Forex research

[Alpari]

UK Opening Call from Alpari UK - Wednesday 14th May 2014

European stocks pause following ECB driven boost

• PBOC boosts housing market, yet worries remain
• Potential ECB action continues to drive markets
• Defunct EU sanctions imposed yet impending election threatens to increase tensions.

The European markets are looking at a somewhat more tame start to the day today, following yet another strong Tuesday which saw the S&P500 reach 1900 for the first time. This has come off the back of a somewhat mixed Asian session where the likes of the Nifty and Nikkei pulled back a little, yet the Chinese stocks rose following the news that the PBOC has asked major lenders to hasten the process of providing mortgages in the face of a slowing housing market. The European markets are expected to open relatively flat, with the FTSE100 -2, CAC +1 and DAX +6 points.

The overnight news that the PBOC has requested lenders both reduce the amount of time a mortgage loan is processed, and lend more has been welcomed across the Chinese markets. However, there are worrying signs here in the face of already weakening indicators in the region. Yesterday's triple-miss of fixed asset investment, retail sales and industrial production showed exactly this trend, with the region underperforming in many of the key measures. Thus the existence of the housing market as yet another possible driver of lowered growth is something to be worried about, not cheered. Amounting for around 10% of GDP in 2013, the real estate market has been a core driver of both national and individual wealth. Yet with much of these properties unused shells representing the fact that housing is often viewed as simply an investment rather than somewhere to live in, that was always likely to come to an end at some point. Whilst the PBOC's action may stem the issue for the time being, this is a clear sign that an already worrying housing market has just got a little less stable.

The European markets continue to benefit from the boost provided by Mario Draghi last week when he ramped up the usual dovish rhetoric and instead put a potential date upon ECB action. With usual caveats attached relating to the bank's decision being data dependant of course. On this occasion it is the forecasts due out early June upon which Draghi is basing his decision upon for us to possibly see the headline interest rate cut once more. Either way, it seems the ECB has seen low inflation and a rising euro for long enough and are now willing to act. However, it is the previous ineffectiveness of interest rate cuts to spur inflation which interests me as this is likely to be the case yet again. Therefore should we see disinflationary conditions continue despite either flat or negative interest rates, I believe it will force the hand of Draghi and could lead to the ultimate form of stimulus, in the form of asset purchases. This is still some way away and could yet not happen, yet the possibility of such a radical step for the ECB is enough to push the euro lower yet.

Finally, the Ukraine crisis took on another stage yesterday, with the EU adding a further 13 people added to the sanctions list, while two Crimean firms were hit with asset freezes. Unfortunately this represents yet another failure to take any particularly hardline in the issue, which is understandable given the unwillingness of EU countries to hurt their own domestic economies should Russia take any major retaliatory steps. However, with the Ukraine general election approaching, it seems as if the EU's credibility could come to the fore should Russia actively interfere or seek to influence the process. The feeling is that the votes, much like the recent regional votes conducted by anti-Ukrainian seperatists, could be a major source of conflict and as we get closer to that May 25 deadline, the tensions in the region are likely to increase accordingly.

Read the full report at Alpari News Room​

 

[Alpari]

US Opening Call from Alpari UK - Wednesday 14th May 2014

US futures treading water after reaching record levels

• US futures treading water after reaching new highs on Tuesday;
• BoE inflation report headlines busy morning session in Europe;
• Cautious wording from Carney highlights desire to avoid unnecessary market volatility;
• US session quieter with five companies reporting and little data being released.

Markets look set to take a breather on Wednesday, a day after the S&P breached 1,900 for the first time and the Dow also edged to new record highs. Ahead of the opening bell on Wall Street, the S&P is seen opening 1 point lower at 1,896, the Dow 13 points lower at 16,702 and the Nasdaq 5 points lower at 3,606.

