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USD/JPY finally rebounds, Kiwi outperforms

June 5, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: ADP employment data, banks, Bitcoin, Brexit, Cryptocurrencies, ECB, India, OCR, RBA, Sino-U.S. trade talks, trade war

Asian indices finished higher today as investor sentiment improves amid upcoming rate cuts from major Central Banks. The Nikkei225 finished 1.80 percent higher to 20,776 the Hang Seng benchmark in Hong Kong finished 0.30 percent higher at 26,846. The Shanghai Composite finished 0.06 percent higher to 2,862, while in Singapore the FTSE Straits Times index finished 0.61 percent higher to 3,142. Australian equities rose for a second day, with the ASX200 adding 0.4 percent supported by lower rates and gains across most sectors. Firmer banks, gains from major miners and technology companies helped keep the market higher.

European session started on positive foot today mirroring the Asian indices and US futures as trade war worries ease across the globe, DAX30 is adding 0.45 percent to 12,024, CAC40 is 0.56 percent higher at 5,298 while the FTSE MIB in Milan is trading 0.01 percent higher at 20,225. The London Stock Exchange is 0,32 percent higher to 7,237 as traders increasingly concerned over the impact that the ongoing trade dispute is having on the global economy.

In commodities markets, crude oil continues its bearish bias down to 52.87. Oil is down almost 20% from the high in late April, wiping out about half of its rally earlier this year, due to increasing trade worries. Brent oil trades flat to $61,33 per barrel as major oil producers have yet to agree on adjustments on output. Gold continues to attract investors as safe heaven asset adding more than 5 dollars and trades at 1334 zone the highest level since April after President Trump slapped 5% tariffs against all imports from Mexico. The precious metal broke above all major daily moving averages turning the technical picture to bullish. Gold will find support at 1300 round figure and then at 1295 the 100-day moving average while more bids will emerge at 50-day moving average at 1287 on the upside resistance stands at 1336 the high from the Asian session.

In cryptocurrencies market, bitcoin (BTCUSD) is under selling pressure for one more day down to 7,816, the daily low for BTC was at 7,411 and the daily high at 7,855. Immediate support for BTC stands now at $7,411 the session low, on the upside strong resistance now stands at 8,000 round figure. Ethereum (ETHUSD) on the other hand trades to 245 with capitalization to 26 billion, on the upside the immediate resistance stands at 287 the recent high while the support stands at 200 round figure, Litecoin (LTCUSD) also trades higher at 104. The crypto market cap holds above $173.0B.

On the Lookout: The World Bank cut its global growth forecast due to trade growth slowing to the weakest since the financial crisis a decade ago. FED Chairman Jerome Powell on Tuesday dropped his standard “patient” reference to any rate decision, instead of saying the Fed would respond “as appropriate” to the risks posed by a global trade war and other recent developments.[

India is expected to ease policy at Thursday’s meeting for its third-straight rate cut. The Royal Bank of Australia yesterday cut its Official Cash Rate (OCR) by 0.25 bps to a record low of 1.25% the first since September 2016. The RBA has cited downside risks to economic growth due to trade tussles while praising Chinese efforts for economic improvement. Australia’s retail sales fell -0.1% m/m in April, below market expectations while in annual terms, sales growth continued its moderation, coming to 2.8% (a fall from March 3.2% and Feb 3.5%). Australia’s first-quarter current account deficit widened to -2.9 billion from -2.5 billion expected.

The ECB holds its next policy meeting on Thursday and we expected to keep interest rates unchanged though there is growing speculation it could shift to a more dovish footing.

In the America economic calendar, we await the ADP employment data for May, figures on the American services sector, the Fed’s Beige Book (which provides a summary of economic conditions in the U.S.) and a weekly update on crude oil inventories will all be released.

NZDUSD Hourly (H1) Chart

Trading Perspective: In fx markets, the US dollar retreats below 96 on speculation over Fed rate cut after comments from the Federal Reserve on Monday, raised expectations the U.S. central bank is moving closer to a rate cut, while the Aussie dollar trades higher to 0.70 despite the rate cut from the Reserve Bank of Australia. Kiwi outperforms and trades higher to 0.6633 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.

GBPUSD continues the rebound which started from Friday low to 1.2710, but the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2690 and the daily high at 1.2713. Major support now stands at 1.26 recent low. On the upside immediate resistance now stands at 1.2713 the daily high. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.

In Pound futures markets the open interest shrunk by around 4.5K contracts on Tuesday, reaching the third drop in a row, the volume went down by around 20.3K contracts.

EURUSD trades close to yesterday high at 1.1275 amid broad USD weakness. The pair is adding to bullish momentum build last Friday and now an attempt to 1.13 looks possible. On the upside, the immediate resistance stands at 1.13, while more offers will emerge at 1.1375 the 200-day moving average. Support stands at 1.1210 the 50-day moving average, while more bids will emerge at 1.12 round figure. We are following news from Italy as their budget deficit dispute with the European Commission continues, and the political turmoil in Austria and Greece.

In euro futures markets, the open interest shrunk by just 62 contracts. On the other hand, volume prolonged the choppy performance and rose by around 27.3K contracts.

USDJPY finally gets some bids as risk on sentiment returns in fx markets and trades at 1.0828. Today the pair hit the low at 107.96 and the high at 108.29. The pair will find support at 107.84 recent low, on the upside immediate resistance for the pair now stands at 108.29 the high from the Asian session.

