Market analysis and trade recommendations by FBS

[riki143]

MARKET NEWS
3 September 2014

Cease-fire talks support stocks

Demand for risky assets retrurned to the markets as Russia and Ukraine agreed on steps toward a cease-fire. Putin suggested a 7-point plan to resolve the conflict. No final decision has been made yet, but the intentions of the government were a positive signal for the markets. A lasting cease-fire would be the biggest breakthrough in the long-playing conflict that has stolen more than 2,600 human lives.

As a result, US Treasuries and the dollar fell. The yield on 10-year Treasury notes climbed to a 3-week high. At the same time, global stocks rallied: the Standard & Poor’s 500 Index hit an all-time high of

Chart. S&P 500 (Source: Bloomberg)

More:
http://fxbazooka.com/en/news/show/1686

 

[riki143]

MARKET NEWS

Sep. 4: Asian session

USD/JPY edged up to 104.90 after declining yesterday. US dollar is stronger versus Japanese yen ahead of the data forecast to show a pickup in U.S. employment, supporting bets the Fed will raise interest rates. The Bank of Japan kept its record stimulus unchanged at today’s meeting.

AUD/USD attempted to push higher following a strong “bullish engulfing” candle on Wednesday, but met resistance at $0.9360. As expected, Australia retail sales growth slowed from 0.6% in June to 0.4% in July. Trade deficit lowered to 1.36B. NZD/USD consolidates around $0.8310, slightly above the yesterday’s $0.8285 low.

EUR/USD edged down to $1.3440. GBP/USD is trading on the downside in the $1.6455 area.

More:
http://fxbazooka.com/en/news/show/1687

 

[riki143]

MARKET NEWS
4 September 2014

BOJ meeting: key points

• As expected, the Bank of Japan left monetary policy unchanged, leaving the annual QE target 60-70 trillion yen
• The BOJ Governor Kuroda explained on a press-conference, that an aggressive easing was maintained to compensate the impact of the April sales tax hike. Easing has an intended effect
• Dovish point is that BOJ acknowledged housing investment slump post the sales hike
• However, the major risk seen for the economy is external, not the effect of the tax hike
• Despite the recent negative data, the BOJ believes the economy “is recovering as a trend”, private consumption is resilient
• Inflation: CPI ex. Food prices and sales tax hike effect will stay unchanged at 1.25% in the short term. Inflation target of 2% will be reached in Oct 2015 – March 2016.

Conclusion

BOJ acknowledged there is some downbeat effect from the tax hike, but did’t disclose any additional easing intentions

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http://fxbazooka.com/en/news/show/1690

 

[riki143]

MARKET NEWS
4 September 2014

German data: really an improvement?

German factory orders rose by 4.6% in July after declining by 2.7% in the previous month.

Analysts at Commerzbank, however, think that it doesn’t yet mean that the recent phase of weakness is over. In their view, the period of holidays was late this summer, probably in August, so they expect a decline when the data for the final month of summer come out.

More:
http://fxbazooka.com/en/news/show/1691

 

[riki143]

MARKET NEWS
4 September 2014

EUR/USD ahead of the ECB

EUR/USD is consolidating in a sort of triangle on H1 ahead of the ECB meeting and press conference later today (11:45 and 12:30 GMT). Germany released an upbeat factory orders report. The spread between US and German bond yields is also narrowing eases pressure on EUR/USD slightly. At the same time, most European stocks declined as investors awaited the ECB’s decision.

Bears are waiting for ECB policy meeting and ADP for further trend confirmation. The less dovish statement by ECB in policy meeting probably won’t have a prolonged impact on EUR’s downtrend, and Draghi will probably do his best to sound dovish. To do that the ECB could provide new details on ABS purchases (QE) or reduce GDP and inflation forecasts. This might be enough to cause the single currency’s selloff. Positive ADP employment data will affect EUR/USD making it move down.

Most analysts allow a short squeeze in EUR/USD targeting $1.3220 and $1.3345, but remain the long-term bearish. Main support is at $1.3100.

