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Re: Forex News from InstaForex

Postby IFX Gertrude » Mon Aug 19, 2019 10:26 pm

The euro will continue to focus on falling

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Last week, the EUR/USD pair was a step away from updating its annual low and found a local trough at 1.1065.

A decrease in the consumer sentiment index from the University of Michigan to its lowest level over the past seven months somewhat cooled the outburst of the "bears" in EUR/USD. However, this did not force them to abandon their plans.

The weakness of the European economy, the focus of the European Central Bank (ECB) on easing monetary policy, as well as increasing political risks in the region make the euro currency vulnerable. You should not be surprised then at the increase in the chances of its decline by the end of this month to $1.1. A week ago, the derivatives market estimated the likelihood of such a scenario to be realized at more than 16%, while now these chances are 49%.

Obviously, the policy of American protectionism has a more devastating effect on China and the eurozone than on the United States. This is evidenced by the fact that an industry from the eurozone had plummet into an abyss, and the fall of 0.1% of German GDP in the second quarter. Bloomberg analysts predict a further decline in German purchasing managers' indices in August, which increases the risks of a technical recession in the largest currency bloc economy. The divergence of economic growth between the EU and the US is well traced in the dynamics of such an indicator as the index of economic surprises. This fact does not allow the bulls to sleep peacefully for the euro.

If last year investors still had hope that the eurozone would get on its feet and begin to accelerate, then this year it seems that they will be disappointed. The United States still looks like an island of stability in the ocean of world recession.

The "bearish" factor for the euro is also the deterioration of the political landscape in the EU. In Italy, a split in the ruling coalition allowed the country's deputy prime minister, Matteo Salvini, to initiate a motion of no confidence in the head of government, Giuseppe Conte. Early Parliamentary elections loomed on the horizon, and the flight of investors from the Italian debt market was reflected in the increase in the differential yield of local and German government bonds.

On the contrary, the greenback is doing well. Of course, the USD index rally complicates the life of US exporters and helps reduce corporate profits, but this is an objective process. When rates on government bonds in the United States are higher than in other countries, and the US economy looks better, the dollar, it would seem, is doomed to strengthen.

However, there is a fly in the ointment - US President Donald Trump's dissatisfaction with the Fed's actions and, as a result, a possible reduction in the rate of federal funds by the end of this year from 2.25% to 1.75%. However, it is unlikely that the Chairman of the Federal Reserve, Jerome Powell in Jackson Hole, will want to signal a cut in interest rates by 50 basis points at once in September. As for the minutes of the July meeting, it can show the arguments of dissenters who opposed for the FOMC members to ease monetary policy. It is assumed that this will support the EUR/USD bears. In such conditions, the continuation of the fall of the main currency pair seems quite logical.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Wed Aug 21, 2019 9:49 pm

Gold at the crossroads: there are plenty of reasons for a correction, but no less in favor of growth

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Gold froze at a crossroads. Apparently, speculators who push prices higher, and consumers who want to buy cheaper metals, decided to take a break.

Since the beginning of this year, gold has risen by almost 19% in price, breaking the psychologically important mark of $1,500 per ounce. The last time this level was observed was in April 2013.

The main reason for the growth of quotes was the fear of investors about the global recession, which forces them to shift capital to safe haven assets. It is assumed that if the concerns of market participants begin to be confirmed, the rally of precious metals will continue.

"Rising prices to a six-year high is primarily due to bonds, and it is extremely important for investors to monitor changes in their yield in order to understand what will be the dynamics," said Oax Hansen of Saxo Bank.

The decrease in bond yields in the world has already led to the fact that sovereign bonds with a total volume of almost $16 trillion give a negative percentage.

The jump in the cost of precious metals was also caused by expectations that the Fed, the ECB and other central banks would stimulate economic growth in various ways. The easing of monetary policy tends to lower interest rates and increase the investment attractiveness of gold.

A sharp rise in prices carries the risks of an equally sharp decline, analysts warn.

"The aggregate gold volume in ETFs is steadily growing and has reached 77.4 million ounces, which is the highest for six years. Previous similar bursts of speculative demand caused a serious correction of quotations," O. Hansen said.

