http://www.ashraflaidi.com/forex-news/?a=2698
September 13, 2011 07:17 ET :
Italian bonds at center of attention; UK CPI at 3-month high, BoE's Posen renews call for QE2. EUR/CHF near the 1.20 level. WSJ story of BNP Paribas no longer having access to funds is unsubstantiated. US Federal Budget are due later today.
Bank of England Monetary Policy Committee member Adam Posen renewed his calls for QE2 today when he said the central bank should “attack the longer-end of the gilt yield curve with an additional round of GBP 50bln of asset purchases to be made over the next 3 mths”. Posen said the said that with the global economic outlook worsening, the bank should "arguably" make even more asset purchases.
UK Aug inflation highest since May at +4.5% y/y from July's 4.4% y/y; in line with expectations. Gains attributed to record gains in prices of clothing and footwear. UK Jul trade deficit rose to GBP8.92 bn from GBP 8.873bn in Jun
Last night saw the single currency pull back sharply from seven month lows against the US dollar and 10 year lows against the yen, after reports that Italy was in talks with China about possible investment opportunities. Later this morning Italy are also holding a 5 year debt auction of €3-4bn which given that bond yields have continued to rise since the resignation of ECB member Stark over the bond buying program will be a key indicator of investor attitude towards the worlds third largest bond issuer.
Australian business confidence for August nosedived from +2 in July to -8 in August suggesting that despite recent fairly robust economic data in recent days, business leaders don't feel that confident about the global economy against a backdrop on economic conditions in Europe and the US.
The US dollar index slipped back from six month highs yesterday, however if recent comments by Dallas Fed President and FOMC dissenter Richard Fisher are anything to go by it could well be a brief pause, saying he believe that the bar for further easing remained very high and he would be unlikely to support it at the September meeting.
The New York session starts at 8:30 am ET with the Import Price index for August that is expected to show a decline to 12.5% from 14% on annual basis. At 10:00 am ET September IBD/TIPP Economic Optimism index is due and is seen higher at 37.5 from previous 35.8 and finally Federal Budget deficit at 2:00 pm ET should narrow to USD -126.5 bln in August from USD -129.4 bln in July
********ASHRAF's WEBINAR TOMORROW************
Join Ashraf for an All-Star FX Webinar; For the First and Possibly Only Time ever, the most Respected Experts in the Retail Forex Industry are coming together to give you 5 Days Worth of Expert Education and Advice. Not only is the $25 admission price a BARGAIN , but part of the proceeds will also go to Doctors Without Borders and an Orphanage in Africa . Ashraf's session is on September 14 7 AM - 8 AM ET / 11 GMT - 12 GMT . FOR MORE DETAILS, click here: http://bkforexadvisors.infusionsoft.com/ go/ FX1234/ Alaidi
Kyle Morrison & Patrik Urban
Tuesday, September 13, 2011
Monday, September 12, 2011
Germany Explores a Greek Default, Euro Regains 1.36
http://ashraflaidi.com/t/?h2695
September 12, 2011 08:20 ET : German government explores consequences of a Greek default and the possibility of a Greece exit from the Eurozone. EURUSD rebounds from under $1.35; Italian Industrial production fell. FOMC member fisher speaks on monetary policy. Ashraf's Premium Trades will be be posted ahead of London Lunch.
Eurozone data continue to disappoint as Italian Industrial production fell 0.7% in July after dropping 0.8% a month earlier. On annual basis production fell 1.6% from 0.1% and worse than expected growth of 0.2%.
According to German magazine Der Spiegel, the German government is exploring consequences of a Greek default as well as the possibility of a Greece exit from the Eurozone. German experts believe such a situation would be manageable. This increases the credibility of the news that started to circulate on Friday that Greece is about to default. Until now, the German government showed a strong opposition towards the possibility of a Greek bankruptcy. However, over the weekend, Greek Prime Minister Papandreou approved new measures in order to avoid default and keep the euro.
In the event of a default by Greece, attention will be particularly focussed on the big three French banks in particular, with ratings agency Moody's potentially priming themselves to pull the trigger on a ratings downgrade, as early as this week, after putting them on review in June.
G7 meeting ended with no objections to Japanese Finance minister Azumi's intentions to take bold action should he consider yen moves excessive and disorderly. This could mean a higher chance of an intervention as BOJ, or Ministry of Finance to be precise, would not be internationally criticized for a unilateral action.
Earlier in Asia, The August minutes from the Bank of Japan rate meeting last week showed that policymakers were agreed on the need to increase the set of stimulus measures to show that they were serious about the need to loosen monetary policy to weaken the yen and help boost the economy. Business sentiment amongst large manufacturers also improved from -23.3 in the quarter for April/June at 10.3 for the latest quarter though concerns remained about the effect the strong yen was having on exports.
No data at the NY session.