The first half of the European session has been fairly busy so far, with key economic data being released for both the UK and the eurozone and the Bank of England inflation report being released. While the report itself caused a bit of a stir in the markets, particularly in sterling pairs and UK bonds, the press conference that follows is always equally important.

At the time of writing, Mark Carney has succeeded in preventing any unnecessary surges in volatility in the markets. This was clearly an intention of his, and the MPC as a whole, given central banks’ tendency in recent years to send the wrong message and create temporary panic. The wording in the statement and following press conference has clearly been carefully chosen and was very cautious from the MPC. I expect this will become a habit for most central banks going forward, making these events less eventful, as they attempt to return to normal monetary policy.

The data from the UK this morning has provided further evidence that the BoE will be one of the first major central banks to return to normal monetary policy and begin hiking rates next year. Unemployment in the UK fell to 6.8 in March, in line with expectations, while the claimant count continued to fall, albeit slightly slower than expected. The only concern came from average earnings, which did not increase at all compared to last month, despite expectations of quite a significant jump. I don’t see this as a major concern right now but this is one area that we’ll need to see improvement if this recovery is going to be sustainable.

The rest of the day may be a little quieter, with no major economic data being released and earnings season coming to an end. Five S&P 500 companies are scheduled to report earnings today, including Macy’s and Cisco, while on the economic data side, MBA mortgage applications and PPI inflation figures will be released before the open on Wall Street.

Read the full report at Alpari News Room​

 

[Alpari]

Daily Market Update - 14 May 2014 - Alpari UK

[video=youtube;JaHgvEWwOUM]https://www.youtube.com/watch?v=JaHgvEWwOUM[/video]

Chinese worries persist, with housing market coming to the fore - 00:24
UK jobs report paints mixed picture of employment - 02:02
BoE inflation report tries to keep speculation under wraps - 03:42

 

[Alpari]

UK Opening Call from Alpari UK - Thursday 15th May 2014

Markets tread water ahead of key eurozone GDP and CPI

• Japan grows at highest rate in 2 years
• BoE strikes dovish tone, yet fails to address north/south divide
• Eurozone GDP and CPI in focus for the European session.

The European markets are expected to suffer another round of profit taking today, as the dust finally settles following Mario Draghi’s press conference last week. This comes following a leak yesterday that the ECB is preparing a package of policy options ahead of the June meeting which include cuts across it’s interest rates and measures to drive investment in small to medium sized businesses. In much the same manner, the Asian session also failed to spark much excitement, despite the announcement that Japan’s economy grew at the fastest rate in over two years during Q1 2014.

The news out of Japan has understandably caused a somewhat mixed reaction within the markets, with the yen rallying and a subsequent pullback in the Nikkei. Today’s announcement that Japan posted growth of 1.5% in Q1 represents the joint highest rate since the crisis began in 2007 and brings significant doubts as to whether the BoJ will necessarily need to implement any second round of monetary stimulus, as has been widely expected. However, this figure has been somewhat distorted by the implementation of the sales tax in April and thus where we are seeing strength for Q1, it is likely that we will see subsequent weakness in Q2. That being said, strong economic releases have the tendency to bring about this kind of negative reaction in the Nikkei due to the anxiety that the BoJ may not need to act to such an extent as has previously been expected.

Despite this, I believe the most important indicator we should be watching to gauge whether or not there will be further asset purchases is the inflation rate which has stood at 1.3% for four consecutive months now. Thus should we see inflation fail to take the next leg higher towards the 2% target, I believe we are still likely to see further action from the BoJ. Furthermore, today’s figure is positive, yet the test was always going to be how strong growth and investment is following the sales tax hike, not before it. Thus going forward, the economic indicators are likely to become increasingly influential to monetary policy.