In addition, fears of a global recession may also be exaggerated: now markets are most likely driven by emotions. Recent macroeconomic data for the United States were positive and the reduction of interest rates by the world central bank is aimed at maintaining economic growth.

Reducing tensions in Washington and Beijing's trade relations could also serve as a reason for a short, albeit sharp, price correction.

Another negative point for gold may be the expected decline in demand for jewelry in India due to an increase in import duties in the country from 10% to 12.5%, as well as a change in ETF positions, which will respond to the sale of precious metals in response to a restoration of risk appetite .

In case the Fed comes with a surprise - not to continue to lower the interest rate - a correction in gold prices is also possible.

"We expect the Fed to disappoint the market without lowering interest rates in the coming months, and profit taking will ultimately trigger the end of the gold rally. In the event of a pullback, the $1,350 mark per ounce is likely to become a new level of support," representatives of the Fitch rating agency said.

However, there are plenty of factors in favor of the growth of quotes.

According to Deutsche Bank analysts, the main drivers of gold price growth will be real interest rates, stock risk premium, US dollar, as well as purchases of precious metals by central banks.

According to the forecast of Deutsche Bank, the price of gold will be $1,575 per ounce in the next year and a half, and under certain conditions it can reach $1,700.

"Gold is an extremely profitable investment amid the easing of monetary policy by the leading central banks of the world," said Mark Mebius, founder of the Mobius Capital Partners investment fund.

"The long-term prospect of gold – up, up and only up, because the money supply in the world will grow, grow and grow again. Therefore, I believe that gold should be bought at any price," he said.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Thu Aug 22, 2019 10:06 pm

The pound believed in Brexit with a deal. How long?

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On Thursday, the British currency jumped sharply up. Such a change of mood was facilitated by the statements of the German Chancellor. According to Angela Merkel, Britain still has time to make a deal with the European Union. These comments were perceived by the market as the willpower of politicians aimed at breaking the impasse of Brexit.

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Such a violent reaction of market participants can be understood. Due to difficulties with Brexit, pound positioning is too skewed towards sales. Therefore, a small, or even controversial, positive regarding the possible conclusion of an agreement with Brussels sets sterling in motion.

After an unexpectedly strong increase in the British currency, strategists began to think about the correction of the market.

"There is probably the potential for the development of a correction," wrote Credit Agricole SA.

British Prime Minister Boris Johnson will soon meet with various EU leaders to discuss the possibility of a deal. Not the fact that everyone will be as friendly as Germany.

Although French President Emmanuel Macron softened the rhetoric after Angela Merkel, there were still notes of disagreement in his comments. Macron opposed the demands of the UK to reconsider the country's exit from the EU, saying that this is "not an option."

Some strategists drew attention to the fact that the French leader, speaking about the prospects for resolving the border issue with Northern Ireland, noted that in 30 days the parties would not be able to agree on a deal that would be fundamentally different from Theresa May's deal. Macron also made clear that a border decision should ensure that Northern Ireland remains in a single market with the European Union.

Pound buyers have revived, but there is no guarantee that a compromise will be found. The chances of London and Brussels to reach a "workable solution" on the Irish miserable border, which should prevent the growth of the pound.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Tue Aug 27, 2019 12:04 am

Japan Producer Prices Add 0.1% In July

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Producer prices in Japan were up 0.1 percent on month in July, the Bank of Japan said on Tuesday - in line with expectations following the 0.1 percent decline in June.

On a yearly basis, producer prices gained 0.5 percent - shy of expectations for an increase of 0.6 percent and down from 0.7 percent in the previous month.

Individually, prices were up on an annual basis for real estate services, leasing, advertising and transportation.

Prices were down for hotels, rentals and ocean freight transportation.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Tue Aug 27, 2019 12:04 am

Japan Producer Prices Add 0.1% In July

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Producer prices in Japan were up 0.1 percent on month in July, the Bank of Japan said on Tuesday - in line with expectations following the 0.1 percent decline in June.

On a yearly basis, producer prices gained 0.5 percent - shy of expectations for an increase of 0.6 percent and down from 0.7 percent in the previous month.

