Financial markets Archives - The Industry Spread

New Vision for Council of Financial Regulators

August 22, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: Financial markets, Financial regulators, FMA

The Council of Financial Regulators (CoFR) has announced a new vision for New Zealand’s economic wellbeing and has welcomed the addition of the Commerce Commission to the forum.

The new vision aims to contribute to maximising New Zealand’s sustainable economic wellbeing through responsive and coordinated financial system regulation, and allows for a longer-term view that more effectively recognises the specific responsibilities of each agency.

CoFR works to identify and respond to issues of cross-agency relevance. CoFR’s members are the Reserve Bank, Financial Markets Authority, the Treasury, Ministry of Business, Innovation and Employment, and now the Commerce Commission. Responsibility for chairing CoFR alternates between the Reserve Bank Governor and the FMA Chief Executive.

The Reserve Bank’s Governor, Adrian Orr, said: “We recognise our responsibility for joint stewardship (te hunga tiaki) of a healthy and efficient financial system that benefits all New Zealanders.”
Rob Everett
The Financial Markets Authority’s Chief Executive, Rob Everett, said: “The Council was instrumental in launching the recent conduct and culture review of New Zealand’s banks and life insurers. This illustrated the importance and benefits of regulators working together to tackle issues that span across the financial markets’ regulatory system. Ensuring a coordinated response to such issues will help to build confidence in the regulation of New Zealand’s financial markets.”
Mr Orr says, “Bringing the Commerce Commission on board with its consumer credit focus is a welcomed addition to this forum.”

CoFR meets quarterly to discuss financial markets regulatory issues, risks and priorities, and is attended by the heads of each agency. The existence of CoFR does not derogate from the existing statutory rights and responsibilities of the respective authorities. The most recent meeting occurred yesterday.

Its main objectives are to:
• Develop a collective view on longer-term strategic priorities for the financial system;
• Identify and monitor important issues, risks and gaps in the financial system that may impinge upon achievement of member agencies’ regulatory objectives;
• Agree on collaborative responses to issues that require cross-agency involvement and put in place appropriate mechanisms to deliver them.

ENDS

About the Council of Financial Regulators

The Council of Financial Regulators (CoFR) has been operating since 2011 as a forum for agencies with responsibility for financial sector regulation. CoFR is comprised of the Reserve Bank, Financial Markets Authority, the Treasury, Ministry of Business, Innovation and Employment, and recently the Commerce Commission as a forum to share information, identify issues and develop coordinated responses to issues that may require cross-agency involvement.

CoFR agreed to a financial markets regulatory charter in 2016, which sets out how we operate our shared ownership of regulatory functions in this area. MBIE developed the charter as a management tool to set expectations and provide an overview of the regulatory system. The new vision seeks to build on this charter.

CoFR formally meets quarterly to discuss financial markets regulatory issues, risks and priorities. It comprises senior leaders from each agency and from time to time, CoFR may invite representation from other regulatory agencies and public authorities, as required.

Investor Confidence Stable and Improving Over Time

July 28, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: Financial markets, FMA, Investor confidence

Investor Confidence in New Zealand’s financial markets has remained stable over the past two years, despite volatile global markets and a focus on the culture and conduct of major financial institutions in Australia and New Zealand.

The Financial Markets Authority (FMA) today released its annual survey into the public’s attitude to financial markets.

A total 65% of investors said they were confident in New Zealand’s financial markets, in line with 66% last year. The main reasons given for an increase in confidence in the last 12 months included a rising economy and better understanding of financial markets.

FMA Chief Executive Rob Everett said: “While investor confidence has been stable over the past two years, it’s encouraging to see that it has steadily improved since we first started the survey six years ago.”

Investor Confidence 2013-19

“Not surprisingly, investor confidence can be impacted by factors such as market volatility or global events, so we expect to see investor confidence move around from year to year,” said Mr Everett. “What’s more important is the longer term trend which clearly shows investor confidence on the rise.”

The survey found that more investors are receiving information about their investments, with 58% of these investors finding the information helpful. The proportion of investors finding the materials they receive helpful has been on a steady increase since 2013.

Did the investment materials you received help you make an informed decision?

A total 86% of New Zealanders aged 18 years or over have some form of investment. The most common forms of investments are KiwiSaver (66%), Term deposits (34%), Shares (17%), Managed funds (14%) and Residential property (14%).

For one-third of New Zealanders (32%), KiwiSaver is their only investment and their confidence level lags investors in other products. Just 64% of KiwiSaver investors said they were confident in financial markets, compared with 85% of investors in managed funds or investors who had bought their own shares.

Mr Everett said this underlined the importance of continuing to improve the information provided to KiwiSaver members by their providers, as well as efforts to encourage KiwiSaver members to take a greater interest in their investment.

“Over the past few years, the FMA has worked with KiwiSaver providers to include more information on fees in KiwiSaver statements and next year the industry will begin including a forecast retirement balance for every KiwiSaver member,” said Mr Everett.
“These are important changes that will help KiwiSaver members see how well they are tracking towards their retirement goals.”

