Forex Blog

July 10, 2014

U.S. Bonds Higher after Fed Minutes

Bonds edged up from session lows on Tuesday after the release of minutes from the last Federal Reserve meeting, which said the central bank has begun detailing how it plans to ease the U.S. economy out of its easy monetary policy period.

The minutes from the June 17-18 meeting indicate the Fed envisions using its overnight repurchase agreements in tandem with the interest it pays banks on excess reserves to set a ceiling and floor for its target interest rate.

Though no decisions have been announced, the discussion has become detailed enough for Fed officials to contemplate the proper spread between the two – mentioned in the minutes as 20 basis points.

CNBC

Gold Approaches $1330 after Fed Minutes

Spot gold extended earlier gains on Wednesday after the minutes of the Federal Reserve’s most recent policy meeting showed the central bank has begun detailing how it plans to ease the U.S. economy out of an era of loose monetary policy.

The minutes from the June 17-18 meeting indicate the Fed envisions using its overnight repurchase agreements in tandem with the interest it pays banks on excess reserves to set a ceiling and floor for its target interest rate.

Though no decisions have been announced, the discussion has become detailed enough for Fed officials to contemplate the proper spread between the two – mentioned in the minutes as 20 basis points.  After the announcement, spot gold rose 0.8 percent to $1,329 an ounce.  U.S. gold futures for August delivery settled $7.80 higher at $1,324.30 an ounce, logging its first daily gain in four sessions.

CNBC

June 26, 2014

Australia 200 – Looking for Another Run Off Support at 5400

Australia 200 for Thursday, June 26, 2014

The Australia 200 Index is currently doing its best to rally higher and push back towards the resistance and key level at 5500.   It has been relying upon support at the 5400 level yet again after falling sharply back in the last few days.   Over the last couple of weeks the Australian 200 Index has fallen and broken back down through the key 5500 level towards a four week low around 5400 before consolidating and rallying slightly higher. These two levels have firmly established themselves as significant and any substantial break to either side will most likely be a significant move and be closely monitored. It is quite likely many are sitting on the sidelines waiting for the break before committing as they continue to watch the index move between these two levels. A few weeks at the end of May, it moved back and forth between the two key levels of 5500 and 5550 before the recent fall.

Over the last couple of months the Australia 200 Index has formed an amazing attraction to the key 5500 level as it spent a considerable amount of time trading around it. A couple of weeks ago, the index fell away heavily back down to support around 5400 before returning to the key 5500 level just as quickly, as if gravity had pulled it back. Throughout the last couple of months it has been placing ongoing pressure on the resistance level at 5500 and a few weeks ago it was finally able to move through to a three week high before easing back again to this key level. Several weeks ago it slowly but surely eased away from its multi-year high achieved near 5560 however the following week it fell reasonably sharply and started looking towards the 5400 level which is near where it currently sits. In doing so it returned to back under the key 5500 level which has provided some reasonable resistance over the last few months.

For the bulk of the last few months, the Australia 200 Index has traded roughly between 5300 and 5500 therefore its return to back under 5500 was not surprising. The index has done well over the last couple of months to move steadily higher from support around 5300 up to beyond 5500, forming higher peaks and higher troughs along the way. The support level at 5300 may also be called upon should the index fall lower and will also likely play a role in providing some buffer from any decline. Since February, most of the trading activity has occured between 5400 and 5500 therefore the former level may also be called upon to prop up prices. The index has done very well over the last couple of years moving from below 4000 to its present trading levels around 5500.

