Market news and trade recommendations by FBS

[riki143]

Market News

Key option levels (June 4)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3550 (large), $1.3600 (large), $1.3650 (large), $1.3685, $1.3700 (large);

GBP/USD: $1.6830, $1.6910;

USD/JPY: 102.05/10, 102.15 (large), 103.50 (large);

USD/CHF: 0.8895, 0.9005 (large), 0.9025;

AUD/USD: 0.9200, 0.9300, 0.9325, 0.9340;

USD/CAD: 1.0925 (large), 1.0935/40, 1.1000.

More:
http://fxbazooka.com/en/news/show/1325

 

[riki143]

Market News

June 4: American Session

Tatiana Norkina, FBS analyst

Mixed statistics from the U.S. makes market participants cautious. Thus, preliminary ADP data on employment in non-agricultural sector totaled only 179 thousand, instead of the expected by analysts 210 thousand. This led to a drop in the dollar index to a level of 80.0. However, the index of business activity in the service sector ISM steadily grown to 56.3 (forecast growth - 55.5). This allowed to strengthen the dollar a little, which now adds about 0.10 %.

At the same time, stock markets opened lower. The DJIA lost 0.18% and the S&P500 - 0.05%.

Euro remains under pressure. After the formation of the daily high at 1.3638 area, the currency pair EUR/USD comes back to 1.3610. The pair GBP/USD has recovered to 1.6760 resistance, but the bulls cannot pass this level and the reduction is going down in the 1.6740 area. USD/CHF pair is trading at 0.8860/0.8850 yesterday’s minimums. But the bulls did not give up and restore the course to around 0.8970 mark. The currency pair USD/JPY entrenched over 102.50 and is trying to resume recovery.

More:
http://fxbazooka.com/en/news/show/1326

 

[riki143]

Market News

June 5: Asian session

Asian shares swung between gains and losses after better-than-forecast data on US service industries and as investors await the ECB policy decision.

USD/JPY declined from 102.75 to 102.50. AUD/USD recovered to $0.9290 after a quick dip to $0.9260. Aussie dipped on the unexpected Australia trade deficit figures, but soon rebounded despite the lowered China HSBC Services PMI. NZD/USD strengthened to $0.8450 before retracing down by 20 pips. Economists at Westpac cheered the market up by saying the RBNZ is likely to be more hawkish than expected on the next week’s meeting. Gold consolidates in a narrow $1241.8/1244.7 range.

EUR/USD is little changed at $1.3600. GBP/USD edged up to $1.6750.

More:
http://fxbazooka.com/en/news/show/1328

 

[riki143]

Market News
5 June 2014

ECB Draghi's press conference

European Central Bank announced a package of dovish monetary measures:

• ECB cut interest rates by 10 bps to 0.15% (versus expected 0.10%) and the deposit rates to -0.1%
• The regulator will launch quantitative easing (QE) by purchasing asset-based securities (ABS) securities - size of program is still under discusion
• ECB ends bond purchase sterilization (SMP)
• ECB will conduct 2 targeted LTRO in September and December 2014, €400 billon each
• ECB aims to improve the transmisson mechanisms of monetary policy
• Draghi said ECB finished with cutting rates. However, further unconventional measures remain on the table.

ECB forecasts


GDP

• 2014 economic forecast lowered from 1.2% to 1%
• 2015 forecast revised up from 1.5% to 1.7%
• There are still risks of a further downside revision

Inflation

• 2014 forecast lowered from 1.0% to 0.7%
• 2015 forecast lowered from 1.3% to 1.1%

EUR/USD fell to $1.3500 on the news, but bounced back to $1.3550.

More:
http://fxbazooka.com/en/news/show/1329

 

[riki143]

Market News

June 5th: American session

Tatiana Norkina, an analyst at FBS

Today ECB stirred up markets refinancing rate down to 0.15 % (forecast - up to 0.10 %) from 0.25 %. At the same time deposit rates have gone into negative territory - 0.10 %. While Mario Draghi noted on the press conference that easing monetary policy is not yet complete. Immediately thereafter, the U.S. dollar index soared to around 81.06 , but the negative data on the labor market (the number of applications for unemployment benefits over the past week rose to 312 thousand from 304 thousand; forecast - 310 thousand) has returned to the recent support in 80.50. Thus, the index is in the red zone now, losing about 0.20 %. Stock markets, after a gap up, went down to the opening levels, but do not leave the negative zone, up until at 0.04 %.

