki143]

MARKET NEWS

June 18: Asian session

USD/JPY rose to 102.30. US dollar held gains versus most of its major peers before the Federal Reserve announces a policy decision today as signs of US economic growth fuel speculation policy makers are moving toward raising interest rates. Asian stocks outside of Japan fell. MSCI Asia Pacific Excluding Japan Index slipped 0.15%, while Japanese Nikkei added about 1%. The Bank of Japan’s minutes showed no major surprises, with members unanimously voting to keep increasing the monetary base at an annual pace of about 60-70 trillion yen.

AUD/USD consolidates in a tight $0.9325/45 range following the yesterday’s sharp decline. NZD/USD hovers around $0.8660. New Zealand current account surplus came out in line with forecasts at 1.41B (prior: a deficit of 1.51B). Gold trades under bearish pressure around $1267.

EUR/USD is trading in the $1.3546 area after yesterday’s decline from $1.3570. GBP/USD is flat at $1.6960.

More:
http://fxbazooka.com/en/news/show/1365

 

[riki143]

MARKET NEWS

Key option levels (June 18)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3500 (large), $1.3540, $1.3575/85 (large), $1.3640;

GBP/USD: $1.6915;

USD/JPY: 101.40/50 (large), 102.30, 102.60;

AUD/USD: $.9340/50 (large), $0.9400 (large), $0.9450, $0.9500 (large);

USD/CAD: 1.0800 (large), 1.0870;

EUR/GBP: 0.7975, 0.8075.

More:
http://fxbazooka.com/en/news/show/1366

 

[riki143]

MARKET NEWS
18 June 2014

Bank of England: meeting minutes

GBP/USD spiked to $1.7002, but then slid to the $1.6940 area.

The Bank of England’s June 5 meeting showed that the Monetary Policy Committee voted unanimously in favor of maintaining the interest rate at 0.5% and the program of asset purchases steady at 375B pounds.

The MPC expressed surprise with the low probability of a 2014 rate rise being priced in. They also stressed that “the more gradual the intended rise in bank rate, the earlier it might be necessary to start tightening policy.”

The MPC said that the economic recovery in the UK was gaining momentum and that the strong pound was helping to push down inflation. They added, however, that “the weakness in inflation elsewhere, especially the euro area, contained information about underlying global inflationary pressures that might yet become evident in the United Kingdom.”

The majority of the BoE policymakers saw spare capacity remaining in the range of 1% to 1.5% of GDP in 2014 Q2. They suggested that more slack should be absorbed before an increase in interest rates was warranted. They also said it was difficult to judge how persistent is the slowing in housing market activity and that the issue would be addressed by the Financial Policy Committee this month.

Summary: There were hawkish lines which imply that rates may be raised sooner than later. Still pound isn't jumpimg. The approaching FOMC and the fact that the BoE has already been hawkish in the past week must be the reason.

More:
http://fxbazooka.com/en/news/show/1367

 

[riki143]

MARKET NEWS

June 18th: American session

Tatiana Norkina, an analyst at FBS

The index of the U.S. dollar does not stand the pressure today, after the disappointing data on the U.S. balance of payments, which already suffers from a lack of more than 111 billion dollars. Analysts also expect growth in the deficit to $ 97 billion a result, the index today is losing about 0.14%, going down to around 80.60. Stock markets opened mixed today in anticipation of the upcoming Fed meeting, where the interest rates issue will be resolved as well. Dzh.Yellen is expected to perform.


U.S. dollar falls against most currencies. Thus, the pair EUR/USD is back to yesterday's highs of 1.3580; obviously support 1.3520/1.3530 has resisted. Currency pair USD/CHF fell to 0.8960/0.8970 support, threatening corrective decline in the medium term. USD/JPY pair has returned to the figure of 102.00 after the maximum 102.30 for the last five days. Pair GBP/USD has been taken out of context: after the next testing of 1.7000 figure it fell to 1.6940 support.

More:
http://fxbazooka.com/en/news/show/1369

 

[riki143]

MARKET NEWS

June 19: Asian session

US dollar remained near the lows it hit yesterday versus its counterparts after the Federal Reserve signaled it will keep interest rates near zero even as it ends bond purchases, damping demand for the US currency. Asian shares rose toward a 6-year high. MSCI Asia Pacific Index advanced 1.1% before dipping down and erasing gain to 0.12%. Japanese Nikkei is up by 1.5%. Positive news also came from China where Premier Li Keqiang pledged to sustain the nation’s economic expansion forecast.

USD/JPY slid to 101.85. AUD/USD is trading above $0.9400. NZD/USD slid to the levels just above $0.8700 from a 6-week high after New Zealand’s economic growth missed estimates (GDP added 1.0% vs. 1.2% expected).

EUR/USD is trading in the $1.3590 area. GBP/USD is trading in the $1.6990 zone.

More:
http://fxbazooka.com/en/news/show/1371

 

[riki143]

MARKET NEWS
19 June 2014

SNB maintains the EUR/CHF 1.20 peg

As it was widely expected, the Swiss National Bank kept its 3-month target rate at 0.00-0.25%. The EUR/CHF cap was maintained at 1.2000. The regulator underlined it is ready to buy unlimited quantities of foreign currency if needed.

The SNB sees moderate recovery of Swiss economy continuing: the economy is expected to expand by 2% in 2014. However, substantial downside risks still remain. The swiss franc remains elevated.

According to analysts at UBS, the Swiss central bank will follow the ECB in lowering rates if EUR/CHF falls to the 1.2000 peg.

More:
http://fxbazooka.com/en/news/show/1372

 

[riki143]

MARKET NEWS
18 June 2014

Fed tapers QE by another $10 billion

As it was widely expected, the US Federal Reserve cut bond-buying program (QE) by $10 billion for a fifth straight meeting, to $35 billion, keeping it on pace to end the program late this year. Interest rates were left at a record low of 0-0.25%. The Fed repeated that the interest rates will likely remain low for a considerable time after the QE ends.

According to the FOMC statement, growth in economic activity has rebounded in recent months and the labor market has shown further improvement. The statement highlights the decline of the unemployment rate, but still sees it as elevated.

Meanwhile, the 2014 GDP growth forecast was revised down from 2.8-3.0% to 2.1-2.3%. The forecast cut was priced in, however. The 2014 inflation forecast was revised up a bit.

More:
http://fxbazooka.com/en/news/show/1370