Market analysis and trade recommendations by FBS

[riki143]

MARKET NEWS

July 25: Asian session

US dollar headed for a second weekly gain versus euro before data today may show durable goods orders rebounded in June, adding to signs the economy is gathering momentum.

USD/JPY is trading under resistance in the 101.80 area. Japanese CPI data that came out somewhat higher than expected (+3.6% in June vs. +3.5% expected), but Japanese economy minister Amari reassured the markets that the QE end is nowhere near.

AUD/USD consolidates in a narrow $0.9425/00 range, retracing from the yesterday's $0.9470 high. NZD/USD trades in a tight $0.8550/85 range following the yesterday’s sharp selloff. New Zealand business confidence came below the forecast at 39.7. Gold price consolidates at the monthly lows a bit above $1290.

EUR/USD is trading a bit on the upside, in the $1.3460 area. GBP/USD is trying to recover after it slid to $.1.6965 yesterday.

More:
http://fxbazooka.com/en/news/show/1515

 

[riki143]

MARKET NEWS

Key option levels (July 25)

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: $1.3400 (large) $1.3420 $1.3500/10 (large);

GBP/USD: $1.7000 (large) $1.7150;

USD/JPY: 101.00, 102.00;

AUD/USD: $0.9375, $0.9425, $0.9445;

USD/CAD: 1.0695 (USD 600m), 1.0720, 1.0800;

NZD/USD: 0.8610, 0.8720;

EUR/GBP: 0.7800, 0.8100.

More:
http://fxbazooka.com/en/news/show/1516

 

[riki143]

MARKET NEWS

July 28: Asian session

Asian shares rose, while Treasuries and oil slipped as investors await data on US services before the Federal Reserve meets this week. MSCI Asia Pacific Index is up by 0.27%. Japanese Nikkei 225 is up by 0.41%.

The dollar index, a gauge of its strength against a basket of key currencies, stood little changed at 81.026 after striking a near six-month high of 81.084 on Friday. USD/JPY is once again fighting with resistance in the 101.80 area. AUD/USD is trading below $0.9400 touching the levels in the $0.9380 region on the downside. NZD/USD slid to $0.8530.

EUR/USD is trading in the $1.3430/25 area, near 2014 low at $1.3420 which was hit on Friday. GBP/USD is little changed in the $1.6880 zone.

More:
http://fxbazooka.com/en/news/show/1519

 

[riki143]

MARKET NEWS

Key option levels (July 28)

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: $1.3475;

GBP/USD: $1.6975, $1.7035;

USD/JPY: 102.00/10, 102.45;

AUD/USD: $0.9350;

EUR/GBP: 0.7910/15, 0.8000.

More:
http://fxbazooka.com/en/news/show/1520

 

[riki143]

MARKET NEWS
28 July 2014

CFTC: USD net longs at 6-week high

According to the latest CFTC report, released on July 26, large traders and speculators slightly increased their US dollar bullish bets on the week ended July 22. The overall USD long position went up from $9.94 July 15 to a 6-week high at $14.12 billion.

During the past week large speculators bet in favor of JPY and CAD, while there were weekly decreases for EUR, GBP, CHF, AUD and NZD.

More:
http://fxbazooka.com/en/news/show/1521

 

[riki143]

MARKET NEWS
28 July 2014

Hilsenrath: the Fed is divided on rates

Jon Hilsenrath, Wall Street Journal columnist and the Fed expert, has written an article about the Federal Reserve’s next meeting which will take place on Wednesday.

According to Hilsenrath, all the FOMC members agree that the central bank should continue tapering QE and this time they will announce another cut in monthly bond purchases from $35 to $25 billion. As a result, QE3 may end in October.