In currency markets, the emergence of these news sharply increased volatility. Thus, the pair EUR/USD had fallen to 1.3500 figure , but at the moment is trying to update the current highs, testing the 1.3650 mark . GBP/USD has bounced from 1.6730 support and shows signs of recovery, punching resistance 1.6790. Currency pair USD/CHF has set a new high at 0.9036 , but immediately collapsed to 0.8920 . But USD/JPY is rather quietly corrected in 102.40.

More:
http://fxbazooka.com/en/news/show/1331

 

[riki143]

Market News

June 6: Asian session

Asian shares rose after the European Central Bank announced stimulus measures. The MSCI Asia Pacific Index and Japanese Nikkei 225 climbed 0.2%.

USD/JPY declined to 102.25. Still the pair is headed for its biggest weekly gain since April before a US report (NFP) that may show employers added more than 200K jobs in May.

AUD/USD eased down to the $0.9330 area after gaining more than 60 pips yesterday. NZD/USD eased down to $0.8480 after strengthening by more than 80 pips yesterday.

EUR/USD is trading above the 200-day MA in the $1.3660 area. The market rejected the ECB’s unprecedented effort to weaken the single currency. GBP/USD is trading just above $1.6800.

More:
http://fxbazooka.com/en/news/show/1332

 

[riki143]

Market News
6 June 2014

NFP: forecasts of the banks

What do the banks say?

Goldman Sachs: +210K, 6.5%, low market impact

Societe Generale: +240K, 6.2%, higher USD/JPY

Bank of America: +225K, 6.5%,

Barclays: + 225K, 6.3% (consensus: 6.4%), supporting the USD. A positive job creation surprise together with healthy wage growth would be the most USD positive outcome against all currencies. In contrast, a less inflationary report would only be USD positive against low-yielding currencies.

Credit Suisse: +185K, 6.4%, the sustainability of any knee-jerk move may well come down to whether or not there is any evidence of wage inflation in today’s data.

Watch Average Hourly Earnings (consensus: 0.2%; previous: 0.0%).

 

[riki143]

Market News

June 6th: American session

Tatiana Norkina, an analyst at FBS

NFP data for the last month was not quite so surprising, about the expected level. Number of non-agricultural sector employees of the U.S. economy increased by 217 thousand, while analysts suggested it to be increased by 214 thousand. It strengthened U.S. dollar a little, which moved up to the mark of 80.50, showing a gain of +0.15% today. Major U.S. stock indices are located in the green zone, they added 0.40%.

The currency pair EUR/USD fell to 1.3620 after the daily high in 1.3675. Pound slips to support $1.6775. It should be noted that the GBP/USD still checked resistance at 1.6840 today. Pair USD/CHF, hold above 0.8910, recovers near 0.8940. But USD/JPY felt support in 102.10 - here is the lower boundary of Ichimoku cloud at one-hour graph.

More:
http://fxbazooka.com/en/news/show/1334

 

[riki143]

Market News

June 9: Asian session

Asian shares rose after data on Japanese growth, US employment and Chinese exports improved the outlook for the global economy. MSCI Asia Pacific Index gained 0.15%.

USD/JPY is little changed in the 102.50 zone. Japan reported a smaller current-account surplus than economists predicted, reducing the currency’s status as a haven. At the same time, Japanese final Q1 GDP was revised up from 1.5% to 1.6%.

Commodity currencies are in demand on Monday, inspired by the Chinese trade data over the weekend (trade surplus 35.9B vs. expected 22.6B) and the upside revision of the Japanese GDP data. AUD/USD is testing the Friday’s high at $0.9360 to the upside. The RBA Governor Glenn Stevens will hold a speech today at 16:00 GMT. NZD/USD rose to $0.8520, but remains below the Friday’s peak of $0.8555.

EUR/USD is trading just below resistance at $1.3650. German and French banks are closed for a holiday. GBP/USD is tradinginthe $1.6800 area.

More:
http://fxbazooka.com/en/news/show/1336

 

[riki143]

Market News

Key option levels (June 9)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3550, $1.3600 (large), $1.3650 (large), $1.3700;

GBP/USD: $1.6755, $1.6805;

USD/JPY: 102.00 (large), 102.30, 102.50/55 (large), 102.70/75 (large);

USD/CHF: 0.8975, 0.9000;

AUD/USD: $0.9335, $0.9400;

USD/CAD: 1.0915 (large), 1.0925, 1.0955;

EUR/JPY: 139.00 (large), 140.80.

