Hotforex.com - Market Analysis and News.

Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Fri Oct 09, 2020 12:27 pm

Date : 9th October 2020.

The last leg of EU-UK trade talks OR Not?

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The outlook isn’t good for either the UK or Europe given the surge in new Covid cases. New restrictions, from travel limitations to pub closures to local lockdowns, are being introduced almost daily in the UK, and this will have a negative impact on economic activity. The government’s furlough scheme is being withdrawn this month, and being replaced by a narrower, more targeted wage protection scheme, though the Chancellor has announced there will be a new scheme to support those affected by local lockdowns. Dovish signalling has come from the BoE governor this week, similar to policymakers at other central banks.

Attention remains fixated however……

Attention remains fixated on the final phase of talks between the EU and UK, with less than one week to go until the EU’s summit. Despite the public brinkmanship, there have been reports from behind the scenes of motion toward finding a compromise on key issues from both UK and EU sources. Any news of a deal would likely boost Sterling over the near term.

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But even with a deal, and even with UK progress in signing continuity agreements with non-EU trading partners, the UK will see its terms of trade position deteriorate. It has also become increasingly clear that London’s European dominance in financial services will erode, deal or not. The technical picture of Cable is overall neutral after Tuesday’s bearish engulfing candlestick pattern at the 1.3000 area. However the asset reversed again to the upside retesting that area once again. Interestingly an inverse head and shoulders looks ready to be formed, however how the market will respond and whether or not it will confirm the formation depends on next week’s summit. A decisive move above 1.3000 and the 50-DMA could indicate a boost to August highs, while a pullback to 1.2700 lows would increase the negative momentum.

Next week’s Summit

The October 15 EU summit that was originally seen as the deadline for Brexit talks, and which Boris Johnson still flags as the point where the UK will walk away even if there is no deal, is just a week away and the chances that there will be an agreement at that point is almost non-existent, despite latest comments from officials. EU Commission President Von der Leyen and UK Prime Minister Johnson may have agreed to extend official talks during a recent phone conversation, but the fact that these seem to still be regular talks, rather than “tunnel” discussions based on agreed “landing points” on key issues, highlights that differences remain too large to get a deal done quickly.

Listening to the UK side, the question of how to deal with fisheries and future access to UK borders is the key point, but while that clearly is important as a signaling factor for the UK public and important for some EU member states, the more pressing issues for the EU are level playing field rules, the governance of any agreement and the future cooperation on data sharing on security and crime fighting. Indeed, level playing field rules and governance could be the key to any agreement.

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Not that EU states are in any mood to give ground on fishing at the moment and indeed, while it seems at first sight that the UK has every right to exclude the EU’s fleet from its own waters, most of the fish found in UK waters is actually sold and eaten in the EU. The fishing issue, which is a big part of the UK government’s narrative at home (more so than the right to subsidise companies) clearly is a bargaining chip that national heads of state don’t want to give up as long as talks remain at negotiator level.

Next week’s summit will bring an opportunity to take stock and maybe pave the way for “landing zones” that would allow the move towards “tunnel talks” later in the month.

That would push the timing of the likely showdown into early November. Given that any agreement still has to go through a legislative process on both sides of the Channel and that there is a clear risk that the EU parliament will reject any deal if the UK’s Internal Market Bill is not scrapped or modified by then and that Johnson may face defeat if he makes too-big concessions on fisheries, there are still pitfalls ahead.

Ultimately both sides want a deal and it is widely hoped that there is very likely going to be one, although it is also likely to be limited in scope. For the Brexiteers the opportunities that await outside of the EU and its regulations make up for that. The recent agreement with Japan was a case in point, with the UK barely able to match the agreement the EU has with Japan. At the current juncture, the best the UK can hope for is to replicate the deals the EU already has.

Even with a tariff free, quota free deal, the UK’s loss of unfettered access to the single market and customs union would lead to trade destruction.

UK exporters would face cost-increasing non-tariff barriers, such as customs formalities and regulatory barriers. The same would be the case for EU exporters to the UK, though the impact would be much magnified on the UK side of the Channel. Productivity would also be impacted, given reduced competition and reduced scope for businesses to benefit from economies of scale.

