Press review - page 26
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Markets put in a very mixed performance in a week which saw two major technical "glitches" and a raft of "odd" stories.
If actual > forecast = good for currency (for NZD in our case)
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New Zealand Posts Biggest July Trade Deficit In 5 Years :
New Zealand recorded a larger-than-expected trade deficit in July, which was also the widest for the month since 2008, amid higher imports and a fall in crude and dairy exports, the latest figures from Statistics New Zealand showed Monday.
The trade balance moved to a deficit of NZ$774 million in July from a surplus of NZ$374 million in June. Economists had forecast a smaller deficit of NZ$16 million. In July 2012, the balance was in a surplus of NZ$98 million.
The value of imports increased to NZ$4.6 billion in July from NZ$3.6 billion in June. This was higher than the expected value of NZ$3.9 billion.
If actual > forecast = good for currency (for EUR in our case)
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German Business Morale At 16-Month High :
Confidence among German businesses continued to improve, reaching a 16-month high in August, as companies are more satisfied with their current situation amid the economy moving up a gear.
The business confidence index improved more-than-expected to 107.5 in August, the highest since April 2012, from 106.2 in July, results of an Ifo Institute survey, based on 7,000 responses, showed Tuesday. Economists had forecast the index to rise to 107 in August.
FOCUS: Gold Rises On Safe-Haven Buys Over Syria, Technical Charts, Fed QE Debate :
Gold prices are stronger in early North American dealings on Tuesday, supported by several factors: safe-haven buying on nervousness about possible U.S. military action against Syria, bullish technical-chart patterns and thoughts that the Federal Reserve might abstain from curbing its bond purchases.
December Comex gold was up $24.30, or 1.7%, to $1,417.40 an ounce as of 9:39 a.m. EDT. The contract peaked at $1,423, its strongest level in two months.
New York Mercantile Exchange crude oil was also strong, with October crude up $2.64 a barrel to $108.56. Crude oil is especially sensitive to tensions flaring in the Middle East. Although Syria is not a major oil producer, concerns are that violence from the two-year civil war could spill over to other countries and disrupt oil supplies.
Several analysts are citing a flare-up in tensions in Syria as lifting gold prices.
“Geopolitical concerns have ratcheted up over the last 48 hours,” said Robin Bhar, head of metals research at Societe Generale.
If actual > forecast = good for currency (for CHF in our case)
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UBS consumption indicator: virtually no change in consumer sentiment :
The UBS consumption indicator remained virtually unchanged in July. An increase in new car registrations was balanced by gloomier consumer sentiment and a weaker retail sales.
Zurich/Basel, 28 August 2013 – The UBS consumption indicator remained virtually unchanged in July at 1.41 index points compared with the previous month (revised down from 1.44 to 1.41), continuing a trend that has been ongoing since April.
Swiss consumers registered significantly more new cars in July than in the previous month; new car registrations rose by 14.4% after figures are seasonally adjusted. Compared with the same month last year, the number of new car registrations was also up sharply, increasing by 5.3% to 26,333 new car registrations. Following a weak first six months which saw a considerable decline of 11.8%, the second half of 2013 began somewhat more positively for the automotive sector.
NZD/USD slides lower in risk-off trade :
The New Zealand dollar was lower against its U.S. counterpart on Wednesday, as market sentiment remained under pressure amid ongoing tension in Syria and the possibility of a U.S. military intervention in the region.
NZD/USD hit 0.7749 during late Asian trade, the session low; the pair subsequently consolidated at 0.7765, shedding 0.42%.
The pair was likely to find support at 0.7700, the low of July 8 and resistance at 0.7874, the high of August 26.
Market sentiment was hit by growing expectations for U.S. military strikes against Syria’s government. U.S. Vice-President Joe Biden said Tuesday there is "no doubt" that the Syrian government used chemical weapons against civilians and added that it must be held accountable.
The greenback also found support as concerns over the timing of a reduction in Federal Reserve stimulus eased after data on Tuesday showed that U.S. consumer confidence rose more than expected in August, hitting the highest level since January 2008.
The Conference Board said its index of consumer confidence rose to 81.5 in August from an upwardly revised 81.0 in July. Analysts had expected the index to tick down to 79.0.
The kiwi was higher against the Australian dollar with AUD/NZD sliding 0.39%, to hit 1.1480.
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BOE's Carney seeks to soothe views of higher rates :U.K. interest rates aren't going to rise as soon as unemployment falls to 7%, Bank of England Gov. Mark Carney said in his first speech as head of the central bank. The central bank has said it doesn't expect the country's jobless rate to fall to that level until 2016, but financial markets are betting that rates could rise in 2015. "Thinking unemployment will come down faster than we expect isn't enough to believe interest rates will rise soon. As I said earlier, the 7% threshold is a staging post to assess the economy. Nobody should assume that it is a trigger for raising rates," he told business leaders in Nottingham. The central bank also will look at the strength of the economic recovery and inflation, he said. Carney reiterated that if growth is faltering, the central bank would look at ways to stimulate the economy. He also said the central bank will reduce the level of required liquid asset holdings for banks that have a capital base of 7% of their risk-weighted assets, which could eventually free up 90 billion pounds (about $140 billion) from the country's eight major banks and building societies. The pound rose against the dollar on Carney's speech.
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Trading German Unemployment and Implications for EURUSD :
How To Trade This Event Risk
Bullish EUR Trade: German Unemployment contracts 5K or greater
- Need green, five-minute candle after the print to consider a long EURUSD position
- If the reaction favors a buy, establish long entry with two position
- Place stop at the near-by swing low/reasonable distance from cost; at least 1:1 risk-to-reward
- Set stop to breakeven on remaining position once initial target is met; set reasonable limit
Bearish EUR Trade: Labor data misses market expectationsPotential Price Targets For The Release
If actual > forecast = good for currency (for EUR in our case)
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U.S. Economy Grew Faster Than Initially Estimated In Q2 :
Reflecting revisions to imports and exports, the Commerce Department released a report on Thursday showing that the U.S. economy grew by more than previously estimated in the second quarter.
The report said GDP increased by 2.5 percent in the second quarter, reflecting an upward revision from the advance estimate of 1.7 percent growth.
Economists had been anticipating a somewhat more modest upward revision to the pace of GDP growth to about 2.2 percent.
The Commerce Department said the upward revision the pace of GDP growth primarily reflected an upward revision to exports and a downward revision to imports, which are a subtraction in the calculation of GDP.
The report said exports rose by 8.6 percent compared to the previously reported 5.4 percent growth, while imports increased by 7.0 percent versus the initially estimated 9.5 percent jump.
Gold Ends Moderately Lower On Profit Taking, Stronger U.S. Dollar Index :
Gold prices ended the U.S. day session moderately lower but up from the daily low Thursday, on some profit taking and a technical correction after recent gains that saw the market hit a 3.5-month high Wednesday. The key “outside markets” were also in a bearish daily posture for the precious metals Thursday, as the U.S. dollar index was sharply higher and crude oil prices were weaker. December Comex gold was last down $8.00 at $1,410.80 an ounce. Spot gold was last quoted down $6.80 at $1411.50. September Comex silver last traded down $0.411 at $23.98 an ounce.
The market place was a bit less risk-averse Thursday. Notions of an imminent U.S. military attack on Syria receded as President Obama said Wednesday he has not decided on a response to the Syrian regime’s alleged use of chemical weapons against civilians. Also, U.S. allies and other world nations are not at all in agreement on what to do on the matter.
The U.S. dollar index surged following a better-than-expected second-quarter U.S. GDP report. Shortly after that report the gold market hit its daily low as the greenback rallied.