Dallas Fed president Richard Fisher delivers a speech at the National Association of Business Economists in Dallas at 4:00 pm ET. The volatility could increase as Q&A session is expected.
**** DETAILS ON ASHRAF's SEP 14 WEBINAR ****
Join Ashraf for an All-Star FX Webinar; For the First and Possibly Only Time ever, the most Respected Experts in the Retail Forex Industry are coming together to give you 5 Days Worth of Expert Education and Advice. Not only is the $25 admission price a BARGAIN , but part of the proceeds will also go to Doctors Without Borders and an Orphanage in Africa . Ashraf's session is on September 14 7 AM - 8 AM ET / 11 GMT - 12 GMT .
FOR MORE DETAILS, click here: http://bkforexadvisors.infusionsoft.com/ go/ FX1234/ Alaidi
Patrik Urban
September 12, 2011 08:20 ET : German government explores consequences of a Greek default and the possibility of a Greece exit from the Eurozone. EURUSD rebounds from under $1.35; Italian Industrial production fell. FOMC member fisher speaks on monetary policy. Ashraf's Premium Trades will be be posted ahead of London Lunch.
Eurozone data continue to disappoint as Italian Industrial production fell 0.7% in July after dropping 0.8% a month earlier. On annual basis production fell 1.6% from 0.1% and worse than expected growth of 0.2%.
According to German magazine Der Spiegel, the German government is exploring consequences of a Greek default as well as the possibility of a Greece exit from the Eurozone. German experts believe such a situation would be manageable. This increases the credibility of the news that started to circulate on Friday that Greece is about to default. Until now, the German government showed a strong opposition towards the possibility of a Greek bankruptcy. However, over the weekend, Greek Prime Minister Papandreou approved new measures in order to avoid default and keep the euro.
In the event of a default by Greece, attention will be particularly focussed on the big three French banks in particular, with ratings agency Moody's potentially priming themselves to pull the trigger on a ratings downgrade, as early as this week, after putting them on review in June.
G7 meeting ended with no objections to Japanese Finance minister Azumi's intentions to take bold action should he consider yen moves excessive and disorderly. This could mean a higher chance of an intervention as BOJ, or Ministry of Finance to be precise, would not be internationally criticized for a unilateral action.
Earlier in Asia, The August minutes from the Bank of Japan rate meeting last week showed that policymakers were agreed on the need to increase the set of stimulus measures to show that they were serious about the need to loosen monetary policy to weaken the yen and help boost the economy. Business sentiment amongst large manufacturers also improved from -23.3 in the quarter for April/June at 10.3 for the latest quarter though concerns remained about the effect the strong yen was having on exports.
No data at the NY session.
Dallas Fed president Richard Fisher delivers a speech at the National Association of Business Economists in Dallas at 4:00 pm ET. The volatility could increase as Q&A session is expected.
**** DETAILS ON ASHRAF's SEP 14 WEBINAR ****
Join Ashraf for an All-Star FX Webinar; For the First and Possibly Only Time ever, the most Respected Experts in the Retail Forex Industry are coming together to give you 5 Days Worth of Expert Education and Advice. Not only is the $25 admission price a BARGAIN , but part of the proceeds will also go to Doctors Without Borders and an Orphanage in Africa . Ashraf's session is on September 14 7 AM - 8 AM ET / 11 GMT - 12 GMT .
FOR MORE DETAILS, click here: http://bkforexadvisors.infusionsoft.com/ go/ FX1234/ Alaidi
Patrik Urban
Friday, September 9, 2011
Euro Below $1.38, Greek Default Chatter Re-emerges
http://www.ashraflaidi.com/forex-news/?a=2692
September 9, 2011 08:41 ET :
German CPI revised higher; UK PPI input prices fell; Canadian labor market deteriorated. Chatter of a Greek report doing the rounds. Ashraf's BNN interview on why Fed's Twist Operations shall shall fail t prop the euro.
USD is higher across the board amid high risk aversion and weak equity markets. The selloff in the Euro continues and EURUSD fell to 1.3788 even as German final CPI was revised up to 0.0% after earlier estimate of -0.1% (2.4% y/y). Even French Industrial production that unexpectedly rose and showed a robust 1.5% growth in July failed to underpin the euro.
UK PPI input prices dropped 1.9% in August after 0.5% in July experiencing the largest decline since April 2009. On annualized basis they grew 16.2% after 18.3% previously. GBPUSD dropped to below 1.59 but has since recovered a part of the loss.
Japanese Finance minister Azumi said during today's G7 meeting in France that he continues to monitor exchange rates and will take bold action if there are excessive moves. Interventions will undoubtedly be discussed during the G7 meeting as Canadian Finance minister Jim Flaherty said that he was concerned about unilateral actions of Japan and Switzerland that intervened in the currency market to weaken their respective currencies. Should Japan reach a consensus, Japanese Monday morning might be the ideal time for such an intervention to occur. Japan spent almost USD 60 bln during August failed intervention.