In Yen futures markets, open interest shrunk by around 8.2K contracts, the second drop in a row. In the same line, volume shrunk by around 8.3K contracts, also down for the second consecutive session.

USDJPY Hourly (H1) Chart

USDCAD sharp correction continues for the second day breaking below the 1.34 level and trading to 2-week lows at 1.3376 as the retreat in crude oil prices, Canada’s main export item, seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 100-day moving average around 1.3345 while extra support stands at 1.3300 round figure. On the upside, immediate resistance stands at the 1.34 zone before an attempt to 1.3417 where the 50-day moving average stands.

RBA Delivers the Cut, AUD slightly Higher

June 4, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: AUD/USD, banks, Bitcoin, Brexit, Capital Markets, Cryptocurrencies, ECB, EDP, EUR-USD, Italy budget, monetary policy, RBA, Sino-U.S. trade talks, trading platform

Asian indices finished mostly lower today as investor sentiment remains fragile amid trade war and the upcoming rate cuts from major Central Banks. The Nikkei225 finished 0.01 percent lower to 20,408 below its 100-day moving average; the Hang Seng benchmark in Hong Kong finished 0.70 percent lower at 26,702. The Shanghai Composite finished 0.96 percent lower to 2,862 also below the 100-day MA, while in Singapore, the FTSE Straits Times index finished 0.20 percent higher to 3,130. Australian equities bounced on the back of the rate cut news, with the ASX200 finishing up 11 points or 0.2% to 6,332. The market was supported by gains in the Financial, Materials, and Telco sectors, which offset losses in the Healthcare, Energy, and IT sectors.

European session started mixed today as trade war intensifies across the globe, and news that the EU is preparing to launch EDP against Italy tomorrow. DAX30 is giving up 0.12 percent to 11,803, CAC40 is 0.52 percent lower at 5,214 while the FTSE MIB in Milan is trading 0.75 percent higher at 20,036. The London Stock Exchange is down 0,22 percent to 7,128 as traders are increasingly concerned over the impact that the ongoing trade dispute is having on the global economy.

XAUUSD Hourly (H1) Chart

In commodities markets, crude oil continues consolidation to recent lows down to 53.28. Oil is down almost 20% from the high in late April, wiping out about half of its rally earlier this year, due to increasing trade worries. Brent oil also trades flat to $61,23 per barrel as major oil producers are yet to agree on adjustments on output. Gold continues to attract investors as a safe-haven asset, adding more than 15 dollars and trades at 1327 zone the highest level since mid-April after President Trump slapped 5% tariffs against all imports from Mexico. The precious metal broke above all major daily moving averages turning the technical picture to bullish. Gold will find support at 1300 round figure and then at 1295, the 100-day moving average while more bids will emerge at 50-day moving average at 1287. On the upside, resistance stands at 1328.67 the high from the Asian session.

In cryptocurrencies market, bitcoin (BTCUSD) is under selling pressure today breaking below the 8,000 figure down to 7,849. The daily low for BTC was at 7,691 and the daily high at 8,556. Immediate support for BTC stands now at $7,690 the session low. On the upside, strong resistance now stands at the 8,000 round figure. Ethereum (ETHUSD) gives up 15 dollars to 243, and capitalization dropped to 26 billion. On the upside, the immediate resistance stands at 287, the recent high while the support stands at the 200 round figure. Litecoin (LTCUSD) also trades lower at 102. The crypto market cap holds above $173.0B.

On the Lookout: The Royal Bank of Australia cut its Official Cash Rate (OCR) by 0.25 bps to a record low of 1.25% — the first since September 2016. The RBA has cited downside risks to economic growth due to trade tussles while praising Chinese efforts for economic improvement. Australia’s retail sales fell -0.1% m/m in April, below market expectations, while in annual terms, sales growth continued its moderation, coming to 2.8% (a fall from March 3.2% and Feb 3.5%). Australia’s first-quarter current account deficit widened to -2.9 billion from -2.5 billion expected.

AUDUSD Daily Chart

The ECB holds its next policy meeting on Thursday, and we expected to keep interest rates unchanged though there is growing speculation it could shift to a more dovish footing.

In the America economic calendar, we await the US factory orders and weekly chain store sales data. The Chairman of the US Federal Reserve Powell is scheduled to deliver a speech.

Trading Perspective: In fx markets, soft optimism is the story today. The US dollar crushed to 97.03 on speculation over Fed rate cut after comments from the Federal Reserve on Monday raised expectations that the U.S. central bank is moving closer to a rate cut, while the Aussie dollar trades higher to 0.6990 despite the rate cut from the Reserve Bank of Australia. Kiwi also trades higher to the 0.6592 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.

GBPUSD continues the rebound which started from Friday low to 1.2660, but the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2651 and the daily high at 1.2686. Major support now stands at the 1.26 recent low. On the upside, immediate resistance now stands at 1.27, the high from Friday. Sterling shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.

In Pound futures markets, the open interest shrunk by 854 contracts at the beginning of the week, while volume rose for the second session in a row, now by around 13.8K contracts.

EURUSD trades close to yesterday high amid broad USD weakness. The pair is adding to the bullish momentum build last Friday, and now an attempt to 1.12 looks possible. On the upside, the immediate resistance stands at 1.12, the high from Tuesday, while more offers will emerge at 1.1276, the 100-day moving average. Support stands at 1.1139, Asian session low, while more bids will emerge at the 1.12 round figure. We are following news from Italy as their budget deficit dispute with the European Commission continues, and the political turmoil in Austria and Greece.