Dollar Slips, Yields Fall, Brexit Fears Hound the Pound

July 18, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, CFTC, ECB, economy, EUR-USD, FCA, FED, financial institutions, Financial markets, financial services, FX trading, GBP-USD, Sino-U.S. trade talks, trading, trading platform, USD/JPY

Summary: The Dollar eased against most of its rivals following softer June Housing Starts and Building Permits data. Expectations that the Fed would lower interest rates led to a fall in US bond yields. Stronger-than-forecast US retail sales data had lifted the Greenback yesterday. Fears of a no-deal Brexit continued to hound the Pound, which hit fresh 27-month lows at 1.2382 before rebounding to 1.2430. UK Brexit Secretary Steve Barclay said that the risk of a no-deal split with the European Union is “under-priced.” The Euro hit a one-week low at 1.11998 before climbing back to 1.1225, at the lower end of its recent range. Expectations of an easing by the ECB has kept the Single Currency on the defensive. The Australian Dollar was little changed at 0.7010 (0.7013 yesterday). USD/JPY slipped to 107.99 from 108.27 on lower US yields. The benchmark US 10-year treasury yield was down 6 basis points to 2.05%. Japan’s 10-year JGB yield was unchanged at -0.13%.

Forex Factory US Building Permits – 18 July 2019

Wall Street stocks fell on weaker than expected earnings.
US June Housing Starts missed forecasts at 1.25 million from 1.26 million. June Building Permits fell to 1.22 million from 1.29 million, and against an expected 1.30 million.
The Fed’s Beige Book economic report saw that the longest US economic expansion remained intact amidst trade risks.

Daily FX EUR USD Chart – 18 July 2019

EUR/USD – The Euro finished slightly higher at 1.1225 after trading in a narrow 1.11998 to 1.123336 range overnight. German 10-year bond yields were 4 basis points lower to -0.29%. The one week low of 1.1200 is providing solid support.
GBP/USD – Sterling slumped to a fresh 27 week low at 1.23820 before rebounding to 1.2430. Traders continued to sell the Pound on the perception that risks are growing for the UK to leave the EU without a transition deal in place. The latest Commitment of Traders report saw speculators dump the Pound for the 4^th straight week.
USD/JPY – The Dollar eased against the Yen to 107.99 from 108.27 yesterday, down 0.22%. Lower US bond yields continue to drag the Greenback lower. Speculative JPY shorts were trimmed by a large USD 1 billion.
AUD/USD – the Aussie Dollar was little changed at 0.7013 (0.7010 yesterday). Australia’s June Employment report is released later today. The dovish leaning RBA kept the Aussie Battler in check, while speculative Aussie short covering supported the currency.

On the Lookout: Today sees Japan’s Trade Balance and Australia’s June Employment report in Asia. The lone European report today comes from Switzerland, reporting its June trade balance.
UK data follow with June Headline and Core Retail Sales, (month and annual). Finally, US Weekly Unemployment Claims and Philadelphia Fed Manufacturing Index finish the day’s reports.

Trading Perspective: With FX trading in tight summer ranges we look at market positioning. Saxo Bank’s Bloomberg Commitment of Traders/CFTC report for the week ended July 2 (delayed due to the US 4^th of July holiday) saw continued reduction of total net USD longs by speculators. According to Saxo Bank, bullish Dollar bets have now been cut by 65% from the late April peak. The bulk of these cuts have been against the Euro, Canadian Dollar and Yen. The main exception among the major currencies was Sterling (not surprising) where net GBP shorts have increased for the 4^th straight week.

Saxo Bank – Bloomberg COT Report – 18 July 2019

EUR/USD – The Euro held the support level around 1.1200 before rallying to close at 1.1225. This morning the Single Currency opens at 1.1229. Immediate resistance lies at 1.1240 (overnight high traded 1.12336). The next resistance level can be found at 1.1280. Immediate support at 1.1200 should hold with the next support level at 1.1180. The latest COT report was net short Eur bets cut further to -EUR 31,733 from the previous week’s -EUR 56,295. Look for a likely range today of 1.1210-1.1260. Prefer to buy dips.
GBP/USD – Sterling continues to trade heavy with the risk skewed to the downside. That said, Sterling short bets for the week ended July 2 increased to -GBP 64,244 contracts from the previous week’s -GBP 58,937. This is the 4^th straight week of GBP selling. Total short GBP short contracts stand at US$5.69 billion. That is a danger sign despite risks of the Pound grinding lower. Immediate support lies at 1.2380 (overnight low at 1.2382) followed by 1.2340. Immediate resistance lies at 1.2460 and 1.2500. Look for a likely range today of 1.2385-1.2485. Prefer to buy dips.
USD/JPY – The Dollar fell against the Yen on the lower US 10-year yield. USD/JPY closed at 108.00 after trading to 107.971 overnight. Immediate support lies at 107.80 followed by 107.60. Immediate resistance can be found at 108.30 and 108.60. The latest COT report was net speculative JPY shorts cut to -JPY 1,227 (week ended July 2) from the previous week’s -JPY 10,147. That’s virtually square. Look for a likely range today of 107.80-108.30. Just trade the range shag on this one.
AUD/USD – The Aussie was little changed, closing at 0.7013. The dovish tone from the RBA meeting minutes failed to push the currency any lower as shorts continue to support the Battler. Australia is forecast to have created 9,000 jobs in June from May’s 42,300 while the Jobless rate is expected to remain at 5.2%. The latest COT report saw speculative Aussie shorts trimmed to -AUD 58,735 contracts (week ended July 2) from -AUD 66,320. AUD/USD has immediate support at 0.6990 (overnight low 0.69962) followed by 0.6960. Immediate resistance can be found at 0.7030 (overnight high 0.70249) and 0.7060. Look to trade a likely range of 0.6990-0.7040. Prefer to buy dips.

Happy Thursday and trading all.