Canadian employment fell by 5.5K in August after a July rise of 7.1K, with the
unemployment rate up 0.1% to 7.3%. Ashraf's Premium trade to short CADJPY remains in progress. http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=490
August Canadian Housing starts fell to 184.7K in August from 205K vs exp 200K.
Ashraf's 7-minute interview on the set of BNN, discussing intermarket dynamics, euro outlook, gold, silver, oil & Fed policy http://watch.bnn.ca/ #clip528927
Patrik Urban
September 9, 2011 08:41 ET :
German CPI revised higher; UK PPI input prices fell; Canadian labor market deteriorated. Chatter of a Greek report doing the rounds. Ashraf's BNN interview on why Fed's Twist Operations shall shall fail t prop the euro.
USD is higher across the board amid high risk aversion and weak equity markets. The selloff in the Euro continues and EURUSD fell to 1.3788 even as German final CPI was revised up to 0.0% after earlier estimate of -0.1% (2.4% y/y). Even French Industrial production that unexpectedly rose and showed a robust 1.5% growth in July failed to underpin the euro.
UK PPI input prices dropped 1.9% in August after 0.5% in July experiencing the largest decline since April 2009. On annualized basis they grew 16.2% after 18.3% previously. GBPUSD dropped to below 1.59 but has since recovered a part of the loss.
Japanese Finance minister Azumi said during today's G7 meeting in France that he continues to monitor exchange rates and will take bold action if there are excessive moves. Interventions will undoubtedly be discussed during the G7 meeting as Canadian Finance minister Jim Flaherty said that he was concerned about unilateral actions of Japan and Switzerland that intervened in the currency market to weaken their respective currencies. Should Japan reach a consensus, Japanese Monday morning might be the ideal time for such an intervention to occur. Japan spent almost USD 60 bln during August failed intervention.
Canadian employment fell by 5.5K in August after a July rise of 7.1K, with the
unemployment rate up 0.1% to 7.3%. Ashraf's Premium trade to short CADJPY remains in progress. http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=490
August Canadian Housing starts fell to 184.7K in August from 205K vs exp 200K.
Ashraf's 7-minute interview on the set of BNN, discussing intermarket dynamics, euro outlook, gold, silver, oil & Fed policy http://watch.bnn.ca/ #clip528927
Patrik Urban
All Eyes On ECB and Trichet's Press Conference
http://www.ashraflaidi.com/forex-news/?a=2688
September 8, 2011 08:16 ET :
BoE, ECB both unchanged, with no new QE from BoE. Market turns to ECB and Trichet's press conference at 8:30 EST. US Trade Balance and Canadian data also due.
The Bank of England held rates steady at 0.5% and kept Asset Purchase Facility unchanged at GBP 200 bln. Sterling spikes on the announcement across the board and sends EURGBP premium trade deeper into money.
In other news, Swiss unemployment rate remained unchanged at 3% in August and June German Trade surplus narrowed slightly from EUR 11.5 bln to EUR 10.1 bln.
EUR is under pressure after the EU commission said that there is no possibility that Greece would receive further funds unless it fulfills its commitments.
The New York session will start at 8:30 am ET with ECB press conference. In light of rapidly slowing growth, high unemployment and declining inflation it is possible that J. C. Trichet could hint a rate cut which would punish the Euro.
US Trade balance also due at 8:30 EST is seen narrowing to USD -50.6 bln in July from -53.1 bln month earlier. Unemployment claims are still seen above the important 400K mark.
8:30 am EST will also bring Canadian Building permits and Trade balance. Building permits are expected to grow 0.2% in July from 2.1% and trade balance is seen at CAD -0.8 bln from previous CAD -1.6 bln. Canadian trade deficit has been widening steadily over the past four months.
Volatility could also increase at 1:30 pm ET when Fed chairman Bernanke speaks at the Economic Club of Minnesota Luncheon where he delivers a speech about the US economic outlook. Considering that the next FOMC meeting is less than two weeks away, Bernanke will be cautious and is unlikely to provide any surprising details regarding the possibility of a further easing.
Patrik Urban
September 8, 2011 08:16 ET :
BoE, ECB both unchanged, with no new QE from BoE. Market turns to ECB and Trichet's press conference at 8:30 EST. US Trade Balance and Canadian data also due.
The Bank of England held rates steady at 0.5% and kept Asset Purchase Facility unchanged at GBP 200 bln. Sterling spikes on the announcement across the board and sends EURGBP premium trade deeper into money.
In other news, Swiss unemployment rate remained unchanged at 3% in August and June German Trade surplus narrowed slightly from EUR 11.5 bln to EUR 10.1 bln.
EUR is under pressure after the EU commission said that there is no possibility that Greece would receive further funds unless it fulfills its commitments.
