Topic: Hotforex.com - Market Analysis and News. - page 20. (Read 32319 times)

Date : 13th July 2020.

Events to Look Out for This Week.



An interesting week is coming up, packed with economic data and political developments, as next week’s EU summit highlights that the EUR 750 bln recovery fund proposed by the European Commission remains controversial in its proposed form, and remains far from certain. Attention will remain on virus reports and on the monetary policy meetings in the world’s major economies (ECB, BoJ and BoC) and their potential for guidance regarding future stimulus actions.

.Monday – 13 July 2020

BoE’s Governor Bailey speech (USD, GMT 15:30) – In June’s meeting, the BoE voted unanimously to keep rates unchanged, but a 8-1 majority opted for an extension of the asset purchase target by GBP 100 bln to now GBP 745 bln. The overall tone of the assessment seemed less gloomy than the sharp contraction in monthly GDP had suggested. This speech could clear the view of further stimulus and the reports that the BoE has been talking with commercial banks to prepare them for the possibility of negative interest rates.

Tuesday –  14 July 2020

Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German HICP inflation for June is anticipated to decline at 0.5% y/y from 0.8% y/y.

Gross Domestic Product (GBP, GMT 06:00) – GDP is the economy’s most important figure. April’s GDP was contracted to -20.4% m/m.

ECB Bank Lending Survey (EUR, GMT 08:00) – The bank lending survey (BLS) for the euro area was launched in 2003. Its main objective is to enhance the Eurosystem’s knowledge of financing conditions in the euro area.

Economic Sentiment (EUR, GMT 09:00) – German July ZEW economic sentiment is expected to have declined at 60.0 compared to 63.4 in June.

Consumer Price Index (USD, GMT 12:30) – The headline CPI for June is expected with a 0.1% core price rate, following May declines of -0.1% for both. The headline will be boosted by an estimated 13% June pop for CPI gasoline prices. As-expected June figures would result in a headline y/y increase of 0.6%, up from 0.1% in May. Core prices should sit a 1.0% y/y rise, below the 1.2% y/y pace last month.

SNB’s Chairman Jordan speech (CHF, GMT 13:30)

Wednesday – 15 July 2020

BoJ Interest Rate Decision and Conference (JPY, GMT 03:00- 06:00) – Shadowed by Covid-19, the BoJ has less room for monetary policy manoeuvre, with Japan not depending on foreign investment inflows to sustain financing and with Japanese investors apt during times of risk aversion in global markets to repatriate capital from the sale of foreign assets, and/or put on currency hedges on foreign assets.

Consumer Price Index and Retail Sales (GBP, GMT 06:00) – Prices are expected to have eased in June, with overall inflation expected to stand unchanged at 0.5% y/y, and core at 1.3% from 1.2% y/y last month. UK retail sales expected to grow slightly to 0.1% in June.

BoC Interest Rate Decision and Conference (CAD, GMT 14:00- 15:00) – Bank of Canada expected to maintain the 0.25% rate setting. However, since in the latest announcement the Bank maintained its commitment to continue large-scale asset purchases until the economic recovery is well underway, this is expected to be seen again this time.

Thursday – 16 July 2020

Employment Data (AUD, GMT 01:30) – Both the unemployment rate and the employment change are expected to have grown in June.

Gross Domestic Product (CNY, GMT 02:00) – GDP is the economy’s most important figure. Q2’s GDP is expected to be dropped to -9.9% q/q contraction from -9.8%q/q.
Average Earnings (GBP, GMT 06:00) – Average Earnings excluding bonus are expected to have grown by 1.4% in May. The ILO unemployment rate is expected to have risen at 4.7% from 3.9%.

ECB Interest Rate Decision and Press Conference (EUR, GMT 11:45 & 12:30) – So far the ECB seems to have been united behind the goal to provide financial market stability through the crisis as lockdowns not just across Europe plunged economies into deep recessions.
However, hectic diplomacy ahead of EU summit highlights that the EUR 750 bln recovery fund proposed by the European Commission remains controversial in its proposed form, and remains far from certain. At the same time, there is a new rifts emerging at the ECB – not just over the need to use the full PEPP envelope, but also over the future of the inflation target. Virus headlines have distracted from the fact that the ECB is currently in the process of conducting a thorough review of its overall strategy and that also involved the definition of price stability, which currently still is set as “below but close to 2%”. In the current situation that would mean the central bank would leave expansionary policy measures in place longer than necessary to bring inflation back to the 2% target.

Retail Sales (USD, GMT 12:30) – June increases are expected at 6.0% for headline retail sales and 6.7% for the ex-auto figure, following May increases of 17.7% for the headline and 12.4% ex-autos.

Friday – 17 July 2020

EU Leaders Special Summit.

Consumer Price Index (EUR, GMT 09:00) – The final Euro Area CPI for June is anticipated to slow down to 0.1% y/y from 0.3%y/y last month. The core inflation is seen at 0.9% y/y from 0.8% y/y.

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.

Date : 9th July 2020.

14th consecutive decline in US claims.



EURUSD, H1

After it pared declines as a mostly risk-on session in Asia, led by a continued rally in Chinese stocks, gave way to a less certain session in European markets, Dollar was little changed after the slightly higher than consensus rise in jobless claims. EURUSD turned slightly lower to 1.1335 from 1.1340, while USDJPY was pretty much unchanged, bouncing between 107.17-107.40.

US initial jobless claims dropped -99k to 1,314k in the week ended July 4, close to forecasts. The prior report for June 27 was revised to show a -69k decline to 1,413k (was 1,427k). This is the 14th week of decline from the record 6,867k from March 27. It brings the 4-week moving average to 1,437.25k from 1,500.25k (was 1,503.75k). Continuing claims declined -698k to 18,062k in the week ended June 27 versus 18,760k (was 19,290k) in the June 20 week. And continuing claims are down from a May 9 high of 24,912k. The insured unemployment rate fell to 12.4% from 12.9% (was 13.2%).



Today‘s improvement was encouraging, though claims declines overall continue to fall short of the rebound we’re seeing in nonfarm payrolls, as well as the increases into the summer for most available supply and demand measures for the economy, though with some restraint in gains recently from pull-backs in re-openings.



Treasury yields are inching slightly lower, even as equity futures rally. There was no real impact from the 14th consecutive decline in initial jobless claims. The 10-year yield is 1.8 bps richer at 0.646%, while the 2-year has dipped to 0.157%. Equity futures are now in the green, albeit barely for the USA30, while the USA100 is 0.6% firmer and the USA500 is up 0.2%.

