EUR/USD, USD/JPY: Learning By Doing On The RMB - Goldman Sachs - General

thenews 2016.02.10 20:30 #61

EUR/USD, USD/JPY: Learning By Doing On The RMB - Goldman Sachs There is growing conviction in the market that the rapid pace of capital outflows makes a large, one-off devaluation of the RMB all but inevitable.At first glance, it is true that the balance of payments for 2015 – fourth quarter data were published last week – paints an alarming picture, with capital outflows up to -$742bn from -$311bn in 2014 (Exhibit 1).

This caused foreign exchange reserves to fall -$342bn last year,even with a rising current account surplus thanks to lower oil prices. The thinking goes that this pace of reserve losses is unsustainable and will require a one-off devaluation to get ahead of what some describe as a run on the currency.

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Market Views For 2016 Goldman Sachs - buy We use Bitcoin ;)

thenews 2016.02.14 14:36 #62

5 Things to Watch on the Economic Calendar This Week 1. FOMC meeting minutes

Investors will be focusing on minutes of the Federal Reserve’s January policy meeting due on Wednesday at 19:00GMT, or 2:00PM ET.

The Fed left interest rates unchanged following its meeting on January 27, as widely expected, and said it was "closely monitoring" global economic and financial developments.

Fed Chair Janet Yellen said last week that financial conditions have become less supportive to growth as foreign developments pose risks to the economic outlook, but also maintained that moderate growth at home would justify "gradual adjustments" to the Fed's monetary policy stance.

2. U.S. January inflation figures

The Commerce Department will publish inflation figures for January at 13:30GMT, or 8:30AM ET, Friday. The consensus forecast is that the report will show consumer prices inched down 0.1% last month, while core inflation is forecast to rise 0.2%.

The U.S. will also release data on building permits, housing starts and producer price inflation on Wednesday, followed by reports on initial jobless claims and manufacturing activity in the Philadelphia region on Thursday.

3. Chinese trade data

China is to release January trade data at around 3:00GMT on Monday, or 10:00PM EST, Sunday. The report is expected to show that the country’s trade surplus narrowed to $58.9 billion last month from $60.1 billion in December.

Chinese exports for January are forecast to drop 1.9% from a year earlier, following a decline of 1.4% a month ago, while imports are expected to slump 0.8%, after falling 7.6% in December.

On Thursday, China is to publish reports on January consumer and producer price inflation. The data is expected to show that consumer prices rose 1.9% last month, compared to a reading of 1.6% in December, while producer prices are forecast to fall by 5.4%, which would be the 45th straight monthly decline.

4. Japan fourth quarter GDP

Japan will publish fourth quarter economic growth data at 23:50GMT on Sunday, or 6:50PM ET. The report is expected to reveal that Japan's economy shrank 0.3% in the final three months of last year, maintaining pressure on policymakers to support the world's third largest economy.

5. U.K. inflation, employment & retail sales data

The U.K. Office for National Statistics will release data on consumer price inflation for January at 9:30GMT, or 4:30AM ET, on Tuesday. Analysts expect consumer prices to inch up 0.3%, after rising 0.2% a month earlier.

The U.K. December jobs report will be published at 9:30GMT, or 4:30AM ET, on Wednesday. The unemployment rate fell to the lowest level since 2006 in November, underlining optimism over the health of the labor market.

On Friday, the ONS will produce a report on January retail sales at 9:30GMT, or 4:30AM ET, which will offer further clues on the strength of the economy and the timing of a rate hike by the Bank of England.

Expectations for a rate hike by the BoE have been pushed back to late-2016 due to a recent spate of weaker than expected data and amid

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The Top Events/Releases for Press review 5 Key Economic Events

thenews 2016.02.15 10:46 #63

Top 5 Things to Know In the Market on Monday 1. Chinese imports, exports fall more than forecast in January

The latest trade figures out of China added to concerns over the health of the world's second-biggest economy.

Chinese exports in yuan-denominated terms slumped 6.6% from a year earlier in January, disappointing forecasts for a gain of 3.6%, while imports sank 14.4%, missing expectations for a rise of 1.8%. That left the Asian nation with a surplus of 406 billion yuan.

In dollar-terms, exports tumbled 11.2% in January, far worse than forecasts for a decline of 1.9%, while imports dropped 18.8%, compared to expectations for a fall of 0.8%, leaving China with a record trade surplus of $63.3 billion last month.

The disappointing data reinforced the view that the economy remains in the midst of a gradual slowdown which will require Beijing to roll out more support in coming months.

