Daily Market Analysis by FxGrow

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Daily Market Analysis – 18th May, 2015
By FxGrow Research & Analysis Team

US Dollar tumbles on concerns over US Economy

On Friday University of Michigan Confidence survey fell for the month of May indicating that there is no robust rebound in the US economy. The consumer sentiment index was 88.6 for May as against the analyst expectations of 95.9

US Economy faces reduced production and employment from lower oil prices, falling exports, and rising imports from a stronger dollar.

US Industrial production fell 0.3% in April for a fifth month pushing down the dollar and U.S. bond yields.

Asian markets are down on Monday and US Dollar stays weak amid a basket of major currencies after weak signs from the US Economy.

Globally investors are concerned over the weakness of the US economy, slowdown in China and problems in the Eurozone.

Rise in the Euro zone debt yields is supporting the EURUSD which is trading above 1.1400 in the Asian trading session.

In Japan Industrial production fell to -0.8% while analyst expectations were at -0.3% for the month of April.

In Canada manufacturing sales climbed to 2.9% in March which was above the market expectations of a 1.0% gain.

Crude Oil is higher trading above 61.30$ amid news of conflicts in Yemen and Iraq.

Gold remains bullish trading at 1227.94 in the Asian trading session, while Silver is strong at 17.66

18th May 2015 – 07:18hrs GMT

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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.

 

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Daily Market Analysis – 19th May, 2015
By FxGrow Research & Analysis Team

Asian markets and Euro lower on Greece concerns

Asian markets are down on renewed concerns over Greece and Euro remains under pressure trading below 1.1300 Investors fear of a Greek bankruptcy as the Greek Prime Minister Alexi Tsipras said the country is running out of funds.

Greek Finance minister said on Monday that it is getting closer to a deal with its lenders that would help it meet debt repayments next month.

The possibility of a Greek default or exit from the Eurozone can cause big intraday swings and High volatility in the coming weeks.

Eurozone is due to release German ZEW Economic sentiment and Euro-Zone CPI today, while UK will release its Consumer Price Index and Retail Price Index.

The Australian dollar sank after the Reserve Bank of Australia released minutes showing the board continued to see it as too strong given the current economic conditions.

The RBA said that further interest rate cuts are possible stating that members did not see this as limiting the board's scope for any action that might be appropriate at future meetings.

NZDUSD was up after the RBNZ reported higher inflation expectations going forward. The central bank said expectations were for a gain of 1.32% from 1.11% seen in the first quarter.

Crude Oil is down at 59.73$ due to a stronger US Dollar and the news that Saudi exports reached a 7-year high.

Gold is trading lower this morning at 1219.70 while Silver is weak at 17.39

19th May 2015 – 07:29hrs GMT

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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.

 

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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

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.

 

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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

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.

 

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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

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.

 

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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

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.

 

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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.

 

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Daily Market Analysis – 27th May, 2015
By FxGrow Research & Analysis Team

Greek Talks Continue with G7 meeting in Dresden

G7 Finance ministers and Central bank chiefs begin a three-day meeting in Dresden today. Greece will be discussed and markets are looking for cues from the today’s meeting.

As time is running out Greece is close to a default on its next debt repayment to the International Monetary Fund.

Greece needs to repay €300m on 5 June, with €1.6 billion in total due to be repaid to the IMF next month. An official from Eurozone stated “There is the possibility of putting together several payments that Greece would need to make to the IMF in the course of June and then just make one payment.”

The Greek finance minister Yanis Varoufakis said ""It would be a disaster for everyone involved. It would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end of the common currency project in Europe".

The IMF's MD Christine Lagarde said that an extension will not be granted, even with additional economic reforms, and that no developed nation has defaulted on the IMF in 30 years.
In UK retail sales growth surged in May to +51 while analyst expectations were at +17.

UK Confederation of British Industry's Director said "Low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power".

Bank of Japan said that risks to Inflation are on the downside and Growth is slow.

According to the minutes released by BOJ "With regard to the baseline scenario for prices, many members expressed the view that there was considerable uncertainty, mainly in developments in medium- to long-term inflation expectations, and risks on the price front were skewed to the downside".

FED Vice Chairman Stanley Fischer stated "The tightening of U.S. policy will begin only when the US expansion has advanced far enough - when we have seen further improvement in the labor market and when we are reasonably confident that the inflation rate will rise to our 2% goal. If foreign growth is weaker than anticipated, the consequences for the US economy could lead the Fed to remove accommodation more slowly than otherwise".