The RBA probably won’t move interest rates after its policy meeting on Tuesday, but it could fire another shot in its war of words with the Australian dollar.  In October last year, the exchange rate headed back up towards 97 US cents after dipping below 90 in both July and August.  he central bank fired a warning shot, referring to it as “uncomfortably high”.   The phrase was repeated in November and December but as the currency fell below 90 US cents again – dipping below 88 in late January – it was dropped after the RBA’s first monetary policy meeting of 2014 in February.   “If sustained, a lower exchange rate would be expansionary for economic activity and assist in achieving balanced growth of the economy,” the RBA said in minutes of the February meeting.   But it wasn’t sustained, leading the RBA to step up the rhetoric.   By the policy meeting earlier this month the Aussie had been supported above 92 US cents for over two months and was looking strong.   In the minutes of that meeting, the RBA again pointed accusingly to the exchange rate, which was “high by historical standards, particularly given the further decline in commodity prices over the past month”.   And it repeated the warning that the exchange rate’s recovery from its February lows mean less of a boost to growth.

(Daily chart below)

asx_20140626

Australia 200 June 26 at 01:55 GMT   5432   H: 5435   L: 5407

Australia 200 Technical

S3 S2 S1 R1 R2 R3
5400 5300 5000 5550

During the hours of the Asian trading session on Thursday, the Australia 200 Index is rallying back higher after threatening to break through the lower support level at 5400 in the last couple of days.  For most of this year the Australia 200 Index has moved well from the lower support level at 5000 up to the multi-year highs above 5500 in the last month or so.

Further levels in both directions:

• Below: 5400, 5300 and 5000.

• Above: 5550.

Economic Releases

  • 12:30 US Core PCE Price Index (May)
  • 12:30 US Initial Claims (21/06/2014)
  • 12:30 US Personal income (May)
  • 12:30 US Personal spending (May)
  • EU European Council Meeting (to 27th)
  • UK Financial Stability Report Published

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

June 25, 2014

Australia 200 – Relying on Support at 5400 Again

Australia 200 for Wednesday, June 25, 2014

The Australia 200 Index is currently trying to rally higher as it is relying upon support at the 5400 level yet again and falling sharply back in the last day or so.   Over the last couple of weeks the Australian 200 Index has fallen and broken back down through the key 5500 level towards a four week low around 5400 before consolidating and rallying slightly higher. These two levels have firmly established themselves as significant and any substantial break to either side will most likely be a significant move and be closely monitored. It is quite likely many are sitting on the sidelines waiting for the break before committing as they continue to watch the index move between these two levels. A few weeks at the end of May, it moved back and forth between the two key levels of 5500 and 5550 before the recent fall.

Over the last couple of months the Australia 200 Index has formed an amazing attraction to the key 5500 level as it spent a considerable amount of time trading around it. A couple of weeks ago, the index fell away heavily back down to support around 5400 before returning to the key 5500 level just as quickly, as if gravity had pulled it back. Throughout the last couple of months it has been placing ongoing pressure on the resistance level at 5500 and a few weeks ago it was finally able to move through to a three week high before easing back again to this key level. Several weeks ago it slowly but surely eased away from its multi-year high achieved near 5560 however the following week it fell reasonably sharply and started looking towards the 5400 level which is near where it currently sits. In doing so it returned to back under the key 5500 level which has provided some reasonable resistance over the last few months.

For the bulk of the last few months, the Australia 200 Index has traded roughly between 5300 and 5500 therefore its return to back under 5500 was not surprising. The index has done well over the last couple of months to move steadily higher from support around 5300 up to beyond 5500, forming higher peaks and higher troughs along the way. The support level at 5300 may also be called upon should the index fall lower and will also likely play a role in providing some buffer from any decline. Since February, most of the trading activity has occured between 5400 and 5500 therefore the former level may also be called upon to prop up prices. The index has done very well over the last couple of years moving from below 4000 to its present trading levels around 5500.