Chinese stocks fell modestly on Monday, catching up with recent losses in global equity markets, as mainland markets reopened following the week-long Lunar New Year holiday. The Shanghai Composite Index closed down 0.6%.

On the currency front, China's yuan hit a 2016-high against the greenback during the session, after the PBOC set its official midpoint rate sharply stronger and after central bank governor Zhou Xiaochuan said there was no basis for the currency to keep depreciating.

2. Japan's economy contracts 1.4% in fourth quarter

Japan's economy contracted in the fourth quarter, as weak consumer demand and slower exports battered the recovery.

Data released before the Tokyo market opened showed that Japan's economy contracted at a 1.4% annualized rate in the October-to-December quarter, worse than expectations for a 1.2% contraction. On a quarter-on-quarter basis, the economy shrank 0.4% in the final three months of 2015.

The weak data added to pressure on the Bank of Japan to step up monetary easing measures to shore up growth.

Despite the lackluster report, Tokyo’s Nikkei 225, soared 7.1%, boosted by weakness in the Japanese yen and prospects that policymakers will enact further stimulus measures.

3. European stocks rally as Italian banks soar

European stock markets rallied sharply on Monday, with Italian banking stocks leading gains, as investors regained their bullishness and moved back into riskier assets.

Germany’s DAX 30 surged 2.65% by 10:35GMT, or 5:35AM ET, France’s CAC 40 jumped 3.15%, London’s FTSE 100 rose 1.95%, while Italy’s FTSE MIB surged 3.6%.

Italian banks soared on a report that the European Central Bank is in talks with the Italian government about buying bundles of bad loans from the country’s lenders as part of its asset-purchase scheme and accept them as collateral.

Italian banks, which have been among worst performers during this year’s selloff in the financial sector, have approximately €200bn of bad loans.

Trading volume is expected to lighter than usual as U.S. trading is closed for the President’s Day holiday.

4. Oil prices hold gains after Friday’s 12% surge

Oil prices pushed higher on Monday, after scoring its biggest one-day gain in seven years on Friday, as investors were hesitant to bet on lower prices amid a renewed possibility of coordinated production cuts.

U.S. crude was last up 33 cents, or 1.12%, at $29.78 a barrel, while Brent rose 30 cents, or 0.93%, to $33.66.

Global oil prices surged more than 12% on Friday after a report once again suggested OPEC might finally agree to cut production to reduce the world glut.

5. Gold drops $30 as market sentiment improves

Gold futures fell sharply on Monday, as the metal’s safe-haven appeal was dampened amid a recovery in global equity markets.

Gold lost $30.60, or 2.47%, to trade at $1,208.80 a troy ounce. Prices of the yellow metal soared to a one-year high of $1,263.90 last Thursday, boosted by a flight to safety.

Gold futures have been well-supported in recent weeks amid indications global economic and financial headwinds could make it tough for the Federal Reserve to raise interest rates as much as it would like this year.

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Nzdusd Press review Forex News (from InstaForex)

thenews 2016.02.16 06:45 #64

Where now for the pound? More from Goldman Sachs FX Forecasts: We maintain our forecast for EUR/GBP of 0.71, 0.70 and 0.68 in 3, 6 and 12 months, which we adopted on December 7. This implies GBP/$ at 1.46, 1.43 and 1.40.

Motivation for Our FX View: Sterling appreciated notably for much of 2015 as activity remained strong relative to the Euro area. However, Sterling has weakened by around 8% on a trade-weighted basis since November. This recent decline comes as global growth worries have weighed most noticeably on rates in the UK, with the timing of rate hikes pushed back substantially. In addition, some signs of a 'Brexit' risk premium may be starting to appear. Our base case assumes the UK will remain in the EU and that cyclical strength should ultimately allow the BoE to hike rates sooner than markets are currently pricing and, as a result, we see GBP as stronger vs EUR over the next year, with GBP/$ slightly lower.

Monetary Policy and FX Framework: In the February 2014 Inflation Report, the MPC modified its forward guidance to place a broader focus on the outlook for inflation and spare capacity, while emphasising that increases in Bank Rate will be gradual and limited. More recent Inflation Reports have shown some increased willingness on the part of the BoE to look through transitory inflation developments owing to currency moves. Sterling operates under an entirely free float, although the BoE occasionally comments on exchange rate developments

Growth/Inflation Outlook: We expect the UK economy to expand by 2.6% in 2016. Overall, our relatively optimistic outlook is driven by our expectation for ongoing support from the consumer. We anticipate a benign inflation picture, with core CPI rising only gradually and remaining below 2% until 2018Q4. Monetary Policy Forecast: We expect the first increase in Bank Rate in 2016Q4. Subsequently, we expect the pace of further hikes to be steeper than current market pricing. Given the BoE's focus on the disinflationary impact of exchange rate strength, external shocks that affect Sterling - particularly US data and policy developments - are being transmitted to the UK curve.

