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Overview of the main economical events of the current day - 14/08/2013
US Retail Sales Have Been Rising for 4 Months in a Row
The US dollar was traded upwards on Tuesday against most major currencies amid the release of a positive retail sales report and increasing US treasury bonds yields. Retail sales grew by 0.2% in July compared with the prior month, which almost coincided with the expectations of 0.2-0.3%. However, prior month sales were raised: June growth accounted for 0.6%, not 0.4%.
Retail Sales ex Auto, which show consumer spending trends better, rose by 0.5%, Consensus 0.4%. Its growth in July has been the best since early 2013. Employment growth and consumers welfare improvement due to house price and stock quotes growth have a positive effect on consumer spending growth, which may offset the negative impact of government spending cuts on the U.S. economy.
The euro dropped on Tuesday despite German Economic Sentiment growth. According to the Centre for European Economic Research ZEW, German ZEW Economic Sentiment grew up to 42 in august compared with 36.3 in July anticipating the forecasted growth to 39.9. Euro-zone Economic Sentiment has also rocketed to its high since 2010. According to Dr. Michael Schröder - Head of the Research Department of ZEW – the worst part of the recession in the euro-zone has already been passed. At the same time, euro-zone industrial output rose only by 0.7% in June, which turned out lower than forecasted +0.9%.
The pound had almost no reaction on inflation data for July which turned out close to the expectations. Consumer Price Index dropped to 2.8% from 2.9% in June. Core inflation that excludes energy and food prices slowed down more than forecasted to 2% from 2.3% prior month. But the pound was traded better than the euro – housing market data provided support. RICS House Price Balance grew to 36 in July against 21 in June having reached the highest level since November, 2006. ONS House Price Index was rising at the fastest rate in June since December, 2012 – by 3.1% at an annual rate.
The yen continued weakening on Tuesday for the second day amid Japanese stock market growth which increased by 2.6% according to Nikkei. Some support was provided by both statistics data and Nikkei newspaper message that the government of Japan considered a possibility of corporate income taxes reduce to mitigate the effect of the planned sales tax increase. Core Machinery Orders dropped only by 2.7% in June while a fall by 7% was expected. Besides, the Bank of Japan published BoJ Monetary Policy Meeting Minutes on Tuesday where the estimate of state of the economy has been raised to a "moderate recovery".
The Australian dollar was traded downwards on Tuesday amid the Business Confidence decrease. NAB Business Confidence dropped below zero in July to -3 (the lowest in 6 months) Vs 0 in June.
By MasterForex Company
Overview of the main economical events of the current day - 15/08/2013
Euro-Zone Economy Comes Out of Recession
According to the official statistics agency ЕС Eurostat data released on Wednesday the euro-zone economy is coming out of the longest post-war recession. The euro-zone GDP growth recovered in the second quarter of this year after its decline within 6 quarters. Total GDP of 17 euro-zone countries grew by 0.3% in comparison with the first quarter, which exceeded the expected growth by 0.2%. Almost all the statistics data released recently in the region indicated euro-zone economic recovery.
Euro-zone economy has risen mainly due to good German and French indicators. Two largest euro-zone economies showed a more significant rise last quarter than expected. German GDP grew by 0.7% Vs consensus +0.6%. French economy increased by 0.5%, which has exceeded expected growth by 0.2% even more. The euro had almost no reaction towards positive statistics and it was traded in a narrow range all day.
The pound grew considerably on Wednesday after the release of positive labor market report and BoE Meeting Minutes. Claimant Count Change dropped by 29.2 thousand in July while a decrease only by 15 thousand was expected. Prior month data were also revised fore the better. Unemployment rate had been falling for nine months in a row last month, in June and July it had been especially significant since March, 2010, which has become another proof of a strengthened British economic recovery.