Australian households will keep on paying the carbon tax from July 1 — and the bill will be even bigger. Under laws brought in by the former federal Labor government, the so-called “price on pollution” will rise by five per cent from next week to raise an estimated $11.8 million a day from electricity generation alone. There is now no chance the Coalition’s legislation to axe the tax will pass Parliament prior to its preferred end date of July 1 because until then Labor and the Greens have blocking numbers in the Senate. While some major electricity retailers have vowed to refund carbon tax collected from the start of the new financial year, not all have or will. Origin Energy, which has 4.3 million customers Australia-wide, would not commit yesterday. It may ultimately decide to do so, but smaller retailers — which combined hold 20 per cent of the market — may not. “They (smaller retailers) probably can’t pass back if they don’t get it (back) from generators,” a senior energy industry source said. Electricity generators pay carbon tax, which they recoup from retailers who then charge it to consumers.

(Daily chart below)

asx_20140625

Australia 200 June 25 at 02:55 GMT   5401   H: 5411   L: 5379

Australia 200 Technical

S3 S2 S1 R1 R2 R3
5400 5300 5000 5550

During the hours of the Asian trading session on Wednesday, the Australia 200 Index is trying to rally back higher after threatening to break through the lower support level at 5400 in the last day or so.  For most of this year the Australia 200 Index has moved well from the lower support level at 5000 up to the multi-year highs above 5500 in the last month or so.

Further levels in both directions:

• Below: 5400, 5300 and 5000.

• Above: 5550.

Economic Releases

  • 10:00 UK CBI Distributive Trades (Jun)
  • 12:30 US Core PCE Price Index (3rd Est.) (Q1)
  • 12:30 US Durable goods orders (May)
  • 12:30 US Durables ex defence (May)
  • 12:30 US Durables ex transport (May)
  • 12:30 US GDP Annualised (3rd Est.) (Q1)
  • 12:30 US GDP Price Index (3rd Est.) (Q1)

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

June 23, 2014

Australia 200 – Maintains the Range Between 5400 and 5500

Australia 200 for Monday, June 23, 2014

Over the last couple of weeks the Australian 200 Index has fallen and broken back down through the key 5500 level towards a four week low around 5400 before consolidating and rallying slightly higher.  These two levels have firmly established themselves as significant and any substantial break to either side will most likely be a significant move and be closely monitored.  It is quite likely many are sitting on the sidelines waiting for the break before committing as they continue to watch the index move between these two levels.   A few weeks at the end of May, it moved back and forth between the two key levels of 5500 and 5550 before the recent fall.

Over the last couple of months the Australia 200 Index has formed an amazing attraction to the key 5500 level as it spent a considerable amount of time trading around it. A couple of weeks ago, the index fell away heavily back down to support around 5400 before returning to the key 5500 level just as quickly, as if gravity had pulled it back.  Throughout the last couple of months it has been placing ongoing pressure on the resistance level at 5500 and a few weeks ago it was finally able to move through to a three week high before easing back again to this key level. Several weeks ago it slowly but surely eased away from its multi-year high achieved near 5560 however the following week it fell reasonably sharply and started looking towards the 5400 level which is near where it currently sits. In doing so it returned to back under the key 5500 level which has provided some reasonable resistance over the last few months.

For the bulk of the last few months, the Australia 200 Index has traded roughly between 5300 and 5500 therefore its return to back under 5500 was not surprising. The index has done well over the last couple of months to move steadily higher from support around 5300 up to beyond 5500, forming higher peaks and higher troughs along the way. The support level at 5300 may also be called upon should the index fall lower and will also likely play a role in providing some buffer from any decline. Since February, most of the trading activity has occured between 5400 and 5500 therefore the former level may also be called upon to prop up prices. The index has done very well over the last couple of years moving from below 4000 to its present trading levels around 5500.

Record low interest rates in Australia should be helping Reserve Bank governor Glenn Stevens guide the stubbornly high Australian dollar lower to help the local economy. However his aim is being frustrated by interest rates in the US that are even lower, with Federal Reserve boss Janet Yellen signalling they will remain low for a “considerable time”. The Aussie fell to a two-week low of 93.22 US cents on Tuesday after minutes of the RBA’s June board meeting showed it wants to keep the cash rate at a record low of 2.5 per cent “for some time yet”, and included a downbeat assessment on Australia’s economic growth prospects. But the dollar bounced back up through 94 US cents early Thursday morning after Dr Yellen wound up the Fed’s two-day policy meeting saying she would keep the federal funds rate steady despite a recent spike in inflation.

