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FxNet Daily Fundamental Analysis

Discussion in 'Fundamental Analysis' started by fxnetltd, Mar 24, 2016.

  1. fxnetltd

    fxnetltd New Member

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    The US dollar advanced for a fifth straight session on Thursday, pressuring commodities and Asian shares after yet another Federal Reserve official talked up the chance of more than one increase in U.S interest rates this year. Equity investors tend to dislike any hint of tighter U.S. policy and MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.9%. The resource-heavy Australian market lost 1% and Shanghai 0.9%. A softer yen helped Japan's Nikkei try to recoup its early losses however continued pressure saw it continue to fall , currently down 0.45%.

    If the dollar can keep its footing here it will notch up the first weekly gain in a month against a basket of major currencies. The euro eased to $1.1171 leaving it well off last week's top of $1.1342. Sterling also slid to $1.4096 on concerns the attacks in Brussels would aid the campaign to leave the European Union in June's "Brexit" vote. USD/JPY popped 50-odd points before giving back some of its gains although as of writing it’s still not too far from session highs.

    The People's Bank of China set the yuan weaker today in response to USD strength, with the largest daily weakening of the midpoint since January 7. Overnight developments in the US ignited increased speculation of the chance of an April Fed rate hike, and there was chatter in markets here today that the sharp PBOC move on the yuan was perhaps a warning 'shot across the bows' for the Federal Reserve on what to expect from China if an April hike is forthcoming.

    The rise in the dollar also sparked profit-taking in a range of commodities from oil to gold to copper. Oil took a further knock when data showed crude stockpiles had risen by three times the amount expected in the latest week. U.S. crude fell a further 6 cents to $39.73 a barrel, after sliding 4% on Wednesday. Brent inched up 10 cents to $40.57. Gold was down at $1,216.80 an ounce, after hitting its lowest since late February at $1,214.70.

    So to the day ahead and we have a busy day of data releases ahead before many enjoy the long weekend. German GFK Consumer Climate Index (0700 GMT) kicks off the session and having trimmed their economic growth forecast for 2016 to 1.5% from 1.6% in the previous outlook, the slightly lower estimate by the government’s panel of advisers reflects “somewhat weaker external demand” due to a softer global economy. But the outlook is only slightly lower than last year’s 1.7% increase in output and so it's not obvious that anything has changed. The country’s consumer sector is vital for offsetting weakness in the global trend, today’s GFK data looks set to show that domestic growth will continue to provide support for the broad trend in the near-term future.

    UK Retail Sales (0930GMT) Since Monday afternoon, the price of Cable has fallen over 250 pips. We have yet to break below the March 16 low of 1.4051 so for now; that is the focus. With a decline forecast, -0.7% v 2.3% last month, the pound looks vulnerable to end the week very much on the back foot.

    US Durable Goods Orders (1230 GMT) The previous update offered a degree of encouragement. Factory orders rose in January for the first time in three months and the year-on-year trend turned positive, rising the most in 12 months. Is this a sign of a firmer trend for factory output? Reduced spending by a struggling energy sector and a strong US dollar will add to the uncertainty. Economists think those headwinds will remain strong in today’s report on factory orders, which are projected to fall back into the red in February.

    Written by Toby Shirt
     
  2. fxnetltd

    fxnetltd New Member

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    Asian shares struggled to find their footing on Tuesday as markets returned from the four day Easter holiday break. Yesterday’s downbeat U.S. economic data led to a cautious start to the trading week and the mood was not helped by mixed Japanese economic data released by before the market opened. Japanese household spending rose 1.2% in February from a year earlier in price-adjusted real terms, in contrast with the median forecast for a 1.5% fall, partly because of the extra Leap Year day. But the country's jobless rate inched up to 3.3%, and retail sales fell short of expectations coming in at 0.5%.The Nikkei skidded 0.5% as the Japanese fiscal year draws to a close at the end of this month. Australian shares shed 1.4% in their first day of trade following the long weekend as banking sector stocks came under pressure.

