Eur/usd - page 122
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Draghi’s Doctrine Seen Bolstering Best Performing Bonds
Pacific Investment Management Co. and Deutsche Asset & Wealth Management are counting on the policy Mario Draghi reaffirmed yesterday to underpin peripheral bonds for the rest of the year. They’re not alone.
Irish (BIRE) and Greek government securities beat their European peers in the second quarter with returns of 4.2 percent and 4 percent, respectively, followed by a 3.6 percent gain from Italy, according to Bloomberg’s World Bond Indexes. Even German debt, the euro region’s worst performer, advanced 2.2 percent, supported by the European Central Bank president’s strategy.
“The fundamentals of these countries are slowly improving and we believe there will continue to be policy support from the European Central Bank when necessary,” Claus Meyer-Cording, a Deutsche Asset money manager in Frankfurt who helps manage 934 billion euros ($1.27 trillion), said by telephone. “Peripheral bonds have come a long way in terms of gains, but we remain moderately overweight” these bonds.
Investors are bullish even as the gains are tempering.
While Greek bonds advanced in the past five quarters, last quarter’s return was the lowest. The extra yield investors demand to hold the securities instead of benchmark German bonds dropped to the least in more than four years last month.
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EURUSD fell during the course of yesterday, as the ECB left the door open for QE and said it is “watching”. This weighed on the euro. Before American traders celebrate the 4th of July, pressure mounts on the common currency.
Also the jobs number out of the United States came out better than originally anticipated, U.S. employer’s added 288,000 jobs in June and the unemployment rate fell to 6.1 % from 6.3 %. US dollar moved higher against most currencies.
Decline In German Factory Orders Exceeds Expectations
German factory orders declined more-than-expected in May as both domestic and foreign orders decreased from April on geopolitical uncertainties.
New orders in manufacturing fell by a seasonally adjusted 1.7 percent month-on-month in May, provisional data from Destatis showed Friday. Economists had forecast a 1.1 percent fall in new orders, after rising a revised 3.4 percent in April.
Domestic orders slid 2.5 percent versus April's 1.1 percent increase. Similarly, foreign orders were down by 1.2 percent in May compared to the 5 percent gain in the previous month.
Orders for intermediate goods declined 3.4 percent and that for consumer goods by 1.2 percent. Capital goods orders also dropped in May, by 0.7 percent.
As regards the direction of trade in foreign transactions, new orders from the euro area were up 5.7 percent on the previous month. Meanwhile, orders from other countries which prevail in foreign transactions in the manufacturing sector, decreased by 5.2 percent, Destatis said.
Orders are expected to grow in the second quarter, the economy ministry said today. However, increased geopolitical risks need to be examined. Nonetheless, the upturn is likely to continue at a moderate pace, it said.
On a yearly basis, factory orders grew 5.5 percent in May, but slower than the 6.6 percent rise in April. Orders were expected to increase by 6 percent.
The Purchasing Managers' survey revealed that the German manufacturing sector expanded at the weakest pace since October last year as new orders and output growth weakened in June. The Markit/BME purchasing managers' index fell to 52 in June from 52.3 in May.
A PMI score above 50 suggests expansion, while a print below 50 indicates contraction.
According to survey conducted in the construction sector, activity deteriorated in June at the sharpest pace in 15 months, led by a steep fall in new orders, prompting firms to reduce workforce, Markit said today. The seasonally adjusted PMI fell sharply to 45.5 in June from 48.1 in the previous month.
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it was very slow day with the absence of the us market have a great weekend all
EUR/USD forecast for the week of July 7
The EUR/USD pair tried to rally during the course of the week, but as you can see failed at the 1.37 handle. The resulting candle is a shooting star, but it’s hardly a decent sell signal, as there is significant support down at the 1.35 handle. With this, we believe that ultimately this market continues to chop around sideways, and therefore we have no interest in a longer-term trade at this point in time as the market has essentially been taken over by the scalpers. It is not until we break out of this area that we feel comfortable with a longer-term position.
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ECB's Lautenschlaeger does not see bond-buying
European Central Bank executive board member Sabine Lautenschlaeger said she does not see the ECB embarking on a bond-buying spree in the near future, according to a German newspaper report.
"I absolutely do not see the purchase of government bonds on the horizon," she told Frankfurter Allgemeine Sonntagszeitung, according to an excerpt of an article to be published on Sunday.
She said a large-scale purchase of bonds would only be an option if the ECB faced extraordinary risks, adding: "I really don't see that right now".
She also repeated that she was "rather critical" of the ECB's Outright Monetary Transaction (OMT) programme, launched in September 2012 and yet to be used.
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I agree with you man about that ... hope thai week gonna be better.
Key EURUSD levels for the month of July
Forex Trading Outlook
Looking Ahead- Forex Trading Outlook for July 4. 2014 - YouTube
ECB's Coeure: rates to stay low, Europe needs more investment
The European Central Bank will keep interest rates very low for a long period of time to ensure monetary stability but euro zone governments must do their part to boost growth and cut debt, ECB policymaker Benoit Coeure said.
The euro zone has a major investment deficit, said Coeure, a member of the ECB's executive board, adding that governments must also "invest in Europe" by cooperating more closely - another condition for stability.
Saying the current economic situation of high debt, high unemployment and weak growth was very worrying, Coeure told an economic conference in southern France on Sunday: "The only way out is by investing."
But this should not be done by "piling more debt on old debt", he said, urging euro zone states to ensure flexibility to implement the bloc's stability pact is based on reforms that have been proven or carried out, not just on pledges.
"The ECB is taking care of monetary stability. We've said clearly that interest rates will remain very low, very close to zero, for a very long time, whatever the developments in the rest of the world," Coeure said.
"One should expect a divergence of monetary conditions between the euro zone and the United States and Britain - where interest rates will at some point be lifted."
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EUR/USD weekly outlook: July 7 - 11
The euro fell to more than one-week lows against the dollar on Friday, one day after a robust U.S. employment report for June eased concerns over the outlook for the economic recovery.
EUR/USD ended Friday’s session at 1.3594, down 0.35% for the week.
The pair is likely to find support at 1.3550 and resistance at 1.3600.
The Labor Department reported Thursday that that U.S. economy added 288,000 jobs last month, well above expectations for jobs growth of 212,000. The previous month’s figure was revised up to a gain of 224,000 from a previously reported increase of 217,000.
The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years. The data was released a day early, ahead of Friday’s Independence Day holiday.
The upbeat data revived expectations that the Federal Reserve could bring forward its timetable for raising interest rates.
The euro came under pressure after the European Central Bank repeated its forward guidance that rates will remain on hold at present or lower levels for an extended period.
The ECB also reiterated that it could use "unconventional measures" to combat persistently low levels of inflation in the euro area.
The ECB left all rates on hold on Thursday, in a widely anticipated decision, after cutting rates to record lows in June.
The single currency was lower against the yen on Friday, with EUR/JPY down 0.24% to 138.74, off Thursday’s one-month highs of 139.26.
The euro fell to almost two-year lows against the stronger pound on Friday, with EUR/GBP down 0.14% to 0.7921, the weakest since September 2012.
Demand for sterling continued to be underpinned by expectations that the deepening economic recovery in the U.K. will prompt the Bank of England to raise interest rates before the end of this year.
In the week ahead, investors will be focusing on Wednesdays’ minutes of the Federal Reserve’s June meeting, with few other major economic reports on the calendar.
Ahead of the coming week, Investing.com has compiled a list of this and other significant events likely to affect the markets. The guide skips Monday, as there are no relevant events on this day.
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