Hotforex.com - Market Analysis and News.

Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Fri Aug 11, 2017 4:28 am

Date : 11th August 2017.

MACRO EVENTS & NEWS OF 11th August 2017.


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FX News Today

European Outlook: Markets remain firmly in the grip of risk aversion as as the rhetoric between the U.S. and North Korea intensifies. The flight to safety has the stock market rout continuing in Asia (Japan was closed for a holiday) and European and Asian stock futures are also heading south as financial and energy producers in particular come under pressure. Eurozone peripheral bond markets are also feeling the heat and the Italian 10-year yield climbed back above the 2% mark yesterday as investors seek safety in Bund and Gilts. So far peripheral yields still remain relatively low but in this climate Draghi will be very careful not to rock the boat any further with tapering talk. The data calendar focuses on final July CPI readings from US and Fedspeak for today.

Germany: German production data this week was disappointing and the trade data showed a marked contraction in exports over the month, which together with the mixed German PMI readings has sparked concerns over the health of the German economy. Yet, not all is what it seems at first glance and as Germany is heading for the general election in September, the economic outlook remains very strong. The Jul HICP inflation released in the morning, was confirmed at 1.5% y/y, unchanged from the preliminary number and from June. The national CPI rate meanwhile was confirmed at 1.7% y/y, up from 1.6% y/y in the previous month. Overall the German HICP rate remains above the Eurozone average, as the labour market is looking increasingly tight and the number of vacancies rose to post-unification highs. Still, even the German HICP rate is clearly below the ECB’s upper limit for price stability and the data won’t change the ECB’s cautious stance on tapering as it prepares it heads for yet another QE program when the current schedule ends at the end of the year.

U.S. reports: revealed a soft round of PPI and initial claims figures, hence offsetting yesterday’s firm figures for wholesale trade and productivity. August nonfarm payroll estimate is at 190k, which is just above the 184k average thus far in 2017, and it is still expected at 0.2% July headline gains for CPI and PCE chain prices. For PPI report, 0.1% July headline and core price declines reflected a surprising 0.2% service price drop, after firm gains over the past four months, alongside a slightly weaker than expected 0.1% goods price decline. For claims, a 4k rise to 244k in the first week of August reversed a 5k drop at the end of July, to leave claims entering August near recent monthly averages of 242k in July, 243k in June, 241k in May, and 243k in April.

Fedspeak: Fed’s Dudley wrote yesterday in the text of his press briefing that sluggish productivity is damping wages, despite job gains. Though the post-crisis expansion is the third longest on record, it has been at a relatively weak pace, along with wages. He still expects inflation to rise to the 2% target over the medium term. There weren’t any policy insights, though he’s not dissented from the consensus over his tenure, and we don’t look for him to start now. Annual price measures could be depressed for a while, he said in comments to reporters. And he added that it will take some time for the inflation rate to get to the 2% target, but also said the sluggishness is due to a number of one-offs, which won’t fall out of the y/y calculations for several more months. It’s really important, he added, to distinguish what’s happening sequentially compared to a y/y basis. That sentiment suggests he’d likely want to hold off on further rate hikes for now. There’s little chance for any tightening next month, and the risk for December is slipping too, though balance sheet normalization is expected to be announced at the September 20, 21 FOMC.

Main Macro Events Today

US CPI- Production data for June are up today, where expected at a 0.1% m/m contraction but 0.1% y/y expansion.

Fedspeak – Dallas Fed’s hawkish Kaplan will take part in a Q&A session from 9:40 ET and Kashkari will be back to do the same at a community bankers conference from 11:30 ET.

China – July loan growth and new yuan loans are out today should show the latter at CNY 1,000.0 bln from 1,540.0 bln previously.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Andria Pichidi
Market Analyst
HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Mon Aug 14, 2017 5:17 am

Date : 14th August 2017.

MACRO EVENTS & NEWS OF 14th August 2017.


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FX News Today

Geopolitical tensions reared up last week and eclipsed key fundamental data points. The escalating war of words between the U.S. and North Korea resulted in a textbook flight to safety into bonds, and also provided an excuse to take profits on equities, especially after the Dow posted nine straight record highs.