    It was a slow start to the week in FX space with many pairs seemingly happy stay within tight ranges. Speculation of more monetary stimulus and talk that Japanese Prime Minister Shinzo Abe might delay an unpopular sales tax hike and call a snap election kept the yen under pressure, though Abe insisted on Tuesday that neither option was planned.

    Gold dipped slightly managing to hold above a one-month low while oil extended overnight losses on both sides of the pond with Brent down 0.7%t at $40.01 a barrel, while U.S. crude fell 0.6 percent to $39.16 as concerns mount that a rally since January is fizzling out, while analysts forecast another rise to record levels for U.S. crude stockpiles.

    So to the day ahead and the main focus will be on Federal Reserve Chair Janet Yellen's speech at 1720 GMT. U.S. data released on Monday showed signs of weakness, with consumer spending barely rising last month and inflation retreating. That suggested the Federal Reserve could remain cautious about raising interest rates this year even as the labour market rapidly tightens. The market will be looking for fresh signals on the outlook for U.S and interest rate hikes, particularly after a recent chorus of hawkish comments from other Fed officials.

    US CB Consumer confidence at 15:00 BST will also be one to watch with a slight improvement expected (93.2) from last month’s surprisingly poor data (92.2). The short-term outlook grew more pessimistic, with consumers expressing greater apprehension about business conditions, their personal financial situation, and to a lesser degree, labour market prospects. Continued turmoil in the financial markets may be rattling consumers, but their assessment of current conditions still suggests the economy will continue to expand at a moderate pace in the near-term.

    Written by Toby Shirt
     
  3. fxnetltd

    fxnetltd New Member

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    Stock markets in Asia drifted in and out of positive territory on Thursday as the upbeat sentiment fuelled by the prospect of lower US borrowing costs was offset by profit-taking after the recent gains. Wall Street provided a strong lead with another healthy advance on all three main indexes after Federal Reserve chief Janet Yellen said the bank was unlikely to raise interest rates in the first half of this year citing ongoing concerns about the slow global economy and its impact on the US. Traders in Asia however, moved cautiously ahead of the release of key data Friday out of China and the United States.

    The Yen was heavily offered at the Tokyo fix, as month-end flows took USD/JPY from a session low of 112.25 up towards 112.70 resistance in the space of 10 minutes, only to trade towards sessions lows shortly after. The USD had a good session, strengthening against most of its peers in an otherwise subdued session.

    Gold has been reversing a part of yesterday’s losses and defends mild gains, amid the broad based USD recovery attempting recovery towards $ 1230.

    Crude oil prices dipped after U.S. government data showed crude inventories were again at all-time peaks despite strong refinery runs. U.S. crude was down 0.9 percent at $37.99 a barrel and Brent lost 0.5 percent to $39.05 a barrel. Oil prices, which fell to 12-year lows earlier this year, have risen about 50 percent since mid-February after major producers floated the idea of freezing production at January's highs. Some analysts say the rally has breached fundamentals and crude could trade lower.

    So to the day ahead and the data comes thick and fast paving the way for ample trading opportunities as well as month and quarter end flows.

    Eurozone: Consumer Price Index (0900 GMT) Today’s flash data on inflation for March will be closely read for any signs that the ECB’s recent policy efforts are having any effect on fending of deflation risk. Based on forecasters expectations, however, the data is expected to stoke more worries that gravity is winning… again. calls for a second month of headline consumer inflation in the red zone. The annual pace of consumer prices for the euro area is projected to slide 0.1% in March vs. the year-earlier level. That’s a softer rate of deflation vs. February’s 0.2% drop. But the sight of two straight months of decline will fuel more debate about monetary policy and what, if any, can be done to keep consumer inflation above the water line.