The New York session will start at 8:30 am ET with ECB press conference. In light of rapidly slowing growth, high unemployment and declining inflation it is possible that J. C. Trichet could hint a rate cut which would punish the Euro.
US Trade balance also due at 8:30 EST is seen narrowing to USD -50.6 bln in July from -53.1 bln month earlier. Unemployment claims are still seen above the important 400K mark.
8:30 am EST will also bring Canadian Building permits and Trade balance. Building permits are expected to grow 0.2% in July from 2.1% and trade balance is seen at CAD -0.8 bln from previous CAD -1.6 bln. Canadian trade deficit has been widening steadily over the past four months.
Volatility could also increase at 1:30 pm ET when Fed chairman Bernanke speaks at the Economic Club of Minnesota Luncheon where he delivers a speech about the US economic outlook. Considering that the next FOMC meeting is less than two weeks away, Bernanke will be cautious and is unlikely to provide any surprising details regarding the possibility of a further easing.
Patrik Urban
Wednesday, September 7, 2011
German Bailout Participation Confirmed Legal, BoC Next
http://ashraflaidi.com/t/?h2684
September 7, 2011 08:04 ET : German Constitutional Court rules that Ezone bailout is legal, UK manufacturing and industrial data were mixed. German Industrial production pushed higher. Market turns to BoC rate decision, Canadian Ivey PMI and Fed'ss Beige Book. Also details on Ashraf's appearance in this week's TORONTO MONEY SHOW below.
Euro bounced almost a full cent after German Constitutional Court ruled that German involvement in Eurozone bailouts is legal and rejected all lawsuits that were aimed at blocking country's participation in the financial assistance. However, the court said that the Parliament must have a say in decisions, which burdened Germany's budget. The bounce proved to be short lived as EURUSD retraced all gains and currently trades below the pre-release level.
German Industrial production rose by 4.0% in July after it declined by 1.0% in June which to some extent confirms Angela Merkel's earlier comments that Germany will continue to be Europe's growth locomotive and that so far "there are no signs of a recession in Germany".
In the UK, Halifax House Price Index fell 1.2% in August after a 0.2% rise in July. Manufacturing production rose 0.1% in July after dropping 0.4% in June (+1.9% from 2.1% y/y) and Industrial production declined 0.2% after unchanged print a month earlier (-0.7% from -0.3% y/y). The weak print is blamed on oil and gas rigs maintenance.
Recently, the data from the UK mostly disappointed which reinforces the removal of hawkish votes within the Bank of England's MPC
The New York session will bring Bank of Canada Overnight Rate decision and statement; due at 9:00 am ET. Analysts expect rates to remain unchanged at 1.0%. The accompanying statement is likely to point out concerns about the state of the global economy and declining growth.
At 10:00 am ET Canadian volatile Ivey PMI is due and it is seen slightly higher in August at 46.7 from July's 45.4. Despite the anticipated improvement, this would be a second reading in a row below the 50 level which indicates continued sector contraction.
At 2:00 pm ET the Fed releases its Beige Book that provides insights into the economic condition of each of the 12 Federal Reserve districts.
JOIN ASHRAF AT THIS WEEK's TORONTO MONEY
Join Ashraf in Toronto in Next Week. AshrafLaidi.com will exhibit be at next week's Toronto Money Show on Sep 8-10 - booth # 413. Ashraf will give workshops and on-booth presentations about his latest take on the markets. Click here to register (Admission is free) http://www.moneyshow.com/ tradeshow/ toronto/ world_moneyshow/ Company_Profile.asp?exh=17577
Patrik Urban
September 7, 2011 08:04 ET : German Constitutional Court rules that Ezone bailout is legal, UK manufacturing and industrial data were mixed. German Industrial production pushed higher. Market turns to BoC rate decision, Canadian Ivey PMI and Fed'ss Beige Book. Also details on Ashraf's appearance in this week's TORONTO MONEY SHOW below.
Euro bounced almost a full cent after German Constitutional Court ruled that German involvement in Eurozone bailouts is legal and rejected all lawsuits that were aimed at blocking country's participation in the financial assistance. However, the court said that the Parliament must have a say in decisions, which burdened Germany's budget. The bounce proved to be short lived as EURUSD retraced all gains and currently trades below the pre-release level.
German Industrial production rose by 4.0% in July after it declined by 1.0% in June which to some extent confirms Angela Merkel's earlier comments that Germany will continue to be Europe's growth locomotive and that so far "there are no signs of a recession in Germany".
In the UK, Halifax House Price Index fell 1.2% in August after a 0.2% rise in July. Manufacturing production rose 0.1% in July after dropping 0.4% in June (+1.9% from 2.1% y/y) and Industrial production declined 0.2% after unchanged print a month earlier (-0.7% from -0.3% y/y). The weak print is blamed on oil and gas rigs maintenance.