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Financial services — a golden goose that accounts for 22% of government tax receipts — is a particular concern. A Bloomberg article highlighted the steady stream of financial services resources that are being moved out of the UK to the Eurozone, and the fact that even with an EU trade deal in place, London will likely continue to lose business to Eurozone financial centres as the “equivalence” regime on rules would leave firms with long-term uncertainty.

Hence with or without this year’s pandemic, the transition would have been difficult. The UK is likely to also face a huge rise in structural unemployment, as Brexit will cut off access to the cheap workforce in Eastern Europe, while a large part of those losing their livelihoods now – first and foremost those in services sector – won’t be able to just retrain as builders and benefit from the building boom the government is trying to generate.

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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!

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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.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Mon Oct 12, 2020 1:00 pm

Date : 12th October 2020.

Events to Look Out for This Week.


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The risk that virus developments will disrupt the recovery is back in play and very real globally. The lack of another round of stimulus in the US, ongoing US-China frictions and US elections weigh further on a potential economic recovery, as, after all, there is still a long way to go. The EU summit and Q3 earnings season kick off in the next week, with most of the large financials reporting. Data-wise, in focus will be inflation data from the biggest economies in the world, including the US, China and Europe.

Tuesday – 13 October 2020

Trade Balance (CNY, GMT N/A) – Chinese trade is expected to see a decline in September, at $50.5B from the $58.9B last month.

Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German final HICP inflation for September is anticipated to be at -0.1% y/y.

Average Earnings (GBP, GMT 06:00) – Average Earnings excluding bonus are expected to have grown by 0.6% (3Mo/Yr) in August. The ILO unemployment rate is expected to have steadied to 4.1% in the three months to August.

Consumer Price Index (USD, GMT 12:30) – Consumer Price Index is seen at 0.2% September gains for both the CPI headline and core, following 0.4% gains for both in August. The headline will be restrained by an estimated -0.3% September drop for CPI gasoline prices.

Wednesday – 14 October 2020

Producer Price Index (USD, GMT 12:30) – For September both the headline and the core PPI are forecasted at 0.1%. As expected readings would result in a y/y headline PPI metric of 0.2%, up from -0.2% in August. A modest decline in energy prices will weigh on the headline. The y/y core reading is assumed to remain in the 0.9%-1.2% area over the near future, with a downward hit from reduced aggregate demand but a boost for prices from supply disruptions.

Thursday – 15 October 2020

European Council Meeting -Event of the week – With political heavyweights now getting directly involved, we will find out over the next week (into the EU’s October 15th-16th summit) what degree of compromise both sides are willing to make to reach their shared goal of tariff free, quota free trade. Johnson reportedly wants to persuade the EU to enter in “the tunnel” (known as “submarine” in EU parlance), which refers to a media blackout period, to allow the final phase of negotiation to be uninterrupted by media or other criticism. Von de Leyen rejected that this is happening, however. The EU position has been that this would only happen when compromise positions have been established, which has not happened yet, with fishing rights and EU level playing field rules, the latter of which includes the state aid issue, remaining sticking points.

Employment Data (AUD, GMT 00:30) – The unemployment rate is an important national priority for RBA, hence the employment change is key for the RBA this week. However, another sign of economic contraction it is expected as the s.a. reading is seen at -50K in September.

Consumer Price Index (CNY, GMT 01:30) – Consumer Price Index is seen unchanged for September at 2.4% y/y and 0.4% m/m.

Friday – 16 October 2020

IMF Meeting
European Council Meeting -2nd day
US Presidential Debate – Cancelled and postponed until 22nd of October.
Consumer Price Index (EUR, GMT 09:00) – Inflation remains too low and against that background the ECB clearly is on course to strengthen the low for longer message by switching to a fixed inflation target. Eurozone CPI is anticipated steady at -0.4% m/m and core at 0.2% m/m for September.

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 » Tue Oct 13, 2020 1:13 pm

Date : 13th October 2020.

Equity markets rally loses some momentum in EU session.