    US: Initial Jobless Claims (1230 GMT) Yesterday’s upbeat ADP estimate of US payrolls in March points to a similarly encouraging number in tomorrow’s official data from Washington. US companies added 200,000 positions this month, a slightly lower gain vs. February but strong enough to maintain a positive spin on the outlook for the labour market and the economy. Today’s update is on track to reaffirm a rosy view. Analysts project that claims will inch higher by 1,000 to 266,000, but that still translates to a bullish forecast for payrolls. In short, today’s update is widely expected to provide more quantitative support for predicting a solid gain in tomorrow’s employment report from the government.

    Written by Toby Shirt
     
  4. fxnetltd

    fxnetltd New Member

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    Energy firms led losses in Asia on Tuesday sending most stock markets tumbling again as oil prices extended their recent losses leading to analysts to question whether a recent rally may have run its course. Regional investors were handed a negative lead from Wall Street, where the plunge in crude also hammered oil-linked plays and all but wiped out Friday's jobs-fuelled gains. Mixed messages from Federal Reserve policymakers on the outlook for U.S. interest rate rises are also hurting the market, as poor manufacturing data and much weaker business spending on capital goods gave investors no reason to believe the U.S. Federal Reserve would raise interest rates anytime soon. This was in line with the cautious tone Fed chair Janet Yellen sounded last week that contrasted with more hawkish remarks from other central bank policymakers. The Nikkei 225 is down 1.9%, Hang Seng down 1.5%, and the ASX down 1.2%. China bucked the trend having returned from an extended weekend, the Shanghai Composite currently up 0.9%.

    The RBA left rates unchanged (2%) as expected, where it has sat since May 2015. RBAs Stevens stated continued low inflation would provide scope for easier policy, AUD has appreciated somewhat recently and a continued increase would complicate an economic adjustment. They also judged the reasonable prospects for continued economic growth, whilst the tighter regulations have been working to contain risks within the housing market. Inflation was also likely to remain low over next year or two.

    The session kicked off with a report from NZ showing a hard fall in business confidence for Q1 (2 v 15 prior). Australian trade data today showed a widening deficit (-3.41B v -2.55B exp) and revisions to prior data widened it even further; the poor export performance being the main culprit. Both the Kiwi and Aussie came under pressure and as the risk off theme continued the Yen and Euro both benefitted.

    Gold prices halted its 2-day losing streak and swung back higher after the bulls were rescued by deteriorating risk-sentiment jumping to session highs of $1226.90. Both main crude contracts fell Tuesday in Asia, with Brent down 0.5 percent at $37.50 and West Texas Intermediate 0.8 percent lower at $35.40, having broken above $40 a barrel in March.

    So to the day ahead and first up we have UK Services PMI (0930 BST) Confidence in the Pound has continued to wane recently as positive UK data has proven somewhat lacking, allowing Brexit concerns and economic developments to drag the currency lower. A better-than-expected UK Construction PMI has heightened hopes for the corresponding Services PMI, with investors anticipating that the service sector will have defied recent downside pressures to post an uptick in growth.

    Eurozone Retail Sales (0900 GMT). The current outlook is still at a slow pace, but today’s estimate still points to a slight improvement over last year’s 0.3% rise in Q4, edging up by 0.1% for the monthly comparison.

    This afternoon brings US ISM Non-Manufacturing Index (1500 BST) The services sector has been weathering a persistent deceleration in growth since last year’s fourth quarter, but the preliminary data for March suggests that a degree of stabilisation and revival have arrived. For the first time in four months, Markit’s Services PMI posted a higher reading in the flash report. After slumping into negative territory in February (below the neutral 50.0 mark), the index posted a modest gain and settled at 51.0. Today’s first look at the ISM Non-Manufacturing Index for March, however, is on track to deliver better news with forecasters predicting a respectable gain in this benchmark to 54.0.

    Written by Toby Shirt
     
  5. farhan khan

    farhan khan New Member

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    Epic Research News Updates : The Mukesh Ambani-promoted firm wants the government to roll out the marginal fields policy, which was put in place by the Narendra Modi government last year, for the CBM blocks. “The CBM exploration is tricky and much more difficult than the marginal fields.
     
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