Fintech Archives - The Industry Spread

Dollar Rallies on Strong Sales Data, Pound Plummets

July 17, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, Cryptocurrencies, EUR-USD, financial services, Fintech, FX trading, GBP-USD, Retail Fx, Sino-U.S. trade talks, trading platform, USD/JPY

Summary: A strong rise in June US Headline and Core Retail Sales, up 0.4%, easily median forecasts of 0.1%, lifted the Dollar Index (USD/DXY) 0.47% to 97.391. The British Pound plummeted to April 2017 lows (1.23964) as risks build for a no-deal Brexit from the two top candidates for the UK prime ministership. A fall in Germany’s ZEW Economic Sentiment, due in part to the China-US trade conflict, pulled the Euro 0.44% lower against the Greenback to 1.12019, one-week lows. The Australian Dollar retreated to 0.7010 from 0.7040 yesterday, weighed by broad-based US Dollar strength and President Trump’s latest trade tariff threat. Trump said that he could impose additional tariffs on Chinese imports if he wants. And a trade agreement with China had a long way to go. USD/JPY rallied to 108.27 from 107.90 yesterday. EM currencies were mostly lower against the Greenback.
Wall Street stocks slipped at the close. The DOW was modestly lower at 27,325 (27,345) while the S&P 500 dipped 0.38% to 3,003 (3,014 yesterday). US bond yields rose with both the 2-and 10-year treasury rates up a couple of basis points.

Forex Factory – US Retail Sales – 17 July 2019

The UK’s Unemployment Rate matched expectations at 3.8% although Claims for Unemployment benefits rose to 38,000 against a median forecast of 18,900.

EUR/USD – slip-sliding away, the Single currency dipped further to 1.1208 (NY close) after a deterioration in sentiment from German investors. Dovish expectations from the ECB have prevented the Euro from taking advantage of US Dollar weakness earlier this week.

Forex Factory – UK Claimant Count Change (Unemployment Claims) – 17 July 2019Forex Factory – UK Claimant Count Change (Unemployment Claims) – 17 July 2019

GBP/USD – The British Pound extended it’s decline, falling to fresh 27-month lows against the Dollar to 1.23964 before settling at 1.2410. Leading candidates for UK leadership, Boris Johnson (Conservative) and Jeremy Corbyn (Labour) are both pushing for a hard Brexit stance. Sterling also fell against the Euro to the lowest this year.
AUD/USD – The Aussie gradually lost ground against the strengthening US Dollar, closing at 0.7010, down 0.37%. Trump’s latest tariff threat didn’t help the Australian Dollar. RBA meeting minutes released yesterday revealed that the Aussie central bank was willing to adjust policy “if needed” to support growth and inflation.

On the Lookout: Following two sets of better-than-expected US economic data, expectations of deep Fed rate cuts have been watered down. Meantime, data from Europe and the UK continue to underwhelm and pressurise their currencies. We go back to the theme that the Dollar is the best performer among an ugly bunch. Data releases and comments from officials from here on in will take on added significance. We are also in the middle of the Northern Hemisphere summer holiday break. Which leads to the lack of FX volatility. Expect that to pick up next month, after the Fed July 30-31 policy meet.
Today presents a data dump from the UK, Europe and the USA. Australia’s Westpac June Leading Index of Economic Activity is Asia’s only report. The UK reports on its June Headline and Core CPI (y/y), PPI input and output (June), and Retail Price Index. The Eurozone reports on its Final Headline and Core CPI for June (annual). Canadian Headline and Trimmed Means CPI and Manufacturing Sales kick of North American data. The US reports on its Building Permits, Housing Starts and the Fed’s Beige Book Economic Report.

Trading Perspective: The Dollar ended on a strong note, supported by both fundamental and technical factors. Market positioning has seen a chunk of Dollar long bets cut. A Fed rate cut of 0.25% at their July 30-31 meeting is virtually priced in. This lends support to further short-term Dollar strength. US bond yields have stabilised with the 10-year yield around 2.10%. Overlooked last night were comments by Chicago Fed President and FOMC member Charles Evans. Evans said that there was an argument for a 0.50 basis point decrease in interest rates before the end of the year to get inflation up. While Evans is a noted bear, and his view run contrary to another regional Fed head (Dallas’s Robert Kaplan), Fedspeak should also be monitored.
The latest COT/CFTC report (week ended 9 July) saw total net long Dollar bets much unchanged. The stronger-than-expected US Jobs (5 July) report renewed selling of EUR, GBP and JPY. We look at the breakdown in tomorrow’s commentary.