In euro futures markets, the open interest shrunk by just 134 contracts, volume, in the same line, shrunk by around 28.8K contracts.

USDJPY fell to fresh 5 month lows below the 108 figure as traders looking for safe-haven assets. Today the pair hit the low at 107.84 and the high at 108.07. The pair will find support at 107.84 recent low. On the upside, immediate resistance for the pair now stands at 108 and then at the 50-hour moving average at 108.27.

In Yen futures markets, open interest shrunk by 1.3K contracts on Monday, reversing two consecutive daily builds, volume dropped by more than 46K contracts.

USDCAD faces strong pressure down to 1.3430 as the retreat in crude oil prices, Canada’s main export item, seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 50-day moving average around 1.3392 while extra support stands at 1.3300 round figure. On the upside, immediate resistance stands at the 1.36 zone before an attempt to YTD high.

Yen attracts Bids as Trade War Intensifies

June 3, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Bank de Mexico, banks, Bitcoin, BOJ, Brexit, Cryptocurrencies, economy, EUR-USD, financial services, President Trump, Sino-US trade talks, trading platform

Asian indices started the week lower as President Trump vowed to impose a 5% tariff on Mexican imports and China blames the U.S. for the breakdown in trade talks and said it won’t back down. The Nikkei225 finished 0.92 percent lower to 20,410 below its 100-day moving average; the Hang Seng benchmark in Hong Kong finished 0.16 percent lower at 26,854. The Shanghai Composite finished 0.30 percent lower to 2,890 also below the 100-day MA, while in Singapore, the FTSE Straits Times index finished 0.08 percent higher to 3,120. Australian equities closed down 76 points or 1.2% to 6,320 — the worst one-day fall in five months.

XAUUSD Hourly (H1) Chart

European session also started the week lower as trade war intensifies across the globe and the news that the EU is preparing to launch EDP against Italy in June. DAX30 is giving up 0.84 percent to 11,628, CAC40 is 1.04 percent lower at 5,153, while the FTSE MIB in Milan is trading 0.89 percent lower at 19,626. The London Stock Exchange is down 1.10 percent to 7,082 as traders are increasingly concerned over the impact that the ongoing trade dispute is having on the global economy.

In commodities markets, crude oil continues its south trip down to 53.11. Oil is down almost 20% from the high in late April, wiping out about half of its rally earlier this year, due to increasing trade worries. Brent oil also trades lower giving up 3 dollars to $61,23 per barrel as major oil producers have yet to agree on adjustments on output. Gold continues to attract investors as safe-haven assets and trades at the 1310 zone, the highest level since mid-March after President Trump slapped 5% tariffs against all imports from Mexico. The precious metal broke above all major daily moving averages turning the technical picture to bullish. Gold will find support at the 1300 round figure and then at 1295, the 100-day moving average, while more bids will emerge at the 50-day moving average at 1287. On the upside, resistance stands at 1310.67, the high from the Asian session.

In cryptocurrencies market, bitcoin (BTCUSD) rebounds from Friday’s selloff and regained the 200-hour moving average to 8,416, the daily low for BTC was at 8,275 and the daily high at 8,752. Immediate support for BTC stands now at the $8,000 round figure, and on the upside, strong resistance stands at 8,845, the recent high. Ethereum (ETHUSD) also rebounds to 259. On the upside, the immediate resistance stands at 287, the recent high, while the support stands at 200 round figure, Litecoin (LTCUSD) also trades higher at 110. The crypto market cap holds above $174.0B.

On the Lookout: On Friday, the Trump administration eliminated India’s ability to export products to the US duty-free. The Bank Of Japan’s Kuroda noted that BOJ would continue easing to support the economy while in Japan, the Nikkei Manufacturing PMI registered at 49.8 above economist’s expectations (49.6) in May.

China’s May Caixin manufacturing PMI came in at 50.2 vs. 50.0 expected and 50.2 last, as operating conditions improved for the first time in four months.

In the America economic calendar, we await the US data on vehicle sales, construction, and the ISM manufacturing survey.

Trading Perspective: In fx markets risk off tones is the story today. The US dollar trades lower at 97.63 while the Aussie dollar adds 20 cents to 0.6944 as traders are betting that the Reserve Bank of Australia will start its first-rate cutting cycle on Tuesday reducing the cash rate by 25 basis points to 1.25%. Kiwi also trades higher to 0.6552 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.

GBPUSD continues the rebound which started from Friday low to 1.2644, but the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2618 and the daily high at 1.2654. Major support now stands at 1.26 recent low. On the upside, immediate resistance now stands at 1.27, the high from Friday, while more sellers will emerge at the 200-hour moving average at 1.2713. Sterling shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion.

In Pound futures markets, the open interest shrunk by just 237 contracts on Friday, reversing a positive streak prevailing since May 13. Volume extended the choppy activity and increased by around 48.1K contracts.

EURUSD started higher the week at 1.1173 amid early USD weakness. The pair is adding to bullish momentum build last Friday and now an attempt to 1.12 looks possible. On the upside, the immediate resistance stands at 1.12, the high from Tuesday, while more offers will emerge at 1.1245, the 50-day moving average. Support stands at the 1.1159 Asian session low, while more bids will emerge at the YTD low at 1.1105. We are following news from Italy as their budget deficit dispute with the European Commission continues, and the political turmoil in Austria and Greece.