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Risk aversion picked up again, underpinned by negative vaccine news amid reports that Johnson & Johnson halted its Covid-19 trial due to “unexplained illness”.

The December 10-year Bund future is up 1 tick, while in cash markets Treasury yields have dropped back -1.2 bp to 0.76% after yesterday’s holiday. In FX markets EUR and GBP both declined against a largely stronger US Dollar. Negative vaccine headlines weighed on sentiment overnight, but tech stocks remained supported and the prospect of additional monetary and fiscal stimulus should help to underpin sentiment.

European stock markets are narrowly mixed in opening trade, with the UK100 up 0.04%, GER30 down -0.14% and the Euro Stoxx 50 down -0.03%, while US futures are narrowly mixed, with only the USA100 future managing fractional gains.

The ECB is clearly readying a strengthening of the PEPP program, the BoE is stepping up the preparations for a move towards negative rates and ECB President Lagarde also stressed again the need for fiscal stimulus to support the wave of monetary stimulus as the renewed surge in virus cases is threatening the still fragile recovery. An ongoing salvo of dovish signalling from ECB policymakers has resulted in outright Euro and GER30 declines, though has likely been contributory in offsetting dollar weakness recently. Aside from the Fed itself, and partly in response to, many other central banks have been conducting similar messaging campaigns.

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Further pressure has been added to both EUR and GER30 despite after the release of German HICP inflation earlier. German HICP inflation confirmed at -0.4% y/y in the final reading for September. The national CPI rate was confirmed at -0.2% y/y, with the temporary cut to the VAT rate as well as the decline in energy prices the main reasons for the negative headline rate. Excluding household energy and petrol, CPI would have been 0.6% y/y. Still, while is not real deflation, the officials are clearly concerned that a prolonged period of negative headline rates against the background of new virus restrictions and rising unemployment will lead to a more permanent shift in inflation expectations that could lead to a deflationary spiral down the line. For the dovish camp at the ECB, the numbers will provide further ammunition in the push for additional stimulus measures and a further extension and strengthening of the PEPP program.

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GER30, despite a decline on opening, retains the support at the 50-period SMA in the 1-hour chart. Although the asset has reversed nearly all the year’s losses and is trading clear above 12,500, the outlook is still not decisively positive, but neutral. It has been in a new uptrend since the beginning of October but momentum looks neutral with bulls struggling for a second day to move above 13,200 (76.4% FIb level) after a weak close yesterday. The improvement in momentum indicators will clear the strength level of the trend, as MACD is being tested around neutral as RSI slips lower towards 50. Immediate Resistance is in place at yesterday’s high, and the 13,200 at 76.4% Fib. The bulls need to show a breakout of this area. A pullback below 61.8% Fib. level at 13,027 but more precisely below the round 13,000 would seriously challenge whether bears are slowly taking the control again.

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 » Wed Oct 14, 2020 5:23 pm

Date : 14th October 2020.

Big Bank Earnings & PPI lift sentiment.

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USA500, Daily

Bank of America (BoA) and Goldman Sachs (GS) both reported third-quarter earnings earlier that beat estimates.

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BoA reported net income of $4.9bn, or 0.51 cents per share (EPS) compared to the consensus estimate of 0.49 cents EPS. Revenue in the same quarter last year was $5.8bn and only $3.5bn for the second quarter of 2020. Like JPMorgan and Citibank yesterday, the recovery in Q3 was the reduction in provisions for bad loans down to “only” $1.4 bn from the colossal $5.1bn in Q2. Total revenues were lower at $20.3bn. Shares closed down 2.84% yesterday at 24.95 and are down a further 2.9% in out-of-hours trading today at 24.21.

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Goldman Sachs (GS) figures were significantly better than consensus, with EPS at an impressive $9.68 versus expectations of just $5.57 – a beat in excess of 73% and a record for a quarter. Net revenues for the quarter were $10.78 bn versus $9.45 bn, a beat of some 14% and 30% better than the same quarter in 2019. Shares closed down 1.55% yesterday at 210.81 and are up 2.0% in out-of-hours trading today at 215.10.