(Daily chart below)

asx_20140623

Australia 200 June 23 at 03:35 GMT   5472   H: 5478   L: 5439

Australia 200 Technical

S3 S2 S1 R1 R2 R3
5400 5300 5000 5550

During the hours of the Asian trading session on Monday, the Australia 200 Index is doing well to rally higher and move back towards the key 5500 level.  For most of this year the Australia 200 Index has moved well from the lower support level at 5000 up to the multi-year highs above 5500 in the last month or so.

Further levels in both directions:

• Below: 5400, 5300 and 5000.

• Above: 5550.

Economic Releases

  • 22:00 (Sun) NZ Westpac Consumer Confidence (Q2)
  • 06:00 UK Nationwide House Prices (23rd-27th) (Jun)
  • 08:00 EU Flash Composite PMI (Jun)
  • 08:00 EU Flash Manufacturing PMI (Jun)
  • 08:00 EU Flash Services PMI (Jun)
  • 13:45 US Flash Manufacturing PMI (Jun)
  • 14:00 US Existing home sales (May)

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

June 19, 2014

Australia 200 – Still Relying on Support at 5400

Australia 200 for Thursday, June 19, 2014

Over the last couple of weeks the Australian 200 Index has slowly fallen back and broken back down through the key 5500 level towards a four week low around 5400 where it has found some support over recent days.  It moved lower strongly to finish out last week and will now look at the support level at 5400 to provide some assistance in rallying back to the key 5500 level. In the couple of weeks prior it moved back and forth between the two key levels of 5500 and 5550 before the recent fall. Over the last couple of months the Australia 200 Index has formed an amazing attraction to the key 5500 level as it spent a considerable amount of time trading around it. A couple of weeks ago, the index fell away heavily back down to support around 5400 before returning to the key 5500 level just as quickly, as if gravity had pulled it back.

Throughout the last few weeks it has been placing ongoing pressure on the resistance level at 5500 and a few weeks ago it was finally able to move through to a three week high before easing back again to this key level. Several weeks ago it slowly but surely eased away from its multi-year high achieved near 5560 however the following week it fell reasonably sharply and started looking towards the 5400 level which is near where it currently sits. In doing so it returned to back under the key 5500 level which has provided some reasonable resistance over the last few months.

For the bulk of the last few months, the Australia 200 Index has traded roughly between 5300 and 5500 therefore its return to back under 5500 was not surprising. The index has done well over the last couple of months to move steadily higher from support around 5300 up to beyond 5500, forming higher peaks and higher troughs along the way. The support level at 5300 may also be called upon should the index fall lower and will also likely play a role in providing some buffer from any decline. Since February, most of the trading activity has occured between 5400 and 5500 therefore the former level may also be called upon to prop up prices. The index has done very well over the last couple of years moving from below 4000 to its present trading levels around 5500.

Australian Leading Indexes were listless in May, and point to a slowdown in the economy. The MI Leading Index managed a paltry gain of 0.1%, its highest level in 2014. The CB Leading Index posted a decline of 0.1%, its worst showing since last September. Australia’s key export sector is being squeezed by falling commodity prices while the high Australian dollar is making Australian goods less competitive on global markets. At the same time, consumer confidence and spending remains at very low levels. If key economic data points downward, the high-flying Aussie could lose ground.

(Daily chart below)

asx_20140619

Australia 200 June 19 at 00:40 GMT 5405   H: 5405   L: 5405

Australia 200 Technical

S3 S2 S1 R1 R2 R3
5400 5300 5000 5550

During the hours of the Asian trading session on Thursday, the Australia 200 Index will again be trying to rally and use the support from the 5400 level after falling heavily back down to there over the last few days to finish out last week. For most of this year the Australia 200 Index has moved well from the lower support level at 5000 up to the multi-year highs above 5500 in the last month or so.