In euro futures markets, the open interest shrunk for the second session in a row on Friday, by around 11.8K contracts. Volume rose by around 151.6K contracts, the largest build since April 23.

USDJPY fell to fresh 4.5 month lows and tested the 108 figure as traders are looking for safe-haven assets. Today the pair hit the low at 108.06 and the high at 108.37. The pair will find support at 108.06 recent low. On the upside, immediate resistance for the pair now stands at 108.96, the 50-hour moving average and then at the 109 round figure.

In Yen futures markets, open interest rose by nearly 8.6K contracts on Friday, clinching the second consecutive build. The volume went up by almost 122.5K contracts, the largest single-day build so far this year.

USDJPY Hourly (H1) Chart

USDCAD holds the 1.35 level as the retreat in crude oil prices, Canada’s main export item, seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 50-day moving average around 1.3392 while extra support stands at 1.3300 round figure. On the upside, immediate resistance stands at the 1.36 zone before an attempt to YTD high.

ECB Member Marc Jesse Joins CLS Group as Its Chief Executive Officer

May 31, 2019 by Karthik Subramanian Leave a Comment Filed Under: Industry News Tagged: banks, Capital Markets, CLS Group, CLS Settlement, David Puth, ECB, financial services, FX Markets, Marc Bayle De Jesse, T2S

CLS group

As per the latest update from multinational FX risk management firm CLS group, Marc Bayle De Jesse – current Chairman of the market infrastructure and payments committee at ECB will be joining the firm as its CEO. The report stated that Marc would join CLS group at the end of the year by which time Marc is expected to terminate all his current ties and responsibilities To European Central Bank. Marc has been part of the ECB since the start of his career and has held multiple key roles of significant importance in the central bank for more than a decade. Marc joined the central bank more than two decades ago and has held multiple key roles in the bank for more than a decade now. His role in upper echelons of the bank started when Marc became Head of T2S division at ECB back in 2006 and moved on to become the T2s program’s manager and Principle adviser by 2008, a post which he held the role for a period of six years.

He was then promoted as Director General of Market Infrastructure and Payments in May 2014 a position which he held for more than 5 years and became the Chairman of Market Infrastructure board in April 2016 before taking up his current role as Chairman of Market Infrastructure and Payments Committee. Marc is bringing the firm a wealth of experience from his vast experience as a part of upper echelon at ECB. CLS group is a multi-national FX risk mitigation and settlement service provider with head office located in New York and London to ensure fast and seamless user experience for clients on both sides of Atlantic. Marc is joining the firm to fill in the shoes of David Puth who stepped down from his role as CEO back in September 2018 post which the role has been taken care of by interim CEO and Chairman – Kenneth Harvey.

Harvey is expected to continue acting as interim CEO until Bayle takes up the role as CEO in December 2, 2019. When speaking about Marc’s appointment as CEO, Harvey was quoted saying, “Having spent 22 years at the ECB, Marc has played a central role in revolutionizing Europe’s settlement infrastructure. I believe he is extremely well placed to lead CLS and maintain and grow our unique position at the centre of the FX market. His extensive experience with central banks and market participants will help ensure we continue to respond to the needs of the industry, enhancing and developing our risk mitigation solutions”. Speaking on the same topic, Marc Jesse commented, “As a leading global market infrastructure provider, CLS plays a crucial systemic risk-mitigation role in the FX industry. I am looking forward to ensuring the organization continues to deliver the highest level of service to its clients and shareholders, as well as further expanding its capabilities as a trusted market solutions provider”.

Please feel free to let us know what you think in the comments below.

Risk aversion on the rise as global bond yields continue to fall

May 29, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: AUD/USD, banks, Bitcoin, BOC, Brexit, BTC, Cryptocurrencies, economy, ETH, eToro, EUR-USD, FED, risk aversion, Sino-U.S. trade talks, trading platform

Asian indices finished lower today as the China-U.S. trade dispute continues and a Chinese official hinted yesterday that Beijing could use its strength in rare earth minerals as leverage in its trade dispute with the United States. A rally in US 10-year treasuries saw yields slump to multi-year lows resulting in the inversion of the yield curve for the second time this year. It’s a repeat of the warning shot first fired in March this year.

The Nikkei225 finished 1.21 percent lower to 21,003 below its 100-day moving average the Hang Seng benchmark in Hong Kong finished 0.40 percent lower at 27,285. The Shanghai Composite finished 0.18 percent higher to 2,914 below the 100-day MA, while in Singapore the FTSE Straits Times index finished 0.16 percent lower to 3,154. Australian equities closed down 44 points or 0.7% to 6,440, giving up yesterday’s gains.

European session started lower today as risk aversion has been on the rise following news that EU is preparing to launch EDP against Italy in June, the DAX30 is 0.88 percent lower to 11,921 and CAC40 is 1.27 percent lower at 5,245 while the FTSE MIB in Milan is trading 0.99 percent lower at 20,057. The London Stock Exchange is giving up 0.84 percent to 7,208 as traders increasingly concerned over the impact that the ongoing trade dispute is having on the global economy.

