Bullet Report : Top 5 Things Happening in the Market Today

Top 5 Things to Know Before You Start Trading

1. There is a lack of data out today, however this week will feature important events including Euro Area PMI’s as well as the Jackson Hole Symposium which is hosted by the FED from Thursday to Saturday. Key speakers will include ECB President Mario Draghi. Markets will likely remain calm though this week, unless there is some announcement from US President Trump.

2. EURUSD is under pressure today, extending its biggest weekly decline since 2 months as markets are embracing for Draghi’s speech this week. It fell 0.17 percent to $1.1740 against the U.S. dollar, after weakening 0.5 percent last week, its biggest weekly decline since June 9. It rose more than 11% this year, making it the most valuable currency to have purchased this year.

3. The dollar was lower against the yen, with USD/JPY last at 108.99, after touching a four-month trough of 108.59 on Friday. Sterling edged lower against the dollar, with GBP/USD inching down to 1.2864. The euro posted its third consecutive weekly gain against sterling last week amid growing expectations that the Bank of England will keep interest rates on hold in the coming months amid concerns over the economic fallout from Brexit.

4. Gold prices are little changed so far after briefly hitting $1300 an ounce on Friday, on reports that senior White house advisor Steven Bannon was leaving his post. Gold has been benefiting from the turmoil caused by North Korea as well as Trump’s volatile presidency.

5. US and South Korea have kicked off the join annual military exercise today. North Korea warned that the drills would worsen the tensions by “throwing fuel on fire”. But markets have little reaction to the news so far. Yen is trading mildly higher, possibly because of that, but strength is limited.

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Monday Outlook 21-08-2017

Welcome to the easyMarkets weekly outlook starting this Monday 21 August. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. A slow start to the week sees a very heavy news release on Wednesday for the Eurozone, UK and New Zealand. On Thursday, the Jackson Hole Summit begins in the US and rolls into the weekend.

 

Event: Manufacturing PMI & Services PMI

Date: Wednesday 23 August 2017 at 08:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur, #pmi

 

The Eurozone will be releasing its preliminary figures for August’s Manufacturing Purchasing Managers Index (PMI) which came in at a healthy 56.6 for the previous month. The release by Markit Economics gives insight into the manufacturing sector for the region which has a large influence in the overall Gross Domestic Product. It’s a strong signifier for the health of the economy and anything over 50 is considered positive for the euro. The Services PMI is also due out at the same time and this gives a summary of sales and employment in the Eurozone. It’s not as important as manufacturing but again, a result over 50 is seen as bullish for the common currency. Last month’s result was 55.4.

 

Event: UK Gross Domestic Product (Q2)

Date: Thursday 24 August 2017 at 08:30 GMT

Markets affected: GBP/USD, EUR/GBP

Trending hashtags: #gbp, #gdp

 

In the first quarter of this year, the United Kingdom’s economy grew 2% on an annualised basis – a 0.1% increase on the previous quarter – Q4 2016. However, with Brexit negotiations still weighing on the economy and leading to a reduced sterling, analysts are expecting a contraction in the GDP figure for the second quarter of this year to 1.9% or less.

 

Event: EU Consumer Confidence

Date: Wednesday 23 August 2017 at 14:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur

 

CPI for Europe decreased last month to -1.7, falling further than June’s figure of -1.3. Economists were worried at the outcome which came in below their forecast of -1.1, and their outlook for the August preliminary figure is for -1.9. This is an important indicator for the European Central Bank and any decisions it makes in regards to its monetary policy.

 

Event: New Zealand Trade Balance

Date: Wednesday 23 August 2017 at 22:45 GMT

Markets affected: NZD/USD, AUD/NZD

Trending hashtags: #nzd, #trade

 

Trade surplus in NZ for June came in wider than expected at NZD 242 million according to Statistics New Zealand making it the 4th surplus in the last five months. On an annualised basis, the balance stood at -$3.66 billion, down from the previous month’s reading of -$3.8 billion. Exports increased 9.9% while imports increased 2.9%.

 

Event: US Jackson Hole Summit

Date: Thursday 24-26 August 2017

Markets affected: EUR/USD, USD/JPY

Trending hashtags: #usd

 

Every year at Jackson Hole in Wyoming, the Federal Reserve hosts an Economic Policy Symposium for central bankers and academics from around the world. Inflation is a likely hot topic as it seems to be the holy grail for monetary policy setters to get their economies back on track. And currently it’s a lot softer than most nation’s central banks feel comfortable with.

 

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Friday Lookback 18-08-2017

Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.

