Daily Market Analysis by Vinson Financials

Financial News November 20, 2015


Euro area November consumer confidence may improve

The European Commission's consumer confidence indicator is scheduled to publish today. The indicator is calculated based on the questions regarding the general economic situation, savings and households' financial situation, expectations of unemployment over the next 12 months.

Other business surveys observe an improvement in the job market of the economy both in terms of wages as well as employment. Lower oil prices continue to prevail in the market , therefore, purchasing power for consumers is seemed to be increased.

"We expect the number for consumer confidence to improve from -7.7 to -6.9 for November. The rest of the EC confidence indicators, along with the flash PMI estimates, will be released next week" says Societe Generale in a research note.

Market Review November 20, 2015

Asian Session was rather quiet while the lack of important announcements pushed the market to move sideways. All these despite the ‘’confirmation’’ of a rate hike in December by FED, this signals that traders are looking beyond December into next year and the outlook for Fed's rate path is still rather unclear something that can confirm form bonds futures pricing.

On the data front New Zealand’s Credit Card Spending y/y announce at 7.8% that boosted a little the country’s currency. China also release CB Leading Index m/m at 0.6%. Germany released PPI in early European session at -0.4% missing the forecast of -0.2% causing EUR/USD to drop below the 1.0690. UK will release public sector net borrowing. Additionally today the Canadian data will attract investors interest since includes retail sales and CPI. Furthermore Eurozone will also release consumer confidence.

Data releases to monitor:

GBP: Public Sector Net Borrowing

EUR: Consumer Confidence, German Buba President Weidmann Speaks

USD: FOMC Member Dudley Speaks

CAD: Core CPI m/m, Core Retail Sales m/m, CPI m/m, Retail Sales m/m

Trade Idea of the Day

USD/CAD

Currently the pair is trading at 1.3329. Traders must monitor the 1.3370 resistance level and the support level 1.3245 for possible breakouts. A possible scenario would be a movement towards the 1.3340 resistance level, where a break may lead above the 1.3370 level. An alternative scenario could be a movement towards the 1.3292 support level, where a break may lead to the 1.3245.

Daily Market Analysis by Vinson Financials

Daily Market Analysis by Vinson Financials

Financial News November 17, 2015


EUR/USD likely to trade at 0.95 by Q3 16

TThe poor performance of the Chinese economy is likely to increase downside risks for euro area growth and inflation. Therefore, ECB is likely to respond the down momentum with additional policy easing in the form of a time extension to QE.

Barclays anticipates deposit rate cut of 10 bp. However, a deposit rate cut is likely to build pressure on the EUR. Therefore, EURUSD pair is likely to fall further.

"We forecast EURUSD to depreciate to 1.03 by year-end and trade at 0.95 by Q3 16", argues Barclays.

Market Review November 17, 2015


ECB Vice President Vitor Constancio , during an event in Frankfurt yesterday, warned that the terror attacks in Paris could hit investor confidence in Europe. Moreover, he condemned the “terrible events” in Paris and cautioned that they would compound the problems already facing the region. “Several factors surround what happened and responses are not easy to find because it then compounds on all the problems we were already facing quite recently,” Constancio said. Furthermore, Vice president Constancio noted, “markets are so far taking it calmly,” but warned that it was still too early to know the economic cost of the attacks and added that if they affect consumer and business confidence and risk aversion, “the consequences can of course be worse,” he said. The common currency had seen some down pressure, EUR/USD dropped to the 1.0655 area, while EUR/GBP plunged to the 0.7020 area.

In addition, European equity markets had seen some slight movement. FTSE Eurofirst 300 was little changed compared with Friday’s close, while the French stock market index, the CAC 40, was fractionally down having recovered from a 1 per cent drop at its opening.

The Asian session was rather quiet with no economic few economic releases. Released from New Zealand, longer term inflation expectations weakened marginally, with annual consumers price inflation expected to be 1.85 percent in two years' time, compared with an expectation of 1.94 percent for the same measure in the September survey. NZD/USD is currently trading near the 0.6460 area, with the next support seen at the 0.6286.