Caution over the coronavirus, with another record increase in US cases, and concerns over the reopening process are dictating a lot of the trade.

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.

Date : 8th July 2020.

EURUSD – The remainder of the week.



EURUSD, H4 – Even though the weekly framework is still sideways, the overall view of this pair is still considered positive. However, due to the strength of the USD yesterday, the pair pushed back to below 1.3000, after it initially propped up following the European Economic Report yesterday . Overall, the results were lower than expected. German industrial production came out at 7.8% from the forecast of 11%. France had a trade deficit more than expected at -7.1 billion, while Italian retail sales came out better than expected.

Throughout June the pair was in the range of 1.1200-1.1350. In the H4-chart it has been being supported by the 50-period EMA line since yesterday. From last week we began to see higher lows as well as new highs, suggesting that it is likely to see the pair  test the same high again at 1.1350. The MACD is still in the positive territory, but if we see the pair breaking through the 50-period-EMA, it could be seen that this pair will come down to test the key support zone at the 200-period EMA , which clashes with the 1.1200 low.

However, in larger time frames like the weekly one, it can be seen that the EURUSD is already trying for the 6th consecutive week to pass the major Resistance level at the 200-week EMA or higher, but it looks to be stuck between the 50-week and the 200-week EMA. Hence any pullback away from the 200-week EMA could see the asset retesting the 50-week EMA line if the 1.1200 fails to provide Support.

The economic calendar this week is quiet. The key data from the EUR side today is the European Commission’s economic growth forecast. On Thursday, there is the European group meeting Including numbers using the US unemployment privileges, and on Friday, US PPI numbers will be announced.

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.

Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

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.

Date : 1st July 2020.

US Data – ADP, PMIs & Vaccine News.



EURUSD, H1

US ADP reported private payrolls rose 2.369 million in June. Also, May was revised sharply higher, by 5.825 million to a 3.065 million increase (was -2.760 million). April’s -19.409 million was a record plunge. Jobs in the goods production sector increased 457,000, with construction jobs up 394,000. Service sector employment increased 1.912 million, with gains of 961,000 in leisure/hospitality, 283,000 in education/health, and 151,000 in professional/business services. A robust private payrolls. The ADP climb beats the modest improvement in the continuing and initial claims data for the period, but undershoots the bigger sales, sentiment, and output gains in other measures, and is in line with the payroll gain expected for tomorrow’s jobs report. ADP gains were fairly evenly dispersed across increases of 873,000 for large companies, 559,000 for medium companies, and 937,000 for small companies.

US final June Markit manufacturing rose to 49.8 (was 49.6 in the preliminary) from May’s 39.8. It is a fourth month of contraction and was at 50.6 a year ago. But the weakness is abating from the 36.1 record low from April amid re-openings of the economy. The 10-point surge in the index was a record jump, and it is now the highest reading since February. Output climbed to 47.5 from May’s 34.4, with new orders also moving higher.

US equity markets have opened in positive territory, rebounding from early losses on the futures market following reports of positive results on a vaccine from Pfizer and BioNTech.

EURUSD pushes towards 1.1250 following a dip to 1.1184 earlier, USDJPY pivots around 107.50, down from Asian session highs at 108.06 and the USA500 trades at 3115 and highs of the day. FOMC Minutes due at 18:00 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.

Date : 30th June 2020.

USDIndex – Is the trend still down?



USDIndex – The Dollar has strengthened after home sales came out better than expected, at 44.3% from the 19.7% predicted and higher than -21.8% seen last month, boosting also  stock markets. The US returned to the positive with S&P +1.47%, NASDAQ +1.2% and Dow Jones +2.32%.

It looks like the USDIndex’s resumption attempt in the second half of June was not as effective as expected, with safe haven demand falling after the May lockdown. As a result of the latter, the US Dollar seems to be based on more internal economic factors. Therefore, this week we must pay special attention to US economic data. Today, the Chicago PMI index numbers are due alongside consumer confidence and Fed President Powell’s testimony, and tomorrow the ADP employment numbers and the PMI-ISM index will highlight US economic calendar  this week , Tthe non-farm payrolls – which have moved to Thursday because Friday is the National Day and the market is closed.

However, the USDIndex trend still has significant obstacles in the uptrend. A potential bearish flag trend could be spotted which could be the continuation of the downtrend if it is confirmed with a strong pullback. That is still below the 200-EMA and followed by Golden cross (50-EMA and 200-EMA), all of which are in line with momentum indicators such as MACD that are still in the negative.



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.

Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand
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.

Date : 29th June 2020.

Events to Look Out for This Week.



An important week is coming up as Brexit trade talks resume next week, with Boris Johnson holding a video link summit with the EU Commission President on Monday. In addition, NFPs will be out on Thursday and a broad range of PMIs and other early indicators are expected during the week.

Monday – 29 June 2020

Harmonized Index of Consumer Prices (EUR, GMT 12:00) – The German HICP inflation is expected to hold at 0.5% y/y for June.

Tuesday – 30 June 2020

Gross Domestic Product (GBP, GMT 06:00) – The GDP is the economy’s most important figure. Q1’s GDP is expected to remain unchanged at -1.6% y/y and -2% q/q. As for the Q2 GDP,  a severe contraction is expected after the 20.4% m/m contraction seen in April.

Consumer Price Index and Core (EUR, GMT 09:00) – The Euro Area flash CPI for June is forecasted to remain steady, at 0.1% y/y.

Gross Domestic Product (CAD, GMT 12:30) – The April GDP is expected to contract at -18.2%. The Q1 GDP revealed a -8.2% pandemic driven drop,  marking a hefty pull-back in activity as lockdown measures shuttered much of the economy in the second half of March.

Consumer Confidence (USD, GMT 14:00) – Consumer confidence is expected to rise to 89.0 from 86.6 in May and a 6-year low of 86.9 in April. This compares to an 18-year high of 137.9 in October of 2018 and a recession-low of 25.3 in February of 2009. The present situation index is expected to improve to 78.5 from a seven-year low of 71.1 in May. All of the available confidence measures were oscillating near historic highs before being crushed by COVID-19, and even with big drop-backs, it’s remarkable how firm the consumer measures have stayed relative to prior recessions.