In commodities markets, crude oil gives up 1.29 percent to 58.38 after American Petroleum Institute data showed that U.S. crude stockpiles rose unexpectedly the previous week. Brent oil trades also lower at $69,38 per barrel as major oil producers have yet to agree on adjustments on output. Gold is trading around 1283 zone in a quiet session. The precious metal is trading between 50 and 200-hour moving average turning the technical picture to neutral. Gold will find support at 1272 the low from the previous week while more bids will emerge at 200-day moving average at 1255 on the upside resistance stands at 1296 the 100-day moving average.

In cryptocurrencies market, bitcoin (BTCUSD) retreats today to 8,525, the daily low for BTC was at 8,410 and the daily high at 8,735. Immediate support for BTC stands now at $8,000 round figure, on the upside strong resistance stands at 8,845 the recent high. eToro’s, Mati Greenspan, says Bitcoin’s increasingly limited supply is the number one reason for the leading cryptocurrency’s 2019 rally. Ethereum (ETHUSD) also gives up 6 dollars to 263, on the upside the immediate resistance stands at 273 the high from yesterday while the support stands at 258 and the 100 hour SMA, Litecoin (LTCUSD) trades lower at 111.10. The crypto market cap holds above $175.0B.

On the Lookout: Donald Trump said yesterday that his administration was “not ready” to make a trade deal with China, adding tariffs on the country’s imports could go up “substantially.” Huawei filed a motion in USA court challenging the constitutionality of a law that limits its sales of telecom equipment.

In European macro news the France Gross Domestic Product (QoQ) matched economist’s forecasts (0.3%) in 1Q and in Switzerland the KOF Leading Indicator came in at 94.4, below expectations (95.9) in May. Fears of a coming battle between Italy and EU returned this week as reports emerged stating the EU is considering disciplinary action over the Italian government’s failure to rein in debt.

The monetary policy meeting by the Bank of Canada (BOC) will gain also market focus. The Canadian central bank is likely not to alter present monetary policy with 1.75% overnight rate.

In the America economic calendar, we await the Richmond Federal Reserve manufacturing index will be released, along with weekly mortgage finance data.

Trading Perspective: In fx markets, major currencies are little changed, the US dollar trades higher to 97.95, the Aussie dollar trades flat at 0.6918 supported by better Australian consumer confidence data and the rally in iron ore prices. Kiwi gives up 20 cents to 0.6528 level.

GBPUSD trades flat at 1.2655 as the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2641 and the daily high at 1.2664. On the upside immediate resistance now stands at 1.27 the high from Asian session while more sellers will emerge at the 200-hour moving average at 1.2713. Sterling shows persistent weakness amid UK political uncertainty and also on the back of risk aversion.

In Pound futures markets open interest rose by 7.2K contracts volume, shrunk by more than 9K contracts.

EURUSD also trades flat today to 1.1160 on trade tensions, patient Fed and EU weakness. The pair is losing the bullish momentum build last Friday and now looks neutral. On the upside, the immediate resistance stands at 1.12 the high from yesterday, while more offers will emerge at 1.1245 the 50-day moving average. We are following news from Italy as their budget deficit dispute with the European Commission continues.

In Euro futures markets, traders added 2.7K contracts to their open interest positions on Tuesday from Friday’s final 535,859 contracts, volume increased by around 62.7K contracts.

USDJPY Daily Chart

USDJPY is down for one more day giving up 0.13 percent to 109.20. Today the pair hit the low at 109.14 and the high at 109.43. The pair will find support at 109.14 the low from Asian session, on the upside immediate resistance for the pair now stands at 110 and then at 110.54 the 100-day moving.

In Yen futures markets open interest rose by just 920 contracts on Tuesday extending the erratic activity seen as of late, volume increased by around 49.1K contracts.

USDCAD managed to break above the 1.35. The pair will find immediate support at the 50-day moving average around 1.3392 while extra support stands at 1.3300 round figure. On the upside, immediate resistance stands at the 1.36 zone before an attempt to YTD high.

USDCAD Daily Chart

Arnab Nilim Appointed As Head of FX London Branch of Goldman Sachs Asset Management

May 28, 2019 by Karthik Subramanian Leave a Comment Filed Under: Industry News Tagged: Alliance Bernstein, Arnab Nilim, banks, brokerage, Capital Markets, citigroup, financial services, Goldman Sachs, Goldman Sachs’s Asset Management, trading platform

The London branch of global investment banking giant Goldman Sachs’s Asset Management division now has a new head of FX. As per the statement released by the banking giant, Arnab Nilim an industry veteran with nearly two decades of experience in the finance industry has now been hired by the firm to serve as Managing Director and Head of Currency in the Asset management division. For his new role as Head of FX, Arnab has relocated from New York to London having resigned and cut all professional ties with his previous firm. Arnab’s LinkedIn profile also reflects his appointment at Goldman Sach’s London office which suggests he joined the firm earlier this month.

Prior to his appointment as Head of FX in Goldman Sachs’s Asset management division, Arnab served as SVP & Lead Currency Portfolio Manager at Alliance Bernstein in the New York office for more than 7 years having joined the firm back in March’ 12. Alliance Bernstein is yet another giant in the investment management sector on a global level while also known for its market research capabilities. The firm currently has assets worth nearly USD 500 Billion under management. Before his tenure at Alliance Bernstein, Arnab served as an EM currency/rates derivatives trader and Vice President for Citigroup for more than 7 years in their US office from January 2005 to February 2012. Prior to his long career in the financial sector, Arnab Nilim was a graduate of the University of California, Berkeley where he graduated with a Ph.D. focused on Stochastic Controls and Optimisation.