EUR/USD – The Euro slid back to an overnight and one week low at 1.12019 before a slight bounce to 1.1210 in early Asia. Immediate support can be found at 1.1200 followed by 1.1180. Immediate resistance lies at 1.1230 and 1.1260. Apart from overall US Dollar strength, the Euro has been pulled lower by the British Pound. Traders are also expecting the ECB to push rates, already in negative territory lower later this year. Overnight German 10-year Bund yields stood at -0.25%, unchanged from yesterday. While US 10-year rates climbed 2 basis points. Expect the Euro to stay under pressure with a likely range of 1.1200-1.1240. Prefer to buy dips.

DAILY FX – GBPUSD Chart – 17 July 2019

GBP/USD – “The Pound is sinking”, sang Paul McCartney in 1982. Sterling slumped to lows not seen since April 2017, lower than its flash-crash earlier this year. And the move has been more of a slower grind this time round. The British Pound crumpled under the building risk of the UK leaving the EU without a trade deal. Both leading candidates in the leadership race seem to be vying for who has a harder Brexit stance. Which traders see as leading the BOE to have to lower interest rates to stave off an economic disaster. GBP/USD has immediate support at 1.2390 (overnight low of 1.23964). The next support level can be found at 1.2360 followed by 1.2320. Look for a likely range of 1.2385-1.2485 today. Prefer to buy dips with a tight stop near current levels.
AUD/USD – The Australian Dollar retreated to just above 0.70 cents on the overall stronger US Dollar. RBA meeting minutes revealed the Australian central bank as dovish leaning. Trump’s latest tariff threats also weighed on the Battler. AUD/USD closed at 0.7010. Immediate support can be found at 0.7000 followed by 0.6970. Immediate resistance can be found at 0.7030 and 0.7050. The latest COT/CFTC report saw a further trimming of AUD shorts by speculators to -AUD 54,007 in the week ended 9 July from -AUD 58,735 the previous week. Look to trade a likely range today of 0.6990-0.7030. Prefer to sell rallies.

Happy trading all.

Dollar Steadies on Upbeat Empire State Manufacturing

July 16, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, Fintech, FX trading, GBP-USD, Sino-U.S. trade talks, trading platform, USD/JPY

Summary: The Dollar steadied in slow, featureless trading supported by upbeat US Empire State Manufacturing report that bettered forecasts. Expectations of a Fed interest rate cut next week plus another reduction in September continued to weigh on the Greenback. The Dollar Index (USD/DXY) a popular measure of the currency’s value against a basket of foreign currencies, advanced a modest 0.15% to 96.947 (96.722 yesterday). Sterling slid 0.40% to 1.2516 from 1.2576 as prospects of lower interest rates and a new leader weighed on the currency. The Euro retreated to 1.1258 (1.1270). The ECB also meets on interest rates on July 25 and markets expect a dovish statement.

Forex Factory US Empire State Manufacturing Index – 16 July 2019

USD/JPY was little changed at 107.90 (107.88 yesterday). The Australian Dollar rose to near two-week highs at 0.7038 from 0.7022. Earlier, China’s GDP grew 6.2%, the slowest in nearly 3 decades, partially driven by the country’s trade war with the US. Chinese Retail Sales beat forecasts, up 9.8% in June from May’s 8.6%, offsetting the slow growth report. Domestic sales of consumer items (cosmetics) lifted the retail number.
Global bond yields eased. The US 10-year treasury yield closed at 2.09% from 2.12% yesterday. Germany’s 10-year Bund yield fell 5 basis points to -0.26%.
The DOW finished up 0.14% (27,344) while the S&P 500 closed at 3,014, up a modest 0.08%.

EUR/USD – slip-sliding away, the Euro retreated to 1.1258 after failing to clear above 1.1280. The Single currency has not been able to benefit from the overall US Dollar weakness as dovish expectations from the ECB are matching those of the Fed.
USD/JPY – the Dollar was little changed against the Yen, closing at 107.90 after trading in a narrow 107.798-108.109 overnight range. Japan’s 10-year JGB yield was unchanged at -0.13%. Traditional summer thin trading affects this currency most.