 

Event: UK Consumer Price Index

Date: Tuesday 15 August 2017 at 08:30 GMT

Markets affected: GBP/USD, EUR/GBP

Trending hashtags: #gbp, #inflation

The sterling fell on the release of the lower than expected inflation figure from the UK. The Consumer Price Index maintained its previous reading of 2.6% for the month of July, 0.1% less than what analysts were expecting. While petrol prices fell, the costs of clothing, food and utilities increased. The retail price index on the other hand came in 0.1% higher than expectations at 3.6% but this was not enough to help the struggling pound. The CPI result is lowering expectations that the Bank of England may raise the interest rate any time soon.

 

Event: US Retail Sales

Date: Tuesday 15 August 2017 at 12:30 GMT

Markets affected: EUR/USD, USD/JPY

Trending hashtags: #usd

Retail sales in the US increased 0.6% for July, a significant 0.2% higher than what analysts were forecasting for the month. June’s figure was also upwardly revised to from a -0.2% to a positive 0.3% increase. The result for July was a seven-month high and is increasing the outlook for the third quarter of this year for the US.

 

Event: EU Gross Domestic Product

Date: Wednesday 16 August 2017 at 09:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur, #gdp

GDP for the Eurozone came in at a better than expected 2.2% growth for the second quarter of 2017. The Eurozone’s economy continues to demonstrate a strong recovery. The annualised reading came in 0.3% better than the previous quarter and gave a boost to European equity markets.

 

Event: FOMC Meeting Minutes

Date: Wednesday 16 August 2017 at 18:00 GMT

Markets affected: EUR/USD, USD/JPY

Trending hashtags: #usd, #fomc

The Federal Market Open Committee released the minutes from their July meeting and showed a divergence amongst members attitudes to raising the interest rate. The Fed voted to keep the interest rate in the 1% – 1.25% range as the economy has yet to reach the 2% inflation target set by the central bank. The USD fell on the release of the minutes against most of its major counterparts.

 

Event: Australian Unemployment Rate

Date: Thursday 17 August 2017 at 01:30 GMT

Markets affected: AUD/USD, AUD/NZD

Trending hashtags: #aud, #jobs

 

Employment in Australia grew by 27,900 in July and June’s figure was revised upwardly to 20,000 from its initial reading of 14,000. The jobs result was a little over expectations though full-time employment dropped by just over 20,000 to 62,000. So, the positive jobs result came from part-time job gains for July. The unemployment rate fell to 5.6% from the previous month’s reading of 5.7% painting a somewhat better employment picture. However, the wages price index was the slowest on record as it showed growth of only 1.9% annualised growth for the second quarter.

 

Event: EU Consumer Price Index

Date: Thursday 17 August 2017 at 09:00 GMT

Markets affected: EUR/USD, EUR/GBP

Trending hashtags: #eur, #cpi

 

The Consumer Price Index for the Eurozone came in at an expected 1.3% on Thursday, pretty much as the markets were expecting. Later in the day the European Central Bank released their July 20 meeting minutes that showed the central bank, similar to the Fed in the US, is worried about the inflation rate meeting expectations. The euro lost ground on the day and hit a three-week low.

Trade of the Week

Time in: Wednesday 16 August 2017 at 13:00 GMT
Market : XAU/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 17 August 2017 at 02:00 GMT

P&L: $1,546

If you had bought XAU/USD with a $500 margin at the price of 1,269.31 and closed the deal once after the FOMC Meeting Minutes on Wednesday at 18:00 GMT which saw the gold rise by 1.55%, you might have made $1,546. Note this example does not take into account spread.

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FOMC Minutes Reveal Division Over Policy Path

The Federal Reserve is not on the same path when it comes to raising interest rates, the minutes of last month’s Federal Open Market Committee (FOMC) revealed on Wednesday.

Policymakers are struggling to balance concerns over declining inflation with signs of a job market that continues to tighten. As a result, officials were split on whether further rate hikes are warranted.

“Some participants…. [expressed] concerns about the recent decline inflation,” the minutes of the 25-26 July FOMC meeting showed. For these members, the Fed “could afford to be patient under current circumstances.

On the other side of the debate were more hawkish members “worried about risks arising from a labor market that has already reached full employment and was projected to tighten further.” [1]

The labour market continues to be the strongest component of the U.S. recovery. Employers have added more than 200,000 jobs in three of the past four months.[2] The unemployment rate is currently the lowest it has been in more than 16 years.

Policymakers voted to keep policy on hold last month after raising rates in three of the previous five meetings. The Fed’s most recent quarterly projections, which were released in June, showed plans to hike interest rates once more before the end of 2017.

Despite the uncertainty, traders upped their bets that the Fed will tighten policy in December, according to the CME Group FedWatch tool. As of Wednesday, traders assigned a 46.8% probability of a quarter-point increase at the final FOMC meeting of the year. That’s up from 42% on Tuesday.[3]

The minutes failed to deter U.S. stocks from notching their third consecutive gain. The large-cap S&P 500 Index climbed 0.1% to close at 2,468.11. The Dow Jones Industrial Average advanced 0.1% to 22,024.87. The technology-heavy Nasdaq Composite Index was the best performer in percentage terms, rising 0.2% to 6,345.11.