Individually, prices were up on an annual basis for real estate services, leasing, advertising and transportation.

Prices were down for hotels, rentals and ocean freight transportation.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Tue Aug 27, 2019 10:59 pm

USD/JPY: sell the dollar on growth

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Whoever said anything about Donald Trump's tweets, but the White House owner still managed to bring the markets out of balance. High volatility was observed in the USD/JPY pair. In a short time, quotes managed to go back and forth. Demand for the defensive yen is increasing on Tuesday, as it is difficult for investors and traders to believe in the words of the US president, who announced that there was a call from China. Beijing aggressively calls him to the negotiating table. In addition, the facts indicate the opposite. A spokesman for the Chinese Foreign Ministry said he did not know what Trump was talking about. If the fact of the call is not confirmed and China does not make concessions (which is unlikely), one should not hope for a recovery of USD/JPY.

Bank of America Merrill Lynch calls attempts to raise the dollar in conjunction with the yen an opportunity to sell. According to the forecasts of currency strategists, the pair will stay in the region of 105 until the end of the current quarter, and by the end of the year it will fall to the level of 101.

American statistics now look good, but do not flatter yourself about its invulnerability and impenetrable immunity. The global trends, from which the negative blows, will do their job. Banking analysts estimate the chance of a recession in the United States before the end of this year 1 to 3. At the same time, the BAML analytical model signals that the likelihood of such a scenario has increased to 20%.

The recession in the global economy is becoming increasingly apparent. New statistical data is expected to continue to support fears about the consequences of a trade war, the end and edge of which is not visible. It is worth noting that Trump regularly plays with the emotions of market participants and with China, included. The analyst community believes that Beijing is ready to tolerate and wait for the US presidential election in 2020 in the hope that Trump will not win.

Decrease in the USD/JPY quotes should ensure the Fed rate cut and preservation of soft rhetoric. An additional driver promises to be the stock market. In the second half of the year, the peak on it will finally form, and control will pass to the "bears". According to banking analysts, in the context of a trade war and a global recession, easing the Fed's policy is unlikely to ensure a steady increase in risk appetite

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Re: Forex News from InstaForex

Postby IFX Gertrude » Wed Aug 28, 2019 10:26 pm

EUR/USD: Should the Fed soften the blow or refuse to play along with Trump?


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The EUR/USD pair is still stuck in the range of 1.1050-1.11150 and so far has not found a reason to exit this side trend.

The day before, former head of the Federal Reserve Bank of New York William Dudley voiced what many probably thought, but did not dare to say out loud.

"If the re-election of Donald Trump in 2020 poses a threat to the US economy, then the Fed should stop being apolitical and indulge the head of the White House," said the former vice president of FOMC.

One of the reasons for the slowdown in US GDP, indeed, is the trade war between Washington and Beijing, which adversely affects investment and exports. Tariffs are a heavy burden on US citizens. The question is, why then should the Fed follow the lead of a person who is pushing the country to the abyss?

According to W. Dudley, attempts by the regulator to protect the US economy from the negative effects of a trade war may not only be ineffective, but will worsen the situation even more.

"What if easing monetary policy would only provoke the US president, allowing him to further escalate the trade conflict and increase the risk of recession?" he said.

D. Trump raises old and introduces new tariffs, putting pressure on the Fed, urging it to cut the interest rate by 1% and to revive the quantitative easing (QE) program. He does all this in order to win the trade war, which harms the US economy. This is the truth that people refuse to listen. However, as you know, he will not get away from it. Another round of escalation of trade tension has led to a decrease in the differential yield of ten- and two-year US government bonds to -5.3 basis points for the first time since March 2007. At the same time, the spread between ten-year and three-month bonds fell to -51.4 basis points. Thus, the chances of a recession in the United States are growing by leaps and bounds, and there is no need to look for the culprit.

Most of all, Trump' statement at the G7 summit on a phone call from the representatives of China regarding the resumption of trade negotiations seems to have surprised the Chinese themselves. So far, Beijing has not given any confirmation of the conversation. The trade war continues, the risks of a slowdown and recession in the US economy increases, and the USD index is growing.