Yesterday saw the BoE strike somewhat of a dovish tone, pushing back expectations of a rate hike, whilst raising growth forecasts. The interesting part of this problem is that much of this rate argument seems to be centered around the impact it has been having to the housing market in possibly creating yet another asset bubble. However, with much of the London housing demand being driven by foreign ‘safe haven’ flows, it could be said that the London boom would be significantly lessened should we only see domestic investment in the manner that northern cities in the UK generally have. Mark Carney touched on the fact that the BoE treat both north and south as a single entity, avoiding policy decisions for separate regions of the UK. However, with prices still recovering to pre-recession levels, there is the threat that those in the north of the country will become disenfranchised by London centric policy—making, in much the same way that some have in Scotland.

Today’s theme is going to continue to be the release of GDP figures this morning, with Eurozone countries releasing their growth rates for Q1 throughout the morning. The backdrop of impending stimulus measures from the ECB add another dimension to this today, with GDP rates likely to be strengthened by any monetary stimulus going forward. I would not expect any adverse reaction should these figures come in above estimates, owing to the fact that largely the ECB decision-making is driven by low inflation and a strong euro, rather than any current growth fears for the region. However, with the inflation figure also due out this morning, we could certainly see markets draw conclusions as to whether we will see any further action from the ECB in June. The March announcement of 0.7% is expected to be matched this month, yet given disinflationary pressures, we could see it tumble further to the downside, putting further pressure upon Draghi to act. The March figure was largely expected to be higher given that Easter typically sees firms in the services sector increase their prices, thus with this out of the way, I believe there will likely be downward pressure upon this release.

Read the full report at Alpari News Room​

 

[Alpari]

US Opening Call from Alpari UK - Thursday 15th May 2014

US futures mixed following tough start in Europe

• US futures mixed following tough start in Europe;
• Further evidence of two-tier eurozone as Germany again leads the way;
• Get out of jail free card for ECB as core CPI reading rises to 1%;
• Attention turns to US data with inflation, labour market and manufacturing data being released.

US futures are mixed ahead of the opening bell on Thursday, with the S&P seen down 1 point and the Dow and Nasdaq up 2 and 8 points, respectively. This comes following a difficult morning in Europe with data largely disappointing and traders looking to lock in more profits.

The day started in negative territory in Europe as traders looked to lock in further profits following a couple of strong weeks and wait for a catalyst for the next leg higher. That catalyst did not come this morning though as GDP figures largely disappointed, with only the German release providing any upside to the data. That’s pretty much in line with what we’ve become accustomed to, a two tier eurozone with Germany the engine behind any growth.

It was hoped we were finally moving away from this scenario, with other countries at least showing signs of catching up, but clearly that is not the case. The GDP figures for Portugal and the Netherlands were particularly poor and miles away from expectations, while France and Italy, the second and third largest countries in the euro area, failed to grow, with the latter actually falling back into contraction territory. This is very disappointing just as we thought the area was heading in the right direction, instead we’re seeing another setback. The eurozone as a whole grew by 0.2%, slightly short of expectations, but this can largely be attributed to the 0.8% growth in Germany.

The key release this morning was the final CPI reading for the eurozone for April as this was likely to influence the ECBs monetary policy decision at its next meeting in June. We’ve already had comments from President Mario Draghi, among others, that would suggest they’re leaning towards easing monetary policy at the meeting as inflation remains stubbornly low. This reading could have been the straw the broke the camel’s back but as it turns out, it may have bought the ECB a little more time.

While the main reading was in line with expectations of 0.7%, which the central bank may be comfortable with anyway, the core reading could be its get out of jail free card. It’s been clear in recent months that the board would rather not use any unconventional tools to fight the falling inflation, which is all they have available now that interest rates are at record lows. With the core reading rising to 1% from 0.7% in March, they may be able to delay the inevitable a little longer, which would suit them but further frustrate others who are demanding the ECB do more to fight the threat of deflation.