US headline PPI rose 0.4% in September, with the core rate up 0.4% as well, both hotter than forecast, following respective August gains of 0.3% and 0.4%. The core price ties with August for the firmest since April 2019. Prices have recovered from big and record drops in April of -1.3% for the headline and -0.4% on the core. The 12-month pace climbed to a 0.4% y/y rate from -0.2% y/y previously, and the core rate surged to a 1.2% y/y clip versus 0.6% y/y. Goods prices increased 0.4% on the month from August’s 0.1% gain, with food prices jumping 1.2% from the prior -0.4% decline, while energy prices fell -0.3% after slipping -0.1% previously. Services prices were up 0.4% from 0.5% in August.

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The Dollar edged lower following the September PPI print. USDJPY hit near two-week lows of 105.21, down from near 105.30, as EURUSD headed to intraday highs of 1.1764 from near 1.1755. The Dollar has been on the decline generally since before the open. Equity futures remains mixed with USA500 trading at 3519, up from earlier lows at 3502 but down from European session highs at 3532.

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
Head 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.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Thu Oct 15, 2020 1:49 pm

Date : 15th October 2020.

European Equities Heavy on Covid-19 Resurgence.

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Trading Leveraged Products is risky

GER30, UK100, H1

European stock markets are selling off, with the GER30 now down 3%, the UK100 2.3%, as investors price out stimulus hopes in the US and prepare for fresh economic setbacks as the second round of Covid-19 hit Europe and leads to increasingly strict restrictions. France has announced a curfew for Paris, that confines citizens to their homes between 9 pm and 6 am for four weeks, in the U.K. regional lockdowns are widened with London moving to tier 2 (No household mixing indoors anywhere from midnight on Friday. People are discouraged from using public transport. Schools, universities and places of worship remain open. All businesses and venues can continue to operate) and in Germany Chancellor Merkel has urged citizens to stick to the rules while signalling that official measures will be tightened if cases continue to rise at the current rate. Officials are eager to avoid full lockdowns, but despite the respite over the summer, they failed to prepare appropriate alternative measures to deal with the spike in cases that is now starting to show up in hospital admissions. Central bank officials continue to signal the willingness to do more if needed, but that hasn’t prevented Eurozone spreads from widening this morning, as peripheral bond markets feel the pressure from the pick-up in risk aversion. The Italian 10-year yield is up 3.4 bp, although still below the 0.7% mark, while German 10-year yields have dropped back -3.8 bp and -3.2 bp so far today.
The GER30 spiked below 12,600 from a close yesterday at 12,970, the UK100 pushed below 5,800 from highs yesterday over 6,000.

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The GER30 spiked below 12,600 from a close yesterday at 12,970, the UK100 pushed below 5,800 from highs yesterday over 6,000.

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
Head 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 Oct 16, 2020 12:39 pm

Date : 16th October 2020.

Election2020 – Only Three Weekends Remain.

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A little over 2 weeks – 12 trading days – until the US Election, and the Town Hall meetings co-hosted on the two main US national TV networks provided nothing really new with regards to policy or outlook. However, it did provide the opportunity to have both meetings running consecutively side-by-side. President Trump was in Miami, in the must-win state of Florida (29 Electoral College votes) with NBC, while former Vice President Biden was in Philadelphia, Pennsylvania, another key swing state with 20 Electoral college votes available to the victor, with ABC.

President Trump said “I know nothing about QAnon”, that he WILL accept a peaceful transfer of power, ”Yes, I will. But I want it to be an honest election, and so does everybody else.” and commented on whether he took a coronavirus test on the day of his last debate with Mr Biden, saying: “Possibly I did, possibly I didn’t.”

Candidate Biden continued to avoid answering if he would move to increase the size of the supreme court (the third arm of US government) with judges if, as seems likely, the Senate confirm judge Amy Coney Barrett to the court before election day. “I have not been a fan of court packing. I’m not a fan.” He admitted that the 1994 crime bill, which he helped draft, which the Black Lives Matter Movement has claimed is one of the reasons for mass jailings of African Americans, was a “mistake” but continued to defend his record “It [the bill] had a lot of other things in it that turned out to be both bad and good.”