Further levels in both directions:

• Below: 5400, 5300 and 5000.

• Above: 5550.

Economic Releases

  • 04:30 JP All Industry activity index (Apr)
  • 05:00 JP Leading indicator (Final) (Apr)
  • 08:30 UK Retail Sales (May)
  • 10:00 UK CBI Industrial Trends (Jun)
  • 12:30 US Initial Claims (14/06/2014)
  • 14:00 US Leading Indicator (May)
  • 14:00 US Philadelphia Fed Survey (Jun)

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

June 13, 2014

Australia 200 – Drops Sharply to Support at 5400

Australia 200 for Friday, June 13, 2014

Over the last couple of weeks the Australian 200 Index has fallen back and broken back down through the key 5500 level towards a four week low around 5400.   In the couple of weeks prior it moved back and forth between the two key levels of 5500 and 5550 before the recent fall.   Over the last couple of months the Australia 200 Index has formed an amazing attraction to the key 5500 level as it spent a considerable amount of time trading around it. A couple of weeks ago, the index fell away heavily back down to support around 5400 before returning to the key 5500 level just as quickly, as if gravity had pulled it back. Throughout the last few weeks it has been placing ongoing pressure on the resistance level at 5500 and a few weeks ago it was finally able to move through to a three week high before easing back again to this key level.

Several weeks ago it slowly but surely eased away from its multi-year high achieved near 5560 however the following week it fell reasonably sharply and started looking towards the 5400 level which is near where it currently sits. In doing so it returned to back under the key 5500 level which has provided some reasonable resistance over the last few months.

For the bulk of the last few months, the Australia 200 Index has traded roughly between 5300 and 5500 therefore its return to back under 5500 was not surprising. The index has done well over the last couple of months to move steadily higher from support around 5300 up to beyond 5500, forming higher peaks and higher troughs along the way. The support level at 5300 may also be called upon should the index fall lower and will also likely play a role in providing some buffer from any decline. Since February, most of the trading activity has occured between 5400 and 5500 therefore the former level may also be called upon to prop up prices. The index has done very well over the last couple of years moving from below 4000 to its present trading levels around 5500.

Australia’s unemployment rate was steady at 5.8 per cent in May, official figures show.  The total number of people with jobs fell 4,800 to 11.565 million in May, according to seasonally adjusted figures from the Australian Bureau of Statistics on Thursday.  The unemployment rate was expected to reach 5.9 per cent in May, with 10,000 jobs added to the economy, according to an AAP survey of 13 economists.  Full-time employment rose 22,200 to 8.068 million in May and part-time employment was down 27,000 to 3.496 million.  The participation rate — those that have a job, are looking for work or are ready to start work — fell to 64.6 per cent, from 64.7 per cent in April.

(Daily chart below)

asx_20140613

Australia 200 June 13 at 01:25 GMT   5393   H: 5401   L: 5384

Australia 200 Technical

S3 S2 S1 R1 R2 R3
5400 5300 5000 5550

During the hours of the Asian trading session on Friday, the Australia 200 Index is trying to hold onto the 5400 level after falling heavily back down to there over the last couple of days.   For most of this year the Australia 200 Index has moved well from the lower support level at 5000 up to the multi-year highs above 5500 in the last month or so.

Further levels in both directions:

• Below: 5400, 5300 and 5000.

• Above: 5550.

Economic Releases

  • 04:30 JP Capacity Utilisation (Apr)
  • 04:30 JP Industrial Production (Final) (Apr)
  • 09:00 EU Employment (Q1)
  • 09:00 EU Trade Balance (Apr)
  • 12:30 CA Manufacturing sales (Apr)
  • 12:30 US PPI (May)
  • 13:55 US Univ of Mich Sent. (Prelim.) (Jun)
  • JP BoJ MPC – Overnight Rate (Jun)

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

April 29, 2014

US-Japan Meetings To Take Place Before All TPP Talks

Japan’s minister in charge of Pacific trade talks said Tuesday he needs to meet with his U.S. counterpart before an expected late May gathering of ministers from the 12 countries involved in the regional initiative.