FOREX FACTORY – China Annual GDP Q 2 – 16 JULY 2019

AUD/USD – The Aussie, as well as the Kiwi continued to benefit most from US Dollar weakness. AUD/USD was up at 0.7038 from 0.7022 yesterday, near 2-week highs. Both antipodean currencies fell the most from the Dollar’s ascent. Previous Aussie sellers have turned buyers.

On the Lookout: Economic reports pick up today and the data dump may see attempts to break out of these low volatility summer trading.
New Zealand’s Q2 CPI just released matched expectations at 0.6%, higher than Q1’s 0.1% and kept a bid on the Kiwi (0.6722 from 0.6718). Aussie traders will be looking out for the release of the RBA’s latest meeting minutes (11.30 am Sydney). Italy reports its June Trade Balance. The UK reports its Average Earnings Index (Wages), Claimant Count Change (Unemployment benefits) and Unemployment Rate. Germany’s ZEW Economic Sentiment Index and Eurozone Trade Balance round up Europe’s data. Bank of England Mark Carney speaks at the France G7 Presidency meeting in Paris.
The US reports on Headline and Core Retail Sales, Import Prices, Capacity Utilisation Rate, Industrial Production. Finally, Fed Chairman Jerome Powell addresses the France G7 Presidency meeting in Paris with a speech on “Aspects of Monetary Policy in the Post-Crisis Era”.

Trading Perspective: The Dollar should hold the support levels as the yield differentials slightly in favour of the Greenback. While the US 10-year yield slipped 3 basis points, those of its global counterparts either matched (UK) or fell further (Germany). A fed rate cut of 0.25% at the end of this month is widely expected and looking like a done deal. However, another interest rate reduction by the Fed in September is far from certain, and still a bit away. Data released today could excite with the spotlight on US Retail Sales.

EUR/USD – The Euro traded to an overnight high at 1.12839 before easing back to 1.12533. With the yield differentials still in favour of the Greenback, the Euro has struggled to take advantage of overall USD weakness. The Single currency is plagued by its own inherent weakness which is due to the dovish ECB. Market positioning has also seen a large reduction in Euro shorts which constrains the Euro’s topside. Immediate resistance lies at 1.1280 followed by 1.1310. EUR/USD has immediate support at 1.1250 (overnight low 1.12533) and 1.1220. Look for a likely trading range today of 1.1250-1.1290. Just trade the range shag on this one.
AUD/USD – The Aussie continues to benefit most from broad-based US Dollar weakness. Today’s RBA meeting minutes release will determine the next short term moves in the Aussie. AUD/USD has immediate resistance at 0.7050 followed by 0.7080. Immediate support can be found at 0.7020 and 0.7000. Mostly upbeat Chinese retail sales and industrial production data were offset by continued weak GDP growth due in part to the trade war. Unless a trade deal is done, China’s economic growth will suffer. And so will Australia and the Aussie. Look for a likely trading range today of 0.7010-0.7050. Prefer to sell rallies above 0.7050.
USD/JPY – The Dollar closed little-changed against the Yen at 107.90. Immediate support can be found at 107.70/80 followed by 107.40. Immediate resistance lies at 108.00 and 108.30. Expect Japanese corporations to be on the bid lower down as Tokyo returns today (holiday yesterday). Look to trade a likely range of 107.70-108.20 today. Prefer to buy dips.

Daily FX GBP USD Chart – 16 JULY 2019

GBP/USD – Sterling emerged as worst-performing currency after climbing to an overnight high at 1.25778 and slumping to 1.25103 before settling at 1.2517. Sentiment remains bearish on the British Pound. Although market positioning is currently short, having increased from the last COT report, sentiment remains overwhelming bearish. The Pound has lost value against other currencies, the Euro, Yen and Aussie. Recent UK data have missed forecasts (Manufacturing and Industrial Production) and the next likely move in interest rates is not up but down. Politically the country remains hamstrung with a new Prime Minister expected to be announced at the end of this month. GBP/USD has immediate support at 1.2500/10 followed by 1.2460. Immediate resistance can be found at 1.2550 followed by 1.2580. UK data released later today will see how the British Jobs market is holding up. Look to trade a likely range of 1.2490-1.2590. Prefer to buy dips as shorts GBP bets build.

Happy trading all.