Claimant Count Rate last month dropped by 0.1% to its low 4.3% since February, 2009 while no changes were expected. According to the end of the second quarter ILO Unemployment Rate maintained at 7.8%, which coincided with the expectations. Bank of England Meeting Minutes showed a unanimous vote on the rate and the QE size but one of the MPC members Martin Weale opposed the policy of providing Forward Guidance concerning the monetary policy outlook as he had a hard-line attitude towards inflation.
The dollar turned out under pressure on Wednesday due to unexpected drop of Producer Price Index which didn’t meet the forecast. Producer Price Index published on Wednesday didn’t change last month although its growth by 0.3% m/m was expected. Core Producer Price Index which excludes volatile components (energy and food) also has risen only by 0.1% m/m Vs 0.2% growth Consensus.
FOMC Member Bullard making speech on Wednesday evening referred to low inflation and said that FOMC outlook seemed to be too optimistic. Fed needs to analyze a lot of information before taking a decision concerning asset purchase tapering off. Besides, according to him, key factors concerning QE issue will be inflation data, GDP, employment and FED balance. All this seems to put off the terms of possible QE reduction from September to October as far as the Fed will have too little reliable information about the third quarter.
New Zealand dollar rose on Wednesday after the release of a positive retail sales report for the second quarter which showed sales growth by 1.7% at a quarterly rate, which exceeded the expected growth by 1.4%. The Australian dollar also strengthened amid consumer sentiment increase. Westpac Consumer Sentiment rose by 3.5% in August to 105.7 Vs 102.1 prior month.
By MasterForex Company
Overview of the main economical events of the current day - 16/08/2013
UK Retail Sales Exceeded Expectations
The pound reached 8-week high on Thursday Vs dollar and 6-week high Vs euro after the release of UK retail sales report which considerably exceeded the expectations. Retail sales in July rose by 1.1% compared with the prior month while an increase by 0.7% was expected. Retail sales in July grew for the third month in a row, which was recorded for the first time in 3 years. Retail sales grew by 3% at an annual rate (Consensus +2.4%) – it is the fastest growth rate since January, 2011.
The US dollar dropped on Thursday against most major currencies amid the release of macrostatistics data which mostly were negative although the dollar made attempts of growth at first after the release of strong unemployment claims data. Unemployment Claims in the USA fell more than expected last week – by 15 thousand to 320 thousand – the lowest level for more than 5 years since early 2008.
But all the other data on the capital inflow, industrial output and manufacturing PMI turned out worse than expected. Thus, foreign investors sold a net $81.6 billion in US long-term treasury bonds and bills in June, which turned out almost twice more than the last record level documented in May. Industrial output didn’t change in July compared with the prior month while its growth by 0.3% was expected. June growth was revised downwards to 0.2% from 0.3%.
Empire State Manufacturing Index dropped to 8.24 in August compared with 9.46 in July Vs expected growth to 10. A more important Philadelphia Fed Manufacturing Index also dropped more than expected – it fell to 9.3 in August against 19.8 in July while a drop only to 15 was expected. Consumer Price Index turned out as forecasted; and only NAHB Housing Market Index has risen significantly. FOMC member James Bullard who made a speech on Thursday repeated again as he did on Wednesday that the Fed needed more data to examine before taking a decision concerning bond purchase decrease.
Stock market fall, 10-Year Treasury Note Yield growth to 2-year high and a sharp rise of the gold also influenced dollar’s weakening. The yen grew significantly on Thursday amid a sharp decline of stock markets and Nikkei future. Stock index DJIA closed at a maximum fall since June, 20 by 1.47%.
New Zealand dollar reached 3-week high on Thursday on the back of manufacturing PMI increase to its high since June, 2004. Business NZ Manufacturing Index grew to 59.5 in July compared with 55.2 in June. Consumer confidence also grew - ANZ Consumer Confidence Index rose by 2.7% in August to 123Vs its decline by 3.3% prior month.
By MasterForex Company
Overview of the main economical events of the current day - 19/08/2013
The Main Events of the Week
he dollar was traded slightly upwards on Friday against most major currencies despite consumer confidence decline in the USA. Building Permits and Housing Starts also grew in July a little less than forecasted. Prelim U. of Michigan Consumer Sentiment fell unexpectedly to 80 p. in August from the highest reading 85.1 p. prior month since July, 2007. Mortgage rate rise can bring down the momentum of the real estate market growth which contributes to economic development.