Powell, Fed Reinforce Rate Cut Stance, Dollar Sinks

July 11, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, Financial markets, financial services, FX, FX trading, GBP-USD, trading, trading platform, USD/JPY

Summary: Federal Reserve Chairman Jerome Powell boosted expectations of a near-term rate cut, saying the US central bank was “ready to act” to sustain the decade long economic expansion. The FOMC’s June meeting minutes confirmed Powell’s outlook struck at his testimony before Congress.
Traders sold the US Dollar across the board, expecting the Fed to deliver a 0.25% cut at their July meeting. The Euro advanced 0.43% to 1.1252, while Sterling rallied to 1.2505 from 1.2465. USD/JPY fell to 108.47 from 108.87. The Aussie climbed 0.43% to 0.6960. New Zealand’s Kiwi jumped 0.62% to 0.6645 from 0.6608, finishing as best-performing currency among the majors. Emerging Market currencies saw the biggest gains with South Africa’s Rand soaring 1.5% against the Greenback (USD/ZAR 13.9885 from 14.1850). The Dollar dropped to 6.8720 Chinese Yuan from 6.8920.

CNBC US 2-Year Bond Yield – 11 July 2019

Short-dated US treasury yields sank with the 2-year yield down 8 basis points to 1.83%. The yield curve widened as 10-year rates were unchanged at 2.06%. Wall Street stocks rallied with the S&P 500 trading above 3,000 before easing to 2,993 at the close. The Dow was up 0.26% to 26,860.
China’s Annual CPI in June was unchanged at 2.7% while annual PPI was lower than forecast at 0.0% from 0.3%. French and German Industrial Production data both bettered expectations. UK June GDP matched forecasts while Manufacturing and Industrial Production underwhelmed.
The Bank of Canada left its key interest rate unchanged at 1.75%, as expected.

EUR/USD – the Euro advanced to 1.12643 before settling at 1.1252 in New York late afternoon. Broad-based US Dollar weakness boosted the Single Currency.
USD/JPY – The Dollar retreated against the Yen after failing to trade above 109.00. USD/JPY settled at 108.47 from 108.87, 0.48% lower. The lower short-dated US bond yields weighed on the Dollar.
AUD/USD – The Aussie Battler jumped off it’s low at 0.69105 to 0.6969 before settling at 0.6960, up 0.43%. The overall weaker Greenback lifted the Aussie off it’s base as the buyers came in full force.
GBP/USD – Sterling rallied 0.31% to finish just above 1.2500 at 1.2505. The British currency also benefitted from overall USD weakness although the rally was limited with the miss in both Manufacturing and Industrial Production data yesterday.

On the Lookout: Jerome Powell delivers the second instalment of his testimony before the US Senate Banking Committee (12 am Sydney, 12 July). RBA Assistant Governor Guy Debelle speaks at the FX Week USA event in New York (11.10 pm Sydney time). Prior to that, the US reports it’s June Headline and Core CPI. Markets will focus on the data after Powell cited weak inflation as one of his concerns.
Australia starts off today’s reports with second tier M1 Inflation expectations and June Home Loans reports. Euro area Final CPI (France and Germany) data follow. The Bank of England Financial Stability Report and ECB’s latest Monetary Policy Meeting Accounts are due to be released. US Weekly Unemployment Claims round up today’s data releases.
On the trade front, Dow Jones reported that the US blacklisting of Chinese tech giant Huawei has become a stumbling block in talks. And according to the Wall Street Journal, US Treasury Secretary Mnuchin has urged US suppliers of Huawei Technologies to seek licenses to resume sales to the blacklisted company.

Trading Perspective: The Dollar fell across the board after Powell boosted expectations of a rate cut which was backed by Fed minutes. The Dollar Index (USD/DXY), which is really a mirror of the Euro, fell to 97.127 (97.50 yesterday). Which is still higher than last week, just prior to the release of the US Payrolls report. FX ranges are still intact, but a likely downside USD break is in the making.

Trading View USD DXY 6 M CHART – 11 JULY 2019

Benchmark US 10-year bond yields were unchanged at 2.06%. However, rival yields climbed. Germany’s 10-year Bund yield was up 5 basis points to -0.31%. Japan’s 10-Year JGB yield was at -0.13% from -0.15%. UK ten-year gilt rates were up 4 basis points to 0.76%. As the yield differentials between the US and its Rivals narrow, the Greenback will retreat.

EUR/USD – The Euro bounced off the 1.1200 support level after trading briefly to 3-week lows at 1.1193 earlier this week. The Single currency was also boosted by better-than-expected Euro area Industrial Production data yesterday. EUR/USD traded to an overnight high at 1.12643 before settling at 1.1252. Immediate resistance lies at 1.1270 followed by 1.1300. Immediate support can be found at 1.1240 and 1.1210. Look to buy dips with a likely range today of 1.1240-1.1290.

DAILY FX USD JPY Chart – 11 JULY 2019

USD/JPY – The Dollar eased against the Yen after trading to 108.991 last night. USD/JPY closed at 108.47 before easing further in early Sydney to 108.34. While the US 10-year bond yield was unchanged at 2.06%, Japanese ten-year rates were higher. USD/JPY has immediate support at 108.40 followed by 108.00. The next support level lies at 107.70 (strong). Immediate resistance can be found at 108.60 and 108.90. Look to sell rallies with a likely range today of 108.20-108.70.
AUD/USD – The Aussie came back in true Battler fashion, climbing to 0.69691 overnight highs before settling at 0.6961 currently. Immediate resistance can be found at 0.6970, a break of which would yield 0.7000. Immediate support lies at 0.6940 followed by 0.6910. Assistant Governor Guy Debelle speaks tonight in New York at the FX Week USA conference. Look to buy dips with a likely range of 0.6950-0.7000.
GBP/USD – Sterling managed to edge higher against the broad-based weaker US Dollar. The British Pound remains constrained by Brexit jitters and recently disappointing UK economic data. Which could see the Bank of England turn dovish on rates. However, short GBP market positioning continues to grow. Speculators extended their GBP short bets in the latest COT/CFTC report to -GBP 64,244 contracts from -GBP 58,937. The short bets are near the biggest they’ve been in a year. Immediate support can be found at 1.2470 and 1.2440. Immediate resistance lies at 1.2540 and 1.2590. Look to buy dips with a likely range today of 1.2485-1.2585.