Akira Amari, the minister in charge of Trans-Pacific Partnership negotiations, told reporters in Tokyo that Japan and the United States “must have a chance to solve the remaining issues” between the two countries ahead of the envisioned entire TPP session, which will likely be held in Singapore around May 20.

Despite marathon talks involving Amari and U.S. Trade Representative Michael Froman during U.S. President Barack Obama’s visit to Japan last week, the two countries were unable to secure a broad deal, only saying in a joint statement that they have “identified a path forward” on bilateral issues.

Prior to the Singapore ministerial meeting, senior trade officials of the 12 TPP countries are expected to meet in Ho Chi Minh City from May 12 to 15, according to negotiation sources.

Amari said a TPP ministerial meeting will be set if the senior officials can resolve their concerns and find a path toward a broad agreement.

The TPP negotiations involve Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

Trade observers say little progress is expected in the Singapore meeting unless Tokyo and Washington — which together account for some 80 percent of combined gross domestic product in the TPP — move much closer. The issue of market access for agricultural products and autos remains the biggest sticking points in bilateral talks.

via Mainichi

March 21, 2014

Taiwan Protests Chinese Trade Pact

Thousands of young Taiwanese waved banners and shouted slogans to mark the third day of their occupation of parliament to protest against a trade pact with China which they fear could further swell Beijing’s economic influence.

Parliamentary approval of the pact would pave the way for greater economic integration between the two former geopolitical foes by opening 80 of China’s service sectors to Taiwan and 64 Taiwanese sectors to China.

The protesters say the deal will damage Taiwan’s economy and leave it vulnerable to political pressure from China.

“We will continue [the occupation] since [President] Ma did not respond to our demands or hold an open dialogue with the students and the people. We will take further actions,” one of the protest leaders, Huang Yu-feng, told reporters. Details would be unveiled later in the day, she said, after their ultimatum expired at noon on Friday.

President Ma Ying-jeou, meanwhile, called for a peaceful end to the standoff, saying a consensus should be reached in “rational and democratic ways”.

“President Ma hopes the parliament will resume functioning soon to ensure the constitutional order so the dispute can come to a peaceful end,” his office said in a statement.

Police set up barbed-wired barricades outside the presidential office and 2,000 officers were deployed in parliament, as the 200-plus protesters considered their counter-measures.

via The Guardian

The post Taiwan Protests Chinese Trade Pact appeared first on MarketPulse.

China’s 2014 7.5 Percent GDP Target In Jeopady

The sluggish start has led many economists to downgrade their forecasts, and some think Beijing may not be able to meet its 7.5% GDP growth target for 2014.
In the past, policymakers might have responded by pushing cheap credit into the economy and pursuing other quick fixes to boost growth.
But Beijing has started a series of market-oriented reforms that include a crackdown on the shadow banking sector and runaway local government debt. Another sugar high of easy credit would endanger those initiatives.
Related story: China’s rich make plans to avoid smog
Market participants believe growth will be allowed to slow. Eighty-four percent of investors expect GDP will expand by less than 7.5% this year, according to a survey by Barclays (BCS). Respondents rank weak growth in China as their biggest worry, ahead of geopolitical concerns and changes to the Fed’s stimulus program.
In a sign that policymakers might seek to exhaust other options before pursuing major stimulus measures, Premier Li Keqiang indicated this month that Beijing is placing less emphasis on hitting a specific GDP target — a measurement long used to gauge the performance of local and provincial officials.

via CNN

The post China’s 2014 7.5 Percent GDP Target In Jeopady appeared first on MarketPulse.

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