Market Overview by FiboGroup - 2014

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The Australian dollar is trading higher today after a jump in the number of new home loans, brushing off poor CPI numbers out of China.

At 5.45pm (AEDT) the Australian dollar is trading at US83.20 cents after falling as low as US82.23 cents in yesterday’s trade.

The total number of home loans in Australia was up a seasonally adjusted 0.3% in October to 51,720 the Australian Bureau of Statistics said on Wednesday well above Analysts forecasts of a 0% rise and significantly above last month’s number of - 0.4%.

National Australia Bank senior economist David de Garis said the Australian property market is being underpinned by Sydney.

"The other states have been much flatter and if anything the Melbourne market has come off the boil a little bit," he said.

He also noted "We know there is a lot of new apartments coming on to the market in the next one to two years, that should at least be some type of headwind to house price growth in that market,"

Figures from China showed producer prices fell 2.7% in November from the previous year while consumer inflation slowed to 1.4%, its slowest pace since 2009.

This poor reading may keep a lid on the Aussie dollar’s gains as the market awaits the latest new loans report out of China tomorrow to see if it will follow in the footsteps of the disappointing CPI figures adding more evidence of a slowdown in China.

The latest unemployment rate from Australia, which is one of the biggest drags on the local economy at the moment is also due out tomorrow. Analysts expect a number of 6.3%, up slightly from last month’s 6.2%, and may put further pressure on the Australian dollar.

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Wednesday 10.12.201

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On Wednesday the focus will be on China as the latest consumer price Index is released to the market amid growing concerns that the country is showing signs of a slowdown. The number has fallen since the start of the year from a reading of 1% to last month’s figure of 0% showing enthusiasm in the Chinese economy is waning.

Market Overview by FiboGroup

 

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The Australian dollar jumped as high as US83.73 cents in early morning trade buoyed by the news that the economy created 42,700 new jobs last month well above analysts’ expectations of 15,000 although 95% of the growth was part time jobs.

The Australian Bureau of Statistics data for November show 40,800 part-time jobs and 1,800 full-time jobs were added to the economy last month, seasonally adjusted.

The party was short lived however as Investors concentrated on the big picture which showed that unemployment in Australia rose to 6.3% from last month’s 6.2%, its highest level in 12 years pushing the currency lower to leave it trading at around US83.22 cents at 4.22pm(AEDT).

What appeared to be positive numbers at first sight turned out to be smoke and mirrors with Commonwealth Bank currency strategist Joseph Capurso noting,

"When you look at the detail, virtually all of the growth was in part-time jobs, so the headline was probably a bit better than it looked,"

Commonwealth Bank senior economist Michael Workman told Reuters that a rising unemployment rate may help the cause for an Interest rate cut.

"The net outcome is a labour market that is just not providing all the jobs that are required for the new entrants, so we get this gradual drift upward in the unemployment rate," he said.

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Thursday 11.12.2014

[video=youtube;5xdaB9_2Lkg]https://www.youtube.com/watch?v=5xdaB9_2Lkg[/video]​

hursday will be the highlight of the week especially for traders of the Australian and US dollars as the Unemployment rate from Australia and the latest retail sales from the US hit the market which should produce some volatility.

Market Overview by FiboGroup

 

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The Australian dollar is under pressure today after weak Industrial production figures out of China and an Interview with RBA governor Glen Stevens where he said he would like to see the Australian currency finally settle at around US75.00 cents.

At 7.20pm (AEDT) the Australian dollar is trading at US82.72 cents after falling as low as US82.40 cents in early trade.

China's industrial production rose 7.2% year on year in November coming in below analysts’ expectations of 7.5% and down from the 7.7% increase in October confirming there are a few cracks appearing in the Chinese economy.

In a wide ranging Interview Stevens noted that the RBA was happy to see the Australian dollar at US85.00 cents a year ago but circumstances have changed and he noted that,

"It's quite likely that it the Australian dollar will a year from now be lower than it is today, on the basis of the facts that we presently have,"

“In terms of trade, while historically high we’re still falling further and faster than was a assumed a year back.”

“Which means that in a year from now the Aussie dollar will be lower than where it is at the moment”

Noting how low he would like to see the currency fall he mentioned that,

“On the basis of the facts that we presently have. And, yes, a year ago I said probably 85US cents was better than 95. And if I had to pick a figure now, I would say probably 75 is better than 85”.

Brushing off speculation of an Interest rate cut to solve the economy’s problem he noted that,

I don't think we see many people at all saying 'look, the cost of money is too high, or I can't get money'," "I don't think that's really the problem now."