Fed Rate Cut Euphoria Lifts Stocks, Plagues Dollar

July 15, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, Fintech, FX trading, GBP-USD, Retail Fx, Sino-U.S. trade talks, trading, trading platform, USD/JPY

Summary: Increased expectations of a Fed rate ease at the end of this month continued to plague the Dollar and lift stocks. US data on Friday showed that Producer Prices increased 0.1% in June as most analysts had forecast. This followed Thursday’s stronger-than-expected climb in US Core CPI to 0.3% in June, its largest rise since early 2018. The Dollar Index (USD/DXY), a popular gauge of its value against a basket of foreign currencies, fell 0.34% to 96.722 from 97.056 Friday. Japan’s Yen outperformed. USD/JPY slumped 0.65% to 107.90 (108.52). The Euro advanced to 1.1269 (1.1253) The Australian Dollar rallied to 0.7024, up 0.32% while the Kiwi was up 0.36% to 0.6697 (0.6664).

Forex Factory US Core CPI Table – 15 July 2019

US treasury yields eased. The benchmark 10-year rate closed at 2.12% from 2.14%.
Wall Street stocks extended gains. The DOW finished 0.83% higher to 27,310. From 27,090.
Japanese Revised Industrial Production underwhelmed at 2.0% against a forecast 2.3%. China’s Trade Surplus in June climbed to CNY 345 billion from the May’s CNY 279 billion.
Germany’s Wholesale Price Index slumped to -0.5% in June from the previous month’s 0.3%.
Eurozone Industrial Production beat forecasts, climbing to 0.9% against an expected 0.2% rise.
Fed speakers John Williams (New York) and Charles Evans (Chicago) both weighed in their preference for monetary policy accommodation in the short term.

USD/JPY – The Dollar lost 0.66% against the surging Yen to 107.87 in late New York from its opening of 108.52. In contrast to the 2 basis-point fall in US 10-year yields, Japan’s 10-year JGB yield climbed 2 basis points to -0.13%.
EUR/USD – The Single currency advanced to 1.1270 at the NY close, near it’s overnight highs (1.12749). The Euro’s rally remained constrained by market expectations that the ECB will cut the discount rate in its September meeting.
AUD/USD – The Aussie rallied above 70 cents to finish at 0.7024, up 0.47% (0.6975 Friday). The Aussie’s corrective rebound took it to highs seen a week ago. Aussie traders will look out for today’s Chinese trifecta of top-tier data released later today.

Trading View – USD DXY Chart – 15 July 2019

USD/DXY – The Dollar Index closed 0.34% lower to 96.722, not far off from its overnight and one-week lows. The Greenback’s was broad-based. Only a few Emerging Market currencies managed lost ground versus the US Dollar.

On the Lookout: A Japanese bank holiday should see a slow start to markets today in Asia. At least until Chinese releases its trifecta of first tier data beginning with Q2 GDP, Fixed Asset Investment (June), Industrial Production and Retail Sales. China will also release its Unemployment Rate for June. Swiss PPI is the lone European report. US Empire State Manufacturing round up today’s reports.
Tomorrow sees a busy start to the week with New Zealand’s Q2 CPI report, the RBA Meeting Minutes release, and US Headline and Core Retail Sales.
Fed speak will also figure prominently throughout the week. The highlight will be Wednesday’s speech by Fed Chair Jerome Powell in Paris, France on “Aspects of Monetary Policy in the Pro-Crisis Era”. Powell is a guest at the France G7 2019 Presidency ceremony.

Trading Perspective: The Dollar’s next move depends much on where US yields head. On Friday, the benchmark US 10-year yield slipped 2 basis points to 2.12%. Other global yields were higher (by contrast) or flat. This pressured the Greenback. The Dollar Index (USD/DXY) lost 0.34% to 96.722, just above immediate supports. With a 0.25% rate decrease from the Fed at the end of this month pretty much priced in, we would need to see a slide in US yields for more Dollar losses. Market positioning will also have an impact. Data released tomorrow on the latest COT/CFTC report will be interesting. And definitely worth looking at.