By the end of the week the dollar had grown slightly by 0.2% according to the dollar index that shows its attitude towards the basket of six major currencies. The dollar showed the largest growth Vs yen (+1.38), Swiss franc (+0.44%) and Canadian dollar (+0.44%); it almost didn’t change against the Australian dollar (+0.10%) and the euro (+0.08%) and dropped against the pound (-0.77%) and New Zealand dollar (-0.77%).
Meanwhile according to the Bloomberg poll, 65% of the experts expect the Fed to announce tapering off of bond purchase program at the nearest Fed meeting in September and probably the first step will be a decrease by $10 billion. Important events for the dollar are expected in September: Fed meeting on September 18, the federal elections in Germany on September 22, continuation of US discussions on the next fiscal year budget.
The coming third week of the month is poor for significant data. The main event in the euro-zone will be Thursday release of French, German and the whole euro-zone Flash Manufacturing PMI and Flash Services PMI. German Producer Price Index will be released on Tuesday and German Final GDP for the second quarter – on Friday.
The UK Second Estimate GDP for the second quarter will be released on Friday. On Wednesday Public Sector Net Borrowing and CBI Industrial Order Expectations will be released on Wednesday and BBA Mortgage Approvals – on Friday. In Canada retail sales data will be released on Thursday and Consumer Price Index – on Friday. Trade balance of Japan will be released on Monday. HSBC Flash Manufacturing PMI will be released on Thursday.
In Australia on Tuesday there will be a release of the last meeting minutes of Australian Reserve Bank. Westpac and Conference Board Leading Indexes will be released on Wednesday and Thursday respectively. In New Zealand there will be a release of quarterly reports: Producer Price Index – on Monday and expected inflation in two years – on Tuesday.
FOMC Meeting Minutes will be released on Wednesday. Existing Home Sales will be released on Wednesday and New Home Sales – on Friday. Chicago Fed National Activity Index will be published on Tuesday and House Price Index – on Thursday. Annual Economic Symposium will be held in Jackson Hole, Wyoming from on August, 22-24. As expected, the Fed governor Ben Bernanke will not take part in it, which may lower the significance of this event for the markets.
By MasterForex Company
Overview of the main economical events of the current day - 20/08/2013
Australian dollar may drop to $0.80
US dollar was traded slightly downwards on Monday against the euro and the pound but almost didn’t change against the yen and rose Vs commodity currencies amid a poor news background - no US data were released on the first day of the week. FOMC member Jeffrey Lacker said that the first six months data proved that asset purchase hadn’t helped economic growth. 10-Year Treasury Bonds Yield continued to grow and reached its high since July, 2011. Dallas Fed president Richard Fisher believes that a sharp US Treasuries price fall is linked to the expectations of soon QE tapering off.
The euro grew after the publication of Bundesbank Monthly Report but then it lost all its growth. According to the report German economic growth in the second half of the year must stabilize after the second strong quarter. Central Bank of Germany also declared that ECB promises to keep low rates within a long period of time didn’t exclude the possibilities of rates increase in case of inflation pressure strengthening. Meanwhile, according to the Reuters Bad Loans Data in Spanish banks in June reached its historical high 11.6% Vs 11.2% in May.
The pound was traded upwards and updated its monthly height amid the increase of British economic growth outlook. Confederation of British Industry (CBI) raised its outlook for 2013 from 1% to 1.2% and for 2014 from 2% to 2.3%. The expectations for the current year turned out twice better than the budgeted level. “The economy has started to gain momentum for growth, the confidence recovers but all this is in the early stages”, - said director-general of the CBI John Cridland. Meanwhile according to the Rightmove House Prices dropped by 1.8% m/m in August – the first time this year amid a traditional fall in summer.