As per data in his LinkedIn profile, while at the University of California, Berkeley – Arnab was awarded the Leon Chua Award for best research in the field of non-linear science. Nilim’s migration to Goldman Sachs comes at a time when the global FX market is suffering from low volatility issues and geopolitical/economic power struggle. The firm was also severely hit by same as visible from the release of the firm Q4 data which showed that it was the worst Q4 of the decade and also suggested that the firm lost a significant amount of cash during last three months last year via a regulatory disclosure. However, Goldman Sachs is not alone in suffering loss as many other major brokers and trading venues have also reported dovish first-quarter results citing low volatility and lower levels of client activity as the reason for the drop in quarterly statement data.

Please feel free to let us know what you think in the comments below.

Trading View & Saxo Bank Securities Partner to Allow Japanese Clients to Trade Using TV’s Platform

May 28, 2019 by Karthik Subramanian Leave a Comment Filed Under: Industry News Tagged: banks, Dennis Glover, economy, Francisco Izawa, Saxo Bank, Saxo Bank Group, saxo bank securities, trading platform, Trading view

Japanese banking giant Saxo bank’s retail brokerage division – Saxo Bank Securities recently released a statement earlier today citing its partnership with Trading View. According to the statement, this partnership between the two firs is aimed at facilitating access for Trading View’s platform for the broker’s clients in Japan.

When speaking about the partnership between two parties, Francisco Izawa, Chief Executive Officer of Saxo Bank Securities commented: “Through this partnership, users will be able to trade a wide range of products, including currency pairs and contracts-for-difference (CFDs) provided by Saxo Bank Securities, directly from Trading View”. Izawa was also noted saying that, “With the ability to provide these new solutions, we have enhanced our ability to provide our clients with a trading environment akin to that of a professional trader”.

Trading View is a social networking platform for traders and investors across the globe which deals with a wide range of financial assets while also doubling as a trade-related technology and service provider owing to its charting and trading platform products and solutions. Trading View on average sees around 8 million users across the globe visit their site and use their product solutions on a daily basis. The most popular product of Trading View is their free for all access to trading charts, price quotes, and strategy information. While the partnership has become fully active, clients of Saxo Bank Securities can only trade with 150 currency pairs at the moment. However, the brokerage house has promised in its statement that it has plans to add around 6000 CFD’s on Trading View’s trading platform.

While this partnership enables Trading View to gain entry into the Japanese market’s investment sector, for now only clients of Saxo Bank Securities will be able to gain access to Trading View’s trading platform. This deal makes Trading View appear in the Japanese market as an affiliate of Saxo Bank Securities as there aren’t many broker-dealers in Japan who can give their clients’ access to Trading View’s trading platform. When speaking on the topic of dealing with a Japanese brokerage house, Dennis Glover, CEO of Trading View commented, “We are delighted to partner with the well-known and well-known Saxo Bank Group. We have access to Saxo Bank’s FX price quotes on our platform. As a result, we are confident that the platform’s value will be further enhanced and that customers from all over the world – as well as Japan – will benefit from this partnership.”

Please feel free to let us know what you think in the comments below.

Futures on Money Market benchmark RUSFAR begin trading on MOEX

May 26, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: banks, derivatives markets, lending transactions, market makers, MOEX, money-market, OTC Derivatives Market, RUSFAR, trading

On 21 May 2019, Moscow Exchange will launch cash-settled futures contracts on RUSFAR, which is the most representative rate measuring the value of the Russian Ruble in deposit and lending transactions by banks, brokers and non-financial companies.

The new contracts will serve as an effective tool to hedge the interest rate exposure of liquidity management and a portfolio of securities, as well as implement a range of trading strategies on the Money, Equity & Bond and Derivatives Markets.

The contract settlement price is based on the RUSFAR average value over the settlement month. Twelve monthly contracts with

Igor Marich, FX and Money Market Managing Director at Moscow Exchange, commented

settlement from June 2019 to May 2020 will be available for trading at the same time. The contract’s nominal value will be RUB 1 million.

Igor Marich, FX and Money Market Managing Director at Moscow Exchange, commented: “With the launch of RUSFAR futures, we are taking the final step in building an ecosystem of liquidity and interest rate risk management. In 2013, we rolled out repo with the CCP, which was complemented by GCC repo in 2016. These instruments laid the cornerstone for MOEX’s Money Market, bringing together banks, brokers, asset management, insurance companies and industrial corporations and thereby ensuring market representativeness of the ruble rate RUSFAR. A week ago, RUSFAR interest swaps were introduced on MOEX’s Standartised OTC Derivatives Market with the first trades already executed by the participants. RUSFAR futures will help make rate derivatives available to all participants of MOEX’s Derivatives Market and their clients”.

On 18 April 2019, Moscow Exchange presented a new money market benchmark tracking the value of secured money – the RUSFAR. The gauge is calculated based on CCP-cleared repo transactions and orders in general collateral certificates (GCC), which is now the most widely traded segment on the Russian money market. More than 200 participants connected to the GCC repo market, setting market rates for regular terms O/N, 1W, 2W, 1M, 2M and 3M by making anonymous order book trades, and 15 market makers quote the instrument on a regular basis.

From 13 May 2019, MOEX’s Standartised OTC Derivatives Market offered an overnight index swap (OIS) on RUSFAR with maturities from three days to one year.