The reasons for the greenback's strengthening primarily lies in the weaknesses of its main competitors. At the same time, Washington's fears of currency interventions with the aim of weakening the US currency are holding back EUR/USD bears from taking action. Neither the deterioration of the political situation in Italy, nor the decrease in German GDP by 0.1% in April-June in quarterly terms led to a breakthrough of support at 1.1050-1.1065 for the EUR/USD pair. It is possible that market participants decided to wait for the release of data on US GDP for the second quarter, as well as the August release on European inflation, which will be released this week.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Mon Sep 02, 2019 12:52 am

European Economics Preview: Eurozone Final PMI Data Due

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Final Purchasing Managers' survey data from euro area is due on Monday, headlining a busy day for the European economic news.

At 3.00 am ET, Purchasing Managers' survey results are due from Norway, Poland and Turkey. Poland's factory PMI is forecast to rise to 47.7 in August from 47.4 in July.

In the meantime, Turkey's GDP data is due. The economy is forecast to contract 2 percent on year in the second quarter, following a 2.6 percent fall in the first quarter.

At 3.45 am ET, IHS Markit is scheduled to issue Italy's manufacturing PMI data. The PMI is expected to rise slightly to 48.6 in August from 48.5 in July.

Thereafter, final PMI figures are due from France and Germany at 3.50 am and 3.55 am ET, respectively.

At 4.00 am ET, IHS Markit is set to release euro area factory PMI data. The final reading is forecast to match the flash estimate of 47.0 in August.

Half an hour later, UK Markit/CIPS manufacturing PMI figures are due. The PMI is seen at 48.8 in August versus 48.0 in July.

At 5.00 am ET, Italy's Istat releases July retail sales data. Sales had increased 1.9 percent on month in June.

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Re: Forex News from InstaForex

Postby IFX Gertrude » Mon Sep 02, 2019 8:07 pm

EUR/USD: if there is a rebound, it will be short-lived, the decline will continue

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After a slight rebound, the EUR/USD pair may resume falling, as the trend is still in a downward direction. Resistance is expected at a psychologically significant level of 1.1000, followed by 1.1027, then 1.050, at which EUR/USD held in mid-August. A potential rebound, if any, will be temporary. Although the situation in the German political arena encourages the euro's growth, Italy has not yet formed a government, and in Germany, the key parties have agreed only on fundamental principles and still need to agree on many details. Moreover, the economic situation in the eurozone remains alarming. Markit purchasing managers' final indices for the manufacturing sector show that prospects remain bleak.

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How low can the euro go? This question after the Friday crash worries many traders. Most likely, the market will see a temporary recovery. The chancellor of the ruling CDU party, Angela Merkel, won the local elections in Saxony. In other regions, fears of the victory of extremists from the Alternative German State (AfD) also did not materialize. These results will help stabilize the shaky coalition and strengthen the role of Merkel as a guarantor of stability on the continent. There is another reason for the rebound. US President Donald Trump, although he introduced new duties, recalled that high-level talks should be held at the end of this month in Washington. Until recently, the relative lull in the trade war stimulated the growth of the dollar, now the dollar will experience downward pressure. In addition, the escalation of the trade war means better prospects for German manufacturers, which depend on exports to China.

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Re: Forex News from InstaForex

Postby IFX Yvonne » Wed Sep 04, 2019 2:08 am

Ireland Services Activity Growth Weakest Since January

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Ireland's services activity grew at the slowest pace since January on weak new orders and employment, survey results from IHS Markit showed Wednesday.

The AIB services Purchasing Managers' Index fell to 54.6 in August from 55.0 in July. The score signaled the slowest rise since January. However, a reading above 50 indicates expansion in the sector.

Inflows of overall new business expanded at the slowest pace in four months, amid reports from some firms of Brexit uncertainty negatively affecting orders from the UK.

Irish service providers recorded the weakest payroll expansion since May 2013. On the price front, data showed that while the rate of input cost inflation eased, companies increased their output charges at a faster pace in August.

Meanwhile, sentiment towards activity over the coming year dropped to the lowest since December 2011 as Brexit weighed on optimism.

The composite output index held steady at 51.8 in August despite the manufacturing sector continued to contract.
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