The yen dropped after the publication of Japanese Merchandise Trade Balance but then it recovered amid stock markets decrease. Trade deficit in July increased to 1.02 trillion yens (the third largest in history). The deficit has been fixed for 13 months in a row. Both exports and imports growth rates turned out the highest since 2010. The exports rose by 12.2% at an annual rate although it turned out weaker than expected. The imports exceeded the outlook and rose by 19.6%. Japanese exports recovery has continued in July for the fifth month in a row due to yen weakening.
The Australian dollar reached its high within three weeks at the Asian session on Monday but then it traded downwards before the publication of Australian Reserve Bank Meeting Minutes. New Motor Vehicle Sales in Australia fell by 3.5% in July compared with the prior month. Extra pressure was put by the statements of one of the PIMCO’s board members Scott A. Mather who said that AUD might fall to $0.80 during the next year as RBA would be forced to lower the key interest rate to 2% to stimulate economic growth and put a downward pressure on the national currency.
By MasterForex Company
Overview of the main economical events of the current day - 21/08/2013
The Dollar Fell Before FOMC Meeting Minutes Publication
The dollar dropped on Tuesday against almost all major currencies (except commodity ones) before the publication of FOMC Meeting Minutes on Wednesday. FOMC Meeting Minutes will clarify the placement of forces in the Federal Reserve about reducing the QE3 incentive program and whether it should be expected in September already. If the FOMC Meeting Minutes don’t say anything about QE tapering off and the state of economy is not considered good enough for this, it can have a negative impact on the dollar.
Extra pressure on the dollar was put by the decrease of the US National Activity Index. Chicago Fed National Activity Index (CFNAI) grew in July less than expected (-0.10) to -0.15 from -0.23 in June. Prior month reading was revised for the worse from -0.13 to -0.23. The index has been below zero for five months in a row since March – which indicates National Activity Index growth being below the trend.
The euro overcame the level of 1.34 Vs the dollar and closed higher than it for the first time since the middle of February. Construction Output in the euro-zone in June grew by 0.7% compared with the prior month, May data were revised from -0.3% to +0.5%. The reading has been growing for three month in a row making a significant contribution to overcoming the recession, which was shown by the euro-zone preliminary GDP released last week (GDP growth by +0.3% q/q after 6-quarter decrease). Belgium NBB Consumer Confidence Index had been growing for the fifth month in a row in August to its high for the last 15 months (to -12 from -16 in July).
The pound was traded upwards and updated the August maximum. According to the Council of Mortgage Lenders (CML), UK mortgage lending reached its high in July for almost 5 years amid incentive programs of the government: 16.6 bln pounds against 14.8 bln prior month. The yen has grown amid Japanese stock market decrease which according to Nikkei 225 lost 2.6% on Tuesday.
The Canadian dollar dropped Vs US dollar to its low for almost two weeks on the back of Wholesale Sales report in Canada which showed the highest decrease rates for more than 4 years. According to the Canadian Office for National Statistics, Wholesale Sales dropped by 2.8% in June against the expected decrease by 0.5%.
The Australian dollar fell after the publication of Australian Reserve Bank Meeting Minutes on August 6, which resulted in the decrease of the key interest rate to the record low 2.5%. The RBA declared in its meeting minutes that it didn’t exclude the possibility of further interest rate decrease in future although it hadn’t plans of mandatory rates decrease and it would continue to monitor the economic indicators. According to the minutes, AUD maintains overvalued in historical standards and it probably will continue falling.
New Zealand dollar weakened to a week low against the US dollar after the RBNZ Governor Graeme Wheeler speech. He called NZD rate overvalued, not just high, speaking of high credit risks. At the last meeting RBNZ used a mild formulation, which probably was a mistake. Also Wheeler announced on Tuesday that mortgage lending restrictions to borrowers with small deposits will be introduced since October 1, which put an extra pressure on the NZD.