Chart. H1 EUR/USD

More:
http://fxbazooka.com/en/news/show/1692

 

[riki143]

MARKET NEWS
4 September 2014

Bank of England: policy unchanged

FXBAZOOKA.com - As it was widely expected, the Bank of England left monetary policy unchanged with a bank rate at 0.5% and QE at £375 billion pounds.

The markets will now be awaiting for the MPC minutes release on September 17 to see how did the 9 policymakers vote. Remember that August meeting minutes showed 2 members voted for an immediate rate hike, while other 7 didn't support the idea.

GBP/USD dipped to a new low of $1.6430 on the news, but recovered to $1.6450 rapidly.

More:
http://fxbazooka.com/en/news/show/1693

 

[riki143]

MARKET NEWS
4 September 2014

ECB cut rate to 0.05%
FXBAZOOKA.com - The European Central Bank unexpectedly cut benchmark rate from 0.15% to 0.05%.

EUR/USD tested $1.3036. Next target on the downside is $1.3000. Former support at $1.3110 represents a resistance.

The ECB’s President Mario Draghi will start his press conference at 12:30 GMT.

More:
http://fxbazooka.com/en/news/show/1694

 

[riki143]

MARKET NEWS

Sept.4: American session

Tatiana Norkina, analyst at FBS

The US Dollar index has leapt abruptly to the 83.48 mark after ECB decision to cut interest rates from 0.15% to 0.05%. By the American session opening, the index is adding over 0.60%.

Stock markets have also opened on the positive: the major indexes are adding slightly above 0.30%. The main driver was the data on the US trade balance, the deficit of which has decreased to $40.55 billion.

Currency markets have responded rather nervously to the ECB decision. Thus, the EUR/USD pair hs tumbled to new lows of 1.2995. The GBP/USD currency pair has fallen to 1.6390, then returning to the 1.6425 area. Bears continue stepping up. USD/CHF has soared to new highs - 0.9268. The USD/JPY pair, however, is still trading under the 105.00 figure.

More:
http://fxbazooka.com/en/news/show/1696

 

[riki143]

MARKET NEWS

Sept. 5: Asian session

FXBAZOOKA.com - Asian stocks fell while the US dollar extended the upside after the European Central Bank announced a rate cut and an Asset-purchase plan on Thursday. Markets await the US labor data to confirm US economic recovery. Meanwhile in Ukraine, President Petro Poroshenko voiced “careful optimism” that talks today with pro-Russian rebels will set the course for a cease-fire. The MSCI Asia Pacific Index dropped 0.6%. USD/JPY touched a new high of 105.70, but retraced to back to the 105.00 mark as we write.

EUR/USD consolidates around $1.2930 after falling by more than 200 pips on the ECB policy easing announcement. GBP/USD touched a new minimum of $1.6285 in Asia, but bounced a little bit higher.

AUD/USD consolidates around $0.9340following the yesterday’s rapid push to $0.9390. NZD/USD touched $0.8270 in Asian trade.

More:
http://fxbazooka.com/en/news/show/1698

 

[riki143]

MARKET NEWS
5 September 2014

What to expect from the US NFP?

FXBAZOOKA.com - Exhausted by the yesterday’s ECB-related move, currency traders await the US labor market data on Friday (12:30 GMT). Consensus forecasts are upbeat for all the 3 releases:

Key US releases (Sept. 5)

The ECB easing announcement made it very clear that monetary policy divergence between the euro zone and the United States is increasing. The Federal Reserve has a clear intention to finish the QE in October and to proceed to raising interest rates afterwards. Of course, the terms are important, but in this case it is the direction that matters: the Fed is hawkish, while Yellen is dovish. In our view, US NFP above 200K will be enough to confirm: US economic recovery remains on track and the Fed's tightening strategy is adequate to the market conditions.

Chart. NFP dynamics in 2013-2014

NFP above the 226K consensus will clearly push the US dollar a little higher. but the upside seems to be limited today. However, the figure below forecast will likely trigger a short-lived, but potentially deep USD correction. The greenback is clearly overbought after the yesterday's rally.