Treasury Secretary Mnuchin speech

Feds Chair Powell testimony

Wednesday – 01 July 2020

Canada and Hong-Kong – Holiday Day.

Caixin Manufacturing PMI (CNY, GMT 01:45) – The Caixin manufacturing PMI is expected to hold into the neutral zone in June.

Markit Manufacturing PMI and Unemployment data (EUR, GMT 07:55) – In June, the German PMI is expected to once again show weakness in German manufacturing and a lift in the jobless rate at 6.6%, despite the wage subsidies and announced stimulus from the government. These are unlikely to prevent a further rise in official jobless numbers to around the 3 million mark by the end of the year, highlighting the impact of the pandemic on the economy.

ADP Employment Change (USD, GMT 12:15) – Employment change is seen spiking to 3.5 mln in the number of employed people in June, compared to the -2,760k May ADP drop.

ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to rise to 49.0 in June from 43.1 in May.

Thursday – 02 July 2020

NFP and Labour Market Data (USD, GMT 12:30) – A 3,000k June nonfarm payroll increase is projected, after a 2,509k rebound in May and a -20,527 April collapse.An assumption has been made for a 600k factory jobs increase in June, after a 225k May rise, with a big lift from a re-opening vehicle sector. The jobless rate should fall to 12.0% from 13.3% in May and a 14.7% peak in April. The continuing claims data have been slow to moderate, but nearly all other measures of activity have risen into June from a trough just after the April BLS survey week. Average hourly earnings are assumed to fall another -1.0% in June with a continued unwind of the April distortion from the concentration of layoffs in low-wage categories. This would translate to a drop in the y/y gain to 5.3% from 6.7%.

Friday – 03 July 2020

United States – Independence Day.

Retail Sales (AUD, GMT 00:30) – Retail Sales are expected to flatten at 16.3% for May.

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.

Date : 26th June 2020.

Another mixed US data set.



USDJPY, H1

Another mixed set of US data today, with the Weekly Claims once again falling but just as importantly missing expectations. Durable Goods were a positive beat but the advance goods trade deficit widened and the final reading of Q1 GDP remained unmoved at -5.0%.

US initial jobless claims fell -60,000 to 1,480,000 in the week ended June 20 following the disappointing small -26,000 drop to 1,540,000 (was 1,508,000) in the June 13 week which also coincided with the BLS survey period. This is a 12th straight decline in claims after the record surge to the all-time high of 6,867,000 in the March 27 week. The 4-week moving average continued to slip and was at 1,620,750 versus 1,781,500 (was 1,773,000). Continuing claims dropped -767,000 to 19,522,000 in the week of June 13 after falling -317,000 to 20,289,000 (was 20,544,000).

US durable goods orders bounced 15.8% in May, a little firmer than expected and the biggest leap since July 2014, following the -18.1% (was -17.7%) plunge in April (the second worst on record) and the -16.7% drop in March. Transportation orders climbed 80.7% after April’s -48.6% (was -47.3%) plunge. Excluding transportation, orders rebounded 4.0% from -8.2% (was -7.7%) previously. Nondefense capital goods orders excluding aircraft climbed 2.3% from -6.5% (was -6.1%). Shipments were up 4.4% in May from -18.6% (was -18.2%). Nondefense capital goods shipments excluding aircraft rose 1.8% from -6.2% (was -5.7%). Inventories edged up 0.1% versus the prior unchanged reading (was 0.2%).

US Q1 GDP was unrevised at -5.0% in the third look at the data, and compares to -4.8% in the Advance number, and 2.1% in Q4 2019. Personal consumption was down -6.8%, as it was in the second report, and was -7.6% in the Advance, and 1.8% in Q4. Fixed investment was revised up to a -1.3% pace from -2.4% in the second look, and was -0.6% in Q4. Government consumption was bumped up to 1.1% from 0.8% previously and 2.5% in Q4. Inventories subtracted -1.56%, revised down from -0.98%, while net exports added 1.3%, also lowered from 1.5% previously. The GDP chain price index posted a 1.4% rate, as it did in the second look, and was 1.3% in Q4. The core rate rose to 1.7% from 1.6% previously and 1.3% in Q4.

Finally, the US advance goods trade deficit widened to -$74.3 bln in May from -$70.7 bln (was -$69.7 bln). Exports fell -5.8% to $90.1 bln after plunging -25.1% to $95.6 bln in April. Imports dropped -1.2% to $164.4 bln following the -13.6% decline to $166.3 bln previously. Wholesale inventories declined -1.2% to $642.2 from $649.9 bln (was $651.5 bln), with retail inventories dropping -6.1% to $604.5 bln from $643.8 bln (was $644.9 bln).



All of this has taken the shine off the USD recovery today – USDJPY slipped from 107.45  back under R1 at 107.20 and EURUSD moved up from S2 sub-1.1200, to 1.1225. However, both remain on trend from key moves which were initiated yesterday.

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.

Date : 24th June 2020.

European stock markets are selling off.



European stock markets are selling off. The better than expected German Ifo reading failed to lift sentiment and after a mixed close in Asia stock markets are now selling off across Europe, with GER30 and UK100 down -1.8% on the day.

Meanwhile US futures have lost their modest overnight gains and are down -0.4 to -0.7% now with fears of a second wave of virus infections and warnings that the lockdowns will have a longer term impact on activity adding to caution.Markets already struggled during the Asian part of the session and Topix and Nikkei closed with losses of -0.4% and -0.07% respectively. The Hang Seng was -0.50% lower at the close, while CSI 300 and ASX managed gained of 0.4% and 0.2%.

Lets get back to GER30 and UK100 though. The interesting part is that both assets reversed away from the 61.8%-76.4% Fibonacci level set on the June’s downleg. Theoretically, 61.8% is the strongest retracement level, hence that confirms that from the technical side, the asset confirmed that retracement and further decline could find support on lower Fib. levels. However other that the slip away from 61.8% Fib. level, both assets breakout their 20-day SMA, suggesting that if the price action is been sustained by the end of the day below it, then the asset could be seen retesting June 11-15 low territory.

