Daily Market Analysis by FxGrow - page 2
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Daily Market Analysis – 20th May, 2015
By FxGrow Research & Analysis Team
Euro collapses after ECB Plans to Increase Bond Purchases
The European Central Bank plans to increase bond purchases as a part of its €1.1 trillion program in the coming weeks. This assured the investors globally that ECB will take necessary steps to meet their monthly bond-purchase target of €60 billion.
The comments made by ECB board member Benoit Coeure triggered a rally in European stock and bond markets and weakened the Euro. Coeure also hinted that ECB may push interest rates further below zero when deciding monetary policy.
The ECB has to decide whether it is willing to apply haircuts on debt it will accept from Greek banks under its ELA program as it will not risk a meltdown of Greek banks. Greece is running out of time as it has just two weeks before it runs out of cash and defaults, since its next payment is due on 5th of May.
Soon after the news EURUSD came under heavy selling pressure and is currently trading below 1.1100 in the Asian trading session.
In Germany Investor sentiment fell for the second month. The ZEW German Economic sentiment fell to 41.9 while analyst expectations were at 49.0 Germany’s Producer Price Inflation rose to 0.1% while analyst expectations were for a rise of 0.2%
In UK Inflation turned negative for the first time since 1960, as per expectations of the Bank of England GBP Consumer Price Index fell to -0.1% in April.
In US Housing Starts and Building Permits surged more than expected in the month of April. According to Ted Wieseman, an economist at Morgan Stanley "The strong rebound in housing starts confirmed expectations for housing to accelerate substantially in the second quarter and be a stand-out growth contributor amid otherwise sluggish indications for a pickup in GDP growth".
In Japan Economy grew more than expected to 2.4% in first quarter. According to Marcel Thieliant, a Japan economist at Capital Economics "The acceleration in GDP growth last quarter was mostly due to a jump in inventories, and a range of indicators point to a slowdown in the second quarter".
Crude Oil is higher in the Asian trading session at 58.81$ ahead of the EIA's weekly Crude Oil data.
Gold is trading lower this morning at 1207.14 while Silver is up at 17.10
20th May 2015 – 07:55hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 21st May, 2015
By FxGrow Research & Analysis Team
FOMC Minutes show reduced likelihood of June Rate Hike
The Federal Open Market Committee (FOMC) minutes indicate a consensus that the weakness in Q1 growth was transitory and that some of the recent weakness in the pace of economic activity might persist. The minutes show a reduced likelihood of a June rate hike with only "a few" participants expecting conditions would justify raising the fed funds rate at that time.
Many participants, however, thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising the target range for the federal funds rate had been satisfied, al-though they generally did not rule out this possibility.
However, most participants felt that the timing of the first increase in the target range for the federal funds rate would appropriately be determined on a meeting-by-meeting basis and would depend on the evolution of economic conditions and the outlook.
In UK Bank of England minutes show consensus to maintain the benchmark interest rate at all-time low of 0.5% this month and to keep the size of the central bank's bond portfolio at 375 billion pounds.
According to Bank of England "While there was a range of views over the most likely future path for bank rate, all members agreed that it was more likely than not that bank rate would rise over the three-year forecast period".
In Canada wholesale sales rebounded in March which is a positive sign for Canada's economy.
According to the Bank of Canada Governor- Stephen Poloz "Not only are the headwinds of the global financial crisis still blowing, but now we're also dealing with lower prices for oil and other key commodities, which previously were a key growth engine for us".
Crude Oil is higher in the Asian trading session at 59.34$ as Fed suggested that a rate hike in June is unlikely.
Gold is trading lower this morning at 1210.33 while Silver is up at 17.20
21st May 2015 – 07:58hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 22nd May, 2015
By FxGrow Research & Analysis Team
Bank of Japan leaves monetary policies unchanged
The Bank of Japan left monetary policies unchanged as its economy grew more than expected in the first quarter. Policymakers have kept the central bank's annual 80 trillion yen monetary easing programme in place after a two-day meeting.