Chart. US dollar index (Bloomberg)

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http://fxbazooka.com/en/news/show/1701

 

[riki143]

MARKET NEWS
5 September 2014

USD down on weak NFP

US dollar index declined from a 14-month as the US non-farm payrolls increased at a lowest pace in 2014 in August. The news dampen expectations that the Federal Reserve will raise interest rates sooner than expected. US employers added only 142K jobs in August vs. 226K expected. July figure was revised up from 209K to 212K.

Unemployment rate declined from 62.% to 6.1% in line with expectations.

More:
http://fxbazooka.com/en/news/show/1702

 

[riki143]

MARKET NEWS
5 September 2014

Ukraine agreed ceasfire with rebels

The Ukrainian government and representatives of the Russian-backed rebels have agreed a ceasefire from 15:00 GMT on Friday in Minsk. European Union will likely hold off the additional sanctions if the conflict really will be deescalated.

The reports of the ceasefire agreement are a strong positive factors fpr the risky assets. Russian markets and the rouble rallied sharply on the news.

More:
http://fxbazooka.com/en/news/show/1703

 

[riki143]

MARKET NEWS
8 September 2014

CFTC: USD longs keep rising

FXBAZOOKA.com - According to the latest CFTC report, released on Sep. 5, large traders and speculators raised their USD bullish bets to the highest level since June 2013. The value of net USD longs increased from $32.9 billion as of Aug. 26. to $35.9 billion as of Sept. 2. The aggregate US dollar bullish position has risen for 3 weeks in a row.

Large speculators turned much more bearish versus the euro, yen and the pound. Demand for the Aussie and the loonie recovered a little bit.

More:
http://fxbazooka.com/en/news/show/1706

 

[riki143]

MARKET NEWS

September,8: American session

Tatyana Norkina, FBS analyst.

Index of the dollar at the opening session adds a little more than 0.25% on expectations of speech by the Minister of Finance, Mr. Lu today. The rise of the dollar is also associated with the bearish pressure on the single European currency.

US stock markets are slightly down, losing 0.05%.

Currency pairs traded in different directions. For example, EUR / USD is consolidating just above 1.2940. GBP / USD pair is trading at 1.6100 lows. Currency pair USD / CHF hits a maximum of 0.9325, and USD / JPY grew to around 105.40.

More:
http://fxbazooka.com/en/news/show/1708

 

[riki143]

MARKET NEWS

September 9: Asian session

FXBAZOOKA.com - The US dollar resumed growth versus all the major currencies as expectations for an earlier Fed Fund rate rise increased. The San Francisco Federal Reserve published a research showing investors are pricing in a lower chance for interest rate hikes then members of the Fed itself. DXY index approached the July 2013 peak of 84.753 on the news.

EUR/USD fell to a fresh 14-month low of $1.2867. Investors avoid the single currency following the ECB easing announcement on Thursday. Meanwhile, GBP/USD hit a 10-month low of $1.6065 on worries that Scotland may vote for secession on Sept. 18 referendum. A TNS poll on Tuesday confirmed a surge in “Yes” votes. Strong BRC retail sales data couldn’t stop the GBP selloff. USD/JPY renewed a 6-year high, hitting 106.30.

More:
http://fxbazooka.com/en/news/show/1709

 

[riki143]

MARKET NEWS
9 September 2014

BOE Carney: rate hike comes in Spring 2015

FXBAZOOKA.com - The Bank of England might start to hike interest rates in Spring 2015, although the labour market is still in the process of recovering from crisis, Governor Mark Carney said in a speech in Liverpool on Tuesday.