United States: Data in recent weeks continued to reflect the surprising dichotomy of stronger economic growth and slower inflation. Those dynamics have frustrated FOMC officials who have become increasing eager to normalize policy. Retail sales for July (Tuesday) will highlight the calendar. Headline sales are projected rebounding 0.4% after dipping 0.2% in June and 0.1% in May, while the ex-auto component should rise 0.3% versus the prior declines of 0.2% and 0.3% in June and May, respectively. The Empire State (Tuesday) and Philly Fed (Thursday) manufacturing indexes are due. The former is expected to rise 1.2 points to 11.0 in August, the latter is expected to slip 0.5 points to 19.0 in August. ( A third consecutive decline). July industrial production (Thursday) is forecast rising 0.4%, the same as in June, lifting capacity utilization to 76.8%. July housing starts (Wednesday) should rise to a 1.220 mln pace after the 8.3% June rise to 1.215 mln. The preliminary reading on August consumer confidence (Friday) should edge up to 93.5 from July’s 93.4. It’s held in the mid- to high 90s since the election. As for July trade prices (Tuesday), import prices should bounce 0.2% after June’s 0.2% decline, while export prices should climb 0.3% following the prior 0.2% drop. Other economic reports this week include The August NAHB homebuilder survey index (Tuesday) and July leading indicators (Thursday).

The FOMC minutes (Wednesday) to the July 25, 26 policy meeting will be of interest, but anti-climactic, given the ongoing divergence in growth and inflation trends, and the upshot in geopolitical risks.

Canada: CPI report is the focus this week as inflation remains a key variable for policymakers. We expect CPI (Friday) to be unchanged in July versus June’s 0.1% dip. Manufacturing shipment values (Thursday) are projected to fall 1.0% in June after the 1.1% gain in May. The hefty price driven 4.3% m/m plunge in June export values drives our manufacturing shipments projection. July existing home sales (Tuesday) and the July Teranet/National Bank HPI (Monday) are also due out.

Europe: Geopolitical risks continue to hang over the markets and have shown that Eurozone peripherals remain vulnerable to bouts of risk aversion. The ECB is still on holiday, but recent events will do little to change Draghi’s reluctance to commit to the further QE schedule just yet. Data releases are unlikely to change the central bank outlook. They include the final reading of Eurozone July HICP inflation (Thursday) as well as the first reading for German Q2 GDP (Tuesday) and the second reading of Q2 GDP for the Eurozone (Wednesday), none of which are expected to bring major surprises.

UK: The UK economy has been and is likely to continue to underperform the Eurozone and other peers. The latest Reuters poll found a strong consensus among 70 analysts for the BoE to leave monetary policy on hold until 2019. The calendar this week brings July inflation data (Tuesday), the labour market report covering June and July (Wednesday) and official retail sales numbers for July (Thursday).

China’s docket today revealed July industrial output, which was seen at 7.7% y/y clip missed and came in at 6.4%. July retail sales also missed at 10.4% (10.9% expected) 11.0%, while July fixed investment ALSO missed (8.3%) forecast was 8.6% y/y. Poor set of data.

Japan: Q2 GDP highlighted and was a big beat earlier expected growth to was 2.6% q/q pace from 1.0% previously, but came in at 4.0%. Revised June industrial production is due Tuesday, while the July trade surplus (Thursday) should narrow to JPY 300.0 bln from JPY 439.9 bln.

Australia: The employment report (Thursday) is expected to reveal a 15.0k gain in July jobs after the 14.0k rise in June. The unemployment rate is seen steady at 5.6% in July. The wage price index (Wednesday) is anticipated to expand 0.5% in Q2 after the identical 0.5% increase in Q1. The Reserve Bank of Australia releases the minutes to the August meeting (Tuesday). Assistant Governor Kent speaks (Monday). Assistant Governor (Economic) Ellis delivers a speech Thursday.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
SeniorMarket Analyst
HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Tue Aug 15, 2017 5:40 am

Date : 15th August 2017.

MACRO EVENTS & NEWS OF 15th August 2017.


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FX News Today

European Outlook: The stock market recovery continued in Asia overnight, with Japan outperforming after underperforming yesterday, while gains were more muted elsewhere. Still, U.K. and U.S. futures are also moving higher, indicating that abating fears over North Korea are keeping markets underpinned, while earnings optimism are helping financials, even as lower oil prices are hitting energy producers. Following the German GDP data (see below) the European session sees U.K. and Sweden release inflation numbers with the former seen nudging higher to 2.7% y/y (med same) from 2.6% y/y in June.

German Q2 GDP: It rose 0.6% q/q a little under forecast and a tad below consensus, but with Q1 revised up to 0.7% q/q from 0.6%, which leaves a stronger overall trajectory. There is no full breakdown with the preliminary number, but the stats office reported that private as well as government consumption improved markedly and that machinery as well as construction investment also picked up. Net exports meanwhile made a negative contribution as imports rose stronger than exports. All in all pretty much in line with expectations and confirming the robust German recovery, which judging by confidence data and the strong orders inflow in Q2 continues in the third quarter. The ECB has acknowledged the improved growth environment, but remains focused on low inflation and moderate wage growth and the most recent rise in the EUR will only add to the arguments for a very cautious approach to QE tapering.

