Daily Market Overview by IFC Markets

Re: Daily Market Overview by IFC Markets

Postby Akriti » Tue Sep 17, 2013 6:50 am

US Dollar Moves Currency Market Ahead of Fed’s Decision

The US dollar index drew support line at 80.94 and bounced up to 81.32 as investors focus on FOMC meeting, expecting some asset tapering of the $85B bond buying program. In addition to that traders were collecting profits by covering short positions. We will be busy today with economic announcements but we would be cautious in our trading ahead of the Fed’s monetary policy announcement tomorrow. Therefore we expect the greenback to remain in sideways until tomorrow evening between 81.32/80.94 recently created range.

The Reserve Bank of Australia released earlier on Tuesday its September 3 meeting minutes stating that the possibility of reducing rates further is not eliminated but also a reduction is not imminent.

See more: http://www.ifcmarkets.com/en/market-overview/show/1506
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Wed Sep 18, 2013 7:40 am

All Eyes on FOMC Statement and Projections

The US dollar index remains steady in 81.19/81.07 tight range ahead of the release of the two-day FOMC policy meeting outcome. It is generally expected that the Fed would start reducing its $85B program. Market consensus is that the Fed most likely will cut down purchases of the long-term Treasury securities from $45B to $35B and MBS purchases program could be tapered by $5B, falling from $40B to $35. Thus we are expecting a $10B-$15B reduction today to be announced by the Fed alongside with FOMC projections.
As you can notice on Fundamental Analysis table, US Unemployment Rate dropped from 8.1% in August 2012, just before starting MBS purchases at $40B pace per month, to 7.3% in August 2013.

See more: http://www.ifcmarkets.com/en/market-overview/show/1507
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Thu Sep 19, 2013 8:39 am

Fed Shocks FX Markets Holding Asset Purchases Unchanged at 85B, USDIDX to 7-month Low

The Federal Reserve decided to shake the financial markets by leaving its asset purchase program unchanged in a highly surprising move. As we have previously addressed, surveys from Reuters and Bloomberg was giving more chances to asset tapering. However, FOMC committee said that “decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.” Therefore the US quantitative easing remains steady at $40B purchases of mortgage-backed securities per month and $45B purchases of longer-term treasury securities per month. The interest rate would remain unchanged at 0-0.25% as long as the unemployment rate is more than 6.5% and inflation projections for the next 1-2 years are not more than 2.5%.

See more: http://www.ifcmarkets.com/en/market-overview/show/1508
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Fri Sep 20, 2013 8:38 am

Major Pairs Go into Narrow Trading after Volatile 2-day Sessions

FX markets extend into sideways following an eventful week. Previously we saw the Fed refraining from asset purchases reduction and as consequence US dollar was lost broadly against its major peers on Wednesday US evening session and continued its slide on Thursday as well. Although contrary to other major currencies the Japanese Yen has been under selling pressure yesterday due to risk-on. In addition, a member of BOJ board said that monetary stimulus might expand further since inflation target of 2.0% is still far away.

The USD/JPY therefore after drawing a support line at 97.76 started recovering back previous lost ground and rose even higher than before Fed’s announcement achieving resistance at 99.59.

See more: http://www.ifcmarkets.com/en/market-overview/show/1509
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Mon Sep 23, 2013 8:37 am

Merkel Goes For Third Term, Euro in Range Due to No Surprises

Following German elections outcome, the Euro did not move much against the US dollar and still remains in 1.3565/1.3506 tight range since the previous week. The currency pair rose just slightly from 1.3520 to 1.3539. Merkel’s Christian Democratic Union (CDU/CSU) won 42% of the votes, winning the majority as expected. Social Democrats (SPD) are second in popularity with 26% of votes while CDU/CSU partners in the previous government Free Democrats secured just 4.7% down from 14.7% four years ago and did not make it into parliament. Now Merkel would need to form a new coalition, analysts expect that the most probable scenario is that the SPD would agree coalition with the CDU/CSU. Should the latter is achieved would rule out any uncertainty and support the common currency.