So attention is turned to a weekend of high intensity campaigning, the final two-week onslaught of media messages and no-holds-barred advertising. The pair are still expected to meet face to face for the final time before polling day on Thursday in Belmont University, Nashville, Tennessee (a strongly Republican state with 11 electoral college votes, almost guaranteed for the President).

The Pandemic, Economics, Foreign Policy, and even the environment are likely to be key topics in what is expected to be a much less raucous and chaotic affair than their first encounter. The most powerful job in the world is up for grabs, and it impacts us all, regardless of where we live.

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
Head 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 Oct 21, 2020 10:31 pm

Date : 21st October 2020.

USD Down, GBP & Crypto’s Higher, CAD data.

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Sterling has rallied quite strongly, showing a 1.0%+ gain on the Dollar at prevailing levels, as it rallied to test 1.3100. EURGBP is back under 0.9100 and down over 0.5% and testing 0.9050. The market reacted to remarks from EU trade negotiator, Barnier, that talks with the UK could continue “day and night.” There was also news that US Trade Representative Robert Lighthizer said that a trade agreement with the UK would come “reasonably soon.” The currency market evidently remains bullish on the EU and UK reaching an agreement, although the game of chicken between the two sides is continuing. Boris Johnson’s position is that the EU must fundamentally change its stance, while France’s European affairs minister Clément Beaune asserted yesterday that there would be “no new approach.” USDJPY tumbled under 105.00 en-route to printing a one-month low at 104.55. EURUSD lifted to a one-month high at 1.1868.

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USDCAD posted a new low for a fourth consecutive day in pegging a six-week low at 1.3080 before recouping back above 1.3100 amid a near 2% drop in oil prices. USOil fell from the $41.88 highs seen on Tuesday to a low of $40.86 in London morning trade. The API reported a 600k bbl weekly inventory build after the close yesterday, versus expectations for a 2.0 mln bbl draw, which weighed on prices some. Inventories at the Cushing, OK storage hub were up by 1.2 mln bbls. Concerns over Covid related demand destruction, along with increased crude production from Libya, should keep a cap on prices for now. The EIA weekly inventory report is due at 14:30 GMT.

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Canada’s CPI accelerated and retail sales grew, but both measures were on the tame side. CPI rose 0.5% y/y in September after the 0.1% gain in August. But CPI dipped -0.1% on an m/m basis (nsa) after the -0.1% slip in August and flat (0.0%) reading in July. CPI last rose on an m/m basis in June, rising 0.8%. The average of the three core CPI measures was 1.7% y/y, matching the 1.7% average seen in August. The CPI report remains consistent with ample slack in the economy, with a long way to go before activity returns to pre-pandemic levels across all industries. Meanwhile, retail sales rose 0.4% in August (m/m, sa) after a 1.0% gain in July (revised from 0.6%). Statistics Canada’s preliminary estimate is for little change in September retail sales. Sales have returned to more typical growth rates following the initial pop that followed the reopening of the economy — sales surged 21.2% in May after plunging -24.8% in April and falling -10.0% in March. Retail sales jumped 22.5% in June, an all time high growth rate. The ex-autos sales aggregate gained 0.5% in August. Both measures undershot expectations for stronger gains. Tame annual CPI growth along with the deceleration in retail sales is consistent with steady, accommodative policy from the BoC for an extended period.

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Elsewhere, BTCUSD moved to 2020 highs after Paypal confirmed it will allow cryptocurrency buying, selling and shopping on its network.¹ The press release stated it “signaled its plans to significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide. The company is introducing the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet. The service will be available to PayPal account holders in the U.S. in the coming weeks.”

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
Head Market Analyst
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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.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Thu Oct 22, 2020 3:57 pm

Date : 22nd October 2020.

Volatility and US elections.

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US Elections had been and always expected to be an event historically extremely volatile globally. Elections similar to other political or banking sector events are notably treated by market participants with anticipation and speculation. As discussed in our HF Markets Q4 Outlook, markets look to have already pricing in the possibility of Biden’s victory even though they overall maintain an increasing cautious optimism, holding US Dollar basket to 2018 low territory.