FX Update: USDJPY extended its rebound for a third session, today making a one-week high at 110.45. EURJPY also rose, logging a one-week peak just above 130.0, and other yen crosses are up. The recovery in risk appetite, as cooler heads prevail in the North Korean situation, has remained the central theme behind broad yen weakening. USDJPY support is at 109.84-45, and resistance is at 110.80-82. EURUSD ebbed to a two-session low at 1.1786, as did Cable, at 1.2954, with the dollar now more than having recouped the losses seen on Friday following tepid CPI data. The dollar also gained ground versus the Canadian and Australian dollars, and most emerging market currencies.

Fedspeak: Dudley said he backs another rate hike this year, assuming the economy evolves as expected, in an AP interview. And he added his outlook is little changed from the start of the year. It’s not unreasonable to expect action on the balance sheet next month. He still forecasts growth around 2%, which will tighten the job market. Inflation should move somewhat higher. He thinks asset prices are consistent with the economy’s performance. So far the Fed has been “very, very gentle” in removing accommodation. President Trump has respective the monetary policy process. And he said Gary Cohn would be a “reasonable candidate” for Fed chair.

Main Macro Events Today

UK CPI – Expectations are for a rise in UK CPI later today back to 2.7% from the surprised dip in July to 2.6%. The June 2.9% reading remains the current peak and fueled speculation of a UK rate hike which has now all but disappeared following the BOE’s suggestion of a lot more caution surrounding tightening following the inflation slip.

US Retails Sales – Expectations are for a 0.4% retail sales bounce in July with a 0.3% rise for the ex-auto figure, following vehicle and price-led declines in May and June. We saw a modest 0.6% vehicle sales rise in July, construction jobs and hours worked rose by 6k and 0.1% respectively, chain store sales posted moderate gains, and gasoline prices stabilized after two months of declines. The various consumer confidence and producer sentiment indexes remained strong on the month, though with modest drop-backs for some measures, and we saw big stock price gains

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
Senior Market Analyst
HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Wed Aug 16, 2017 5:14 am

Date : 16th August 2017.

MACRO EVENTS & NEWS OF 16th August 2017.


Image

FX News Today

European Outlook: Asian stock markets are mixed, after an uninspiring session on Wall Street. The Nikkei is up 0.02%, the ASX gained 0.23% as oil prices moved slightly higher and the Hang Seng is up 0.72% in contrast to a -0.30% drop in the CSI. Earnings reports, geopolitics and currencies remain in focus. Ongoing Sterling weakness is propping up the FTSE 100, and U.S. stock futures are also up. EGB yields meanwhile are rising and Eurozone peripheral yields in particular were pushed up yesterday as Germany’s top court raised doubts over the ECB’s stimulus program. Finance Minister Schaeuble told Handelsblatt, that in his view the ECB’s QE program remains within its mandate, but the uncertainty ahead of the final court decision will hang over markets. Still, yields moved back down from highs during yesterday’s session and things should calm down further after the initial announcement.

FX Update: The dollar majors settled in narrow ranges. USDJPY lost upside steam as global stock market performance turned more mixed following a rebound phase. The pair settled in the mid 110.00s after a three-day rally capped out yesterday at 110.84, an eight-day peak. And right on the 20 day moving average. EURUSD planted itself around 1.17740 after logging a one-week low at 1.1687 yesterday, which was seen following robust retail sales and Empire State index reports out of the U.S. USD-CAD settled below the one-month peak of yesterday, at 1.2778, and Cable rooted itself in the mid 1.28s after logging a one-month low yesterday at 1.2846. A central focal point today will be the release of the FOMC minutes to the June policy meeting. (Details below)

Yesterday’s US Reports: Mostly beat estimates and lifted prospects for GDP in 2017, with solid July retail sales gains after big and broad-based upward revisions, and an August Empire State surge to a 3-year high of 25.2. The June business inventory figures tracked estimates, with a big 0.5% June rise that included a tiny retail inventory undershoot, and a firm round of July trade prices led by gains for food export and oil import prices, with a skewing of price strength toward exports. Q3 and Q4 GDP growth estimates remain around 3.3% and 2.6% respectively.

