Hotforex - Market Analysis and News.

H

HFblogNews

Well-known member
Jan 31, 2019
285
Points
389
Date : 14th September 2020.

Events to Look Out for This Week.



The week ahead is expected to be a massive one, as three of the major Central Banks – the Fed, BoJ and BoE– will announce their rate decision and hold a policy press conference. However, markets’ attention will be focused on Brexit jitters, virus concerns and lingering US-China tensions which will also remain in the mix.

Have a look at the most important events of the coming days in our usual weekly publication.

Monday – 14 September 2020


  • Leadership election of the ruling LDP – Japan
  • UK Inflation Report Hearings (GBP, GMT N/A)
  • UK Parliamentary Vote on Brexit (GBP, GMT N/A) –Internal Market Bill, which overrides parts of the Brexit divorce deal, will be debated in the Commons on Monday September 14.
Tuesday – 15 September 2020

  • RBA Minutes (AUD, GMT 01:30) – The RBA minutes should provide guidance as to how further the RBA members are prepared to go in order to support the economy. The bank in its last meeting left rates on hold, and increased the size of the Term Funding Facility and made the facility available for longer. RBA Governor Lowe said “the board is committed to do what it can to support jobs, incomes and businesses in Australia”. “Low for longer”, with the willingness to do more if necessary, is pretty much the stance at most major central banks as the world economy deals with Covid-19.
  • Average Earnings (GBP, GMT 06:00) – Average Earnings excluding bonus for July are expected to decline to -0.6% (3Mo/Yr). The ILO unemployment rate is seen unchanged.
  • Economic Sentiment (EUR, GMT 09:00) – German ZEW economic sentiment for September is expected to have slightly declined, after spiking to 64 in August. This will be important for retail to actually recover as consumers need to be confident enough to go out and spend again.
Wednesday – 16 September 2020

  • Consumer Price Index and Core (GBP, GMT 06:00) – The UK CPI inflation is anticipated to be underwhelmed as Brexit jitters. August CPI is anticipated higher at 1.3% y/y from 1% y/y, while core is anticipated lower at 1.4%y/y from 1.8% y/y.
  • Retail Sales (USD, GMT 12:30) – August Retail sales are anticipated to increase at 0.9% for headline and 1.0% for the ex-auto figure, following July gains of 1.2% for the headline and 1.9% ex-autos.
  • Consumer Price Index (CAD, GMT 12:30) – The August BOC CPI is expected to continue adding to the backing for steady BoC policy this year, as the Fed and ECB also remained in a wait and see stance. CPI has been forecasted to grow to a 0.9% y/y pace in August, above the 0.7% last month.
  • Interest Rate Decision, Monetary Policy Statement and Press Conference (USD, GMT 18:00-18:30) – The FOMC announced a shift in its monetary policy strategy, moving to an average inflation target. Though the outcome was widely expected, the timing surprised. Markets widely assumed it would be outlined at the September FOMC, along with the SEP. Under this strategy, the Fed will let the economy run hotter and will let the inflation rate rise “moderately” over 2% in order to make up for prior undershoots of that level. There was no indication of a time frame. Hence this meeting will provide further guidance and timeframe. Lastly as the government looks unlikely to deliver more stimulus, the Fed is expected to be all in.
Thursday – 17 September 2020

  • Interest Rate Decision, Monetary Policy Statement (JPY, GMT 03:00 – 06:00) – The focus is on Monday’s leadership election of the ruling LDP, which will appoint a new prime minister after Shinzo Abe stepped down. Yoshihide Suga is expected to win. No major changes to prevailing policies would be expected should he indeed be confirmed as the new PM. He is a supporter of ‘Abenomics’, large fiscal stimulus is already in the works, and the close relationship between government and the BoJ would be maintained.
  • Consumer Price Index and Core (EUR, GMT 09:00) – The final reading of August inflation is expected to have held steady at -0.4% m/m and core at -0.5% m/m.
  • Interest Rate Decision, Monetary Policy Statement and MPC Voting (GBP, GMT 11:00) –Shadowed by the ongoing political developments in Brexit, the BoE is not expected to proceed with any interest rate actions while no change in the MPC voting is expected. BoE policymakers have been subtly changing their tune to a more circumspect one. MPC member Vlieghe, for instance, said that there is a “material risk” that it could take several years before the economy to return to full capacity.
  • Building Permits & Housing Starts (USD, GMT 12:30) – Housing starts should slip to a 1.440 mln pace in August, after climbing to a 1.496 mln pace in July from 1.220 mln in June, versus a 14-year high of 1.617 mln in January. Permits are expected to climb to 1.530 mln in August, after rising to 1.483 mln in July. All the housing measures have rebounded sharply in Q3, though the dramatic Q2 climb in the MBA purchase index has been followed by more stable Q3 readings around lofty levels.
  • Philly Fed Index (USD, GMT 12:30) –The Philly Fed index is seen rising to 19.0 in September from 17.2, after the big jump to 27.5 by June from a 40-year low of -56.6 in April. The Philly Fed index posted a bottom in the last recession of -40.9 in November of 2008. These diffusion indexes should remain elevated as factory activity continues to ramp up, though with backtracking in some states from restrictions on retail activity. Conditions are improving through Q3, as producers face lean inventory levels.
Friday – 18 September 2020