Daily FX USD JPY Chart – 15 July 2019

USD/JPY – The Dollar fell most against the Yen, by 0.66%, as a slip in US 10-year yields contrasted with a climb in Japanese 10-year JGB yields. The net differential narrowed 4 basis points. USD/JPY traded to an overnight and 1-week low at 107.805 before settling at 107.90 this morning. USD/JPY has immediate support at 107.70/80 followed by 107.50 and 107.20. Immediate resistance can be found at 108.10 followed by 108.40. With Japan out for a bank holiday (Marine Day), expect a relatively quiet day with tight ranges. Prefer to buy dips with a likely trade between 107.70-108.30 today.
AUD/USD – The Aussie Battler has bounced back strongly in true fashion from 0.6925 a week ago to 0.7025 on Friday. AUD/USD opens in Sydney at 0.70195. AUD/USD has immediate resistance at 0.7040 followed by 0.7070. Immediate support can be found at 0.7000 and 0.6975. Aussie traders will be watching China’s trifecta of first tier releases today. Tomorrow sees the release of the RBA’s latest meeting minutes. Look for a likely range today of 0.6980-0.7030. Just trade the range shag on this one.
EUR/USD – The Euro grinded higher from 1.1240 to 1.12749 overnight, settling at 1.1268. The Single currency has been stuck in a relatively tight range 1.1200 and 1.1400 for most of 2019. Broad based US Dollar weakness has failed to boost the Euro, constrained by a dovish ECB, which seems to be a step just behind the Fed. Short speculative Euro bets have continued to dwindle which makes the currency less likely to rebound strongly. EUR/USD has immediate resistance at 1.1280 followed by 1.1310. Immediate support can be found at 1.1250 and 1.1220. Look to trade a likely 1.1240-1.1290 range today.
USD/DXY – The Dollar Index has good support at 96.50 followed by 96.20. Immediate resistance can be found at 97.00 and 97.30. Looking like a range trade today between 96.60-97.10. Just trade the range shag on this puppy too.

Have a good week ahead all, happy trading.

SmartStream Analyzes Intraday Liquidity Management as True Business Value

July 12, 2019 by Ricardo Esteves Leave a Comment Filed Under: Industry News Tagged: Fintech, Intraday Liquidity Management, SmartStream

SmartStream Technologies released a white paper about the regulatory pressures imposed on intraday liquidity requirements, which explores the benefits that can be realized by financial institutions when they transform intraday discussions from an operational burden into adding true business value.

The financial Transaction Lifecycle Management solutions provider, which titled the white paper ‘Intraday Liquidity Management: From a costs discussion to a revenue opportunity’, also analyzed how institutions can leverage next-generation technologies like Cloud, Artificial Intelligence and Machine Learning to achieve the goals of real-time, active management of global intraday liquidity.

In addition to reviewing regulators’ views and the monitoring tools available, the report found that while meeting regulatory obligations is undoubtedly front and center for most financial institutions, the ability to manage liquidity intraday and to stress test liquidity demands are not simply a matter of regulatory interest. Smartstream concluded that business optimization opportunities can come from having a strengthened intraday liquidity framework.

Nadeem Shamim, Head of Cash and Liquidity Management at SmartStream, commented:

“While this may seem to be another exercise in regulatory compliance, active intraday management offers a competitive advantage in the changing regulatory landscape. It provides added benefits to both banks and their customers. In the past, intraday liquidity management
was a nice to have, but this has moved to a ’must have’ and the trend is to optimise the management of intraday liquidity, from a cost perspective to a potential revenue generating exercise. This typifies the kind of discussions we are currently having with our customers on a daily basis”.

The paper also discusses the current status of where banks are now with their monitoring of intraday liquidity.

In April 2019, SmartStream announced a new client-driven strategic focus in line with the new FSA (now PRA) rules governing liquidity management for the UK and foreign branches. Nadeem Shamim was appointed to lead cash and liquidity management solutions globally in response to
the new regulations. Nadeem’s 30 years of experience in treasury, cash and liquidity management include roles at Standard Chartered Bank as Managing Director and at J.P. Morgan as Head of Financial Institutions Group EMEA, Treasury Services.

Vincent Kilcoyne, Head of Product Management, SmartStream, says: “Nadeem brings with him solid experience of strategic advisory and innovative thinking in bank transformation, treasury risk management, FinTech, and supply chain financing. I am delighted to have such a
strong and committed team with Paul, Richard, and Nadeem – we will see great success in the coming future”.

Wealth Management Platform d1g1t Raises Funds to Expand Into US Market

July 11, 2019 by Ricardo Esteves Leave a Comment Filed Under: Industry News Tagged: analytics, CAD, d1g1t, Fintech, grade analytics

The CAD$3 million raised is an extension of their Series A round bringing the total raised to over CAD$12 million as d1g1t continues product innovation and accelerates expansion into the US market.

d1g1t Inc., a provider of enterprise wealth management solutions powered by institutional-grade analytics and risk management tools, has raised CAD$3 million from Illuminate Financial Management in order to accelerate product innovation for its industry-leading wealth advisory platform and further commercial expansion into the United States market.