Fiscal Policy Outlook: The government still plans to reduce the deficit gradually, albeit at a slower pace than initially projected. The deficit is expected to turn into a surplus in 2017-18, mostly due to spending cuts.

Balance of Payments Situation: We forecast a current account balance of -5.4% of GDP in 2015. Portfolio flows remain difficult to assess given the large cross-border flows linked to London as a financial centre.

Things to Watch: The impact of the cyclical acceleration on capital inflows remains a key factor, as well as financial spillovers from the Euro area. Over the next year, the UK's in/out referendum on continued membership in the EU will likely be a key source of volatility.

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Daily market moving news Goldman Sachs still sees Goldman Sachs still sees

thenews 2016.02.17 12:57 #65

JPY, EUR: Caution Remains Warranted - Credit Agricole We remain of the view that caution remains warranted when it comes to risk. This is especially true as major central banks have not really made a case of increasing liquidity expectations of late while global growth expectations remained capped.

As a result to the above outlined conditions it cannot be excluded that the JPY faces further upside risk. The same may hold true as when it comes to the EUR, especially as risk sentiment has been a more important currency driver rather than ECB monetary policy expectations. From a broader angle we stay of the view that rallies should be sold. However, better levels may be reached towards the March meeting.

In the US, Fed’s Rosengreen stressed that progress on inflation has been slowing and that weak global growth could slow the process towards the Fed’s policy goals. This in turn may delay the need for additional interest-rate increases. It appears that central bank members increasingly take note of more muted external conditions.

The longer uncertainty remains intact the higher the likelihood of it impacting domestic conditions. Even if markets do not price in any tightening of monetary policy for the reminder of the year, a further delay in rate hike expectations or renewed speculation of the Fed being in the need to reverse course can trigger USD downside risk from the current levels. In the longer run we expect global growth expectations to start stabilizing. However, as stressed above in the weeks to come caution may be warranted.

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EUR/USD: Awaiting Better Levels Euro Dollar Rate Forecasts Weekly forecast

thenews 2016.02.18 15:51 #66

Don't Bet On A G20 Agreement: 5 Reasons - Credit Suisse The G20 finance minister and central bank meeting in Shanghai on Feb 26-27 has become a focal point for hopes that global policymakers can offer some new form of policy interaction and coordination among major countries to inspire deeper confidence in financial markets. In our view the barrier remains high for five reasons:

1. The range of countries is large, representing a variety of economic systems and interests. As well as the traditional G7 countries there are the BRIICS countries as well as states as diverse as Korea, Mexico, Argentina and Saudi Arabia. Implementing policies requiring coordination, commitment and rapid implementation from a large and disparate group is not easy.

2. The most likely condition for coordinated action of any form would be a major global crisis that risks spinning out of control, helping to focus attention and boosting motivation. While there have been sporadic bouts of instability (oil prices, China FX and equity markets, US energy credit markets, European bank stocks and last week's JPY surge to name a few), it is uncertain whether any of these are correlated, severe or persistent enough to call for immediate and unprecedented G20 action.

3. It remains unclear to us what range of active, coordinated policy decisions would be both acceptable to the wide range of countries involved and have a positive impact on market sentiment. For example, it seems unlikely that a one-off CNY devaluation as some have asked for within such a framework would be welcome in the US, euro area or Japan given low inflation. And a reciprocal commitment not to push endlessly on negative interest rates would tie up the hands of many central banks that seemingly have little else to offer and this stage.

4. Countries like the US, UK and the euro area are technically in a better growth environment now with falling unemployment even if inflation is low. After all the Fed only hiked as recently as December. Despite fears of slowing growth or even recession ahead, the jury is clearly still out on whether any coordinated global policy is needed at all, even if agreement could be reached. For the record, Credit Suisse economists still expect two Fed rate hikes in H2 2016.

5. Dramatic actions that could be interpreted as market manipulation on an international scale would go against the message the G20 has been trying to sell in recent years aiming for less market manipulation. This raises the bar in terms of the degree of perceived crisis needed to prompt immediate action.

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