Happy trading all.

IMF Acting Managing Director Statement on Argentina

July 9, 2019 by Reg Hub Leave a Comment Filed Under: Central Bank Annoucements, Central Bank News Tagged: argentina, Argentine Peso, Financial markets, IMF

Mr. David Lipton, the International Monetary Fund’s Acting Managing Director issued the following statement today on Argentina:

“I am pleased to announce that IMF staff and the Argentine authorities reached an agreement on the fourth review of the economic program supported by the Stand-By Arrangement. Subject to the approval of the Executive Board, Argentina would have access to about US$ 5.4 billion (SDR 3.9 billion).

“I commend the Argentine authorities on their continued efforts and steadfast implementation of their economic policy program. The authorities completed all their fiscal, monetary and the social expenditure targets under the IMF-backed program in the context of this review.

Argentina Peso

“Argentina’s economic policies are yielding results. Financial markets stabilized in May and June. Inflation – while still at high levels – is expected to continue to fall in the coming months. The fiscal and external positions continue to improve. There are also signs that the economy is improving in the second quarter.

“I fully support Argentina’s efforts to bolster confidence, lay the foundation for sustainable growth and protect the most vulnerable. Steadfast implementation of the commitments and policies underlying the authorities’ IMF-backed program will be critical for continued progress. I look forward to discussing this review with the IMF’s Executive Board on July 12.”

An International Monetary Fund (IMF) mission led by Mr. Roberto Cardarelli visited Argentina during May 11–22, 2019 to conduct discussions on the fourth review of Argentina’s IMF-supported program under the Stand-By Arrangement (SBA). Talks continued in Washington DC after the end of the mission. During its visit to Buenos Aires, the mission met with the Minister of the Economy Nicolas Dujovne, the Governor of the Central Bank Guido Sandleris, as well as other government officials and members of the private sector and trade union representatives.

FX Little Changed, US Payrolls – What to Look For

July 5, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, ECB, EUR-USD, Financial markets, Fintech, FX trading, GBP-USD, Sino-U.S. trade talks, trading platform, USD/JPY

Summary: FX was little changed while global bond yields slipped further. US Payrolls day. Lack of first-tier data and the US Independence Day holiday made for subdued trade. Treasury prices rallied this week on expectations of further monetary policy easing from major central banks. US bond yields slid the furthest, global peers followed. The impact on foreign exchange markets was minimal and currency volatility remained low. Germany’s 10-year Bund yield slipped to -0.40% from -0.39%, all time lows.

CNBC German 10-Year Bund Yield – 05 July 2019 (1)

The Euro was modestly up at 1.1285 from 1.1280, despite a fall in Eurozone retail sales. The Australian Dollar steadied at 0.7025 (0.7032) despite a slightly lower than expected May retail sales report. Japan’s Yen kept its overall gains, ending slightly higher against the US Dollar at 107.79 (107.85). Trade war concerns lingered after Chinese Ministry of Commerce spokesman Gao Feng insisted the US remove all tariffs as part of the deal struck at the G20 meeting.
Australia’s May Retail Sales missed forecasts at 0.1% against 0.2% although this bettered April’s -0.1%. Swiss CPI bettered expectations. Germany’s retail sales slumped to -0.3% although the previous month’s sales were revised up.

USD/JPY – The haven associated Yen outperformed, keeping most of it’s gains versus the Greenback. The sharp fall in US bond yields this week kept USD/JPY under pressure. Falling expectations of a speedy resolution to the US-China trade conflict also dented sentiment toward the Greenback. USD/JPY closed at 107.79 from 107.85 yesterday.
AUD/USD – The Aussie Battler touched fresh two-month highs at 0.70478 yesterday despite the lower-than-forecast retail sales, closing at 0.7025. A less than dovish sounding RBA and short market positioning has underpinned the Aussie.
EUR/USD – Despite the drop in German 10-year Bund yields to all-time lows and weaker-than-forecast Euro area retail sales, the Euro ended slightly up at 1.1285 (1.1277). The data is second tier while US rates have fallen from higher and quicker than Euro area yields.

On the Lookout: Friday, US Payrolls day. Possibly a game changer. June’s Non-Farms Employment report is critical for the upcoming Fed rate cut. The extremely low number in May and downward revisions for both April and March saw a sharp slide in US bond yields.
June Payrolls are forecast at a median +162,000 from May’s +75,000. Wage growth also weakened to 0.2%. A climb to 0.3% is expected for June.
Other data releases today include Australia’s AIG Construction Index and Japan’s Household Spending and Leading Indicators for Asia. Europe kicks off with German Factory Orders, French Trade Balance, and UK Halifax House Price Index (June). Canada reports its Employment Change, Unemployment Rate, and Ivey PMI. The US NFP Employment Change, Average Hourly Earnings (Wages), Unemployment Rate and the Federal Reserve’s Monetary Policy Report round up today’s data.