In regards to the EU data now……

German Ifo business confidence jumped to 86.2 in June, from 79.7 in the previous month. The current conditions index nudged higher, but less than hoped and the overall improvement was mainly due to a jump in the future expectations reading, which lifted to 91.4 from 80.4 in may. This is the highest reading since February, although the overall reading still fell back to an average of 80.1 in the second quarter of the year, from 92.6 in the first quarter. The numbers highlight the sharp correction in overall activity that was the result of lockdowns and the diffusion index, which gives the balance of positive and negative answers, still remained firmly in negative territory in June, with pessimists outnumbering optimists across all key sectors. A further indication then that things are improving, but that it will take a long time to overcome the slump. Against that background it remains to be see how many companies will survive and how the labour market will far once official wage support schemes are scaled back.

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.

Date : 23rd June 2020.

European Market : EURUSD at 1.1300 again.



The news flow today caused a brief risk-off burst in Asia-Pacific markets followed by a sharp recovery. In currencies, this transpired as a bout of dollar and yen outperformance alongside a sharp drop in risk-sensitive currencies such as the Australian dollar, followed by a quick reversal. The cause was miscommunication from the White House. Trade adviser to President Trump, Pete Navarro, said during an interview with Fox that the trade deal with China was “over.”

This saw risk assets and currencies tumbling, before Navarro quickly walked-back his remarks with the help of White House Economic adviser Kudlow, who affirmed that the trade deal was very much in place. Trump himself then tweeted: “China Trade Deal is fully intact.“

The narrow trade-weighted USDIndex (DXY) dropped to a 96.65 low on the initial remarks by Navarro, which is the lowest level seen since June 17th, before sprinting to a 97.24 high and subsequently settling near 97.00. EURUSD concurrently dropped by over 30 pips in making a low at 1.1244 before rebounding to levels around 1.1305. The pair earlier printed a six-day high at 1.1305.

Followed by overnight news,  European stock markets and Euro remain broadly higher, after the stronger than expected Eurozone and UK PMI readings  that help to underpin sentiment further.

Eurozone PMIs stronger than expected in preliminary readings for June. The manufacturing PMI lifted to a four months high of 46.9 from 39.4 in May and the services number jumped to 47.3 from 30.5 in May. That left the composite at a 4-month high of 47.5, up from 31.9 in the previous month. Data still points to overall contraction in the Eurozone economy, but the French readings were already above the 50-point no change mark and the pace of the downturn eased markedly as economies further relaxed restrictions. Markit also reported continued strong improvement in business expectations for the year ahead. Hotels, restaurants, travel and tourism remain impacted but with borders gradually opening there seems at least light at the end of the tunnel, which is helping to boost sentiment even if current conditions remain subdued. Nevertheless, we agree with Markit’s comment that the outlook remains uncertain as the “new normal” will likely continue to impact the services sector in particular and it remains to be seen how many companies can survive the downturn, especially if and when government wage support is scaled back

In other news, SNB’s Zurbruegg stated that FX intervention potentially “unlimited”. Zurbruegg said there are no limits to how far the SNB’s balance sheet could expand. He also suggested that the bank is not concerned about the possibility of being named a currency manipulator by the U.S. saying the central bank is in close contact with the United States to explain Switzerland’s special situation and its highly valued currency. At the same time, Zurbruegg said monetary policy can not cushion the blow of Covid-19 – stressing that “this is where fiscal policy comes in. If fiscal policy no longer able to use its instruments, this will lead to a worse overall economic result”.

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.

Date : 22nd June 2020.

Events to Look Out for This Week.



Welcome to our weekly agenda, our briefing on all the key financial events globally.Virus jitters will remain a focus along with Beijing and several US states as real data continues to reveal the impact of the pandemic on the economy. Market attention is honed in on any trade escalations but also on next week’s agenda, the high frequency data of the world’s biggest economy remaining a major focal point for markets.


Monday – 22 June 2020

PBoC Interest Rate Decision (CNY, GMT 01:30) – The People’s Bank of China announced a more aggressive monetary stimulus in its first-quarter report. In this meeting they should provide guidances on the next move in Loan Prime Rates.

Tuesday – 23 June 2020

Markit PMI (EUR, GMT 07:30-08:00) – The prel. June composite PMI for Germany is forecasted to register an upwards reading  to 34.1 from 32.3, while the Eurozone’s number is expected to decline to 25.0 from 31.9.

Markit PMI (GBP, GMT 08:30) – The May final services PMI was revised up to 29.0 from 27.8 vs 13.4 in April, and final manufacturing PMI revised up to 40.7 from 40.6, vs 32.6 in April.

New Home Sales (USD, GMT 14:00) – A 1.1% May increase is seen for new home sales to a 630k pace, after a slight rise to a 623k rate in April. We saw a 12-year high of 774k as recently as January. The start of mandated closures in mid-March fueled the March-April pull-back for sales, following robust growth for all the housing measures through the winter, though a big Q2 hit is expected on home sales. As the economy reopens, the recovery for new home construction will likely be faster than for the rest of the economy, given solid fundamentals going into the crisis, and even lower mortgage rates.

Wednesday – 24 June 2020

Interest rate Decision and Conference (NZD, GMT 02:00) – RBNZ held rates steady at 1.75% in May, and this is expected to remain the case again in next week’s meeting.

German IFO (EUR, GMT 08:00) – June German IFO business confidence is expected to slow down to 78.3, after it unexpectedly rose to 79.5 in May.

Trade Balance (NZD, GMT 22:45) – The overall trade deficit of New Zealand is currently at -$2.5B.

Thursday – 25 June 2020

ECB Monetary Policy Meeting Accounts (EUR, GMT 11:30) –The ECB Monetary Policy Meeting Accounts, similar to the FOMC minutes, provide information with regards to the policymakers’ rationale behind their decisions.

Jobless Claims (USD, GMT 12:30)–  US initial jobless claims fell -58k to 1,508k in the week ended June 13 following the-331k drop to 1,566k (was 1,542k) in the June 6 week. That’s an 11th consecutive weekly decline since the record surge to an all-time high of 6,867k in the March 27 week.

Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 17.0% in May with a 105% surge in transportation orders, after a -17.7% headline orders decrease in April that included a -48.3% transportation orders decline.

US Final Gross Domestic Product (USD, GMT 12:30) – No net revision in the -5.0% Q1 GDP growth clip is anticipated. The revised Q1 data will still depict a quarter that was likely posting respectable 2% growth until mid-March, when mandatory shutdowns prompted a dramatic output plunge.

Tokyo CPI (JPY, GMT 23:30) – The country’s main leading indicator of inflation is expected to have declined at -0.2% y/y in June ex Fresh Food.