In addition, the expert says that the Fed’s officials will discuss when and how to raise interest rates – here there’s no single opinion about the FOMC members. The hawk Richard Fisher, president of the Federal Reserve Bank of Dallas, predicted the Fed could start raising rates by early 2015 “or potentially sooner.” However, there are doves like Chicago Fed President Charles Evans who thinks that the short-term rates should stay near zero until well into next year for the Fed could be sure that the economy’s really getting stronger and that inflation is going to be at the central bank’s target and now below.

The Fed’s Chair janet Yellen has emphasized that the timing of rate hikes will depend on the economy. As the Federal Reserve has said since March it will keep rates near zero for a “considerable time” after the bond program ends and as QE is likely to end in October, the Fed will need to renew its forward guidance and tell the markets more about when it plans to raise the interest rates.

More:
http://fxbazooka.com/en/news/show/1522

 

[riki143]

MARKET NEWS
29 July 2014

BOJ Ishida on additional stimulus

The Bank of Japan board member Koji Ishida warned on Tuesday that domestic structural factors may further delay a rebound in export performance even despite the fact that global growth picks up. This makes Japanese economic recovery fragile.

Ishida also made the case for a more flexible view of the BOJ’s 2% price goal suggesting that the central bank won’t automatically expand stimulus simply because inflation fails to hit the target within a given timeframe. Japanese CPI has risen steadily, although its growth slowed to 1.3% in the year to June from 1.4% in May.

More:
http://fxbazooka.com/en/news/show/1525

 

[riki143]

MARKET NEWS
29 July 2014

European yields are falling

Spanish and Italian bond yields hit the latest in a series of record lows on Tuesday with investors looking to 60 billion euro of coupon and debt repayments from the two countries this week to return to the market.

Yields on 10-year German bonds, the benchmark for euro zone borrowing costs, also touched all-time lows with the prospect of a fresh round of long-term loans to banks from the ECB (TLTRO) from September also supporting demand for euro zone bonds.

Italy is the only euro zone country selling bonds this week, so there may be enough cash to keep the euro zone yields subdued at or near historic lows.

Green line – Italian 10-year bond yield

Orange line – Spanish 10-year bond yield

Yellow line – German 10-year bond yield

Source: Bloomberg

More:
http://fxbazooka.com/en/news/show/1526

 

[riki143]

MARKET NEWS
29 July 2014

IMF: GBP is overvalued

The International Monetary Fund warned that British pound is overvalued by 5-10% and this may hamper efforts to rebalance the British economy, reports the UK Telegraph. According to the IMF, high sterling may hit exporters and take some of the steam out of the improving economy which has the fastest growth pace among advanced economies.

The fund claimed that the Bank of England’s ultra-loose monetary policy was the right course at present, but warned that interest rates may have to rise if inflation starts to increase. The IMF also said that the BoE Governor Mark Carney should improve his controversial “forward guidance”.

The BoE’s Deputy Governor Broadbent said today that the IMF’s view on pound was fuelled by weak global growth. According to him, UK has had sharp bounce in economic activity and current account deficit doesn't threaten British economy.

More:
http://fxbazooka.com/en/news/show/1527

 

[riki143]

MARKET NEWS

July 30: Asian session

Asian shares are a bit on the upside with MSCI Asia Pacific Index up by 0.2%. US dollar is consolidating versus its counterparts after yesterday’s gains. The greenback remains near the highest in almost eight weeks against major peers amid prospects jobs numbers will add to indicators of stronger economic growth, prompting the Fed to further taper stimulus at a meeting that concludes today.

USD/JPY is trading in the 102.10 area after it closed above 102.00 yesterday. Japanese industrial production contracted by 3.3%.

AUD/USD is in the $0.9380 area. NZD/USD is just above $0.8500. New Zealand’s building concerts rose by 3.5%. According to the data released today, the RBNZ made no currency interventions in June. EUR/USD is trading just above $1.3400. GBP/USD is in the $1.6945 area.