  • Retail Sales (GBP, GMT 06:00) – – UK retail sales for August expected to give further glimpse into Covid-19 damage, with a very pessimistic outcome as forecasts sustain contraction picture .
  • Retail Sales (CAD, GMT 12:30) – July Retail sales are anticipated to increase at 24.5% for headline and 9.4% for the ex-auto figure.
  • Michigan Index (USD, GMT 14:00) – The preliminary Michigan sentiment report should climb to 75.0 from 74.1 in August.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.


Click 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 to register for FREE!



Andria Pichidi
Market Analyst
HotForex

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
 
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H

HFblogNews

Well-known member
Jan 31, 2019
285
Points
389
Date : 15th September 2020.

What you need to know today?



Trading Leveraged Products is risky
Risk seemed to bounce back yesterday, but investors turned cautious again as the FOMC meeting comes into view. Data out of China, including industrial production and retail sales, beat expectations and the PBOC injected 600 bln yuan via a 1 year MLF, which helped China bourses to move higher. Hang Seng and CSI 300 meanwhile are up 0.5% and 0.7%, also helped by comments out of China that a vaccine could be taken in November.

The main US equity indexes closed on Wall Street yesterday with gains of over 1%, and USA500 mini is up 0.5% in overnight trading. Positive news on the Covid-19 vaccine and treatment front, s, along with above-forecast data out of China, have collectively floated investor spirits.

Elsewhere Asian markets traded mixed, however Eurozone peripheral markets are mostly outperforming slightly, after ECB officials including President Lagarde strengthened the central bank’s message on the EUR since last week’s policy announcement. The message that if the exchange rate threatens to undermine the inflation projection, the ECB will act, is getting clearer and has already seen peripheral markets rallying yesterday.



GER30 and UK100 futures are both up 0.1% at the moment, underperforming versus US futures, which are up around 0.5% after a mixed session in Asia overnight. The GER30 and UK100are hardly changed as the focus turns to the FOMC meeting, which starts today and its policy statement and new Summary of Economic Projections (SEP) on Wednesday.

Chair Powell largely pre-empted this meeting in terms of policy with his Jackson Hole announcement of the FOMC’s new strategies where it will pursue an average inflation target and monitor any shortfall in employment. An upward revision is seen in the Fed’s GDP and inflation outlooks, and a downward bump to unemployment, as a consequence of its regime change. The upward revisions to growth may give the US Dollar a lift, though the lower-for-longer strategy on interest rates may offset.

The BoE, which announces its policy decision on Thursday, is also expected to keep overall settings on hold, against the background of Brexit and virus jitters. PM Johnson managed to get his controversial Internal Market Bill through the first reading in parliament yesterday and that leaves the risk of a no-deal scenario firmly on the table.

In FX markets

The USD and JPY softened
against their peers amid a background theme of mostly higher stock markets. Among currencies, the USDIndexprinted a 5-day low at 92.84. Sterling remained heavy, though remained above above recent lows. The UK government’s controversial Internal Markets Bill was passed in the House of Commons, and will now go the House of Lords.

As for the Euro, attention will be on the latest ZEW investor sentiment survey, which is the first major confidence data of September. A slight decline in the expectations reading is expected to 71.0 from 71.5. Nothing yet to shake the ECB’s baseline scenario, with Brexit and virus/casedemic developments the key factors that policymakers will be watching closely. EURUSDconcurrently pegged a 5-day high at 1.1900. USDJPY flatlined in the mid-to-upper 105.00s (PP at 105.80).



AUDUSD rallied by over 0.5% to a 12-day high at 0.7336 but retreated to 0.7310. The release of the latest RBA minutes, although stating “a lower exchange rate would provide more assistance to the Australian economy,” sparked initial Aussie Dollar buying as markets deemed the minutes to be less dovish in overall tone than had been anticipated. The Aussie was subsequently given a further lift by above forecast Chinese data. .

USDCAD has been playing a narrow range in the mid 1.3100s, below the 3-week high that was seen last Wednesday at 1.3261. Oil prices have stabilized in recent days following a near 20% tumble, which has arrested the recent decent in oil-correlating currencies, such as the Canadian Dollar. The flattening out in the recovery pace of the global economy, juxtaposed to large global crude stockpiles and uncertainty about Chinese demand (which has been importing crude in record quantities in recent months, but may now be ready to slow this process down), caused the rotation lower in oil prices.

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 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 to register for FREE!



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.
 
H

HFblogNews

Well-known member
Jan 31, 2019
285
Points
389
Date : 16th September 2020.

FX Update September 16 – A weaker USD ahead of the FED.