By MasterForex Company
Overview of the main economical events of the current day - 22/08/2013
US Existing Home Sales Reached Its High for Almost 4 Years
The US dollar was traded upwards on Wednesday against most major currencies before the publication of the FOMC Meeting Minutes and it grew after the publication. In spite of the fact that the opinions of Fed leaders on the terms of bond purchase reduce divided, most Fed leaders’ wide support of the Fed governor Ben Bernanke’s plan on tapering off of incentives became evident although the minutes didn’t contain any apparent hints on the terms of QE reduce start.
It can be said that the text of the meeting minutes turned out without surprises. There are almost no changes in the Fed leader’s estimates of the state of the economy. Almost all FOMC members agreed that there was no need to make changes in the asset purchase program yet. The outlook of finishing QE program still depends on the data. Asset purchases will have been over by 2014 if the economic situation develops according to the expectations. In the whole the minutes raised the expectations that the Fed would start tapering off the economy incentive program within the next several months.
The dollar was supported on Wednesday by strong housing market data. Existing home sales grew by 6.5% in July compared with the prior month to 5.39 million houses at an annual rate, which turned out the highest reading for almost four years. A growth to 5.15 million houses was forecasted. Sales growth is likely to reflect consumers activity jump who want to close transactions before mortgage rates rise higher. Mortgage rate growth in the nearest weeks threatens to slow down the recovery rates of the housing market which is the US economic growth engine this year.
The pound was traded upwards on Wednesday and updated August maximum again but had lost all the growth by the end of the day. Some support was provided by the CBI’s report. CBI Industrial Order Expectations anticipating industrial indicator reached zero level in August against -12 in July and improvement expectations to -8 points, which turned out the highest reading in 2 years. Industrial production grew to 25 in August – the highest reading since March, 2011 against 15 in July. Such growth indicates that economic recovery which has started this year is gathering pace.
The Australian dollar hit 2-week low on Wednesday Vs the US dollar amid the fall of Asian developing countries’ currencies and the leak at NPP Fukushima that was declared the accident of the third level of danger according to the International Nuclear Event Scale. The Canadian dollar fell to 6-year low Vs the US dollar amid commodity assets price decrease.
By MasterForex Company
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Overview of the main economical events of the current day - 23/08/2013
Chinese and Euro-Zone PMI Is Growing
The US dollar had grown by the end of Thursday Vs most major currencies after the publication of July FOMC Meeting Minutes that showed that almost all Fed leaders were ready to start tapering off QE already in 2013 although the start terms were not clarified. Most of all the dollar rose against the yen, dropped against the Australian dollar and almost didn’t change against the euro amid the release of positive macrostatistics from China and euro-zone. Thursday US statistics data were also mainly positive despite some worsening of labour market data.
Unemployment Claims rose by 13 thousand last week up to 336 thousand while a smaller growth to 330 thousand was expected. Last week data were also revised for the worse by 3 thousand. However, an average number of claims for the past 4 weeks – the reading that smoothes volatility – dropped by 2.25 thousand to 330.5 thousand, the lowest reading since November, 2007.
The US Manufacturing PMI rose in August to its high for five months as employment and new orders growth accelerated. Flash Manufacturing PMI rose to 53.9 in August against the final July reading 53.7. Kansas City Fed Manufacturing PMI also grew as companies’ demand for labour is increasing for the first time in six months.
Kansas City Fed Manufacturing Activity Index rose in August to 8 from 6 in July – the highest reading since February, 2012. CB Leading Index rose by 0.6% in July having exceeded the forecast after zero changes prior month. FHFA House Price Index grew by 0.6% in June also having exceeded the forecast. FOMC Member Richard Fisher making speech on Thursday repeated that reducing bond purchasing should be started in September.
The euro was traded downwards but by the end of the day it almost hadn’t changed. Some support was provided by the euro-zone PMI which not just rose but also turned out much better than expected signaling that European economic recovery was gathering pace. Euro-zone Flash Composite PMI rose in August to 26-month high of 51.7 Vs 50.5 in July having exceeded the expectations of 50.9. Flash Manufacturing PMI of Germany reached 25-month high. Only French indicators turned out worse.