FX Street – US Payrolls Forecasts – 05 July 2019

Trading Perspective: Most of the US will be out for a long weekend, celebrating their fourth of July holiday. US banks will be manned by more junior traders who won’t want to take any big positions. Trading conditions will be thinner. Less participants means less liquidity. Here’s what to look for:
Payrolls – The extremely low May Payrolls number of +75,000 is expected to be offset by a rise in June to +162,000. Which is in keeping with the average Jobs creation of 100,000 this year. If Payrolls come in at +135,000 or less, the Dollar will slide. Any number under +100,000 could be sayonara for the Greenback.
If Payrolls come exactly as expected, around +165,000, the Dollar will steady at current levels. And markets will look at Wages and revisions.
A gain of +185,000 to +225,000 will see a higher Dollar immediately. Watch for revisions to previous months. Last month both March and April Payrolls were revised lower.
Wages – Are forecast to climb to +0.3% from +0.2%. if wages stay stuck at 0.2%, the Dollar will struggle to gain, unless we see a fantastic Payrolls.
Unemployment Rate: The US Jobless rate is forecast flat at 3.6%. Any changes here could see exaggerated moves.
Market positioning saw a large reduction of USD long bets, most of them against the Euro and Yen.
Sterling shorts increased. Aussie Dollar short bets were much the same.

USD/JPY – The Dollar Yen could be the biggest mover if we see weaker US Payrolls. The combination of lower US 10-year yields and the current China-US trade conflict will keep USD/JPY under pressure. USD/JPY has immediate support at 107.50 followed by 107.20 and 106.80. Immediate resistance can be found at 108.00 and 108.40. A weak Payrolls number could see USD/JPY slump to 106.80. A good number (+185-+200K) will see a test of 108.50, possibly 109.00 before settling. Will look to trade the extremes. Preference is to sell rallies.
AUD/USD – Much of the Aussie’s up move has been shorts scrambling for cover. Sentiment was extremely bearish into the RBA’s second rate cut decision. When RBA Governor Philip Lowe expressed less than dovish sentiments, the Aussie started to climb. It comes down to the US Payrolls today. A good Payrolls report (+185,000 or higher) will see AUD/USD test 0.7000 and perhaps 0.6980 before settling. A weak NFP of +150,000 or less would see the Aussie trade up to 0.7100. AUD/USD has immediate resistance at 0.7050 followed by 0.7080. Immediate support lies at 0.7000 followed by 0.6970. Prefer to trade the extremes here too, the preference is to buy dips.

FX Street EUR USD Chart – 5 July 2019

EUR/USD – The Euro remained stuck in its range, hardly moved at 1.1285. Euro-area (Germany and France) bond yields fell to all-time lows. New ECB Chief Christine Lagarde is widely considered a dove after praising the central bank’s accommodation. The focus is now on the US economy and the Dollar. US bond yields have fallen from higher and harder than its European counterparts. A good Payrolls of +185,000 or more would see the Euro break 1.1260 immediate support to 1.1220 and 1.1200. The next support level lies at 1.1170. A weak NFP print of +135,000 or less will see EUR/USD climb to 1.1350 and 1.1380. Look to go on either side of an extreme trade. Neutral on the Euro, trade the range shag.

Happy Friday, happy Payrolls, happy trading all.

US 10-Year Yield Sinks to Late 2016 Lows, Dollar Slips

July 3, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, Capital Markets, EUR-USD, Financial markets, financial services, FX, FX trading, Sino-U.S. trade talks, trading platform, USD/JPY

Summary: The Dollar Index (USD/DXY) slipped from two-week highs to 96.772 (96.834) as US bond yields sank to late 2016 lows. Benchmark US 10-year bond yields slumped to 1.976%, from 2.03% yesterday, the lowest since November 2016. While central bank policy makers were divided on the next policy move, global yields were lower, indicating their openness to easier monetary policy. The Reserve Bank of Australia cut interest rates for the second straight meeting, which was widely expected. The Australian Dollar climbed 0.45% to 0.6995 (0.6965) to lead all gainers after the RBA said it would lower again “if needed.” Sterling slumped 0.45% to 1.2595 (1.2638) after BOE Governor Mark Carney said that a trade war and a no-Brexit deal was a growing possibility which would hamper domestic UK growth. USD/JPY fell to 107.95 (108.45), weighed by the slump in the US 10-year yield. The Euro slipped back to end unchanged at 1.1285 after initially climbing on a report that the ECB’s governing council weren’t ready to rush into additional monetary stimulus at this month’s meeting.

CNBC US 10-Year Bond Yield Chart – 03 July 2019

President Trump threatened the European Union with US$4 billion worth of additional tariffs. Christine Lagarde (current IMF head) was chosen by EU leaders to succeed Mario Draghi as ECB President.

AUD/USD – The Aussie led all gainers to close at 0.6995 from 0.6965 following the RBA’s decision to cut its key interest rates by 0.25% to 1.00% an all-time low. The move was widely expected. AUD/USD dropped initially to 0.6956 immediately after the news of the rate cut. In its statement, the RBA said it would lower again “if needed” which markets saw as a more balanced outlook.
USD/JPY – The Dollar fell back against the Yen weighed by the fall in US yields. USD/JPY closes at 107.95 from 108.45 yesterday. The Dollar is most sensitive against the Yen to any moves in the 10-year yield. Japanese 10-Year JGB yields, by contrast, were up one basis point to -0.15%.
EUR/USD – the Single currency settled unchanged at 1.1285 after initially rallying to an overnight high at 1.1321. Reports that the ECB’s Governing Council were in no rush to cut interest rates at their meeting later this month provided a brief boost for the currency.
GBP/USD – Sterling closed as worst performer to 1.2595 (1.2638) after Mark Carney remarked that a trade war and no-deal Brexit were growing possibilities. The BOE Chief said that both would hamper global and UK economic growth. UK Construction PMI fell well below forecasts.