BOJ stated that "private consumption has been resilient against the background of steady improvement in the employment and income situation. The year-on-year rate of increase in the CPI is likely to be around zero percent for the time being, due to the effects of the decline in energy prices".
In Eurozone, the negotiations between Greece, Germany and France have ended without any signs of an agreement to release the EUR 7.2billion in financial aid to Greece.
Greece’s new government is still to reach an agreement with its European creditors over its €240 billion bailout program. Rising concerns over the ability of the Greek government to repay its debts and remain in the Euro is worrying investors worldwide.
In US Existing home sales fell by 3.3% to 5.04 million while market expectations were at 5.23 million. US initial claims rose by 10k to 274,000 in the week ending May 16, 2015.
Germany’s GDP rose to 0.3% in line with the analyst expectations. According to the data the German's economy entered 2015 with a relaxed pace of expansion.
In Euro Zone Manufacturing Activity continues to recover as services sector enjoyed a healthy expansion.
ECB stated that "Overall, members agreed that emphasis needed to be placed on a steady course of monetary policy" and that the central bank's asset buying programme yielded intended results.
In news coming from Greece it says that it expects to reach a deal with its creditors within 10 days and meet all its payments in June.
NYMEX Crude is down in Asia to $60.65 as investors await US data on drilling activity.
Gold prices have bounced in Asia currently trading at 1208.96 while Silver is strong at 17.19
22nd May 2015 – 07:19hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 25th May, 2015
By FxGrow Research & Analysis Team
Euro under pressure as Greece is set to default on Debt Repayment Loans
Greece is set to default on Debt repayment loans of €1.6billion which are due to IMF next month as it does not have the funds.
Greek Interior minister, Nikos Voutsis said that Greece needs to strike a deal with its European creditors soon or it would default on repayments to the International Monetary Fund. He said "This money will not be given and is not there to be given.”
If Greece is unable to repay its loans to the IMF, it would deepen the country’s economic crisis, force capital controls and foreclosure of Greek banks.
Euro is under pressure as Greek debt issue remains unresolved trading at 1.0976 in the Asian trading session. Outcome of the elections in Spain also weigh down on Euro with expectations of low liquidity amid market holidays in the UK, Germany and the US.
In USA Consumer Price Index rose 0.1% in the month of April, while CPI YoY rate remained negative, at -0.2% in April. The annual increase in core prices remained unchanged at 1.8%.
US Core Inflation in April, excluding Food and Energy, showed the biggest gain since January 2013.
Federal Reserve Chairwoman Janet Yellen said on Friday "If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target".
With upbeat US Inflation data and comments made by Yellen US Dollar strengthened against its major counterparts on Friday with EURUSD falling more than 200pips from its high of 1.1197
Crude Oil is trading at $59.60 on account of strong US Dollar ahead of US holiday.
Gold prices are flat in Asia at 1203.57 on the prospect of a Federal Reserve rate hike this year while Silver is down at 17.02
25th May 2015 – 08:09hrs GMT
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 26th May, 2015
By FxGrow Research & Analysis Team
US Dollar strong on prospects of a FED Rate Hike
Federal Reserve Vice Chairman Stanley Fischer said on Monday that "If the US Economy is growing very, very slowly we will wait. If the economy is growing faster we will do it quicker".
Fischer said that FED expects the interest rate will reach 3.25 to 4 percent by 2017-2018.
He further stated - "What we are thinking about is raising the interest rate from zero, which is an ultra-expansionary monetary policy to a quarter percent, which is an extremely expansionary monetary policy. This will be a gradual process".
US Dollar continues its Bull Run as Federal Reserve keeps its door open for a Fed rate hike.
Euro has dropped below 1.0900 in the Asian trading session amid fears of Greece inability to pay the IMF loan next week and the outcome of the Spanish regional elections.
Meanwhile Greek debt talks have resumed and officials have expressed confidence that Greece was close to a deal with its European creditors.
In Athens, government spokesman Gavriil Sakellaridis stated "We want to be consistent with our obligations and so we are striving for a deal so the economy can get some relief".