More:
http://fxbazooka.com/en/news/show/1529

 

[riki143]

MARKET NEWS

Key option levels (July 30)

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: $1.3400, $1.3415, $1.3470, $1.3500;

GBP/USD: $1.6800;

USD/JPY: 101.70/75, 102.50;

AUD/USD: $0.9400, $0.9425, $0.9450, $0.9475;

USD/CAD: 1.0780, 1.0800;

EUR/GBP: 0.7800, 0.7900, 0.7950 (large), 0.8000.

More:
http://fxbazooka.com/en/news/show/1533

 

[riki143]

MARKET NEWS
30 July 2014

New coordinated sanctions against Russia

Russia keeps getting penalized for backing of armed rebels in eastern Ukraine. The United States and Europe have made a joint effort on Tuesday. The new sanctions are designed to hit major pillars of the Russian economy, including oil and gas supplies and technology, banking and finance, and arms sales. Close associates of Putin are also targeted.

The US sanctioned three Russian banks and a state-owned shipbuilder that serves Russia’s navy and oil and gas industry.

The EU curbed Russia’s access to bank financing and advanced technology in its widest-ranging sanctions, including an arms embargo and limits on access to European capital markets for Russian state-owned banks. Details of the EU sanctions are expected to be published Thursday and the measures are supposed to kick in on Friday.

More:
http://fxbazooka.com/en/news/show/1534

 

[riki143]

MARKET NEWS
30 July 2014

Spanish GDP beat expectations

Spanish growth in Q2 turned out to be higher than the Bank of Spain has expected: the nation’s GDP increased by 0.6% q/q versus the anticipated growth of 0.5%. At the same time, Spanish consumer prices fell by 0.3% y/y, while the economists expected an increase.

Economy Minister Luis de Guindos yesterday said that Spain raised economic growth forecasts from 1.25% to 1.3% for 2014 and from 1.75% to 2% for 2015. That will push unemployment lower than the 24.9% rate initially predicted for 2014.

More:
http://fxbazooka.com/en/news/show/1535

 

[riki143]

MARKET NEWS
30 July 2014

FOMC meeting: main moments
- Fed tapers QE from $35B to $25B.

- Rates held at 0-0.25%.

- The odds of persistent inflation below 2% ‘diminished somewhat’.

- Inflation has moved “closer” to long-run objective.

- No more reference that the unemployment rate is elevated.

- Accommodative policy may be appropriate for “considerable time” after asset purchase program ends.

- Charles Plosser, the hawkish president of the Philadelphia Fed, dissented in a 9 to 1 vote because he thought the intention to keep rates low for a considerable time after the Fed stops buying assets does not reflect “considerable economic progress”.

USD bulls obviously wanted more.

 

[riki143]

MARKET NEWS

July 31: Asian session

US dollar held below a 10-month peak against a basket of major currencies on Thursday after soaring on upbeat US growth data (GDP increased by 4% in Q2), with mixed views from the Federal Reserve tempering the rally. The greenback has a good chance of further rising if US releases encouraging labor market data on Friday.

USD/JPY is trading in the 102.77 area after spiking to the levels above 103.00 on Wednesday. AUD/USD is trading on the downside, in the $0.9315 area after it hit $0.9302 yesterday. Australian building approvals slumped by 5%, while the nation’s import prices contracted by 3%. NZD/USD rose above $0.8500 after hitting $0.8461 yesterday.

EUR/USD is trading just below $1.3400 area after hitting $1.3366 yesterday. GBP/USD is trading in the $1.6920 region after dipping to $1.6888 yesterday.

Among other news: Argentina misses default deadline after talks with creditors collapse. The nation failed to make a $539 million interest payment to the holders of its restructured bonds in time, and Standard & Poor’s Ratings Services declared Argentina in default on some of its bonds.