Crude Oil is trading lower at $58.90 on account of strong US Dollar.

Gold prices are lower in Asia at 1188.99 while Silver is flat at 16.78

27th May 2015 – 08:40hrs 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.

 

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Daily Market Analysis – 28th May, 2015
By FxGrow Research & Analysis Team

Greek deal hopes lift Euro, Greek bonds, Markets

European stocks, Greek bonds and Euro are moving higher as news reports from Bloomberg have indicated that Greece is close to reach a deal with its European creditors.

Globally markets are recovering with Major Indices ending in Green, and Euro is trading at 1.0926 up 100 pips from the yesterday's low of 1.0818

Greek Prime Minister Alexis Tsipras said "We have made many steps. We are on the final stretch towards a positive deal. This agreement will be positive for the Greek economy, this agreement will redistribute the financial burdens and I believe that, very soon, we will be in a position to present more information".

The Bank of Canada kept its rate unchanged at 0.75% as per the market expectations.
BOC stated "Despite the recent back-up in global bond yields financial conditions for Canadian households and firms remain highly simulative. The Canadian dollar has strengthened in recent weeks in the context of higher oil prices and a softer U.S. dollar".

In Japan's Retail Sales rose to 5% from the previous year and USDJPY hits a 13 year high of 124.30 on the backdrop of economic recovery in the US and expectations of a FED rate hike later this year.

In Germany Consumers’ confidence reached the highest level since 2001. The GfK Consumer sentiment rose to 10.2 in May. Very robust domestic demand in Germany and low inflation rates have caused economic expectations and willingness to buy to further improve again.

Tough negotiations on the future of Greece in the euro area, the Ukraine crisis, and IS terrorism could noticeably dampen consumption in Germany.

Crude Oil is trading lower at $57.96 on account of strong US Dollar.
Gold prices are lower in Asia at 1190.04 while Silver has recovered its losses at 16.72

28th May 2015 – 09:03hrs 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.

 

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Daily Market Analysis – 29th May, 2015
By FxGrow Research & Analysis Team

US Initial Jobless Claims Rise, Pending Home Sales reach a 9-Year High

In US the number of Americans filing for Initial Jobless benefits rose last week to 282K while analyst expectations were at 270K.

US pending home sales soared to a nine-year high in April in a strong start to the prime spring season, according to the National Association of Realtors. The National Association of Realtors said its Pending Home Sales Index rose 3.4% in April to a level of 108.7 which is the highest level since May 2006.

Jim O'Sullivan, US economist said "Housing is an important reason why the trend in growth looks much stronger for non-manufacturing and the overall economy, than for manufacturing now".

This uptrend in home sales came after a growth in US Jobs sector, which has increased demand to buy houses.

UK GDP expanded by 0.3% while analyst expectations were for a 0.4% increase. Economic growth slowed due to the service sector performing worse than expected and a widening UK trade deficit.

In Japan Inflation and Industrial production increased more than expected. Japan's Industrial production increased 1.0% in April, while inflation data showed the CPI moving higher 0.2% in May.

USD/JPY is steady at 13-year highs due to increased demand for US Dollar and the indications that the US economy is gaining momentum after a slowdown in the first quarter.

NZDUSD fell to 0.7115 undermined by New Zealand's lac of business optimism and estimates of inflation below the central bank's target.

In a report, European Central Bank said that Euro Zone M3 Money Supply rose to 5.3%. It is the amount of domestic currency in circulation and deposited in banks.

The Euro Zone Consumer and Business Confidence was stable in May at 103.8, overall economic sentiment was mixed across the Euro zone. While it improved in Germany, France, and the Netherlands, it dropped in Italy and Greece.

Howard Archer, Chief UK and European Economist said "The fact that overall Eurozone economic sentiment held up well in May could ease concern that the Eurozone's recovery is starting to flag as the recent stimulus it has received is diluted by a recent firming in the euro, oil prices and bond yields from very low levels".

Crude Oil is trading higher at $58.60 after US Crude Stockpile fell for 4th Week.

Gold is trading stronger in the Asia at 1189.63 while Silver has recovered its losses at 16.75

29th May 2015 – 09:32hrs 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.