EURUSD has rallied by just over 50 pips from the intraday low in posting a high at 1.1882. This swings yesterday’s six-day peak at 1.1901 back into scope. Dollar weakness is driving the move, which is being facilitated by strong gains in Cable (0.6%) and in the AUDUSD and NZDUSD (both 0.5%). USDJPY touched the key psychological 105.00, S2 and new seven-week low from a pivot yesterday at 105.50 and highs last week of 106.38.



Regarding the FOMC, no changes are expected in policy, and while the central bank will likely present upward revisions to US economic projections, the recently codified lower-for-longer monetary policy regime is driving a bearish dollar sentiment. The Dollar is also correlating inversely with global stock markets. These factors appear to be outweighing recent ECB signalling about its concerns about euro strength, which partly counterbalances the easing measures implemented earlier in the year. The Pound has rallied to six-day highs against both the Dollar and Euro.



Cable‘s high is 1.2976. The gains in the UK currency have been concurrent with market narratives showing a measure of incredulity about the UK government’s insistence that it is serious about its threat to leave the EU’s single market at year-end without a new trade deal, given the massive near-term disruptive impact it would have on the economy and the divisions appearing within the Conservative Party and among UK nations. Even though the controversial Internal Market Bill sailed through the House of Commons, the proposed legislation is likely to have a tougher time in the House of Lords, and in any case there are suspicions that the legislation is merely a gambit of PM Johnson and his cabinet to up the ante and strengthen their negotiating position into the final weeks of talks. This fits with expectations that a more practical attitude will be seen in trade negotiations once state leaders become directly involved in the run-in to the October 15th-16th EU summit. This backdrop has lessened the bearish conviction markets have with regard to the Pound.

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 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 to register for FREE!



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.
 
H

HFblogNews

Well-known member
Jan 31, 2019
285
Points
389
Date : 17th September 2020.

The Guppy dips to 135.00, having stalled at 136.00.




GBPJPY, Daily

Both the UK and Japan are in the middle of political upheavals, (the Brexit Trade talks and Internal Market Bill on one side and the handover from one political dynasty to his trusted lieutenant on the other. Earlier today we had the BOJ signalling No Change to current policy as the new PM Suga completes his first few days in the role. The BOE has just published their statement¹ and minutes from their latest meeting, and again it’s no change across the board, (excuse the pun), although the spectre of negative interest rates in the UK is more firmly “in the toolbox” than ever before. The BOE continues to negotiate the tricky ground around monetary policy with the backdrop of deteriorating UK-EU relations and the likelihood of PM Johnson overseeing a very limited trade deal with the EU, if one is agreed at all. The Brexit endgame showdown is very much “in-play”.

BOE highlights include – “stands ready to adjust monetary policy”, and to
“keep under review the range of actions” – taken as a nod to possible negative rates next year with the statement that the MPC has been briefed on the BoE’s plans to explore how a negative bank rate could be implemented effectively. It also “does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.”

Cable continues to rotate around 1.2900 today, whilst EURGBP jumped from 0.9090 to 0.9150 and GBPJPY plunged to 135.00 a level not seen since July 20, some 42 trading days ago.

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 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 to register for FREE!



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.
 
H

HFblogNews

Well-known member
Jan 31, 2019
285
Points
389
Date : 18th September 2020.

FX Update September 18 – A volatile 24hrs.




The Dollar has scraped out a two-day low at 92.76 in the narrow trade-weighted USDIndex, with EURUSD concurrently pegging a two-day high at 1.1868, gaining quite sharply from yesterday’s five-week low at 1.1736. A steadying in stock markets today has seen the Dollar ebb back after finding safe haven demand during the worst of this week’s sharp sell-off across global equity markets.



The Pound has come under modest pressure against most other currencies. Cable posted an intraday low at 1.2941. The WHO is warning of a serious second wave of SARS-CoV-2 in Europe¹ (Germany recorded 2,179 cases yesterday) on the back of a surge in new cases (despite data showing a continued very low rate of death alongside a relatively low incidence of Covid being listed on death certificates). In the UK, coronavirus cases and, with it, corona-panic are surging. Localised lockdowns are now affecting 10 million people in the UK, and the government’s scientific advisory group are, according to an FT report, advising the government to implement a two-week national lockdown. The embattled Health Secretary (Matt Hancock) this morning called it a “last line of defence” but “will do whatever is necessary”. This is a negative backdrop for the Pound, adding to the uncertainty surrounding the Brexit endgame, and with the minutes from the BoE MPC meeting yesterday affirming that the central bank is at full steam on contingency planning for negative interest rates (although stressing that it is not ready to do so yet).



Elsewhere, USDJPY has settled in the mid 104.00s, testing the seven-week low seen yesterday at 104.52. Yen crosses have also rebounded out of lows. Both EURJPY and AUDJPY lifted above their respective Thursday highs. Japan’s core CPI came in at -0.4%y/y, matching expectations, but the NZDJPY was the biggest mover, moving over +0.6% as the Kiwi holds its bid.

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 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 to register for FREE!



Stuart Cowell
Head Market Analyst
HotForex

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
 

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