Historically, it has been noticed that during election years, market participants due to the heightened uncertainty, shift their investments into Money market funds instead from the safety of stock and bond funds, AS THEY waiting out. The 2020 is not any different but it’s been a unique one as we have seen an extreme money flow into currency assets in comparison with past election years, due the sluggish US and worldwide economic activity as the Covid-19 crisis resumes, the truce with China again which is under scrutiny, the lockdowns in several areas, the lack of additional fiscal stimulus from central bankers, Brexit frictions and the fear of double dip recession in Europe.

That said, cash balance into money funds spike to $980 in 2020 as of June 30, given the large risk premia. However as soon as uncertainty recedes we might see equity market’s volatility and volume to spike again since they consider to be attractive and more stable assets in period which there are historically low interest rates. If we emphasize on the medium term thought it is expected that if current conditions sustained, market volatility will extend beyond Election days with any potential outcome, i.e. a Biden win and Democrat majority in Congress, a Biden win but split Congress, or a Trump victory with split Congress.

Meanwhile, a very chart from Wells Fargo Investment Institute, shows the USA500 implied Volatility index along with USA500 index performance prior and post the Election Day based on the election since 1988 with 2008 recession year excluded. This chart interestingly suggest that typically the USA500 tends to eased/consolidate a bit a month prior elections despite a extremely high volatility, while USA500 price continue their upwards move after the election day even though volatility declines significantly.

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WELLS FARGO INVESTMENT INSTITUTE

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.

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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 » Fri Oct 23, 2020 1:46 pm

Date : 23rd October 2020.

Dollar Dips as Equities escalate.

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EURUSD, H1

The Dollar fell back concomitantly with rallying European stock markets and US index futures, which was likely a repositioning dynamic after declining over the last two weeks.

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EURUSD rebounded quite strongly, rising back above 1.1850 from a three-day low at 1.1787. Preliminary October PMI data in the services and composite readings out of the Eurozone and UK undershot the median forecast of economists, but didn’t impact the Euro or Sterling. Technically, the H1 chart has moved over the 50-hour moving average (1.1835) to test R1 at 1.1852; above here is Wednesday’s high and R2 at 1.1885. Today’s pivot point is next support at 1.1830, below the 50-hour moving average. The MACD histogram has broken the zero line and the signal is starting to rise, although still south of the zero line, RSI is positive and trades at 64.50, Stochastics are moving into the OB zone.

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Cable settled at near net unchanged levels around 1.3090-95 after dropping back from a high at 1.3124. The UK currency remains comfortably up on week-ago and month-ago levels against the Dollar and Euro, and others, with market participants anticipating a limited trade deal between the EU and UK. The two sides are amid intensive face-to-face discussions. The UK and Japan today signed the trade deal that was agreed in principle a month ago.

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USDJPY is modestly softer after upside forays over the last day stalled at 104.93-95. At levels around 104.70, the pair remains down by 1% on the high seen on Wednesday. AUDUSD rallied to an eight-day high at 0.7158, floated by higher stock markets in Europe and an above-forecast composite PMI reading out of Australia. Global asset markets are likely to remain skittish, notwithstanding the rally today, with investors pondering the uncertainties presented by the surge in Covid cases in Europe and elsewhere, including now in many US states and in Canada, and which are leading to ever more restrictive countermeasures. The ongoing delay in new US fiscal stimulus and the event risk posed by the upcoming US elections are also in the mix. Regarding the elections, polls point to a Biden presidency, but it is less clear if his Democratic party can take control of the Senate. If not, then Congress will remain split at least until the mid-term elections in two years, which will limit the scope for policy changes and crimp Democrat ambitions for expansive fiscal policy.

US data later is topped by flash PMI data, Manufacturing numbers are expected to show a slight rise to 53.5 from 53.2 last time, whilst the more important and significant Services numbers are expected to increase by a single tick from 54.6 to 54.7. The data is due at 13:45 GMT.

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
Head 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 Oct 26, 2020 1:09 pm

Date : 26th October 2020.

Events to Look Out for This Week.