Recently, the data from the UK mostly disappointed which reinforces the removal of hawkish votes within the Bank of England's MPC
The New York session will bring Bank of Canada Overnight Rate decision and statement; due at 9:00 am ET. Analysts expect rates to remain unchanged at 1.0%. The accompanying statement is likely to point out concerns about the state of the global economy and declining growth.
At 10:00 am ET Canadian volatile Ivey PMI is due and it is seen slightly higher in August at 46.7 from July's 45.4. Despite the anticipated improvement, this would be a second reading in a row below the 50 level which indicates continued sector contraction.
At 2:00 pm ET the Fed releases its Beige Book that provides insights into the economic condition of each of the 12 Federal Reserve districts.
JOIN ASHRAF AT THIS WEEK's TORONTO MONEY
Join Ashraf in Toronto in Next Week. AshrafLaidi.com will exhibit be at next week's Toronto Money Show on Sep 8-10 - booth # 413. Ashraf will give workshops and on-booth presentations about his latest take on the markets. Click here to register (Admission is free) http://www.moneyshow.com/ tradeshow/ toronto/ world_moneyshow/ Company_Profile.asp?exh=17577
Patrik Urban
Tuesday, September 6, 2011
SNB Fixes EURCHF, EURUSD Bounces off DMA, ISM Next
http://www.ashraflaidi.com/forex-news/?a=2680
September 6, 2011 07:56 ET :
SNB rocks markets by fixing EURCHF at 1.20, EURCHF +10% in 80 minutes, RBA drops after rate hold, US services ISM is next. Ashraf's Premium trades will be unveiled later at the opening US bell. EURUSD bounced off its 200 dma.
The Swiss National Bank rocks the markets by setting a minimum exchange rate at 1.20 against the Euro. EURCHF soars more than 10% in 80 minutes. SNB said it will enforce this level with utmost determination and it will buy foreign currency in unlimited quantities in order to achieve a substantial and sustained weakening of the CHF.
EURCHF reached a low today at 1.1019 and jumped almost 10% after the announcement to 1.2160. USDCHF gained from 0.7840 to 0.8572. The resulting rally in euro extended into EURUSD as the pair bounced off its 200 DMA of 1.40.
One factor possibly forcing the SNB decision is today's Swiss August CPI showing -0.3% after -0.8% in July may have contributed to SNB's decision. Italy's budget announcement may also have pushed the SNB into acting ahead of another disappointing program.
The SNB said that strong Franc posed an acute risk to the economy and carries a risk of deflation. Should deflationary pressures continue, the SNB is ready to take other further steps to protect and support the economy.
The ECB said that the SNB had informed it about their intentions and that it made their decision under its own responsibility.
Japanese Yen that is sensitive to any chatter about the possibility of an intervention has weakened as well but only about 100 points.
Gold fell in reaction to SNB announcement to 1861 (silver to 41.70) but it has since recovered about half of its losses.
In other news, Eurozone GDP was not revised and stayed at 0.2% q/q. Yearly figure was revised down to 1.6% from 1.7%. German July manufacturing orders fell by -2.8% after they grew by 1.8% a month earlier. In the US, the US 10 year treasury yield fell below 2% for the first time in 60 years when it reached 1.975%.
The New York session will bring August ISM Non-Manufacturing composite index that is seen at 51.0, down from 52.7 a month earlier.
This morning's RBA rate decision left interest rates unchanged at 4.75%, and given the uncertain outlook for growth it remains unlikely that the bank will raise rates any time in the near future. While some economists are forecasting a rate cut by the end of the year, it appears that recent weak economic data is more likely to set the tone, and suggests that for now the bank remains fairly relaxed with rates at current levels due to concern about the global growth outlook, and recent turmoil in financial markets due to the debt situation in Europe.
Yesterday's not unexpected drop in services PMI data in the UK has prompted some fears with respect to further QE by the Bank of England this Thursday. This morning's disappointing BRC retail sales numbers won't have done anything to alter that perception, no matter how misguided the perception might be. The services PMI data did drop sharply, however given the events in August and the fall-out from the riots that shouldn't have been a surprise. In the wake of events in Europe and the high levels of inflation it is unlikely that the Bank will move this Thursday, despite some economists suggesting they might
Kyle Morrison & Patrik Urban
September 6, 2011 07:56 ET :
SNB rocks markets by fixing EURCHF at 1.20, EURCHF +10% in 80 minutes, RBA drops after rate hold, US services ISM is next. Ashraf's Premium trades will be unveiled later at the opening US bell. EURUSD bounced off its 200 dma.
The Swiss National Bank rocks the markets by setting a minimum exchange rate at 1.20 against the Euro. EURCHF soars more than 10% in 80 minutes. SNB said it will enforce this level with utmost determination and it will buy foreign currency in unlimited quantities in order to achieve a substantial and sustained weakening of the CHF.