More:
http://fxbazooka.com/en/news/show/1337

 

[riki143]

Market News
9 June 2014

CFTC: USD longs on the rise

Here are the essentials of the latest Commitments of Traders (COT) report, released on June 6 by the Commodity Futures Trading Commission (CFTC) for a week ended on June 3.

According to the report, the value of the USD net long position increased from $7.4 billion as of May 27 to $11.4 billion as of June 3 (+$3.95 billion). The US dollar positions stay on the bullish side for a fourth straight week and are now at their highest level since early March.

More:
http://fxbazooka.com/en/news/show/1338

 

[riki143]

Market News

June 9: American Session

Tatiana Norkina, FBS analyst

The index of the U.S. dollar in the first day of the week shows a significant strength, increasing by almost 0.30%, after the hold above 80.30 support. Trading in the stock markets opened as positively: DJIA now adds about 0.10%, and the S&P500 - 0.7%. The speech of the FRS member Rosengren is expected a little later.

In currency markets, American dollar strengthened against major world currencies. Thus, EUR/USD pair dropped to 1.3590 support after a failed test of 1.3670 resistance. GBP/USD pair is trading at 1.6790 powerful level, which will be difficult to conquer for bears. USD/CHF pair rebounded with confidence to 0.8970 resistance; an attempt to consolidate above does not rules out. Dollar against the yen looks a bit weak. After the morning reduce of USD/JPY to 102.35 support, the pair returned to earlier levels and storms 102.60. Further strengthening of bullish temper is possible.

More:
http://fxbazooka.com/en/news/show/1340

 

[riki143]

Market News

June 10: Asian session

Commodity currencies gained some ground today. Australia and China released a bunch of important data in the session, but the market impact was limited. China May inflation came above the forecast at 2.5%. Australia NAB business confidence rose to 7 in May, the prior reading was also revised from 6 to 7. AUD/USD pushed up to $0.9370 in the Asian session. NZD/USD strengthened to $0.8510, but stays below the recent $0.8555 high. Gold rose above $1250.

USD/JPY slid to 101.27. The pair’s volatility is low ahead of the Bank of Japan’s meeting later this week. Japanese tertiary industry activity fell by 5.4%. Japanese Nikkei 225 is down by 0.8%.

EUR/USD is trading in the $1.3590 area. GBP/USD is trading just above $1.6800.

http://fxbazooka.com/en/news/show/1342

 

[riki143]

Market News

June 11: Asian session

Asian shares outside Japan fell from a 3-year high as investors weighed valuations following a 4-day rally and after the World Bank cuts its global economic growth forecast for this year from 3,2% to 2.8%. Japanese Nikkei 225 rose by 0.5% aided by MSCI’s decision to remove South Korea and Taiwan indexes from its review list for reclassification to developed markets, keeping them in the emerging markets classification. According to Reuters, there had been speculation Tokyo equities would take the brunt of rebalancing if Korean and Taiwanese shares were reclassified to developed markets.

USD/JPY slid to 102.22. Japanese Quarterly Business Sentiment Index (BSI) survey results for Q2 register big falls. AUD/USD rose to $0.9390. Westpac Consumer Sentiment improved. NZD/USD rose to $0.8556. The kiwi was a solid gainer ahead of the RBNZ monetary policy meeting.

EUR/USD tested $1.3520 before returning to $1.3540. GBP/USD dipped to $1.6738 before returning to $1.6755.

More:
http://fxbazooka.com/en/news/show/1345

 

[riki143]

Market News
11 June 2014

US yields recovered

US Treasury yields have reversed decisively higher with 10-year paper paying 2.646% compared to a trough of 2.402% 2 weeks ago.

According to RBS, the decline in 10-year yields is over and they will stay above 2.80% in the coming months.

US 10-year Treasury yields (Bloomberg)

The prospect of higher yields supports US dollar. The dollar index (DXY) held at 80.811 from May’s low at 78.906.

http://fxbazooka.com/upload/tiny/Analytics/2014/June/11/dxy.png[/ig]

[B]US dollar index (Bloomberg)[/B]

More:
[URL="http://fxbazooka.com/en/news/show/1346"]http://fxbazooka.com/en/news/show/1346[/URL]

 

[riki143]

Market News

Key option levels (June 11)

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT).