Friday – 26 June 2020

Personal Spending and Consumption (USD, GMT 12:30) – Personal consumption is expected to decrease by -5.7% in May after a 10.5% increase in April, alongside a 5.2% rebound in consumption that follows a -13.6% decrease in April. April income faced a big boost from the CARES Act that will be partly unwind into May.

Michigan Index (USD, GMT 14:00) – Michigan Index is the main US consumer confidence index and it is expected to remain flat following the lift to 78.9 from 72.3 in May.

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.

Date : 19th June 2020.

FX Update – June 19 – Mixed Markets.


Trading Leveraged Products is risky

Narrow ranges have been prevailing among Dollar pairings and cross rates against a backdrop of uncertainty in global markets. Most stock markets have lifted out of lows over the last day, though many indices still remain below highs seen earlier in the week. China’s CSI managed to edge out a three-and-a-half-month high, but Japan’s Nikkei and South Korea’s KOSPI, while posting moderate gains, remained below highs from earlier in the week. S&P 500 futures gained 0.5%, but remained off yesterday’s highs.



In Forex markets, EURUSD has settled to a consolidation of recent losses, holding a narrow range in the lower 1.1200s, above the 16-day low seen yesterday at 1.1185. USDJPY has been plying a narrow range in the upper 106.00s, holding above yesterday’s one-week low at 106.67. Cable, amid its second week of declines, has steadied in the mid 1.2400s, above yesterday’s 18-day low at 1.2401. EURGBP concurrently settled off its three-week high, seen Thursday, at 0.9044. Both AUDUSD and AUDJPY have been posting narrow ranges well within the confines of their respective Thursday highs and lows. The Canadian Dollar posted modest gains, although USDCAD remained within its previous-day range.



USOil prices printed a nine-day peak at $39.69, buoyed by news that the OPEC+ group agreed to meet their supply cut quotas, along with major oil traders saying that demand is recovering, although both these items should already have been largely factored in. USOil has failed to close over $40.00 since the early days of March. Gold continues to hold over the key $1725.00 zone, and test the $1730 area, in early European trades.

European stock markets are modestly higher in early trades too, with the GER30 up 0.5%, the UK100 0.3%. US futures are now posting gains of 0.4-0.6% and the 10-year Treasury yield is up from overnight lows at 0.71% – up 0.5 bp on the day.

Taking a step back, global market sentiment is grappling with glass-half-empty and glass-half-full arguments. There are signs of new waves of coronavirus infections as economies reopen, which has already seen social restrictions being introduced in some places (such as in Beijing and California). Geopolitical issues remain wildcards. President Trump, for instance, said yesterday that the US could complete a “decoupling” from China. On the “half full” side, there is the expectation that the massive stimulus by global central banks is primed to give risk assets a major boost.

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.

Date : 18th June 2020.

Central Banks keep markets choppy.



The SNB held rate settings unchanged at the June policy review, as widely expected. The central bank said in a statement that the “expansionary monetary policy remains necessary to ensure appropriate monetary conditions in Switzerland“. To this extent “and in light of the highly valued Swiss franc it remains willing to intervene more strongly in the foreign exchange market”. Under the SNB Covid-19 refinancing facility (CRF) the bank is also providing the banking system with additional liquidity. Not surprisingly the bank stressed that growth and inflation forecasts come with an unusually high degree of uncertainty at the moment, but under that proviso the bank projects CPI to fall to -0.7% this year and remain negative at -0.2% in 2021 before lifting to 0.2% in 2022. This is based on the assumption that the policy rate remains at -0.75%, which highlights that negative rates are unlikely to disappear any time soon.

SNB is sticking to aggressive fx intervention as the main tool to fight the impact of the coronavirus pandemic. SNB chief Jordan stressed that the currency is “highly valued” and repeated that the central bank will continue to sell it as needed. The bank now expects a contraction in economic activity of 6% this year, the most severe recession since 1970. Inflation forecasts were also cut but while the central bank maintains a dovish bias and previously said rates can be tweaked further, it is pretty clear that officials are reluctant to go below the current level of -0.75% for the key policy rate. Negative for longer remains the main message.

Low for Longer is also the message for Norges Bank.  Norges Bank left its policy rate unchanged at zero percent. Norway’s central bank said in a statement that “the committee’s current assessment of the outlook and balance of risks suggests that the policy rate will most likely remain at today’s level for some time ahead”. Lower for longer then is the main message as the pandemic leads to a “sharp downturn in the Norwegian economy”. The statement did say that since the May meeting “activity has picked up faster than expected”, “unemployment has fallen more than anticipated and oil prices have risen”, but despite this activity remains “substantially lower than at the start of the year”. There is also still “considerable uncertainty surrounding the path to recovery”. Against that background the bank argues that “low interest rates are contributing to speeding up the return to more normal output and employment levels”. Norges Bank’s latest policy rate forecast “implies a rate at the current level of the next couple of years, followed by a gradual rise as economic conditions normalise”.

Nonetheless, after today’s SNB conference, the bank is clearly trying to prevent a “disproportionately” strong Swiss franc. That said, as the Swiss franc came under strong upward pressure due to search for safe havens and as it still  remains highly valued according to SNB, the Swiss franc is expected to face a limited appreciation as SNB maintained that they will keep intervening strongly to limit the appreciation of the Swiss franc – as they have been doing over the past few months already.

As for today the conference looks to be an uneventful event as CHF has kept steady and USDCHF has stalled since the Asia session within the 0.9481-0.9500 area, while EURCHF  has been consolidating between 1.0667 – 1.0689 for 6 consecutive hours.

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.

Date : 16th June 2020.

Equity futures boosted further from US data.



The Dollar rose following the better industrial production figures and Retail sales, leaving EURUSD at session lows of 1.1268 from 1.1285, and USDJPY at session highs of 107.51 from 107.45.

US industrial production rebounded 1.4% in May, shy of expectations, following a downwardly revised -12.5% (was -11.2%) in April, which is a record decline (data go back to 1919. This broke a string of two monthly declines and brought capacity utilization up to 64.8% from 64.0% (was 64.9%); the historic low of 66.7% was set in June 2009. Manufacturing production rose 3.8% versus -15.5% (was -13.7%) thanks to a 120.8% pop in vehicles and parts following a record -76.5% (was -71.7%) April plunge.

