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Fundamental Analysis
Daily Market Analysis by Vinson Financials
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[QUOTE="VinsonFinancialsFX, post: 93210, member: 34988"] [url="http://www.vinsonfinancials.com"][CENTER][IMG]http://i58.tinypic.com/1ph2xc.jpg[/IMG][/CENTER][/url] [B][SIZE=4][COLOR=#ff0000]Financial News December 4, 2015 [/COLOR][/SIZE][/B] [B]ECB may hold current policy rates in near future[/B] The ECB declared a deposit rate cut of 10 base points to -0.3% and kept all other rates unchanged. The Bank extended its asset purchase program for further 6 month and decided to reinvest the principal payments on the securities purchased under the program. Analysts support the central bank's decision because weakening currency too much will have a negative impact on the economy. "Today's deposit rate cut looks to have been the "final one" under the conventional policy pillar. We expect policy rates to remain at their current levels in the foreseeable future", says Rabobanks in a research note on Thursday. [SIZE=4][COLOR=#ff0000][B]Market Review December 4, 2015 [/B][/COLOR][/SIZE] The European Central Bank stepped up yesterday its efforts to boost the Eurozone’s weak economy but the size of the stimulus disappointed the markets, driving up the euro against the dollar to as high as 1.0980 level after dipping to the 1.0517 area earlier in the day. Moreover, ECB cut the deposit rate to a record low of -0.30% and vowed to print money for as long as it takes to defeat deflation, pushing its radical stimulus measures to extremes never seen before in any major region in modern history. In addition, Mario Draghi, the ECB’s president, said the bank will keep buying EUR 60bn of bonds each month as far out as March 2017 or “beyond if necessary”. It is effectively an open-ended pledge. “Abundant liquidity will continue for a long, long time,” he said. ECB actions came despite signs that economic growth in the Eurozone is picking up, and ignores intense protests from German-led hawks that quantitative easing at this late stage is doing more harm than good. Elsewhere, Federal Reserve chair, Janet Yellen, has strongly indicated during her testimony to the Congress yesterday that Federal Reserve policymakers are likely to vote to raise US interest rates in two weeks, barring any major shocks to the global economy. Moreover, she noted that unemployment had lowered to 5%, economic growth was continuing well and she was confident that inflation would return to the Fed’s 2% target. “I currently judge that US economic growth is likely to be sufficient over the next year or two to result in further improvement in the labour market,” she said. “Ongoing gains in the labour market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2%.” Released during the Asian session this morning, Australian Retail Sales rose 0.5% versus the estimated 0.4%, Japanese Average Cash Earnings rose 0.7% beating the estimated 0.7% and Consumer Confidence in Japan came in at 42.6 beating the estimated 41.8. Released during the early European session, German Factory Orders rose 1.8% beating the estimated 1.3%, while Swiss Consumer Price Index (CPI) declined -0.1% versus the estimated 0.0%. The key events for the day would be the United States Non-Farm payroll, Average Hourly Earnings and Unemployment Rate. The data will be critical, as it is the last bunch of important economic data before the Fed’s rate decision on December 16. [B]Data releases to monitor:[/B] EUR: Retail PMI. CAD: Employment Change, Trade Balance, Unemployment Rate, Labour Productivity, Ivey PMI. USD: Average Hourly Earnings, Non-Farm Employment Change, Unemployment Rate, Trade Balance. [COLOR="#FF0000"][B]Trade Idea of the Day [/B] [B]USD/CAD[/B][/COLOR] Currently the pair is trading at 1.3351. Traders must monitor the 1.3407 resistance level and the support level 1.3283 for possible breakouts. A possible scenario would be a movement towards the 1.3380 resistance level, where a break may lead to the 1.3405 area. An alternative scenario could be a movement towards the 1.3330 support level, where a break may lead to the 1.3300 area. [IMG]https://www.vinsonfinancials.com/images/daily-chart/2015/December/4Dec15USDCADH1.png[/IMG] [/QUOTE]
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