Fedspeak: Kaplan repeated that the balance sheet unwind should start very soon, but gave no firm date, in a podcast with The American Banker. We’re looking for the FOMC to announce QT at the September 20, 21 meeting. But he also indicated, as he did Friday, that it’s appropriate to be patient on the timing of the next rate hike. Kaplan is a voter, and typically hawkish, so adds some risk to the call for a December rate increase. He believes there is still some slack in the labour market, but the firming jobs market should eventually translate into higher prices.

Main Macro Events Today

FOMC Minutes – The Wall Street Journal wrote yesterday of 5 key elements: 1) Portfolio Pointers – any potential for more ‘definitive signal’ on balance sheet wind down in September sought. 2) Inflation Questions – potential for hot debate on cold inflation stats. 3) Another Rate Increase? – even some centrists have been disappointed by low inflation, could delay next hike. 4) Wither the Dollar? – weak dollar could inform debate on economy, inflation, exports, etc. 5) The Debt Limit, Again – just how much the Fed hits the ‘pause’ button or prepares to take emergency steps in the event of a shutdown could be revealed in the minutes.

Eurozone Q2 – Expectations are for a confirmation of the 0.6% (QoQ) and 2.1% (YoY) first reading.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
Senior Market Analyst
HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Thu Aug 17, 2017 5:00 am

Date : 17th August 2017.

MACRO EVENTS & NEWS OF 17th August 2017.


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FX News Today

Trump: Disbanded both Councils in a Tweet: “Rather than putting pressure on the businesspeople of the Manufacturing Council & Strategy & Policy Forum, I am ending both. Thank you all!” Seeing the writing on the wall, the 45th president of the U.S. is apparently attempting to fire them all (8 have already quit) before they can resign. Meanwhile, VP Pence is reportedly ending his Latam trip “a bit early” and returning to the U.S. after his visit in Panama. Gold and the yen both caught a bid after the announcement. Gossip is now swirling around his top team including Gary Cohn his chief economic adviser and the Presidents rumored preferred candidate as the next chair of the FED. EURUSD 1.1780, JPY 109.70 and Cable 1.2905. Gold trades at $1287 and USOil at $46.80 (having hit our $47.00 target).

Australian Jobs: Employment grew 27.9k in July after a revised 20.0k gain in June (was +14.0k). The increase in July mildly overshot expectations, but the details were less encouraging. Notably, full time employment retreated 20.3k after a revised 69.3k gain (was +62.0k). Part time jobs drove total employment gains in July, rebounding 48.2k after a slightly revised 49.3k decline (was -48.0k). The unemployment rate slipped to 5.6% in July from a revised 5.7% in June (was 5.6%). Employment growth has picked-up momentum this year, but wage growth remains weak. The wage price index, released Wednesday, grew at a 1.9% y/y pace in Q2, matching the growth rate in Q3 and Q4 of 2016, and Q1 of this year. That is the slowest rate on record (going back to 1998.)

FOMC Minutes: They showed definite concerns over inflation, and that gave the report a dovish bias. Meanwhile, most on the Committee preferred to defer the announce balance sheet unwinding until the upcoming (September 19, 20) meeting. Most members still expect inflation to pick up over the medium term, and still see a Phillips Curve connection between a tighter labor market and rising wage and price pressures, though a few doubted the validity of the framework. A number of causes for the sluggishness in inflation were bandied about, suggesting it’s not just idiosyncratic factors weighing. Some participants believed there was room for the FOMC to be patient on further rate hikes. But others saw inflation moving on a clear path toward the 2% target and were concerned about the effect of a tighter labor market. On the appropriate pace of normalization of the funds rate, the FOMC fell back to acknowledging it would depend on how financial conditions evolved. As for the balance sheet, it looks as though it will be announced at the September 19, 20 meeting. “Although several participants were prepared to announce a starting date for the program at the current meeting, most preferred to defer that decision until an upcoming meeting while accumulating additional information on the economic outlook and developments potentially affecting financial markets.”

US Housing Starts: The July U.S. housing starts report revealed declines of 4.8% for starts, 4.1% for permits, and 6.2% for completions, after small net upward revisions that sustained big June bounces from weak May levels, leaving a weaker than expected report. July declines were led by the multi-family sector, with drop-backs in the northeast and midwest after June gains, but with substantial weakness in the south since a spike in January that has left starts underperforming other housing series. We saw a third consecutive drop for the important starts under construction series, which hasn’t risen since April. Starts and permits have shown a 2017 pullback after a weather-led Q4 surge, while completions were strong through Q1 before stabilizing.

Main Macro Events Today

Eurozone CPI – The Eurozone CPI for July is due this morning and expected to show no change in the (YoY) headline figure at 1.3% (MoM dipping to -0.5%) and the key Core CPI (YoY) ticking up to 1.2% (from 1.1%) and MoM no change at 0.2%.