See more: http://www.ifcmarkets.com/en/market-overview/show/1510
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Tue Sep 24, 2013 6:58 am

Modest Changes in Currency Markets, Uncertainty over Fed Tapering in October

Currency markets remain mostly steady from yesterday trading with the US dollar still in 80.52/80.26 tight range following FOMC member Dudley speech. Dudley said that two tests need to be passed for the asset purchases tapering to begin, firstly evidence that labor market has shown improvement and secondly “forward momentum” creating confidence that labor market improvement would continue after tapering.

The FOMC member added that even though unemployment rate dropped from 8.1% to 7.3% in the last year that is overstating actually labor improvement, since other indicators are not so optimistic.

See more: http://www.ifcmarkets.com/en/market-overview/show/1511
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Wed Sep 25, 2013 9:23 am

US Dollar Index Steady Below 80.59, Wary on US Monetary Path and Debt Ceiling

FX currency pairs are mainly moving on news events and central banks releases with the rest of the time doing sideways. Like yesterday when the US dollar rose slightly to resistance at 80.59 on positive Housing sector data and then continuing its range trading below that resistance.

Market participants are uncertain whether the Fed would taper its monthly asset purchases in October meeting after mixed messages from FOMC members, which lead investors to seek safer currencies like the Japanese Yen. In addition, concerns are increasing regarding US debt ceiling as the US policymakers would need to approve a higher debt limit than the current of $16.7B by mid-October. US economy runs the risk of credit-rating downgrade as the Congress delays decision on raising borrowing limit. US equities reflected that risk by closing lower with S&P 500 falling by 0.26% and Dow Jones Industrial Average losing by 0.43%.

See more: http://www.ifcmarkets.com/en/market-overview/show/1512
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Thu Sep 26, 2013 7:14 am

US Dollar Slightly Higher Ahead of Second Quarter Growth Data

The greenback is gaining ground against its major peers on Thursday morning as previously Moody’s said that US economy credit rating would not be affected during talks of increasing Debt ceiling and they expect that eventually lawmakers would approve enhancement of borrowing limit. Thus, fears over another debt ceiling crisis are fading with the US dollar index trading higher early on Thursday, advancing by 0.18%, rising from 80.25 to 80.40. We are slightly cautious today due to risk of second quarter final growth data in the evening projected to be at 2.7% mildly higher than previous reading at 2.5%.
In Asian trading on Thursday the Euro versus the greenback eased from resistance at 1.3536 to support at 1.3510, perhaps as investors were collecting profits from yesterday upside following upbeat German Consumer Confidence indicator.

See more: http://www.ifcmarkets.com/en/market-overview/show/1513
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Mon Sep 30, 2013 7:55 am

Risk Aversion Due to Italy’s Political Turmoil, U.S Probable Shutdown, CNY Disappointing PMI

Monday opening was not boring for sure as many global events have moved the FX market. To begin with, Italy went into a political turmoil during the weekend as five ministers members of the former Prime Minister Silvio Berlusconi party resigned from Enrico Letta’s current government. Letta decided to seek for confidence vote on October 2 from the parliament to remain in power.

The third biggest economy of the Euro-zone enters into political crisis and may need to go for elections again in less than a year time. Political uncertainty increases risk of sovereign debt management in Italy with Italian 10-Year yield climbing from 4.53% on Friday to 4.73% today.

See more: http://www.ifcmarkets.com/en/market-overview/show/1515
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Re: Daily Market Overview by IFC Markets

Postby Akriti » Tue Oct 01, 2013 7:01 am

U.S Government Closes, 2014 Fiscal Budget Fails, USDIDX Drops to Fresh 7-month Low

U.S. government goes into shutdown mode because Republicans and Democrats failed to agree on spending bill for 2014. Thousands of workers would remain home and many government services would not operate and should that continued would hurt business and consumer confidence. Moreover, could have a multiplied effect on GDP with economists projecting that a 21-day close down like the previous one, 17-year ago, could reduce the growth by 0.9-1.4%.

Almost two weeks ago the Fed decided to hold its asset purchases to support weak recovery until further evidence of a sustainable growth appear and now the lawmakers seem like they live in a different country, failing to agree to fund government operations. The US dollar index as of writing dipped below key support at 80.00, confirming its downtrend and moving to fresh 7-month lows, with next stop likely at 79.66.

See more: http://www.ifcmarkets.com/en/market-overview/show/1516
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