EURCHF reached a low today at 1.1019 and jumped almost 10% after the announcement to 1.2160. USDCHF gained from 0.7840 to 0.8572. The resulting rally in euro extended into EURUSD as the pair bounced off its 200 DMA of 1.40.
One factor possibly forcing the SNB decision is today's Swiss August CPI showing -0.3% after -0.8% in July may have contributed to SNB's decision. Italy's budget announcement may also have pushed the SNB into acting ahead of another disappointing program.
The SNB said that strong Franc posed an acute risk to the economy and carries a risk of deflation. Should deflationary pressures continue, the SNB is ready to take other further steps to protect and support the economy.
The ECB said that the SNB had informed it about their intentions and that it made their decision under its own responsibility.
Japanese Yen that is sensitive to any chatter about the possibility of an intervention has weakened as well but only about 100 points.
Gold fell in reaction to SNB announcement to 1861 (silver to 41.70) but it has since recovered about half of its losses.
In other news, Eurozone GDP was not revised and stayed at 0.2% q/q. Yearly figure was revised down to 1.6% from 1.7%. German July manufacturing orders fell by -2.8% after they grew by 1.8% a month earlier. In the US, the US 10 year treasury yield fell below 2% for the first time in 60 years when it reached 1.975%.
The New York session will bring August ISM Non-Manufacturing composite index that is seen at 51.0, down from 52.7 a month earlier.
This morning's RBA rate decision left interest rates unchanged at 4.75%, and given the uncertain outlook for growth it remains unlikely that the bank will raise rates any time in the near future. While some economists are forecasting a rate cut by the end of the year, it appears that recent weak economic data is more likely to set the tone, and suggests that for now the bank remains fairly relaxed with rates at current levels due to concern about the global growth outlook, and recent turmoil in financial markets due to the debt situation in Europe.
Yesterday's not unexpected drop in services PMI data in the UK has prompted some fears with respect to further QE by the Bank of England this Thursday. This morning's disappointing BRC retail sales numbers won't have done anything to alter that perception, no matter how misguided the perception might be. The services PMI data did drop sharply, however given the events in August and the fall-out from the riots that shouldn't have been a surprise. In the wake of events in Europe and the high levels of inflation it is unlikely that the Bank will move this Thursday, despite some economists suggesting they might
Kyle Morrison & Patrik Urban
Monday, September 5, 2011
Central Banks Rate Announcements Preview
http://www.ashraflaidi.com/forex-news/?a=2677
September 5, 2011 07:31 ET :
USD extends robustness across the board amid heightened risk aversion. Labor Day holidays in the US and in Canada will mean narrow trading ranges and low liquidity with the risk of erratic moves. This week will bring interest rates announcements from several major central banks. Ashraf's Premium Insights return tomorrow. All 4 trades shorting EUR have hit their limits so did the gold longs.
AUD has been declining ahead of the upcoming RBA announcement that is due on Tuesday at 12:30 am ET. All 25 economists surveyed by Bloomberg News expect that Australia Cash will stay steady at 4.75%. This notion is supported by RBA governor Stevens who earlier mentioned that while there is some turbulence in the financial markets, monetary policy will not be changed. The implied probability of an interest rate cut surged after disappointing labor market data four weeks ago, but this probability decreased and currently stands at around 18%.
The Bank of Japan will announce rates on Tuesday night as well and their Overnight Call Rate is also seen unchanged at below 0.1%. Market participants have started to price in further easing by the BOJ and many expect that the BOJ will follow the FED in their actions.
Wednesday will bring the Bank of Canada rate statement and the Overnight Rate is also likely to stay unchanged at 1%. While lower rates are not expected, many analysts now predict that next rate hike will come at the end of 2012 or beginning of 2013.
Thursday should prove to be an exciting day for FX traders as both BOE and ECB will announce their rate decisions. The BOE will publish theirs at 7am ET and the rates should stay unchanged. The opposition to further QE seems to be still strong but in light of deteriorating fundamentals, new QE is becoming somewhat more possible. Watch for the Asset Purchase Facility that currently stands at GBP 200 bln. Last week Adam Posen a Monetary Policy Committee member was quoted by Reuters that G7 countries should provide more easing in order to support growth. It will be interesting to see whether he was able to convince other MPC members.
The ECB announces its rate decision at 7:45 am ET and even the European rate is anticipated to stay at 1.5%. However, keep in mind an article published by Bloomberg last week that quoted the CEO of PIMCO Mohamed El-Erian who believes the ECB may be forced to cut rates as the risk of a recession in the Eurozone has increased to 50% in his view. Even if rates are kept steady, watch for ECB press conference at 8:30 am ET for any dovish comments.