US retail sales bounced 17.7% in May, with sales excluding autos jumping 12.4%, both record increases and nearly double expectations. Those follow declines of -14.7% (was -16.4%) and -15.2% (was -17.2%), respectively. Compared to last year, the contraction rate has slowed to -7.7%, with the ex-auto rate at -8.1%, versus double digit rates rates of declines previously.

However Equity futures remain in focus as they continue to indicate a sharply higher Wall Street open, while yields, particularly at the long end of the curve are higher.  US equity futures are rallying since overnight session, as risk appetite soared amid firming expectations for yet more massive stimulus globally.

Currently the USA30 is 1.9% higher, the USA500 is up 1.4% and the USA100 has improved 1.3% in pre-market trading. Wall Street rallied into the close yesterday, coming back from sizable losses earlier in the session, following an announcement from the Fed that the bank would begin purchasing individual corporate bonds beginning today. Reports that the US is planning a $1 tln infrastructure program have added to optimism. Meanwhile, the BoJ kept rates steady but extended its lending program, keeping the stimulus taps wide open.

Finally, prospects for a EU and UK compromise agreement on a future trade relationship are seen as on the rise. While equities are wildly enthusiastic about stimulus, worries continue to fester over a second wave of COVID-19 as governments increasing relax restrictions to reopen economies. However, news of the first life-saving coronavirus drug, reported by the BBC, has added to the equity rally.

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.

Date : 15th June 2020.

Events to Look Out for This Week.



Moving into a new week, the focus is now squarely on the EU-UK meeting on Monday and the monetary policy meetings in the world’s major economies (BoJ and BoE) and their potential for guidance regarding future stimulus actions. On the data front, the economic calendar is packed and focus will be on the UK economic data which will be scrutinized for any sign regarding the depth and length of the recession.

Tuesday – 16 June 2020

RBA Minutes (AUD, GMT 01:30) – The RBA minutes should provide guidance. The bank signalled in its last meeting that “the accommodative approach will be maintained as long as it is required”.

BoJ Interest Rate Decision and Conference (JPY, GMT 03:00 & 06:00)– No major changes are expected in the BoJ’s policy meeting next week, as the Bank already made it clear that it will do whatever it can, but warned the central bank may not be able to keep interest rates low without trust in Japan’s finances over the long term. Kuroda told lawmakers that the BoJ will actively buy T-bills and government bonds  and consider changing rates for its yield curve control if necessary. The BoJ would also consider expanding its special lending programs to further support firms if needed. Monetary easing should be continued until the BoJ’s price target is met, while extraordinary measures in response to the pandemic will fade out post-virus.

Average Earnings Index & ILO rate (GBP, GMT 06:00) – UK Earnings with the bonus-included figure are expected to rise to 2.6% y/y in the three months to April. UK unemployment is expected higher at 4.4%, as data from this month should capture the full effect of the lockdown, which started on March 23rd – mid May in the UK.

Economic Sentiment (EUR, GMT 09:00) – German June ZEW economic sentiment is expected to have sharply declined again to 32 from 51.

Retail Sales (USD, GMT 12:30) – May increases are expected to be seen of 9.5% for headline retail sales and 8.4% for the ex-auto figure, following April drops of -16.4% for the headline and -17.2% ex-autos.

Wednesday – 17 June 2020

Consumer Price Index (GBP, GMT 06:00) – Prices are expected to move up in May, with overall inflation to increase at 0.9% y/y, compared to 0.8% y/y last month.

Consumer Price Index (EUR, GMT 09:00) – The final Euro Area CPI for May is anticipated to rise to 0.4% y/y from 0.1%y/y last month. The core inflation is seen at 0.8% y/y from 0.0% y/y (revised from 0.7%).

Consumer Price Index and Core (CAD, GMT 12:30) – May BoC CPI is expected higher at 0.1% from its -0.4% m/m pace, after it revealed the expected sharp drop in April, as a full month of lockdown savaged the economy.

Crude Oil Inventories.

Gross Domestic Product (NZD, GMT 22:45) – The Q1 GDP is expected to grow at 0.5%, unchanged from last quarter.

Thursday – 18 June 2020

Employment Data (AUD, GMT 01:30) – While the Unemployment Rate is projected to have spiked at 8.3% in May, Employment change is expected to have decreased -575K.

SNB Interest Rate Decision and Press Conference (CHF, GMT 07:30) – SNB is expected to keep rate settings unchanged at the June meeting. The SNB would like to step out of the negative interest rate policy sooner rather than later, but with the world economy still in the grip of Covid-19 and data releases highlighting the fallout from the crisis, there is little the central bank can do if it wants to keep the currency under control. The SNB already signalled in March that it will step up interventions on forex markets to shield the CHF.

Interest rate Decision and Conference (GBP, GMT 11:00) – The economic data from the UK is expected to add pressure on the BoE to add further stimulus measures at next week’s meeting, even if officials continue to shy away from negative rates. Even though the consensus forecasts suggest no change in the policy rate in this meeting, a cut vote at 9-0 MPC is anticipated.

Jobless Claims (USD, GMT 12:30)– US initial jobless claims fell -355k to 1,542k in the week ended June 6 after sliding -226k to 1,897k (was 1,877k) previously.

BoJ Monetary Policy Meeting Minutes (JPY, GMT 23:50) – The BoJ minutes should provide further guidance for 2020.

Friday – 19 June 2020
European Council Meeting (EUR, Full Post) – The meeting will involve the Heads of State and Governments of member states.

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.

Date : 12th June 2020.

FX Update – June 12 – Risk Off Friday.


Trading Leveraged Products is risky

USDJPY, H1

The Dollar and Yen posted fresh highs against most other currencies, although managed to pare losses as the pre-London session in the Asia-Pacific region progressed, with US equity index futures managing about a 1% rebound after closing sharply lower on Wall Street yesterday. Asian share markets, meanwhile, have been a sea of red, although most of the main indices pared intraday losses, and China’s CSI 300 index managed to creep into the black. Oil prices remain soft, with front-month USOil dropping to an 11-day low at $34.49, which marked a near 15% correction from the three-month high seen on Monday, at $40.40. Investors, having driven many asset prices well into pre-pandemic valuations, are now fretting about a trending rise in new coronavirus infections in some areas where economic reopening has been ongoing for over a month. A surge in new cases in the states of Arizona, New Mexico and Utah (up 40% last week versus the prior week’s levels) are cases in point. With a vaccine and/or effective treatment remaining elusive, the premise for optimism about reopening economies has been based on the r-rate remaining below 1.0 (sub-1 readings indicating a contracting rate of new infections, and above 1 indicating an exponential increase in the rate of new infections). This is now being tested, which is translating into concerns about the possibility for there being another bear phase in the markets.