US Initial Jobless – Initial claims data for the week of August 12 are out today and should ease down to 238k for the week from 244k last week and 241k in the week prior. Overall, claims in August look poised to improve over July with an anticipated 240k month average, down from 242k in July. This supports expectations for continued strength in the labour market.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
Senior Market Analyst
HotForex


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Fri Aug 18, 2017 4:30 am

Date : 18th August 2017.

MACRO EVENTS & NEWS OF 18th August 2017.


Image

FX News Today

European Outlook: Risk aversion is back. Sharp losses on Wall Street were followed by a largely negative session in Asia, with the Nikkei underperforming and down more than -1.2% amid a stronger yen. Concerns over Trump and the terror attacks in Spain have prompted investors to head for safety and Bund futures rallied in after hour trade, pointing to a fresh drop in core yields. FTSE 100 futures are down, although U.S. stock futures are stabilizing. Today’s local calendar has Eurozone current account and construction output numbers, none of which are likely to detract markets from a focus on geo-politics.

German producer prices: higher than expected, with the headline rate falling back only slighty to 2.3% y/y from 2.4% y/y in the previous month. Annual price increases for basic goods eased further, but at 3.0% y/y the rate remains high and the pace of decline since the peak in April has slowed, despite the strong EUR. At the same time, energy price inflation picked up to 1.9% y/y from 1.6% y/y. Capitsl, and durable goods price inflation ticked marginally higher, but remains low at 1.1% y/y for each category. Bund futures corrected from the highs seen in after hour trade yesterday, but remain up on the day.

Yesterday’s US Reports: reveal solid factory and labor market readings that signal ongoing upside risk for GDP and payroll growth, though we saw a 4-year low of 10.3 mln for the July vehicle assembly rate that shows a big hit from this year’s auto retooling pattern. Industrial production rose 0.2% in July after upward revisions that left an as-expected report. We saw a solid 18.9 August Philly Fed figure, with a big ISM-adjusted Philly Fed bounce to 56.9 from 53.0. Given Tuesday’s Empire State headline surge to a 3-year high of 25.2 from 9.8, producer sentiment appears to be stabilizing at remarkably high levels. We also saw a 12k initial claims drop to a lean 232k in the BLS survey week, leaving a lean 237k average thus far in August. Finally, leading indicators rose 0.3% in July to leave a solid 11-month string of gains, and the Bloomberg consumer comfort index rose to a 52.1 cycle-high.

ECB minutes: stressed need for caution with regard not just to changes in communication, but also the timing of the next announcement. On the one hand council members feared overreactions in markets to changes in communication, on the other hand some seemed to warn that leaving the announcement on the future of QE too late would likely see markets making up their own mind and leave the ECB with the task of correcting out of synch expectations. Council members noted the tightening impact of the stronger EUR and some raised the risk of overshooting currency markets, putting exchange rate developments into the spotlight going ahead. The ECB wants to maintain its flexibility with regard to asset purchases, but members also raised the issue of flows/versus stock of assets. Indeed the last time around Draghi reduced monthly purchase volumes, but still stressed that this meant a further expansion of stimulus, with just the pace of expansion reduced somewhat. It could well be that rather than laying out a full tapering schedule for the phasing out of monthly purchases Draghi will stick to a similar line and focus just on the next part of what is likely to be a very gradual reduction of QE. The minutes didn’t give a clearer hint on the timing of the announcement, beyond the “autumn” schedule Draghi already indicated at the meeting.

Main Macro Events Today

Canadian CPI – The CPI expected to come in flat (0.0%) for July relative to June, leaving a pick-up in the annual growth rate to 1.2% in July from 1.0% in June. Gasoline prices plunged in June before improving only modestly through July. Indeed, the average gasoline price in July was actually modestly below the average price in June (prices started firm in June, then tracked sharply lower into near month end). Also, the loonie staged a furious rally in July amid the BoC’s rate hike and hawkish guidance. Finally, Ontario electricity prices should again knock total inflation lower, as time of use pricing was chopped roughly 15% by government decree. (This is one of the temporary factors cited by Poloz on inflation back in July.)

US UoM CSI – The first August release on Michigan Sentiment is out today and should post an increase to 94.0 from 93.4 in July and 95.1 in June. Other confidence measures are looking stronger in August as well with the IBD/TIPP Poll rising to 52.2 from 50.2 in July and the Bloomberg Consumer Comfort survey poised to average 51.8 from 48.3 in July.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
Senior Market Analyst
HotForex


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HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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