DETAILS ON ASHRAF's TORONTO APPEARANCE Sep 8-10
http://ashraflaidi.com/ t/ ?h2676
Patrik Urban
September 5, 2011 07:31 ET :
USD extends robustness across the board amid heightened risk aversion. Labor Day holidays in the US and in Canada will mean narrow trading ranges and low liquidity with the risk of erratic moves. This week will bring interest rates announcements from several major central banks. Ashraf's Premium Insights return tomorrow. All 4 trades shorting EUR have hit their limits so did the gold longs.
AUD has been declining ahead of the upcoming RBA announcement that is due on Tuesday at 12:30 am ET. All 25 economists surveyed by Bloomberg News expect that Australia Cash will stay steady at 4.75%. This notion is supported by RBA governor Stevens who earlier mentioned that while there is some turbulence in the financial markets, monetary policy will not be changed. The implied probability of an interest rate cut surged after disappointing labor market data four weeks ago, but this probability decreased and currently stands at around 18%.
The Bank of Japan will announce rates on Tuesday night as well and their Overnight Call Rate is also seen unchanged at below 0.1%. Market participants have started to price in further easing by the BOJ and many expect that the BOJ will follow the FED in their actions.
Wednesday will bring the Bank of Canada rate statement and the Overnight Rate is also likely to stay unchanged at 1%. While lower rates are not expected, many analysts now predict that next rate hike will come at the end of 2012 or beginning of 2013.
Thursday should prove to be an exciting day for FX traders as both BOE and ECB will announce their rate decisions. The BOE will publish theirs at 7am ET and the rates should stay unchanged. The opposition to further QE seems to be still strong but in light of deteriorating fundamentals, new QE is becoming somewhat more possible. Watch for the Asset Purchase Facility that currently stands at GBP 200 bln. Last week Adam Posen a Monetary Policy Committee member was quoted by Reuters that G7 countries should provide more easing in order to support growth. It will be interesting to see whether he was able to convince other MPC members.
The ECB announces its rate decision at 7:45 am ET and even the European rate is anticipated to stay at 1.5%. However, keep in mind an article published by Bloomberg last week that quoted the CEO of PIMCO Mohamed El-Erian who believes the ECB may be forced to cut rates as the risk of a recession in the Eurozone has increased to 50% in his view. Even if rates are kept steady, watch for ECB press conference at 8:30 am ET for any dovish comments.
DETAILS ON ASHRAF's TORONTO APPEARANCE Sep 8-10
http://ashraflaidi.com/ t/ ?h2676
Patrik Urban
Friday, September 2, 2011
Metals Surge, CHF Firms up Despite Weak Data; NFP is Next
http://www.ashraflaidi.com/forex-news/?a=2673
September 2, 2011 07:57 ET :
Gold hits 1860, silver at 42.60s. Swiss employment drops significantly, UK construction PMI declined and Eurozone PPI increased. PIMCO's El-Erian sees ECB cutting rates. Market turns to US labor market data.
The employment level in Switzerland dropped significantly in the last quarter to 2.77M from 4.11M previously. Such a drop comes as a surprise especially because analysts expected an unchanged reading of 4.11M. Despite this alarmingly bad result, CHF continues to surge as EURCHF lost another 200+ points and reached as low as 1.1061.
UK construction PMI fell in August to 52.6 from 53.5 in July which is the lowest print since December 2010. Construction PMI has been decreasing steadily over the past five months.
Eurozone monthly PPI came out at 0.5% from a previous unchanged reading and reached 6.1% on annual basis in July. The highest growth came out of the energy component.
A noteworthy article was published by Bloomberg last night in which Mohamed El-Erian, the CEO of PIMCO, said that ECB will probably cut interest rates as the chance of a recession in the Eurozone has risen to 50%.
The New York session will bring the eagerly awaited labor market news. August Non Farm Payrolls are expected to drop to 74K from 117K in July and the unemployment rate is seen unchanged at 9.1%.
Wednesday's ADP report showed a somewhat lower print than anticipated (91K vs. 102K exp.) so the probability of a significant positive surprise is lower to some extent. It is important to keep in mind that the correlation between ADP and NFP is not high (slightly above 0.6) and that ADP report excludes government workers.
Average hourly earnings are seen growing at 2.2% on annual basis in August from 2.3% a month earlier.
Patrik Urban
September 2, 2011 07:57 ET :
Gold hits 1860, silver at 42.60s. Swiss employment drops significantly, UK construction PMI declined and Eurozone PPI increased. PIMCO's El-Erian sees ECB cutting rates. Market turns to US labor market data.
The employment level in Switzerland dropped significantly in the last quarter to 2.77M from 4.11M previously. Such a drop comes as a surprise especially because analysts expected an unchanged reading of 4.11M. Despite this alarmingly bad result, CHF continues to surge as EURCHF lost another 200+ points and reached as low as 1.1061.
UK construction PMI fell in August to 52.6 from 53.5 in July which is the lowest print since December 2010. Construction PMI has been decreasing steadily over the past five months.