More:
http://fxbazooka.com/en/news/show/1538

 

[riki143]

MARKET NEWS

Key option levels (July 31)

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: $1.3382, $1.3400 (large), $1.3405, $1.3450, $1.3480 (large), $1.3500 (large);

GBP/USD: $1.6850;

USD/JPY: 101.00, 101.40, 101.45, 101.50, 101.75, 101.80 (large), 101.85, 101.95 (large), 102.00 (large), 102.20 (large), 102.25, 102.40, 102.50 (large), 102.60, 102.75, 103.00 (large);

AUD/USD: $0.9320, $0.9360, $0.9365, $0.9375;

USD/CAD: 1.0765, 1.0800;

EUR/GBP: 0.7850 (large), 0.7900 (large), 0.7920 0.7980.

More:
http://fxbazooka.com/en/news/show/1539

 

[riki143]

MARKET NEWS

31 July: American session

Tatiana Norkina, an analyst at FBS

The index of the dollar with session opening subsided a little, but is still in green zone, adding about 0.05%. The reason of the decline was disappointing data on the labor market. The number of applications for unemployment benefits over the past week has grown to 302 thousand, while analysts had forecast an increase to only 301 thousand. US stock markets opened with significant decrease by more than 0.80%.

In currency markets, meanwhile calm prevails. After a strong strengthening of the U.S. dollar in recent days, the pair consolidated on the important levels. Thus, the EUR / USD pair stays above 1.3370 after morning testing of the 1.3400 figure, the GBP / USD continues to decline again, creating a new low of 1.6860. The USD / CHF currency pair was reduced to the 0.9075 support after another attempt to break through the figure of 0.9100 and USD / JPY is trying to storm yesterday's highs just below the 103.00 figure.

More:
http://fxbazooka.com/en/news/show/1543

 

[riki143]

MARKET NEWS

August 1: Asian session

US dollar remains near the recent highs versus the major currencies ahead of a closely watched jobs report (NFP) that has the potential to make or break a rally that saw the greenback post its best monthly performance in over a year. Asian stocks declined following the American markets on concerns about weaker earnings.

USD/JPY edged up and is trading just below 103.00. AUD/USD is trading on the downside in the $0.9290 area after it spiked to $0.9315 earlier during the Asian session. Aussie initially rose after an official China’s manufacturing PMI came at the highest level in more than 2 years, but then fell after an index from HSBC turned out to have a lower final reading than the preliminary one. NZD/USD is trading in the $0.8510/$0.8490 area.

GBP/USD keeps testing the support of the 100-day MA at $1.6865. EUR/USD is on the downside in the $1.3380 area.

More:
http://fxbazooka.com/en/news/show/1544

 

[riki143]

MARKET NEWS

Key option levels (Aug. 1)

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: $1.3274, $1.3350, $1.3375, $1.3400 (large), $1.3450, $1.3460, $1.3475, $1.3500 (large), $1.3510, $1.3525;

GBP/USD: $1.6955;

USD/JPY: 101.00 (large), 101.80, 102.25, 102.50, 102.70;

AUD/USD: $0.9300, $0.9330, $0.9340;

USD/CAD: 1.0700, 1.0745, 1.0750, 1.0775, 1.0785, 1.0795, 1.0800 (large), 1.0870, 1.0910, 1.0920.

More:
http://fxbazooka.com/en/news/show/1545

 

[riki143]

MARKET NEWS

Aug. 1: American Session

Tatiana Norkina, analyst at FBS

The US dollar index has dipped sharply after the publication of negative statistics on the labor market. The change in the number of people employed in the non-agricultural sector of US economy in July was only 209 thousand, instead of the expected 233 thousand. The index has fallen by 0.15%, to the 81.36 mark. Stock markets are also witnessing bearish sentiment: the major stock indexes has slid by almost 0.20%.

Currency markets have begun to move as well. Thus, the EUR/USD pair has grawn to 1.3430 after the morning consolidation above 1.3380. GBP/USD tested the 1.6810 figure, but then returned to the 1.6840 area. At the moment, the bears continue pressuring. The USD/CHF rate has tumbled to the 0.9050 area, while the USD/JPY currency pair is trading just below 102.70.

More:
http://fxbazooka.com/en/news/show/1546