The Australian dollar rose after the release of positive Chinese macrostatistics. HSBC Flash Manufacturing PMI, a key indicator of manufacturing PMI, grew to 50.1in August from 47.7 in July having exceeded the level of 50 points and having turned out significantly better than expected. The activity turned out the highest for the past four months after July fall to the lowest reading in 11 months, which indicates that the second world’s economy could maintain after 2-quarter decrease.
The yen decreased significantly amid the stock indexes growth after the release of Chinese and euro-zone positive statistics. DJIA has grown for the first time after 6-day fall. The Canadian dollar weakened considerably on the back of a weak report on retail sales which dropped by 0.6% m/m in June having exceeded the expectations. Core Retail Sales fell by 0.8% compared with the prior month while no changes were expected.
By MasterForex Company
Overview of the main economical events of the current day - 26/08/2013
The Main Events of the Week
he US dollar lost on Friday all its weekly slight growth and fell after a weak New Home Sales report. In contrast to Existing Home Sales that showed the highest reading for almost 4 years – New Home Sales slumped unexpectedly in July by 13.7% in comparison with the prior month to 394 thousand houses at an annual rate. The sales have turned out the lowest since this January and showed the sharpest decline since May, 2010. The June reading was also considerably revised for the worse – from 497 to 455 thousand houses. FOMC member Bullard said on Friday that the Fed had no necessity to hurry with the reduction of the incentive program.
Sales decline in July amid mortgage interest rate rise may signal a pause in housing market recovery. An average rate on 30-year mortgage loan grew up to 4.58% per annum last week compared with the lowest level of 3.31% recorded in November, 2012. Meanwhile, consumer confidence in the euro-zone grew to the highest level in August for more than two years - up to -15.6 from -17.4 in July.
By the end of the week the dollar had grown a little less than 0.1% according the dollar index that shows its attitude towards the basket of six major currencies. The dollar has grown Vs most major currencies except the euro (-0.40%) and Swiss franc (-0.55%). The largest dollar’s growth was Vs New Zealand dollar (+3.46%), Australian dollar (+1.62%), Canadian dollar (+1.57%) and Japanese yen (+1.18%). The pound showed the smallest decline (-0.28%).
This week there will be a release of retail sales data, labor market and inflation data, confidence and sentiment indexes. Most data will be published on two last days of the week. In the euro-zone unemployment, inflation data and European Commission confidence indexes will be released on Friday. In Germany IFO Business Climate report will be released on Tuesday and GfK Consumer Climate – on Wednesday, labor market and inflation reports – on Thursday and retail sales – on Friday. In Italy retail sales will be released on Wednesday and unemployment and inflation reports – on Friday. Confidence and sentiment indexes are expected to grow which will become another sign that economic recovery in the second quarter is going on.
In the UK it is a day off on Monday and there won’t be a lot of data this week. The main event may become the Bank of England governor Mark Carney’s speech where he is expected to discuss a new strategy of the Bank of England on providing monetary policy Forward Guidance. On Wednesday CBI Realized Sales will be released, on Thursday - GfK Consumer Confidence and on Friday - Mortgage Approvals.
In Japan retail sales report will be published on Thursday and on Friday a large statistics block of the end of the month will be released: inflation, unemployment, industrial production. In New Zealand ANZ Business Confidence will be released on Thursday and Building Permits – on Friday. In Australia Private Capital Expenditure report will be released on Thursday and Private Sector Credit – on Friday. In Canada quarterly Current Account report will be released on Thursday and the GDP for June and for the second quarter – on Friday.
In the USA on Monday there will be a release of Durable Goods Orders data. On Tuesday - CB Consumer Confidence and S&P/Case-Shiller HPI. On Wednesday Pending Home Sales will be released. On Thursday – revised GDP for the second quarter. On Friday Personal Income and Spending report, Chicago PMI and Revised U. of Michigan Consumer Sentiment.
By MasterForex Company