On the Lookout: While the spotlight moves to Friday’s US Payrolls report, date releases today are heavy. Markets will be keen to see if global services PMI’s follow the pattern of the slide in manufacturing.
Australia starts with its June Building Approvals and Trade Balance. China reports on its Caixin Services PMI report. Euro area Services PMI’s (Spain, Italy, France, Germany) follow. The Eurozone Final Services PMI is next. UK Services PMI rounds up Europe’s data releases. Canada’s June Trade Balance follows.
US reports include: Challenger Job Cuts, ADP (Private Sector) Non-Farm Payrolls Change, Trade Balance, Weekly Unemployment Claims and Final and ISM Services PMI’s.

Trading Perspective: Though global bond yields fell overall, the slump in US rates were not matched by those of its Rivals. Except for the UK 10-year Gilt yields which plummeted 9 basis points following Mark Carney’s comments. The gap between US yields and those of its rivals has narrowed which is Dollar negative overall.

DAILY FX USD JPY Chart – 03 July 2019

USD/JPY – The Dollar slid back under 108 to finish at 107.95. Overnight low traded was 107.765, which is todays immediate support level. The next support level lies at 107.40. Immediate resistance can be found at 108.20 and 108.50. Expect Japanese corporates to be on the bid in the USD/JPY near last night’s lows. USD/JPY will continue to be led by moves in the US 10-year yield. The next move in US bond yields will come following Friday’s US Payrolls report. For now, look to trade a likely range of 107.75-108.45. Prefer to sell rallies.
AUD/USD – The Australian Dollar rallied to an overnight high at 0.70003 before easing to settle at 0.6995. While the RBA presented a more balanced outlook following its second rate cut in successive meetings, the RBA may now pause and monitor global developments. The Aussie then becomes driven by the US Dollar. Australian 10-year bond yield were 2 basis points lower to 1.33%. The gap between US and Australian 10-year yields have narrowed 10 basis points since April this year. The Aussie was then at 0.7002. AUD/USD should be higher. Immediate resistance can be found at 0.7010 and 0.7040. Immediate support lies at 0.6970 and 0.6940. Look to buy dips with a likely range today of 0.6885-0.7035.
EUR/USD – The Euro closed unchanged at 1.1285 weighed by the prospect of President Trump’s threat of additional trade tariffs on European goods. German bond yields were one basis point lower to -0.37%. Broad based US Dollar weakness will provide the Single currency the support it needs to move higher. EUR/USD has immediate support at 1.1275 (overnight low) followed by 1.1245. Immediate resistance can be found at 1.1300 and 1.1330. Look for a likely range of 1.1275-1.1325. Prefer to buy dips.

Happy trading all.

Weak Global PMI’s Lift US Dollar, AUD Falls, RBA Cut Forecast

July 2, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, CFTC, ECB, EUR-USD, Financial markets, FX trading, GBP-USD, Sino-U.S. trade talks, trading platform, USD/JPY

Summary: The US Dollar climbed to 2-week highs as US bond yields rose while rival yields fell. Yield differentials widened in favour of the Greenback. Global factory outputs underwhelmed while US manufacturing PMI slightly beat forecasts. The Australian Dollar slumped 0.70% to 0.6965 from 0.7025. The RBA is widely expected to cut its key rate by 0.25% today. Tensions continued to ease following the China-US trade truce lifting the Dollar against the Yen to 108.45. The Dollar climbed against the Swiss Franc to 0.9877. The Euro fell to 1.1285 from 1.1370. Sterling finished 0.31% lower to 1.2638. The Dollar Index (USD/DXY) rallied 0.55% to 96.834 from yesterday’s 96.13.

CNBC US 2-Year Bond Yield Chart – 02 July 2019

Wall Street stocks erased gains with the DOW ending flat at 26,670. The S&P 500 was little changed at 2,959 (2,955).
China’s Caixin Manufacturing PMI disappointed, missing expectations (49.4 vs 50.1). Japan’s Tankan Manufacturing Index slipped, missing forecasts. Spanish and German, Swiss and UK Manufacturing PMI’s missed forecasts. US ISM factory production slightly beat forecasts, although prices paid underwhelmed.
The benchmark 10-year yield was up 2 basis points to 2.03% while US 2-year yields rose to 1.78% from 1.74%. Global yields slipped on the weaker-than-forecast PMI’s. Germany’s 10-year Bund yielded -0.36% (-0.33%). UK 10-year yields were 2 basis points lower to 0.81%.

AUD/USD – the Australian Dollar fell below 0.70 cents to 0.6965 as markets awaited today’s RBA policy meet. The Aussie Battler has risen for 9 straight trading days before yesterday’s drop. The Australian central bank is widely expected to trim its cash rate to 1% from 1.25%.
EUR/USD – The Single currency fell after disappointing Euro area factory output pushed European yields lower. EUR/USD closed at 1.1285 from 1.1370 yesterday.
USD/JPY – closed at 108.45 after touching 108.53 highs following the announcement of a trade truce between China and the US at their bilateral meeting in Japan. Higher US yields also pushed this currency pair higher.

On the Lookout: Yesterday’s moves put back the focus on economic data which will clearly have a more important role this week.
The RBA meeting kicks off today’s events with the Australian central bank widely expected to cut its key interest rate by 0.25%. The question is what next? Will the RBA look to cut rates further? Markets will look to their forward guidance in the rate statement.
Data releases today start with New Zealand’s Building Consents and NZIER Business Confidence. European data releases see Germany’s Retail Sales (June) and Spanish Unemployment Change.