Here are the key options expiring today:

EUR/USD: $1.3500 (large), $1.3525 (large), $1.3575, $1.3600, $1.3625 (large);

USD/JPY: 102.05 (large), 102.25 (large), 102.65 (large), 103.00;

USD/CAD: 1.0900;

EUR/JPY: 139.00, 140.00 (large);

EUR/GBP: 0.8050, 0.8080, 0.8115;

EUR/CHF: 1.2180/85, 1.2200.

More:
http://fxbazooka.com/en/news/show/1347

 

[riki143]

Market News

June 11th: American Session

Tatiana Norkina, FBS analyst

U.S. dollar today is a little weaker compared with yesterday. The dollar index was down to 80.70 and is currently losing about 0.05%. At the same time the major stock indexes unexpectedly fell sharply at the opening. So, DJIA has decreased by 0.50%, while the S&P500 - 0.40%.

That is why the currency pair EUR/USD today is in a sideways mode, in yesterday's support of 1.3530. Today GBP/USD pair is supported by positive data on the labor market. Because of this the rate rose to 1.6800 figure, but the bulls are not yet configured to overcome the current level. Currency pair USD/CHF remains under the 0.9000 figure, it supports the level of 0.8985 below. But USD/JPY pair has gone under the figure of 102.00, after yesterday's consolidation below 102.45 mark.

More:
http://fxbazooka.com/en/news/show/1348

 

[riki143]

Market News

June 12: Asian session

Asian shares fell, with the regional benchmark index set for its biggest loss in almost a month, after US equities declined. The MSCI Asia Pacific Index dropped 0.4%. Nikkei 225 fell 0.8%.

USD/JPY is trading in the 102 area after dipping to 101.85 yesterday. Yen traded near a 2-week high ahead of the Bank of Japan’s policy decision tomorrow.

AUD/USD recovered back into the $0.9380 area following a dip to $0.9350. Australian labor market figures came out mixed. Employment in the country fell by 4.8K in May versus the expected 10.3K increase. The employment rate remained unchanged at 5.8% versus the forecasted increase to 5.9%.

Kiwi dollar was the main market mover today. NZD/USD jumped by 150 pips to $0.8650 on the RBNZ rate hike announcement. The interest rate was raised by 25 bps to 3.25% along with market expectations. Governor Wheeler said the inflationary pressures still exist, raising market expectations for further hikes in the coming months.

EUR/USD edged up to $1.3645. GBP/USD rose to $1.6800.

More:
http://fxbazooka.com/en/news/show/1350

 

[riki143]

Market News
12 June 2014

RBNZ raised rate to 3.25%

The Reserve Bank of New Zealand announced an interest rate hike on Thursday for the third time in 2014, lifting the cash rate by 0.25 to 3.25%.

New Zealand's economic expansion "has considerable momentum" and it is "important that inflation expectations remain contained and that interest rates return to a more neutral level," Reserve Bank Governor Graeme Wheeler said in a statement after the meeting.

Mr. Wheeler reiterated that the "speed and extent" to which the cash rate will need to rise will "depend on economic and financial data, and its implications for inflationary pressures." The central bank's forecasts indicate it expects to raise rates by around another 100 bps over the next 12 months.

That's how ANZ economists comment the current RBNZ policy: "We think the Reserve Bank now needs a reason to pause, rather than a reason to hike and attention will turn to the currency (it has spiked) and Q2 CPI".

More:
http://fxbazooka.com/en/news/show/1351

 

[riki143]

Market News
12 June 2014

BoJ meeting: what to expect?

The Bank of Japan will announce its policy meeting decision on Friday. The regulator is widely expected to refrain from adding stimulus this month. All 33 economists surveyed by Bloomberg forecast the central bank to keep policy unchanged with 60-70 trillion yen QE per year. 9% of the economists expect additional monetary stimulus in July, down from 38% in the previous survey.

Japanese inflation data and the Q1 growth numbers persuaded the investors that the economic recovery remains on track without additional stimulus. Societe Generale analysts go even further, pointing that on the previous meeting on April 30 the Bank revised growth forecasts down without any hints on stimulus to come.

The Bank of Japan may slightly raise its outlook for the overseas economies due to receding geopolitical risks from Ukraine, rises in China's May exports and a surge in U.S. imports. This could signal that the bank remains confident that sluggish exports will pick up and help Japan's economy achieve a sustained recovery.

More:
http://fxbazooka.com/en/news/show/1352