Calm has returned to Wall Street after last week’s volatile selloff. This bodes well for equities over the short term as investors navigate through a historically difficult patch of the year.

In terms of monetary policy, the FOMC will hold its next meeting on 19-20 September. The official rate statement will be accompanied by the central bank’s latest economic projections covering GDP, unemployment and inflation.

[1] Jeff Cox (16 July 2017). “Fed minutes: Central bank split over path of rate hikes.” CNBC.

[2] Trading Economics. United States Non Farm Payrolls.

[3] Eren Sengezer (16 August 2016). “CME Group FedWatch’s December hike probability edged higher after FOMC minutes.” FXStreet.

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Bullet Report : Top 5 Things Happening in the Market Today

Top 5 Things to Know Before You Start Trading

This Wednesday the USD is trading higher while the GBP has declined. Markets react to U.S. and North Korea back and forth threats. 

1 – USD Regains Losses

The US dollar (USD) returned with a vicious comeback yesterday after a lackluster session. It rose to a 1-week high after data showed that US job openings surged to record highs in June. The labor department said job openings reached their highest level since 2000.The dollar index was up 0.34% to 93.745.

2 – GBP Extends Decline

GBP/USD declined further, reaching a low of 1.2952 down from 1.3050. The Job openings data was overall USD supportive as market participants believe now that the Federal Reserve (Fed) has actually got ammunition to continue on its path of raising rates in 2017. The good jobs data came on top of a positive Nonfarm Paryolls (NFP) reading last Friday reinforcing the view that the US is growing its employment sector.

3 – Gold Reacts to Trump’s Threats with North Korea

As mentioned, the USD strengthened following the jobs data, however subsequent give and taken threats from North Korea and President Trump (he said that if N. Korea continues threats, then it will face the US’s “Fire and Fury” in an unprecedented way) caused a whipsaw action in the markets. A perfect example was GOLD, which tumbled from 1265 to 1251, only to rebound back to 1265 shortly after as traders sought its relative safety.

4 – Shares Decline Amidst U.S. And North Korea Conflict

Asian shares and U.S. stock futures slipped on Wednesday and investors sought havens such as U.S. Treasuries, gold and the yen as tensions on the Korean peninsula escalated, with Pyongyang saying it is considering plans to attack Guam. European bourses also looked set to open lower across the board, with DAX futures already down 0.7% in early trade.

5 -Friday’s Inflation Data in Sight

Markets will wait for Friday’s inflation data for further direction US on core Consumer Price Index (CPI) which is expected to show a mild increase to 0.20% in the month of July from 0.1%. any slight increase could cause another round of big moves. Noteworthy is the fact that banks are in holiday mode; any moves can be one directional due to the lack of enough liquidity.

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Bullet Report : Top 5 Things Happening in the Market Today

Top 5 Things to Know Before You Start Trading

This Tuesday trading is quiet with no major data releases, EUR and AUD are higher while German imports are lower. 

1 – Quiet Trading Session

It was a quiet trading session with an absence of major data releases and the European summer holiday season in full swing. Investors were now eyeing U.S. inflation reports later in the week for indications of whether the recovery in the dollar is sustainable in the longer term.

2 – USD Slightly Lower While EUR is Trading Strong

The US dollar (USD) inched down slightly in Asian trading on Tuesday but maintained most of the gains it made on last week’s robust employment data that kept hope alive that the U.S. Federal Reserve could still increase interest rates this year. Meanwhile, Euro (EUR) is trading firm against others so far. In particular, EUR/GBP is also resuming last week’s rally and breaches 0.9050.

3 – AUD Trading Higher than USD

The Australian dollar (AUD) edged higher against USD, while the New Zealand dollar (NZD) held steady after the release of mostly positive economic reports from both Australia and China. Market participants remained cautious ahead of the Reserve Bank of New Zealand’s (RBNZ) monthly policy decision, due later in the week.

4 – German Imports Lower

German imports fell more sharply than exports in June, pushing the trade balance to a 10-month high, data showed on Tuesday. The data are likely to increase criticism of conservative Chancellor Angela Merkel, who is expected to win a fourth term in an election next month, for not boosting investments enough as a way to increase imports and support other countries.

5 -Trump Presidency Persists Over NFP Report

Last Friday’s jobs report showed non-farm payrolls increased by a bigger-than-forecast 209,000 jobs in July, while average hourly earnings increased 0.3 percent to match expectations after rising 0.2 percent in June. While the news was dollar positive, the market doesn’t seem to have bought this story yet. It seems that the political instability caused by Trumps presidency is still hovering over the horizon.

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