The US Dollar hit an eight-year high of 122.68 against the yen as it is expected that Federal Reserve will raise interest rates later this year.
Bank of Japan Governor Haruhiko Kuroda stated "The latest data point can be interpreted as confirming that underlying inflation in Japan has been improving significantly, although the firmness is currently masked by the temporary negative impact of the sharp decline in oil prices".
The New Zealand dollar lost ground as its Trade Surplus shrank in April due to decline in its exports to China. New Zealand's trade surplus shrank to NZ$123 million in April while analyst expectations were at $NZ100 million.
Crude Oil is trading at $59.40 after Iran's Oil Minister stated that the OPEC will maintain its monthly oil production limit.
Gold prices are lower in Asia at 1196.25 on the prospect of a Federal Reserve rate hike this year while Silver is down at 16.80
26th May 2015 – 08:31hrs GMT
For more in depth Research & Analysis please visit FxGrow.
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 02nd June, 2015
By FxGrow Research & Analysis Team
US ISM Manufacturing Index Increased to a 3-month high in May
US Institute for Supply Management (ISM) manufacturing index increased to a 3-month high in May as manufacturing activity in the US expanded at a faster pace than expected.
US Manufacturing expanded in May as the PMI registered 52.8 percent, an increase of 1.3 percentage points over the April reading of 51.5 percent, indicating growth in manufacturing for the 29th consecutive month.
US consumer spending remained flat in April as households cut back on purchases of luxury items and continued to increase savings.
"While the US economy still looks set to rebound from the decline seen in the first quarter, the extent of the second quarter recovery therefore remains highly uncertain and could well disappoint. It therefore remains too early to take a reliable reading on the health of the economy and the data flow over the summer will be crucial in determining the timing of the first Fed rate hike." - said Chris Williamson, Chief Economist at Markit.
The Reserve Bank of Australia kept interest rates unchanged at a record low 2.0 percent, in line with analysts' expectations. Following the news Australian dollar remained bullish and AUDUSD touched a high of 0.7700
"There are a lot of factors influencing the currency. One of those is probably tomorrow, the GDP number for the first quarter. It's probably going to be very strong," Matthew Circosta, an analyst at Moody's Analytics, told CNBC. "But moving forward, you'll see that Aussie dollar weakness coming through in the next few months, because the U.S. is going to be raising interest rates."
UK manufacturing activity increased in May to 52.0 which accounts for about 10% of the UK economy.
"Expectations of a broad rebound in U.K. economic growth during the second quarter of the year is called into question by these readings" – said Rob Dobson, senior economist at Markit.
Greek debt negotiations continue between Greece and its European creditors. IMF chief Christine Lagarde, ECB president Mario Draghi, French president Francois Hollande and European Commission president Jean-Claude Juncker met yesterday to give out an offer for Greece to consider.
Crude Oil is trading higher at $60.90 ahead of weekly US supply data.
Gold is trading lower in the Asia at 1187.26 while Silver is weak at 16.65
02nd June 2015 – 09:54hrs GMT
For more in depth Research & Analysis please visit FxGrow.
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 08th June, 2015
By FxGrow Research & Analysis Team
Strong US Non-Farm Payrolls report boosts Fed Rate Hike in September
In US total nonfarm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5 percent. Job gains occurred in professional and business services, leisure and hospitality, and health care. Mining employment continued to decline - US Bureau of Labor Statistics.
NFP report indicates that the US job market continues to improve solidly and the health of the US economy is more favorable than the weakness displayed in the Q1 GDP report.
US dollar remained strong across its major counterparts on Friday after the US jobs report boosted speculation of a Fed rate hike in September this year.
New York Fed president Dudley noted that "if the labour market continues to improve and inflation expectations remain well-anchored, then I would expect, in the absence of some dark cloud gathering over the growth outlook, to support a decision to begin normalizing monetary policy later this year".
Greece talks continue to dominate the markets as Greek PM Alexis Tsipras stated "the proposals from the creditors are clearly unrealistic...The Greek government cannot consent to unreasonable proposals that call for devastating measures for pensioners and Greek families. I want to believe that it was a bad negotiating trick".