An eventful morning on the economic calendar is likely to be followed with an equally eventful US session, with inflation, labour market and manufacturing data being released. For a long time now the inflation figures in the US have been overlooked as the rate has remained around 1% which isn’t low enough to be concerned about deflation or high enough to worry about excessive inflation. However, the number is expected to rise to 2% today, in line with the Fed’s target, with the core reading hitting 1.7%. Should we see this, there may be more pressure on the Fed to taper at a faster pace and even raise rates earlier than currently planned. Especially if it continues to pick up in the coming months.

Jobless claims will also be released ahead of the opening bell and will be watched closely for further signs that the labour market is improving. We’ve seen a spike in the numbers over the last few weeks, with the weeks before that showing the number of new claims threatening to breach 300,000. Last weeks 319,000 is probably more in line with the kind of number we need to see on a regular basis if we’re going to see a sustainable recovery and that is what we’re expecting today, with the number seen rising slightly to 320,000.

Read the full report at Alpari News Room​

 

[therdup]

Merci pour toutes ces informations qui me sont très utiles!

 

[Alpari]

Daily Market Update - 15 May 2014 - Alpari UK

[video=youtube;ctf7pj41waA]https://www.youtube.com/watch?v=ctf7pj41waA[/video]

GDP readings provide further evidence of two-tier eurozone - 00:09
ECB receives get out of jail free card from April CPI reading - 03:09
Attention turns to US inflation, labour market and manufacturing data - 06:21

 

[Alpari]

UK Opening Call from Alpari UK - Friday 16th May 2014

Quiet end of the week expected as markets start to falter

• Markets stall following multiyear highs
• European markets underperforming US counterparts despite monetary stance
• Light economic calendar means focus will be on US session.

A somewhat quiet end to the week is expected today, as the European markets take a breather following yesterday’s GDP and CPI fuelled rollercoaster. Overnight, the Asian session saw yet another mixed picture, with the majority of indices falling off the back of global growth fears. However, the Indian Sensex rose by the highest amount since 2009 owing to the feel-good factor surrounding the likely election of the opposition BJP party. In the future markets, the European markets are trading higher, with the FTSE100 expected to open +3 points, CAC +12 points and the DAX +17 points.

Coming off the back of a particularly strong period for global markets, there appears to be some form of hesitation following the break of multiyear and even alltime highs in some of the key developing indices. This is something that we should be used to by now, given that the likes of the FTSE100 and S&P500 appear rangebound throughout 2014 to date; temporarily breaching previous highs, only to catch out the overly optimistic investors by returning back to the downside for another round of selling. Taking a look at the recent bullish price action, it makes little sense from a monetary standpoint, with the US stocks their largely outperforming European counterparts. This comes despite the expectations of a potential next round of stimulus from the ECB, whereas tapering means that Fed action is drawing to a close. However, from a purely fundamental point of view, yesterday highlighted the differences between the US and European recoveries where shockingly poor GDP figures from many of the peripheral Eurozone nations gave way to the lowest US jobless claims figure in 7 years and yet another strong manufacturing index release.

Thus today will be interesting for two reasons; firstly, today represents the ability for the markets to take stock and determine whether there is the appetite to once again attempt to challenge those multiyear highs. Furthermore, given the losses seen towards the back end of the week, another day of losses today could put to the bed the idea that we are in breakout territory and consign the markets to rangebound price action for weeks or even months to come. The hesitancy seen within markets could lead many to believe we are seeing a top and thus will be looking at more bearish set-ups. However, with previous experience showing us that market tops generally last for very little time, whereas bottoms form over a longer period of time. As the saying goes, markets take a long time to build up, but no time to come crashing down.