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A gigantic week is coming with FAANGs reporting their Q3 earnings, along with the rate decisions and monetary policy statements from three key Central Banks (ECB, BoJ, and BoC) as the second wave of Covid-19 is hitting the world with full force. Across the Atlantic, all eyes will be also on what emerges from the Brexit talks and how markets will reform in the final week prior to the US Elections. Focus will be on inflation data from the biggest economies in the world, including the US, China and Europe.

Monday – 26 October 2020

German IFO (EUR, GMT 09:00) – German IFO business confidence is expected to slip slightly to 92.9 in October after the jump seen in September to 93.4.

New Home Sales (USD, GMT 14:00) – New home sales are seen at -1.1% in September after a drop-back to a 1,000k pace from a 14-year high of 1,011k in August, versus a prior high of 965k in July. With the economy’s reopening, the recovery for new home construction and sales is proving much faster than for the rest of the economy, partly due to solid fundamentals going into the crisis, and even lower mortgage rates now.

Tuesday – 27 October 2020

ECB Bank Lending Survey (EUR, GMT 09:00).

Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to drop -0.7% in September with a 3.0% decline in transportation orders. The durable orders rise ex-transportation is pegged at 0.4%. A defense orders gain is pegged at 4.0%, following a -3.6% August correction. Boeing orders fell back to zero planes in September from 8 in August and zero in July.

Wednesday – 28 October 2020

Consumer Price Index (AUD, GMT 00:30) – Australian inflation data in Q2 was moderate but in line with projections and remained within the average rate of increase between 2% and 3% that the RBA targets over the medium term. The RBA trimmed mean CPI for Q3 is seen at 0.1% q/q.

Interest Rate Decision and Conference (CAD, GMT 14:00) – In September, the Bank of Canada maintained an aggressive stimulus posture, reiterating forward guidance and the continuation of its QE program until “the recovery is well underway.” However, the BoC removed its promise to “provide further monetary stimulus as needed,” keeping its commitment to hold rates at current levels and maintain the asset purchase program at the current pace. The policy rate was held steady at 0.25%, and it is expected to be maintained in this meeting as well.

Thursday – 29 October 2020

Interest Rate Decision and Conference (JPY, GMT 03:00) – The Bank of Japan remains pledged to do whatever it takes to support the recovery. The BoJ minutes last time highlighted that some council members are becoming concerned that virus developments will negatively impact the recovery. On the political front, PM Suga is expected to maintain policy continuity.

Gross Domestic Product (USD, GMT 12:30) – Gross Domestic Product should advance in Q3 and reveal headline growth of 33.5%, with a reversal in the inventory trajectory from a record-liquidation rate of -$287 bln in Q2 to a $12 bln accumulation rate in Q3, as the inventory figures begin a long rebuild into early-2021.

Interest Rate Decision and Conference (EUR, GMT 12:45 & 13:30) – More than data releases, it is developments on the virus front that will have strengthened the dovish camp at the ECB. The number of new infections, but also hospital admissions and deaths, continues to rise across Europe, with Ireland just announcing a full lockdown until early December. Developments are adding to pressure on the central bank to act sooner rather than later, and the debate at next week’s ECB meeting will likely be lively, although on balance Lagarde is expected to hold fire for now and focus on a dovish presser that will lay the ground for a PEPP extension in early December.

Friday – 30 October 2020

Retail Sales and GDP (EUR, GMT 07:00) – The German Retail sales are seen at 4.2% y/y in September from 3.7% y/y last month. The final Gross Domestic Product in Germany for Q3 is seen at -8.9% q/q from 9.7%.

Gross Domestic Product and Consumer Price Index (EUR, GMT 10:00) – Fears of a double dip recession are on the rise, with preliminary Q3 GDP s.a. numbers likely to show the index down to 16.9% y/y from -14.7%. The Euro Area preliminary CPI is anticipated at -0.4% y/y in October with core reading at 0.5% y/y from 0.2% y/y last month.

Personal Income/Consumption (USD, GMT 12:30) – A 0.3% increase in personal income in September is anticipated after a -2.7% decrease in August, alongside a 1.1% climb in consumption after a 1.0% bounce in August.

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.
User avatar
HFblogNews
 
Posts: 1303
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