Eurozone monthly PPI came out at 0.5% from a previous unchanged reading and reached 6.1% on annual basis in July. The highest growth came out of the energy component.
A noteworthy article was published by Bloomberg last night in which Mohamed El-Erian, the CEO of PIMCO, said that ECB will probably cut interest rates as the chance of a recession in the Eurozone has risen to 50%.
The New York session will bring the eagerly awaited labor market news. August Non Farm Payrolls are expected to drop to 74K from 117K in July and the unemployment rate is seen unchanged at 9.1%.
Wednesday's ADP report showed a somewhat lower print than anticipated (91K vs. 102K exp.) so the probability of a significant positive surprise is lower to some extent. It is important to keep in mind that the correlation between ADP and NFP is not high (slightly above 0.6) and that ADP report excludes government workers.
Average hourly earnings are seen growing at 2.2% on annual basis in August from 2.3% a month earlier.
Patrik Urban
Thursday, September 1, 2011
Will US Manufacturing Also Contract?
http://www.ashraflaidi.com/forex-news/?a=2670
September 1, 2011 07:49 ET :
Both Eurozone Manufacturing PMI and UK Manufacturing PMI contracted, US Manufacturing ISM and Unemployment claims are next. USD is stronger in the ongoing session with the exception of CHF that gained as EURCHF plunged 200+ points. UK Manufacturing PMI showed a similar result as Eurozone manufacturing PMI just 30 minutes earlier. Ashraf's Premium Trades are up
Manufacturing PMI in the UK slowed to 49 in August from 49.4 in July printing the worst result since June 2009. Despite the weak print, the figure was still stronger than the estimate of 48.5. The manufacturing sector in the UK contracted for the second time in a row.
The collateral deal between Finland and Greece showed up on the newswires again today as Irish finance minister said that the deal is definitely off the table and that both parties are seeking other solutions. German government official later said that German, Dutch and Finnish finance ministers will meet on Tuesday in Berlin to discuss this issue.
The New York session starts at 8:30 am ET with Unemployment claims that have been gradually increasing the past three weeks. This week claims are seen at 407K from previous 417K.
August ISM Manufacturing is due at 10:00 am ET and it is expected to fall further to 48.7 from previous 50.9. This is the first month in almost two years when analysts expect a reading below 50 which indicates a manufacturing sector contraction. The decline seen over the past four months (April's reading was 60.4!) confirms the significant deterioration that the economy is experiencing. Should fundamental data releases continue to disappoint, the Fed's projections that the growth will pick up in the second half of the year is likely to be questioned soon.
Traders should also note that FOMC member and Federal Reserve Governor Elizabeth Duke will speak at 12:00 pm about the housing market. Q&A session after the speech is expected so any remarks regarding monetary policy could cause high volatility.
Ashraf's Premium piece that seeks to exploit, among others, further weakness in the euro can be found here: http://ashraflaidi.com/ products/ sub01/access/?a=486 Nonsubscribers can become members here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
September 1, 2011 07:49 ET :
Both Eurozone Manufacturing PMI and UK Manufacturing PMI contracted, US Manufacturing ISM and Unemployment claims are next. USD is stronger in the ongoing session with the exception of CHF that gained as EURCHF plunged 200+ points. UK Manufacturing PMI showed a similar result as Eurozone manufacturing PMI just 30 minutes earlier. Ashraf's Premium Trades are up
Manufacturing PMI in the UK slowed to 49 in August from 49.4 in July printing the worst result since June 2009. Despite the weak print, the figure was still stronger than the estimate of 48.5. The manufacturing sector in the UK contracted for the second time in a row.
The collateral deal between Finland and Greece showed up on the newswires again today as Irish finance minister said that the deal is definitely off the table and that both parties are seeking other solutions. German government official later said that German, Dutch and Finnish finance ministers will meet on Tuesday in Berlin to discuss this issue.
The New York session starts at 8:30 am ET with Unemployment claims that have been gradually increasing the past three weeks. This week claims are seen at 407K from previous 417K.
August ISM Manufacturing is due at 10:00 am ET and it is expected to fall further to 48.7 from previous 50.9. This is the first month in almost two years when analysts expect a reading below 50 which indicates a manufacturing sector contraction. The decline seen over the past four months (April's reading was 60.4!) confirms the significant deterioration that the economy is experiencing. Should fundamental data releases continue to disappoint, the Fed's projections that the growth will pick up in the second half of the year is likely to be questioned soon.
Traders should also note that FOMC member and Federal Reserve Governor Elizabeth Duke will speak at 12:00 pm about the housing market. Q&A session after the speech is expected so any remarks regarding monetary policy could cause high volatility.
Ashraf's Premium piece that seeks to exploit, among others, further weakness in the euro can be found here: http://ashraflaidi.com/ products/ sub01/access/?a=486 Nonsubscribers can become members here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
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