The key events for the day would be the United Kingdom inflation data, German ZEW Economic Sentiment, the United States Consumer Price Index (CPI), Core CPI and New Zealand’s GDT Price Index.

Data releases to monitor:

EUR: Italian Trade Balance,German ZEW Economic Sentiment, ZEW Economic Sentiment.

GBP: CPI, PPI Input, RPI, Core CPI, HPI, PPI Output.

USD: CPI, Core CPI, Capacity Utilization Rate, Industrial Production, Mortgage Delinquencies, NAHB Housing Market Index, TIC Long-Term Purchases.

NZD: GDT Price Index.

Trade Idea of the Day

AUD/USD

Currently the pair is trading at 0.7082. Traders must monitor the 0.7158 resistance level and the support level 0.7015 for possible breakouts. A possible scenario would be a movement towards the 0.7049 support level, where a break may lead to the 0.7027 area. An alternative scenario could be a movement towards the 0.7127 resistance level, where a break may lead to the 0.7150 area.

Daily Market Analysis by Vinson Financials

Daily Market Analysis by Vinson Financials

Financial New for August 07, 2015

Bank of Japan holds course

The JPY has been under pressure for some days now, particularly against the USD. The Bank of Japan's meeting did not move the FX markets during the night. As expected, not much has changed in Japan.

The BoJ continues to buy huge amounts of government bonds. So far, the markets are not interested in the fact that the quantitative and qualitative easing (QQE) does not have the desired effects.
Commerzbank suspects, "For now, any USD/JPY fluctuations will be triggered by developments on the USD side. If the US labour market report is favourable, the exchange rate might pass the threshold of 125 today."

Market Review for August 07, 2015

The Bank of Japan maintained its massive stimulus program and upbeat view of the economy, ignoring the recent weak data that clouded the prospects for hitting its 2.00% Inflation target. BOJ Governor Haruhiko Kuroda stressed that the current weakness in Japan's exports and household spending was temporary, sticking to the view the world's third largest economy continues to recover moderately. Furthermore, Kuroda acknowledged that China and other emerging market economies were slowing while he maintained the view that overseas demand will pick up as strength in advanced economies broadens out. USD/JPY is currently trading near the 124.75 area with the next resistance seen at 125.00 level.

Released during the Asian session this morning, the Australian Home Loans rose 4.4% missing the estimated 5.2% while AIG Construction Index came in at 47.1 versus the previous of 46.4. AUD/USD is currently trading near the 0.7372 area after reaching to the 0.7247 level in previous days.

Released during the early European session, the Swiss Unemployment Rate rose 3.3%, as widely expected, causing insignificant impact on the CHF, USD/CHF hit fresh four- month highs and currently is trading near the 0.9800 area.

EUR/USD spiked higher today despite the mixed economic data from Germany and France. Released from Germany, Industrial Production dropped -1.4% versus the estimated 0.3% while Trade Balance came in at 22.0B missing the estimated 23.2B. Released from France, General Budget Outcome came in at -58.5B versus the previous of -63.9B, Industrial Production dropped -0.1% missing the estimated 0.3% and Trade Balance came in at -2.7B beating the estimated -3.7B. The EUR/USD pair is currently trading near the 1.0940 area awaiting for today’s economic data from the United States.

The main focus for the day will be the United States jobs data and the Canadian jobs data. The United States Non-Farm Employment Change is expected to show 222k growth with unemployment rate unchanged at 5.3%, while average hourly earnings are expected to grow 0.2%. Today’s Job data has major importance, as it will be indication for the FOMC members to find he needed evidence for "some further improvement in labor market" for their decision for rate hike timing.

Data releases to monitor:

CAD: Building Permits, Employment Change, Unemployment Rate, Ivey PMI.

USD: Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate, Consumer Credit.

GBP: Trade Balance.

Trade Idea of the Day

CAD/JPY

Currently the pair is trading at 95.13. Traders must monitor the 95.92 resistance level and the support level of 94.10 for possible breakouts. A possible scenario would be a movement towards the 95.53 resistance level where a break may lead to the 95.80 area. An alternative scenario could be a movement towards the 94.80 support level where a break could lead to the 94.45 area.

Daily Market Analysis by Vinson Financials