• The exact rate hike timing will be data-dependent and will not depend on the UK elections (sceduled for May 2015);
• Carney assumed, that the UK economy recovers much faster than expected;
• However, the labor market remains far from being strong;
• Unit labor costs remain below the level needed to meet the BOE CPI target;
• Real wage growth is expected to resume in mid-2015, Carney projects;
• The UK GDP is expected to grow by 3.5% in 2014 and by 3% in 2015;
• Currency union is incompatible with sovereignity of Scotland.
• GBP/USD bounced to 1.6155 on the news, but markets are selling the rallies

.

More:
http://fxbazooka.com/en/news/show/1710

 

[riki143]

MARKET NEWS

September 9: American Session

Tatiana Norkina, an analyst of FBS

The index of the American dollar continues to grow insistently, adding just under 0.20% at the opening of the American session. A new high of 84.66 was reached today. At the same time, stock markets were opened negatively. Therefore DJIA lost more than a half of a percent, and the S & P500 - about 0.40%.

Currency markets are being moved sideways in relatively wide ranges. Thus, the pair EUR / USD has returned to 1.2900 figure after the formation of a low of 1.2860, but remained in this range. As for the currency pair GBP / USD, it was declining to the level of 1.6060, but the bulls managed to restore the quotation to 1.6155. The bears lowered the prices again under the figure. USD / CHF has formed a high near 0.9380 and fallen to the level of 0.9350. A pair USD / JPY consolidates below the resistance level of 106.30.

More:
http://fxbazooka.com/en/news/show/1712

 

[riki143]

MARKET NEWS

September 10: Asian session

FXBAZOOKA.com - The US dollar extends the rally versus the Japanese yen and the Australian dollar, pushed up by the higher US yields. The USD/JPY pair hit a new six-year high of 106.55.

AUD/USD extended the decline for a third day in a row, hitting $0.9150. This is the lowest level since March 2014. Demand for the Aussie dollar in carry trade operations declines. Westpac Consumer Confidence index for September unexpectedly contracted from +3.8% to -4.6%. NZD/USD consolidates around $0.8240, slightly above the yesterday’s low of $0.8220. Markets await the RBNZ policy review late on Wednesday.

The euro and the pound are got some relief on Wednesday. EUR/USD consolidates around $1.2930, above the yesterday’s low of $1.2850. GBP/USD recovered to $1.6130 from the yesterday’s minimum of $1.6060. British Prime Minister David Cameron asked Scots on Tuesday not to vote for independence in next week's referendum after an opinion poll showed growing support for secession.

More:
http://fxbazooka.com/en/news/show/1713

 

[riki143]

MARKET NEWS
10 September 2014

Pound awaits the Inflation Report Hearings

FXBAZOOKA.com - GBP/USD awaits the BOE Inflation Report Hearings that follow the August quarterly Inflation Report. Testimony that starts at 13:45 GMT will likely provide us with more details about the BOE monetary policy intentions.

Governor Mark Carney will be accompanied by Deputy Governor Nemat Shafik and MPC committee members Martin Weale and David Mile. Yesterday Mr. Carney spoke in favor of a rate hike in Spring 2015. However, Mr. Weale was one of the 2 BOE members who voted in favor of an immediate rate increase in August.

We'll try to assess the aggregate BOE sentiment. Hawkish tone will give GBP/USD a fundamental reason to extend the bullish correction.

More:
http://fxbazooka.com/en/news/show/1714

 

[riki143]

MARKET NEWS

Sept. 10: American Session

Tatiana Norkina, analyst at FBS

The US dollar index is adding about 0.25% at the session opening, consolidating at the 84.50 mark, due to absence of major macroeconomic indicators.

Stock trading began in different directions. Thus, DJIA is adding around 0.02%, while S & P500 is losing 0.08%.

Currency markets are facing significant strengthening of the dollar against the majority of world currencies. Thus, the EUR/USD pair has tumbled to the 1.2900 figure after trading in the 1.2950 area in the morning. GBP/USD has once again tested the 1.6070 support and returned to the 1.6130 resistance. The USD/CHF currency pair hass updated its highs, recovering to the 0.9390 mark, while USD/JPY has recovered to to 106.80.

More:
http://fxbazooka.com/en/news/show/1716