Currently, Moscow Exchange offers 68 futures contracts and 38 options on the futures. The underlying assets include equity indices, shares, currency pairs, precious and industrial metals, oil and other commodities, as well as interest rates. In 2018, derivatives trading volumes on MOEX grew by 5.6% to RUB 89.3 trln.

Sterling at Four-Month Lows

May 22, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: banks, Bitcoin, Brexit, Capital Markets, Cryptocurrencies, EUR-USD, Huawei, monetary policy, Sino-US trade talks, Theresa May, trading platform

Asian markets finished mixed today amid global politics and geopolitical uncertainty. The Nikkei225 finished 0.05 percent lower to 21,283, the Hang Seng benchmark in Hong Kong finished 0.04 percent lower at 27,647. The Shanghai Composite finished 0.87 percent lower to 2,880, while in Singapore, the FTSE Straits Times index finished flat at 3,184.

Australian stocks clawed back earlier losses to finish in positive territory for a sixth straight trading session. The market was lifted by gains from the Consumer Discretionary, Materials, Energy and Industrials sectors, which outweighed weakness in the Consumer Staples, Financials and Telco sectors. The ASX200 ended the session 10 points higher or 0.2% to 6,510. ASX200 is now up 15.3% year-to-date.

European session started mixed today amid geopolitical concerns and the upcoming election in EU. The DAX30 is 0.07 percent lower to 12,133 and CAC40 is 0.06 percent lower at 5,383 while the FTSE MIB in Milan is trading 0.27 percent lower at 20,643. The London Stock Exchange is adding 0.48 percent to 7,364 as May proposed giving MPs a vote on putting her Brexit deal to a referendum in an attempt to win over Parliament over to her side and get her proposals through.

In commodities markets, crude oil trades lower today at 62.48 after American Petroleum Institute data showed that U.S. crude stockpiles rose unexpectedly the previous week. Brent oil also trades lower at $71,73 per barrel. Major oil producers have yet to agree on adjustments on output. Gold consolidates around 1273 zone at the two weeks low. The precious metal breached the 100-day moving average, and that gave the control back to bears. XAUUSD technical picture is bearish now after yesterdays sell-off. Gold will find support at 1272, the April low, while more bids will emerge at the 200-day moving average at 1255. On the upside, resistance stands at 1296, the 100-day moving average.

In cryptocurrencies market, bitcoin (BTCUSD) consolidates near recent highs just below the 8,000 mark. The daily low for BTC was at 7,839 and the daily high at 8,101. BTCUSD breached the 50 and 100-hour moving average during the weekend and bulls took control for the short term. Immediate support for BTC stands at $7,644, the 50-hour SMA round figure and then at the 200-hour moving average at 7,147, and on the upside, strong resistance stands at 8,300, the high from the Asian session. Ethereum (ETHUSD) continues higher to 256. On the upside, the immediate resistance stands at 263, the high during the Asian session, while the support stands at 236 and the 100 hour SMA, Litecoin (LTCUSD) digests the high at 91.51. The crypto market cap holds above $174.0B.

On the Lookout: U.S. Commerce Department on Monday granted Huawei Technologies Co Ltd a license to buy U.S. goods until Aug. 19th The Australian construction data report delivers a contraction of 1.9% in the first three months of 2019 against economist’s expectations for a no change.

In the Central Banks calendar, the European Central Bank President Mario Draghi is due to speak in Frankfurt today. Also, we’ll get the FOMC minutes from the meeting earlier this month.

In the America economic calendar, we await the weekly data on the mortgage.

Trading Perspective: In forex markets, the US dollar trades higher at 97,92 as traders digest the developments in US-Sino trade war. The Aussie dollar started the week strong after Prime Minister Scott Morrison registered surprise victory in the general election, but today during the Asian session, it got a hit down to 0.6879 as RBA Governor Philip Lowe said the board “will consider the case” for an interest rate cut on June 4. Kiwi also trades lower breaking below the critical 0.65 mark. As of writing, the pair is trading at 0.6497.

GBPUSD Hourly (H1) Chart

GBPUSD failed to materialize the jump during the PM May speech which lifted the pair above 1.28, but traders very fast dumped the Pound as T. May failed to deliver a solid solution in the dust of Brexit uncertainty. The pair hit the daily low at 1.2671 a fresh four-month low and the daily high at 1.2718. Bears are in full control now and a test of 1.2670 the January 15th bottom looks possible. On the upside, immediate resistance now stands at 1.27 and then at the 50-hour moving average around 1.2720.

In Sterling futures, the open interest increased for the seventh session in a row on Tuesday, this time by around 4.7K contracts. The volume posted the largest single day build since March 29.

EURUSD trades at three-week lows at 1.1150 as any attempt to the upside meets strong bids. The pair made the Asian high at 1.1165 and the low at 1.1150. The pair breached all major moving averages last Friday and now is looking for support at the yearly low down to 1.1115. On the upside, the immediate resistance stands at 1.1180 the high from yesterday, while more offers will emerge at 1.1245, the 50-day moving average.

In euro futures, the open interest rose by 714 contracts on Tuesday, reaching the fourth consecutive build in a row. Volume, also rose by around 64.7K contracts, extending the choppy activity for one more session.

USDJPY trades at 110.40 amid general USD strength across the board. Today the pair hit the low at 110.36 and the high at 110.62. The pair will find support at 109.54 Friday low. On the upside, immediate resistance for the pair stands at 110.51, the 100-day moving and then at 111.01 the 50-day moving average.