Safe haven demand for the US currency lifted the narrow trade-weighted USDIndex (DXY) to a three-day high at 96.93, before cooling to 96.60. EURUSD concurrently ebbed to a three-day low at 1.1277 before recouping to the daily pivot at 1.1330. The risk-sensitive AUDUSD and AUDJPY also printed fresh lows before rebounding from lows, to 0.6910 and 0.7410, respectively.



Sterling has remained in the underperforming column of currencies, partly due to the continued lack of encouraging signs on the EU-UK trade negotiation front, and partly due to the UK currency’s pandemic-era sensitivity to risk-off conditions. Cable printed an eight-day low at 1.2545, before moving north of 1.2600 again. UK April GDP data, released before the London interbank open, showed a 20.4% m/m contraction, which left the rolling three-month trend at -10.4%. April industrial production contracted 20.3% m/m. April should prove to be the nadir, as data from this month captured the full effect of the lockdown, which started on March 23rd in the UK. Economic reopening started in mid May. Although the GDP and production data were even worse than median forecasts, the data has had little bearing on UK markets, which are looking ahead to economic reopening, both domestically and internationally, and how successful this can be in the continued absence of either a vaccine or effective treatment for the SARS Cov-2 coronavirus.

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.

Date : 11th June 2020.

FOMC: Lower-for-longer stance unchanged.



The FOMC “is not even thinking about thinking about raising rates,” said Fed Chair Powell in his press conference yesterday.

As universally expected, the Fed left the funds rate band unchanged at 0% to 0.25%. But while the policy statement was nearly word for word from April’s, there were some small changes that reflected a rather pessimistic view from Fed officials. That outlook was also underscored by the Fed’s projections, including the dot plot. And while Chair Powell said he was pleasantly surprised by the shocking May jobs data, he stressed the Fed would not react to one report. He was more circumspect of the report and suggested it was more a reflection of the high degree of uncertainties. The only positive in the statement was that financial conditions had improved thanks to the Fed’s and the administration’s relief measures which were “large, forceful, and quick.”

Not surprisingly, the FOMC left the Fed funds rate band unchanged at 0% to 0.25%, and the vote was a unanimous 10-0 for a second straight meeting, after the one dissent on March 15. But the Fed doubled down on its lower for longer stance — not only did the policy statement reiterate that the rate band will be maintained until there is  “confidence” that the economy is back on track, but the central tendency dot plot showed no rate hikes through the 2020-2022 time horizon. Additionally, the policy statement repeated from April that the virus will continue to “weigh heavily on the economy, employment, and inflation over the near term.” But this time the Fed added that the pandemic also poses “considerable risks to the economic outlook over the medium term.”



The Fed’s forecasts backed up those more pessimistic views too. The GDP projections were remarkably weak for 2020 across the board, with a central tendency for 2020 of -7.6% to -5.5% which is well below our own -3.2% figure. However, all but the low-end outlier forecasts showed a big GDP bounce in 2021-22. Oddly, the jobless rate estimates were quite optimistic relative to their GDP estimates, with a 2020 central tendency of just 9.0%-10.0%, versus our estimates of 9.9%, perhaps done to avoid aggravating joblessness fears.

In terms of inflation, there were no visible concerns that the massive stimulus and the surge in the balance sheet could drive price pressures higher. In fact, there were big PCE chain price downgrades across the forecast horizon, and the 2020 central tendency was reduced to just 0.6%-1.0%, versus our own 1.2% estimate.

These projections are consistent with the view that the economy is still at risk over the medium term, with the need to keep rates lower for longer, and with the Fed not even thinking about thinking about raising rates, even as financial conditions improve.

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.

Date : 10th June 2020.

US Equity futures and “Fear-Index”.



The pop in the USA100 to the 10k mark for the first time ever was a focal point. However, it was an uneven close on Wall Street yesterday as tech continued to outperform and news that Apple Inc is preparing to announce a shift from its own main processors in Mac computers helped the USA100 future to move higher overnight. Advanced Micro and Nvidia were also posting strong gains.

That gain helped the USA30 and USA500 pare initial losses, though the decline in the broader index knocked it back into the red for the year. Nevertheless, the 3200 level for USA500 was sustained so far. The slide for USA30 and USA500 came as profit taking after the long rally appears to be in play — for now. Technical indicators are suggesting a pull-back is due on Wall Street following the surprising, record breaking rally from March lows.

The slight erosion in risk appetite supported a recovery in Treasuries and reversed the bearish curve steepener. The recent bear steepening trades were reversed too, with a bull flattener knocking the long bond yield down 6 bps to 1.590%. The 10-year Treasury’s reopening went very poorly by every metric. The curve flattened to 61 bps after widening to 72 bps intraday late last week.

In the stock market, close attention should be given to the correlation between VIX Index and the US Futures. As the Dow and S&P sustain their 2-month rally with the NASDAQ fractionally firmer after setting a fresh record high yesterday, the VIX Index (Volatility Index) or otherwise,  ‘fear index’ , has also turned higher. VIX represents the expected price fluctuations in the S&P 500 Index options over the next 30 days, and hence a  negative correlation has developed between the two indices. Dating back the beginning of the VIX in 1990, the correlation between daily changes in the S&P 500 and VIX was more than -70%, while in the past 10 years the correlation has strengthened further.

Hence the recent reverse of the VIX Index higher as S&P500 is in a rally , has spread doubts over whether the asset will continue advancing. The turn of Volatility higher as per the Reuters picture below, suggest a potential risk appetite erosion that could limit the S&P500 incline and could potential imply to a pullback.



Today, markets remain cautious ahead of the FOMC announcement, although with no change to the rate band expected that also may not provide the catalyst investors seem to need to push stretched valuations further out.

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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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.

Date : 9th June 2020.

FX Update – June 9 – Sterling rally stalls.