Greek Finance Minister Yanis Varoufakis said "the government will not sign a deal that extends this self-feeding crisis of the last 5 years".
In Canada Net Change in Employment for the month of May was +58.9K Jobs while Unemployment Rate remained at 6.8%.
In Japan the economy grew at 3.9% in the first quarter of 2015 beating analyst expectations of a 2.7% growth.
In Germany Factory orders increased by 1.4% in April as German industry looks to experience a boost this year.
Crude Oil is trading higher at $59.02 after OPEC decided to keep its production target unchanged.
Gold is trading higher in the Europe at 1173.24 while Silver is flat at 16.10
08th June 2015 – 09:31hrs GMT
For more in depth Research & Analysis please visit FxGrow.
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 12th June, 2015
By FxGrow Research & Analysis Team
IMF leaves Greece bailout talks amid major differences
The International Monetary Fund has walked out of talks with Greece amid major differences over labour market and pension reforms.
“The ball is very much in Greece’s court. There are major differences between us in most key areas. There has been no progress in narrowing these differences recently” - IMF spokesman Gerry Rice.
Donald Tusk, president of the European Council said "There is no more time for gambling. The day is coming. I'm afraid that someone says that the game is over. It is very obvious that we need decisions, not negotiations".
"Time is running out, and the risk of insolvency is increasing by the day. The main losers in that scenario would be Greece and the Greek people" - Jens Weidmann, president of the Bundesbank.
Greece government needs to strike a deal with its European creditors soon and secure the bailout funds. A deal must be signed by the Eurozone finance ministers before the end of the month. If there is no deal then Greece will be in trouble and could fall out of the Eurozone.
Despite major differences with the IMF Greece hopes to clinch a deal with its lenders at a meeting of Eurozone finance ministers on June 18.
"I hope a deal will come very soon, on June 18, when the Euro group takes place" - Flabouraris, aid to Greek Prime Minister Alexis Tsipras.
Greece's Unemployment Rate rose to 26.6% in the first quarter of the year as it continues to struggle with its long term unemployment problem.
In US Retail sales climbed for the month of May to 1.2% indicating that the economy has regained momentum after contracting in the first quarter.
In China Retail sales and Industrial output improved for the month of May. Total production from China grew at 6.1% YoY basis in May while retail sales soared 10.1% from a year earlier.
In Australia Unemployment rate fell to 6.0% in May the lowest level in 12 months. The number of people with jobs rose by 42K to 11.76 million in May, according to the Australian Bureau of Statistics.
Crude Oil is down to $60.30 because of a stronger dollar and amid uncertainty in Greece.
Gold is trading lower in the Europe at 1179.25 while Silver is weak at 15.91
12th June 2015 – 09:10hrs GMT
For more in depth Research & Analysis please visit FxGrow.
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 26th June, 2015
By FxGrow Research & Analysis Team
Greek crisis extends into weekend before Sunday's Final Deadline
Greece was unable to close a deal with its European creditors on Thursday, as the crisis extends into weekend before the final deadline on Sunday to avoid a default.
Euro zone finance ministers finished their third round of meeting in a week without an agreement as Greek Prime Minister Alexis Tsipras tries to convince its European creditors and secure the much needed bailout funds for his country.
"The institutions informed us that on a number of issues there is still a wide gap with the Greek authorities. In the meantime, the door is still open for the Greek authorities to accept the proposals tabled by the institutions" - Euro group chairman Jeroen Dijsselbloem.
"The climate is that either by Saturday Greece accepts or on Saturday there will be a discussion about Plan B" - Euro zone official.
"The institutions are going to look again at the two documents - our documents and their own. There will be discussions with the Greek government and we'll continue until we find a solution” - Greek Finance Minister Yanis Varoufakis.
"Certain institutions insist in not accepting equivalent measures suggested by the Greek government. The non-acceptance of equivalent measures has never happened before. Neither in Ireland nor in Portugal." - Greek Prime Minister Alexis Tsipras.