In terms of economic releases today, the European session has none to get too excited about with the eurozone trade balance figure likely to represent the most notable event. However, looking into the US session, there is the possibility of an element of volatility surrounding the consumer sentiment index along with the housing data due out later today. The importance of the Michigan consumer sentiment figure is driven by the fact that the US economy is largely reliant upon consumer spending to generate GDP growth; around 70% of it in fact. Thus with expectations pointing towards the highest reading since late 2012, there is a possibility that the US is due for yet another boost to their signs of economic recovery. Meanwhile, the release of building permits and housing starts provides markets with a feel for the state of the construction sector; a major area of employment and economic bellwheather. Should we see weaknesses in the housing market, this could be indicative of tightening credit conditions as lenders begin to raise fixed interest rates in anticipation of Fed action. However, given the role of housing in the 2007/08 crash, any increased confidence and expansion provides us with clues that more and more everyday Americans are confident enough to take up large investment decision off the back of a more secure economic environment.

Read the full report at Alpari News Room​

 

[Alpari]

US Opening Call from Alpari UK - Friday 16th May 2014

US consumer data eyed ahead of important summer

• US indices seen opening lower again on Friday;
• Investors again questioning record levels;
• Yesterday’s inflation reading casting doubts over ECB stimulus;
• Indian Sensex rallies on business friendly election results;
• US consumer confidence and housing data key today.

We’re not seeing the rebound in US futures that could have been expected following yesterday’s sell-off in the S&P and the Dow, with both shedding around 1% on the day. Ahead of the opening bell, the S&P is lower by 4 points, the Dow lower by 31 points and the Nasdaq lower by 8 points.

With US indices having hit new record highs again this week, investors appear to be once again questioning whether the current levels are justified or whether everyone is potentially getting ahead of themselves. At the same time there is an increasing appetite for bonds again, with the ECBs apparent willingness to ease monetary policy, giving investors an incentive to buy bonds again, which is something they haven’t had since the Fed began tapering. While the biggest beneficiaries of any stimulus program will undoubtedly be eurozone bonds, particularly peripheral debt, yields across the board have been falling, pushing US Treasuries back below 2.5% for the first time since October. This

The caution being seen today, with European indices also trading slightly lower, may also be a response to yesterday’s eurozone core inflation number which has cast doubt over whether the ECB will announce a monetary stimulus program at the next meeting. The governing council may view the surprise increase in the core number from 0.7% to 1% as a get out of jail free card that allows them to delay the decision by a few more months. They’re clearly reluctant to test the water with unconventional monetary policy and appear to be more than willing to delay the inevitable given the opportunity. This being up in the air is not in itself a reason to sell, but it is going to make people more reluctant to buy until they’re more confident that stimulus is on its way.

Asian stocks fared no better than their US counterparts over night with the Nikkei shedding 1.41%, the Australian S&P ASX 200 falling 0.58% and the Chinese Hang Seng ending marginally lower. The Indian Sensex on the other hand ended the session 0.9% higher after early results showed the opposition BJP led by Narendra Modi easing to a majority which is seen as a victory for both business and the economy. Modi was largely expected to win the election and the results have already been mostly priced in. What we’re seeing right now is an element of relief that the results are in line with expectations.

The US session today is looking fairly quiet, which isn’t unusual given that it’s the end of the week and not much data is scheduled for release. Of the data being released, the preliminary UoM consumer sentiment reading stands out as quite an important reading. The consumer is extremely important for the US economy so any indication that confidence is on the rise as we head into the summer is likely to be cheered by traders. Building permits and housing starts will also be tracked closely given how important the housing sector has been in the recovery last year. Recent data has shown a slowing in the recovery in the sector which is being attributed to rising mortgage rates. Given that rates are going to rise significantly in the next couple of years we need to see a change in this trend or the recovery may not be quite as strong as many are currently expecting.

Read the full report at Alpari News Room​

 

[Alpari]

Daily Market Update - 16 May 2014 - Alpari UK

[video=youtube;bsPdnT2gZSQ]https://www.youtube.com/watch?v=bsPdnT2gZSQ[/video]

Indian Sensex rallies as Modi closes in on election victory - 01:16
Eurozone posts better surplus than expected - 02:31
US housing data offsets disappointing consumer sentiment number 03:42