FOREX FACTORY – US ISM Manufacturing PMI Chart – 02 July 2019

The UK report its Construction PMI and Nationwide HPI (House Prices) for June. Canada’s Manufacturing PMI rounds up the day’s economic reports.
US New York Fed President and FOMC member John Williams speaks on global economic and monetary policy in Zurich at a Union Bank of Switzerland conference.

Trading Perspective: The widening yield differentials between US and its global peers will continue to be Dollar supportive. The US Payrolls report at the end of this week is crucial to interest rates and will help determine whether the Fed will cut interest rates later this month. It was the US Payrolls last month which got initiated the US Dollar slide.
Market positioning (week ended June 25) has seen speculators further reduce their long USD bets. Total net USD longs were cut by USD 1.1 billion to a total of +USD 19.6 billion.

Trading View AUD USD 3 M Chart – 02 July 2019

AUD/USD – After climbing for 9 straight days, the Aussie dropped 0.70% to 0.6965 as traders prepared for the RBA meeting outcome today. With the RBA widely expected to cut its cash rate by 0.25 basis points the question remains what happens next. A dovish RBA statement, where the central bank opens the door to another ease will see the Aussie slump below 0.69 cents. A neutral outlook following a 0.25 bp cut will see the Aussie back above 0.70 cents to 0.7025, where it opened yesterday. If the RBA leave rates unchanged, we could see 0.7060 tested first before settling. AUD/USD has immediate resistance at 0.7000, 0.7030 and 0.7060. Immediate support can be found at 0.6940 followed by 0.6900. The next support lies at 0.6870. Look for a level to buy Aussie, depending on what the RBA do. The next rate cut will come from the US Federal Reserve.
EUR/USD – The Euro fell after failing to climb much above 1.1370. The weaker Euro area factory output pushed Euro yields lower which weighed on the Single currency. Broad based US Dollar strength saw Dollar demand push the Euro down. EUR/USD closed at 1.1285, two-week lows. EUR/USD has immediate support at 1.1280 followed by 1.1240. Immediate resistance can be found at 1.1300 and 1.1340. Look to buy dips with a likely range today of 1.12370-1.1320.
USD/JPY – The Dollar jumped to a 2-week high at 108.532 in early Asian trade following the announcement of a trade truce between the US and China. USD/JPY settled to close at 108.45 in New York, slipping further to 108.35 in early Asia. Kathy Lien currency strategist at BK Asset Management in New York rightly pointed out that a trade truce is not the same as a trade deal. USD/JPY has immediate resistance at 108.55 followed by 108.85. Immediate support can be found at 108.10 (overnight low) followed by 107.80. Look to trade a likely range of 108.10-108.70. Just trade the range shag on this one.

Happy trading all.

Trump, Xi Agree to Disagree, Restart Trade Talks, as Widely Expected

July 1, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, Financial markets, FX trading, GBP-USD, RBA, Sino-U.S. trade talks, trading platform, USD/JPY

Summary: The Dollar Index (USD/DXY) closed little changed for the week at 96.13 (96.20 Friday) as traders awaited the bilateral meeting between Presidents Trump and Xi in the G20 Osaka summit. Both leaders agreed to resume trade talks and hold off on any new tariffs after 6 weeks of stalemate and escalating tensions. US President Trump said he would allow US companies to sell products to Chinese tech giant Huawei, considered a notable breakthrough. The Dollar gapped against the Yen to 108.50 from Friday’s close of 107.97. USD/CNH, the Offshore US Dollar/Chinese Yuan pair fell to 6.8300 from Friday’s close of 6.8700. Risk currencies the Aussie and Kiwi, already bid following the widely expected ceasefire, gapped 10 points up in early Asia. The Australian Dollar was at 0.7035 from 0.7022 while New Zealand’s Bird opened at 0.6725 from 0.6716. Sterling and the Euro did not budge from Friday’s close of 1.2697 and 1.1369 respectively.

CNBC US 10-Year Bond Yield Chart – 01 July 2019

Stock futures gapped higher with the Dow up 0.67% to 26,850. (26,665 Friday). The S&P 500 rose 0.67% to 2,970 from 2,952 Friday.
While the ceasefire lifted risk in thin early trade, Chinese state media predicted a long road ahead before a trade deal can be reached. The G20 summit yielded little, agreeing to work towards improving the global trade system, but without any breakthrough decisions.
Data on Friday saw a rise in US Personal Income offset by a fall in Chicago’s Manufacturing Index from expectations. China’s Manufacturing PMI for June just missed forecasts at 49.4 against 49.5.

USD/JPY – The Dollar closed at 107.95 in New York on Friday from 107.80. USD/JPY gapped to an early Asian high at 108.36 on the trade ceasefire news between the world’s two largest economies. US bond yields were unchanged on Friday, but a trade truce could see a delay in an immediate Fed interest rate reduction and lift US bond yields.
AUD/USD – The Australian Battler rose against the Dollar to 0.70345, fresh 7-week high before settling at 0.7028 currently. The Aussie gapped higher versus the Yen to 76.15 from Friday’s close of 75.80. The Aussie was last at these levels in early May.
EUR/USD – The Euro closed around 1.1370 for the fourth straight session. Still the Single Currency was on track for its biggest monthly gain in nearly 2 years on broad-based US Dollar weakness. EUIR/USD began the month at 1.1170 rising to a high of 1.1404 before settling at its current 1.1370.