In Yen futures, the open interest shrunk by 4.5K contracts on Tuesday vs. an increase of almost 26.5K contracts in volume.

USDCAD is trading lower for the third day at 1.3405. The pair will find immediate support at the 50-day moving average around 1.3392 while extra support stands at the 1.3300 round figure. On the upside, immediate resistance stands at 1.3435, the 100-hour moving average, while a break above can escalate the rebound towards the 1.35 zone.

USDCAD Hourly (H1) Chart

CFTC Commissioner Endorses SWAP Regulation Framework

May 20, 2019 by Michael Volpe Leave a Comment Filed Under: Feature Articles Tagged: banks, CFTC Commissioner, energy markets, exchanges, Financial Crisis, fraud, industry, market, SWAP Regulation Framework

A Commodities Futures Trading Commission (CFTC) Commissioner threw his support behind the swap regulation framework which started in 2010.

CFTC Commissioner Dan Berkovitz made a speech at Energy Risk 2019 held in Houston, Texas earlier this week.

During the speech, he noted, “Over the past decade, the regulatory system for our financial and commodity markets has also undergone a remarkable transformation. Following the collapse of global financial markets in September 2009, the G20 convened in Pittsburgh to establish the principles that the nations of the world would follow to safeguard the global financial system. The core objectives established by the G20 leaders included raising bank capital standards, increasing central clearing and exchange trading for standardized derivatives, and fostering fair and transparent competition in our financial markets. Concurrently, the G20 leaders pledged to promote global energy security, the development of clean, sustainable energy supplies, and improved regulatory oversight of the energy markets.

Rostin Behnan, CFTC Commissioner

“In 2010, Congress passed the Dodd-Frank Act. This legislation created a new framework to regulate swaps, which had previously been unregulated. Congress directed the CFTC to write rules to decrease risk and increase transparency in the swaps market, including the registration of and business conduct standards for the large swap dealers, mandating that certain standardized swaps be cleared and traded on regulated facilities, and requiring that all swaps be reported to a swap data repository. In addition to broadening its jurisdiction to include swaps, Congress also gave the Commission new tools to prosecute fraud and manipulation.
“As a result of this new framework and the CFTC’s implementing regulations, our financial markets are safer and more resilient than they were in 2008. The mandates for swap dealer registration and swap clearing, trading, and reporting have been applied to large segments of the swaps market. Today, 105 swap dealers and 23 swap execution facilities are now registered with the Commission. Almost 89% of interest rate swaps and 96% of broad index credit default swaps are cleared through a central clearinghouse. Nearly 98% of all swap transactions involve at least one registered swap dealer.”

The framework which Berkovitz referred to started at the G20 Conference in 2010 held in Pittsburgh; at that conference- which brings the world’s twenty biggest economies- a new framework for trading swaps was agreed upon.

This new framework moved swaps, which trade over the counter, and provided much more oversight, including the introduction of clearinghouses.

Swaps, and particularly credit default swaps, were blamed for contributing to the 2008 financial crisis; credit default swaps are supposed to offload credit default risk by moving baskets of assets which banks have gotten too heavy in to other banks.

In the run up to the 2008 financial crisis, they were treated far more like a casino than a hedging tool.

Berkovitz, in the speech, also said derivatives “do not always evolve naturally within a given industry.”

He pointed to oil markets, once dominated by John D. Rockefeller, as an example; Rockefeller was famous for not only turning oil into an industry, but for being no fan of markets, exchanges, and competition.

At its height, his company Standard Oil controlled approximately 90% of all oil production in the US.

Berkovitz noted, “Rather it was the belief of John D. Rockefeller and his firm, Standard Oil, at the dawn of the age of oil, that commodity exchanges were a source of price volatility.
“It did not take long after ‘Colonel’ Drake drilled the first oil well in 1859, and the oil rush was on in Pennsylvania, for oil markets to develop.  At first, producers and buyers met regularly at specific locations to transact, and these gathering places soon evolved into exchanges.  The Titusville Oil Exchange opened in Pennsylvania 1871, and the National Petroleum Exchange in New York was founded in 1882. Both exchanges offered oil spot and futures contracts. Like markets today, the exchanges thrived when prices were volatile.
“Yet the nascent exchanges developed some very powerful enemies.  Rockefeller and the oil producers believed that speculators who were short selling futures contracts were causing volatility and depressing the price of oil.  So Standard Oil and other members of the Producers’ Protective Association stopped buying or selling on the exchanges, choking off their liquidity.  By the beginning of the twentieth century, the oil exchanges had collapsed.
“As one contemporary described it, ‘the regulation of prices by the Standard has eliminated the speculation in certificates entirely.’  For Rockefeller, it was not free markets, but rather firms acting together to avoid ‘ruinous competition’ and prevent uncontrolled speculation, that stabilized prices and brought benefits to the consumer.  Futures markets for crude oil and refined products would not reappear for nearly a hundred years.”

Berkovitz noted that despite Rockefeller’s dominance over oil, markets did eventually develop in oil, markets which continue to trade today.

“It turned out that Rockefeller also was wrong about the value of the exchanges. Suffocating the exchanges did not eliminate price volatility. Boom and bust would continue to plague the oil industry throughout its existence. But oil firms needed a way to manage this volatility. Although it would take another 70 years before oil futures exchanges re-emerged, once trading began it did not take long for industry participants to see the utility of these risk-management tools and embrace these markets.”

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