Greek's International creditors have rejected the government's plan to end its financial crisis, but they have submitted counterproposals. Time is running out and strong measures would be needed to avoid a default and prevent Greek banks from collapsing thereby limiting any market contagion to other euro area countries.
The new proposal submitted by Greece aims to make €8bn in savings, by new taxes on the wealthy and businesses, VAT increases and a cut in defense spending. But in counter-proposals its European creditors have called for further measures on pensions, higher value added tax for restaurants, and for defense expenditure to be slashed by € 400 million.
"I want to stress that it's not just a matter of Greece, it's a matter of the future of Europe. What's happening now in Greece is going to happen tomorrow in other countries" - Dimmitris Kammenos.
“Without a substantial form of debt relief, which looks unlikely in an initial agreement, Greece’s debt ratio will remain unsustainably high and the crisis will continue.” - Jonathan Loynes, Capital Economics.
In Germany GfK consumer sentiment index declined to 10.1 going into July following a decline in German business morale in June. GfK said that Greece's default and exit from the currency bloc, which had seemed a remote possibility, now appears to be quite realistic.
New Zealand logged a Trade surplus of NZ$350 million for the month of May far surpassing analysts’ expectations. The Reserve Bank of New Zealand is unhappy with New Zealand Dollar' strength as the Kiwi Dollar slid to the lowest level in five years versus the US Dollar.
In UK Retail sales growth slowed for the month of June. The British retail sales balance dropped to +29 this month, down from +51 in May.
In US Initial Jobless Claims rose to 271K last week according to the US Department of Labor.
Crude Oil is trading lower at $59.58 as trader’s eye Greece debt talks.
Gold is trading lower in the Europe at 1173.53, while Silver is weak at 15.83
26th June 2015 – 09:39hrs GMT
For more in depth Research & Analysis please visit FxGrow.
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.
Daily Market Analysis – 29th June, 2015
By FxGrow Research & Analysis Team
Greece Crisis Intensifies as Global Stock Markets Slide
Greece debt crisis has intensified after the European Central Bank decided not to extend emergency funding. Greek Prime Minister Alexis Tsipras has announced a referendum to vote on whether to accept the bailout measures offered by its European creditors on July5.
Greek Banks have been closed and capital controls have been imposed to prevent financial chaos following the breakdown of talks with its European creditors.
Stock markets in Europe and Asia witnessed falls with London's FTSE 100 index down by nearly 2%. In Asia Japan's Nikkei fell nearly 3% in the early trading session.
Euro opened with a gap of more than 200 pips touching a low of 1.0953 in the early Asian trading session.
Bond yields for Italy, Spain and Portugal rose sharply, while German bond yields fell in the time of crisis.
In Greece Banks will remain closed till 6th of July and cash withdrawals are limited to €60 in a day. The Athens stock exchange will also remain closed.
“Following the decision by the Greek authorities to hold a referendum and the non-prolongation of the EU adjustment programme for Greece, the governing council declared it will work closely with the Bank of Greece to maintain financial stability” - ECB.
“We continue to work closely with the Bank of Greece and we strongly endorse the commitment of member states in pledging to take action to address the fragilities of euro area economies” - ECB President, Mario Draghi.
"While the imposed restrictive measures appear necessary and proportionate at this time, the free movement of capital will however need to be reinstated as soon as possible in the interest of the Greek economy, the Eurozone, and the European Union's single market as a whole" - European Commission.
After the failure of the debt talks on Friday and the decision of the European Central Bank to freeze emergency loans for Greek banks has led to capital controls. This has increased the risks of a Greek exit from the Euro in the coming times.
After the Eurozone finance ministers on Saturday turned down a request for an extension of the Tuesday payment to the IMF Grexit is possible. “Grexit” is short for the possibility of Greece exiting the European Union and moving away from the Euro.
Crude Oil is trading lower at $58.37 on Greek default concerns.
Gold is trading lower in the Europe at 1177.22, while Silver is weak at 15.81
29th June 2015 – 11:00hrs GMT
For more in depth Research & Analysis please visit FxGrow.
Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.