GBPUSD, H1

The Pound has taken a turn lower, racking up a 0.5% loss to the Dollar and about a 1% decline versus the Yen, while also softening a little against the Euro. The backdrop of sliding stock markets in Europe has weighed on the Pound, which has established a pandemic-era proclivity to underperform its main currency peers during risk-off periods. Attention also remains on the UK-EU trade negotiation front. The decision by EU fisheries ministers not to change course on their position — to maintain the “status quo”, as the EU’s chief negotiator Barnier put it, has “skewed things late in the process,” according to a Downing Street source cited by the Guardian. London is frustrated by Barnier’s inability, thus far, to convince various member states to look for a compromise. The UK is insisting that it will be an independent coastal state, and that there needs to be a new relationship with the EU with regard to fishing, pointing to Norway as a working example. The EU, on the other hand, wants to emulate the common fisheries policy (CFP), under which fishing quotas are agreed at an annual negotiation. This is a major issue for the UK which ran large in the pro-Brexit campaign. The UK government, for instance, points out that the scheme has led to France having 84% of the cod quota in the English Channel. The EU is now expecting the talks to drag on until October, regardless of whether the UK asks for an extension of its post-Brexit transitory access to the single market (which it has to decide on by July 1st). Unless there is a breakthrough in trade negotiations, the pound’s upside potential is likely to remain limited.



Technically, the daily chart remains in bid mode, having closed above the 200-day moving average (1.2676) yesterday (June for the first time since March 11 and completed 8 consecutive days of gains. H4 has moved to test the 20-period moving average on the close of the last candle, whilst the H1 time frame triggered lower on the break of the 20-hour moving average at 1.2700 and moved below yesterday’s low at 1.2627 to test 1.2616.

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.

Date : 08th June 2020.

Events to Look Out for This Week.



The focus will remain on the monetary and fiscal stimulus measures, as FED rate decision and meeting will be the highlight of the week, even though no major changes are expected, as negative rates are off the table for now. Chinese trade figures, the US and Chinese inflation, and GDP out of UK and Europe are over the course of next week’s agenda.

Monday – 08 June 2020

Industrial Production (EUR, GMT 08:00) – German Industrial Production is expected to decline further at 15.5% in April compared to the -9.2% decline seen in March.

Tuesday – 09 June 2020

Gross Domestic Product (EUR, GMT 09:00) – GDP is the economy’s most important figure. Q1’s GDP is expected to confirm a contraction to -3.8% q/q and -3.2% y/y.

Wednesday – 10 June 2020

Consumer Price Index (CNY, GMT 01:30) – Chinese inflation is expected to grow in May at 3.7% y/y, despite the -0.5% drop in the monthly basis.

Consumer Price Index (USD, 12:30) – The US May headline CPI is seen to drop with a flat core price rate, following respective April readings of -0.8% and -0.4%. The headline will be restrained by an estimated -2.2% May drop for CPI gasoline prices. As-expected May figures would result in a headline y/y increase of 0.3%, steady from 0.3% in April. Core prices should set a 1.3% y/y rise, a down-tick from 1.4% y/y last month.

Interest Rate Decision and Press Conference (USD, GMT 18:00-18:30) – In the last FOMC minutes of April 28-29 policy meeting, the committee made it clear that they are not considering implementing negative policy rates anytime soon. The minutes reiterated that while the current stance was seen as “appropriate,” the Committee could “clarify” its forward guidance (which it didn’t really give because of the unprecedented uncertainties). A “date-based” approach could also be considered that would specify a time period for current policy accommodation. As Chair Powell has indicated, the Fed is fighting to make sure that lasting damage isn’t done to the economy, so that liquidity problems don’t turn into solvency problems.

Thursday – 11 June 2020

Producer Price Index (USD, GMT 12:30) – The PPI, the headline inflation figures will be depressed by oil prices, while the core figures face divergent pressures that have thus far been downward on net, via diminished demand, though with risk of price boosts from supply disruptions for some components. The Fed will have plenty of elbow room for an easy money policy over the coming quarters.

Jobless Claims (USD, GMT 12:30)– US initial jobless claims fell -249k to 1,877k in the week ended May 30 after declining -320k to 2,126k (was 2,123k) in the prior week. This is the 9th straight week of declines.

Friday – 12 June 2020

EcoFin Meeting (EUR, Full Post) – European Finance Ministers are to convene on a variety of topics.

Michigan Sentiment (USD, GMT 15:00) – US consumer sentiment slipped to 72.3 in the final May print from the University of Michigan Survey, weaker than expected and down from 73.7 in the preliminary May report. However, it’s still a little better than the 8-year low of 71.8 from April. June’s preliminary release is expected to show an increase to 75.0.

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.

Date : 2nd June 2020.

FX Update – June 2 – Weaker USD.


Trading Leveraged Products is risky

AUDUSD, H1

The Dollar has remained soft, with risk sentiment in global markets holding up, albeit with a weakening grip. Wall Street finished with modest gains yesterday, while the USA500 is moderately in the negative, and while Asian and European markets have gained, they are up by only a limited extent. US President Trump is weighing military action and imposing curfews in cities across the country in an effort to quell rioting, while there are glass-half-full market narratives arguing that, with many assets having recouped to pre-pandemic levels, there may be less upside potential with most economies across the world not expected to fully recover until such time as there is a vaccine or cure for the coronavirus.



Despite the flagging risk-on tone, the narrow trade-weighted USDIndex edged out a new low, at 97.74, which is the lowest level seen since March 16th. EURUSD has remained buoyant, and has breached yesterday’s 11-week high at 1.1155, to trade to 1.1178. USDJPY remained in a narrow range in the mid-to-upper reaches of the 107.00s, which has been the case for about two weeks now. Sterling has outperformed on Brexit-related news, with the London Times reporting that the UK government is expected to signal a compromise on fisheries and “level playing field” trade rules if the EU backs off from its “maximalist” demands on regulatory alignment and fishing access, according to unnamed sources. Cable printed a one-month peak at 1.2555, while EURGBP fell to an 18-day low at 0.8865. AUDUSD edged out a fresh four-month high, at 0.6844. The RBA did the expected and left monetary policy unchanged at its June review today, maintaining the cash rate at 0.25%, while signalling that “the accommodative approach will be maintained as long as it is required.” USDCAD printed a fresh trend low at 1.3507, the lowest seen since March 9th. The Canadian Dollar, like other oil-correlating currencies, remains supported by the ongoing buoyancy in oil prices, ahead of the rescheduled OPEC+ meeting this week, while USOil trades at $36.00 currently.

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.