On the Lookout: The impact of the trade outcome saw risk currencies and assets lifted in thin early trade. The outcome was generally expected by the markets and the impact should be short-lived. Expect US bond yields to rally as well because less trade tension will see expectations of a near-term Federal Reserve rate cut pared. Which should enable the US Dollar to regain better footing against its main Rivals. The warning from official Chinese media that both countries face a long road before they can reach a deal to end their bitter trade war should be heeded.
What lies ahead? Today sees a heavy data calendar which culminates in Friday’s US Payrolls.
Asia kicks off with Australia’s AIG Manufacturing Index, Japan’s Tankan Manufacturing and Non-Manufacturing Index, Consumer Confidence and Chinese Caixin Manufacturing PMI for June.

Forex Factory RBA Cash Rate Expectation – 01 July 2019

European data sees Euro-area Manufacturing PMI’s (Spain, Italy, France and Germany) as well as the Eurozone’s Final Manufacturing PMI and Eurozone Unemployment rate for June. The UK reports on its Net Lending to Individuals and Manufacturing PMI. US data rounds up the day’s report with its ISM Manufacturing PMI and Construction Spending.
The RBA is expected to trim its Cash rate to 1.0% from 1.25% at its policy meet tomorrow (Tuesday). The RBA’s Statement will be closely watched. RBA Governor Lowe is due to deliver a speech at an RBA Board dinner in Darwin. The week’s big event is Friday’s US Payrolls is expected to climb in June after May’s poor number.

Trading Perspective: On a technical basis, the Dollar Index survived another probe on the downside, holding above 96.00 for most of this week. The Greenback will regain it’s footing as US bond yields climb. US Non-farm Payrolls are widely expected to see a bounce in employment to between 155,0000 to 160,000. In June from May’s weak 75,000 increase. A rise in US yields which is expected after the resumption of trade talks between the US and China. A rebound in the benchmark US 10-year yield should stop between 2.10% and 2.15% before resuming its decline.
Market positioning would have seen further trimming of USD longs last week. The latest COT/CFTC report is released tomorrow.

EUR/USD – The Euro’s rally was mostly the result of broad-based Dollar weakness. A short-term rally in the Greenback will see the Single currency ease first. The Euro closed at 1.1370 after trading between 1.13506 and 1.13936. Immediate resistance lies at 1.1400 and 1.1420. Immediate support can be found at 1.1350 followed by 1.1320. Expect a likely trading range of 1.1350-1.1400 for today. Prefer to buy dips near 1.1350.

Daily FX – AUD USD Chart – 01 July 2019

AUD/USD – The Australian Dollar rallied to a near two-month high at 0.7035 earlier this morning. Immediate resistance for the Battler lies at 0.7040 followed by 0.7070. Immediate support can be found at 0.7000 and 0.6970. The RBA is expected to trim its cash rate by 0.25% to 1.00% at the conclusion of its meeting tomorrow. Traders will scrutinise the RBA Statement following the meeting to gauge when the next cut may occur. RBA Governor Philip Lowe speaks later in the day at an RBA Board dinner in Darwin. A 0.25% cut is already built into the currency. If the RBA keep interest rates unchanged, the Aussie will soar. Look for a trading range of 0.6990-0.7040.
USD/JPY – The Dollar gapped against the Yen to a high earlier today at 108.50 following a close in New York at 107.97. USD/JPY currently trades at 108.35. The trade talk resumption news had the biggest impact on this currency pair, with US yields expected to climb. USD/JPY faces immediate resistance at 108.50 followed by 108.80. Immediate support can be found at 108.20 and 107.90. Look to trade a likely range of 108.00-108.60. Prefer to sell rallies.

Fullerton Markets Provides Fund Safety and Education Services to Fund Manager

June 23, 2019 by Ricardo Esteves Leave a Comment Filed Under: Industry News Tagged: business, cryptocurrency, Education Services, Financial markets, Fullerton Markets, fund manager, Fund Safety, liquidity, market insights, PipProfit

Fullerton Markets, the ASIC-regulated foreign exchange broker, has partnered with fund management company Colossus Securities to provide them with fund safety and financial literacy services.

Colossus Securities leverage its team’s years of experience in the forex and equity markets – with stock market analysis and investment planning being their core strenghts – to assist the firm’s global clients in establishing their financial plans and maximizing their benefits.

The fund manager offers a range of services, including cryptocurrency, e-commerce, insurance, asset management and banking services.

Clarence Soh, Chief Executive Officer at Colossus Securities, commented:
“We understand the importance of attaining financial security and we want to make it easier for our clients to do so. By providing them with solid market insights and personalised investment advice, we empower them to make more informed decisions that will bring them closer to their financial goals. Fund safety provided by Fullerton Custodian and financial literacy services offered by the Fullerton Markets team are assets that traders and investors value.”
Mario Singh
Mario Singh, CEO of Fullerton Markets, said: “We’re excited to be working closely with a partner that sharesthe same vision of introducing disruptive solutions to clients around the world. Colossus Securities continues to set the benchmark as an innovative industry leader and we look forward to collaborative efforts focused on bringing unparalleled adaptability and advantages in the financial markets to our clients.”

Fullerton Markets has recently launched its mobile trading app. PipProfit is a one-stop platform which aims to deliver improved convenience and seamless experiences to its global clientele.

The company’s white label business has recently scored a Malaysian broker as a client, BeGold, whose clients now have access to the trading platform operated by Fullerton Markets and the benefits associated with the triple fund safeguards provided by the Fullerton Shield.

In October 2018, Fullerton Markets joined the network where members are able to deliver their liquidity to other end-customers through oneZero’s Liquidity Hub, as well as manage their trading book and customize their liquidity through comprehensive credit, reporting and risk management tools.

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