Market Overview by FiboGroup - 2014

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The Australian dollar has bounced strongly back towards the US86.00 cents level after mixed signals out of the US and strong local housing data boosted the local currency. At 5.54pm (AEDT) the Aussie dollar was trading at US85.86 cents up from US85.47 cents at yesterdays close.

Orders for durable goods which are products designed to last at least three years rose by 0.4% in October from a month earlier reversing a -0.6% drop in September which is positive although a big part was connected to military spending.

Initial jobless claims came in at 313,000, the highest since early September and up from 292,000 in the previous period according to the labor department.

“It’s particularly difficult to adjust the data during the holiday season” noted Thomas Simons, an economist at Jefferies LLC in New York.

He also mentioned “Variant winter weather, the floating timing of the Thanksgiving holiday, and preparations for the holiday-shopping season that differ from prior years tend to make historical comparisons difficult,” “Volatility will probably continue to be elevated until the end of the year, but we expect that claims will drift lower again.”

Most analysts predict this latest disappointing number is only a glitch in an otherwise robust US jobs market and expect a rebound as we head into the run up to Christmas.

Sales of new homes in Australia rose in October to their highest level in four months despite talk of a developing bubble in the housing market .The Housing Industry Association reported that sales of new homes climbed 3% October, up from 0% the previous month.

Market Overview by FiboGroup

 

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Thursday 27.11.2014

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On Thursday traders will focus towards Europe as the Consumer price Index and unemployment data from Germany are released to the market. The CPI has been on the decline for the last three months showing obvious signs of growing problems in the German economy.

Market Overview by FiboGroup

 

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The Australian dollar tumbled in today’s trade as OPEC decided to leave output unchanged which had a drastic effect on commodity currencies. At 608pm (AEDT) The Australian currency is trading at $84.91 US cents down from US85.42 cents at yesterdays close.

The oil cartel decided to keep output at 30 million barrels per day, at least 1 million above OPEC's own estimates of demand for its oil next year, sending the oil price plummeting towards the $70 a barrel mark.

The battle is now on between OPEC and non-OPEC countries, as a boom in U.S. shale oil production and a slowdown in China and Europe have already seen crude prices fall by nearly third since June.

"It is a new world for OPEC because they simply cannot manage the market anymore. It is now the market’s turn to dictate prices and they will certainly go lower," said Dr. Gary Ross, chief executive of PIRA Energy Group.

Although the Australian economy is not closely connected with oil, the sharp fall in price boosted the US dollar against a basket of other currencies including the Aussie and we could see more downward pressure on the currency as the oil price falls further claim analysts from Fibogroup.

Market Overview by FiboGroup

 

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Friday 28.11.2014

[video=youtube;pGbk5rIVgHE]https://www.youtube.com/watch?v=pGbk5rIVgHE[/video]​

Market Overview by FiboGroup

 

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The Australian dollar is trading sharply lower today after weak Chinese manufacturing data and commodity prices forced the currency lower. At 5.46pm (AEDT) the local currency was trading at US84.40 cents down from US85.02 cents at Friday’s close.

Swiss voters rejected a referendum making it necessary for the Swiss National Bank to hold at least 20 per cent of its assets in gold sending the gold price plummeting and dragging down commodity currencies Including the Aussie with it.

The Chinese manufacturing index which is a leading indicator of business confidence came in 50.3 down from last month’s reading of 50.8 and lower than analyst’s forecasts of 50.5.

The price of Brent crude oil is trading at around $US68.35 per barrel with some including Canadian billionaire Murray Edwards, chairman of Canadian Natural Resource, claiming that the commodity may fall much further.

Speaking with Canadian business publication financial post Edwards said, "Prices could spike down to $30, $40. It got down to $35 in 2008, for a very short period of time."

Edwards also noted that "On a given day you can have market fluctuations where prices fluctuate far more than the underlying economic value of the unit," adding that if oil falls to $30 or $40 a barrel he doesn't expect it would stay that low.

Market Overview by FiboGroup

 

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Forex weekly analysis from FIBO Group 01-05.12.2014

[video=youtube;QYB0IfJNyGc]https://www.youtube.com/watch?v=QYB0IfJNyGc[/video]​

Market Overview by FiboGroup

 

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Monday 1.12.2014

[video=youtube;NsiJY5NXNQI]https://www.youtube.com/watch?v=NsiJY5NXNQI[/video]​

Market Overview by FiboGroup

 

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The Australian dollar is trading slightly higher today after the latest Interest rate decision where rates were kept on hold at 2.5% and the following monetary speech from RBA governor Glen Stevens which sounded slightly upbeat.

At 3.25pm(AEDT) the Australian dollar is trading at US85.20 cents up from US84.89 cents yesterday.

Speaking about concerns of a slowdown in China, and especially the property market Stevens sounded cautiously optimistic and noted,

“Growth in the global economy is continuing at a moderate pace. China's growth has generally been in line with policymakers' objectives. While weakening property markets present a challenge in the near term, economic policies have been responding in a way that should support growth”.

Brushing off speculation last week from another board member that the bank may cut interest rates in the nearest future and giving the impression that they will remain on hold he also mentioned that,

“In the Board's judgment, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates”.

In what is becoming like a famous punch line in each of his speeches for talking the Australian currency down Stevens also noted,

“The Australian dollar remains above most estimates of its fundamental value, particularly given the significant declines in key commodity prices in recent months. A lower exchange rate is likely to be needed to achieve balanced growth in the economy”.

Also giving the Aussie dollar a boost today was the latest release of building permits which came in at 11.4% against a consensus of 5% which clearly shows there is confidence remaining in the property market.

Market Overview by FiboGroup

 

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Tuesday 02.12.2014

[video=youtube;5O_37KGyG6g]https://www.youtube.com/watch?v=5O_37KGyG6g[/video]​

The highlight of Tuesday will be the latest Interest rate decision from the RBA followed by the accompanying monetary statement regarding the banks decision and their take on the future direction of the Aussie dollar.

Market Overview by FiboGroup

 

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The Australian dollar broke through the US84.00 Cents mark in early trade today as quarterly GDP figures hit the market well below consensus which sent the currency tumbling.

At 4.35pm (AEDT) the Australian dollar was trading at US83.99 cents down from US84.44 cents yesterday.

The Australian Bureau of Statistics report showed the economy grew by just 0.3 per cent in the September quarter and only 2.7 per cent over the year to September 30.

Most Analysts had been forecasting growth of 0.7 per cent in the September quarter and 3.1 per cent for the year.

AMP Capital Investors chief economist Shane Oliver noted that “Australia is now in an income recession”.

“The fact that GDP was lower than expected, that national income has fallen again in an income recession, suggest to me the risk on interest rates is all to the downside,” he said.

On the bright side he mentioned that a rate cut might give some relief to previously underperforming sectors.

Treasurer Joe Hockey also weighed in on the argument by saying that a falling Australian dollar will help offset the damage of declining national income from abroad.

“It helps to cushion the economic impact from fall terms of trade,” Mr Hockey told reporters in Canberra.

“A lower exchange rate is an important driver for rebalancing growth across the economy.”

Market Overview by FiboGroup