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Friday 12.12.2014

[video=youtube;uu_P7RUUsfQ]https://www.youtube.com/watch?v=uu_P7RUUsfQ[/video]​

On Friday the latest Industrial production figures from Europe as well as the Reuters Michigan consumer sediment Index from the US will be released to the market. Industrial production has fallen in the Eurozone from 0.6% since the start of the year to last month’s reading of -0.3% adding fuel to the fire that the economy is headed for a deflationary period.

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The Australian dollar came under pressure last week as more positive economic news out of the US sent the greenback soaring against most major currencies Including the Aussie adding more pressure on the US Federal Reserve to make a move on Interest rates sooner than later.

At Friday’s close the Australian dollar finished at US82.44 cents down from US83.11 cents the previous week.

At 6.18pm(AEDT) In todays trade the currency is trading slightly lower at US82.37 cents.

The more than 40% drop in oil prices this year also means falling petrol prices which is going to put more money in the pockets of American consumers noted analysts from Fibogroup.

This can only add to inflationary worries which in turn may force the Fed to make a move on Rates at some time in the nearest future to curb spending.

The final straw for the Aussie dollar last week came when consumer confidence in America rose to an eight year high as the latest Reuters/Michigan Consumer Sentiment Index was released to the market.

The number came in at 93.8 well above analysts’ expectations of 89.5 which sent the Australian dollar tumbling to finish off another horror week.

Another damper was the Industrial production figures from China which came in at 7.2% against expectations of 7.5% dragging down the price of Iron ore, Australia’s biggest commodity as well as the local currency.

The Australian dollar may come under further pressure as we head towards Tuesday’s RBA minutes meeting as Investors await the monetary policy statement to see if the bank agrees with a growing list of Analysts who are calling for an Interest rate cut to kick start the local economy

Market Overview by FiboGroup

 

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Forex weekly analysis from FIBO Group. (15 - 19.12.14)

[video=youtube;Be4r37d8FK4]https://www.youtube.com/watch?v=Be4r37d8FK4[/video]​

This week the market will await key statistics and the highlight will be the FOMC minutes from the US Federal reserve as traders await signs from the bank about a potential hike in Interest rates which could cause volatility in the US dollar

Forex weekly analysis from FIBO Group.

 

[fibogroup.com]

The Australian dollar is trading slightly higher after today’s RBA minutes meeting where the bank reiterated they would like to see a period of stability in Interest rates pushing aside speculation of a rate cut next year.

At 4.50pm (AEDT) the local currency is trading at US 82.26 after falling to a fresh four and a half year low of US81.99 cents earlier today and up from US82.12 cents yesterday.

A 16 hour siege in Sydney ended yesterday with three people dead including the hostage taker which undermined the Aussie dollar as well as a further fall in oil prices.

Westpac senior market strategist Imre Speizer noted that these two events pressured the Aussie dollar pushing it to lt’s lowest level since July 2010,

“Oil failed to hold on to overnight gains with Brent crude slipping back to Friday’s lows of $US56.50. Equities continue to move in tandem with oil initially opening higher before giving up the gains later in the day,” he said.

More worrying signs emerged for the Chinese economy today as the HSBC flash PMI for China was released to the market coming in slightly under analyst’s expectations. The latest number came in at 49.5 against a consensus of 50 with a number generally under 50 seen as a contraction.

The Australian dollar is expected to come under further pressure as we head into Wednesday’s Interest rate decision and monetary statement from the Federal Reserve. There is more evidence mounting that the Fed needs to move on rates and with this expectation it doesn’t hold well for the Australian dollar claim analysts at Fibogroup forex brokers..

Market Overview by FiboGroup

 

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The Australian dollar is sharply lower today after the Russian central bank drastically lifted interest rates in order to starve of a further collapse of the rouble reviving fears of their last default in 1998.

At 6.10pm (AEDT) the Australian dollar is trading at US81.55 cents down from US82.44 cents in yesterday’s trade.

Russia’s move to lift interest rates by 650 basis points to 17% was seen as a desperate measure to save the rouble and the currency initially rallied more than 10% after the announcement. The good news however proved to be short lived, as traders digested the news which sent the currency tumbling again to over 80 per US dollar before settling at around 72, after Russia’s finance minister denied speculation that they were considering currency controls as an added protection measure.

The rule would have banned the Russian people form converting roubles into US dollars and placed restrictions on money leaving the country.

The Russian currency has now lost over 50% of its value since the start of the year.

Michal Dybula, from BNP Paribas noted that. “A large-scale run on deposits, once under way, would make capital controls pretty much unavoidable,” and that that “the authorities may start by forcing state-controlled companies to sell foreign assets and repatriate funds”.

Market Overview by FiboGroup