Dan Rosen, CEO and co-founder at d1g1t, commented: “What good is data without good analytics? Advisors need to be able to respond efficiently to client demands and share valuable insights in real-time about clients, portfolios and the business across the organization. Stronger collaboration occurs when everyone is on the
same page. We feel very fortunate to have Illuminate as our partner who joins an amazing group of highly-regarded FinTech investors. We’re looking forward to leveraging their deep expertise and network as we set new standards in the wealth management industry”.

d1g1t transforms the patchwork of legacy systems and empowers advisory firms to scale up the high-value, human services that set them apart in an increasingly competitive and automated world. Its single integrated solution covers the entire advisory lifecycle, Mark Rodrigues, partner at Illuminate, who will join d1g1t’s board of directors.

“The wealth industry is at a crossroads and ready for change. We believe there is a huge opportunity for an end-to-end platform which streamlines the existing infrastructure and brings institutional-grade analytics to the undeserved wealth market. The firms using d1g1t’s platform have not only improved internal efficiencies, but also accessed a whole new set of capabilities which allow them to deliver an exceptional experience to their clients. We’re very excited to add
d1g1t to our portfolio and support an experienced management team with a proven track record of delivering advanced solutions to top financial institutions around the world.”

Based in Ontario, d1g1t provides an end-to-end automated technology platform for onboarding, individualized and model portfolios, trading connectivity and execution, and limits, compliance and trading strategies.

Dollar, US 10-Year Yield Hit 3-Week Highs Ahead of Powell

July 10, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, FINRA, Fintech, FX trading, GBP-USD, Sino-U.S. trade talks, trading, trading platform, USD/JPY

Summary: US bond yields and the Dollar grinded higher to three-week highs ahead of Jerome Powell’s two days of testimony to Congress. Traders will determine the chances of deep-rate cuts even as futures markets see a 95% probability of rate decrease at the Fed’s July meeting. The benchmark US 10-year treasury yield climbed to 2.06% (2.05%) while the Dollar Index (USD/DXY) rose to 97.499 (97.392), both three-week highs. Sterling slumped to 1.2465 from 1.2515, 6-month lows on Brexit worries and growing expectations of a rate cut from the Bank of England. The Australian Dollar dropped to 0.6930 from 0.6974, near two-week lows after a fall in NAB’s Business Confidence Index in May. The Euro edged further toward 1.1200, closing at 1.1208, down 0.07%. The Dollar grinded higher to 108.87 from 108.77 Japanese Yen, up 0.08%.
A late burst in technology stocks pulled Wall Street higher following two days of decline. The DOW finished flat (25,787) while the S&P 500 was up 0.11% (2,979).

FOREX FACTORY US JOLTS Job Openings – 10 July 2019

Australia’s National Australia Bank Business Confidence Index fell to 2 in May from 7 previously.
US JOLTS (Job Openings and Labour Turnover Survey) declined to 7.32 million in May while April’s Job Openings were revised down to 7.32 million from 7.45 million.

EUR/USD – The Single Currency slid further toward 1.1200, closing at 1.1213 after trading to an overnight and fresh 3-week low at 1.11934. The overall stronger US Dollar continues to weigh on the Euro.
AUD/USD – After trading to May 2019 highs just days ago, the Aussie has turned down to 0.6920 overnight and 2-week lows. AUD/USD closed at 0.6930 ahead of Powell’s testimony.
USD/JPY – The Dollar extended its gains versus the Japanese currency to 108.964 highs before settling to close at 108.87, up 0.08%. US bond yields continued to climb with the 10-year up one basis point to 2.06%.
GBP/USD – The British Pound slumped to an overnight and 6-month low at 1.24395 before bouncing to settle at 1.2165, 0.51% lower. Disappointing UK economic data of late (manufacturing and services PMI’s) have highlighted downward pressures in the economy. The BOE’s latest guidance suggested rates could go either way. Crucial May GDP and other primary data are released today.

On the Lookout: While markets await Powell’s testimony (midnight Sydney), primary economic data reports are in full swing today. The Bank of Canada is expected to keep its interest rate policy and overnight cash rate unchanged at 1.75% at the conclusion of its meeting today.
Asian data releases start off with New Zealand’s Food Price Index, Australia’s Westpac Consumer Sentiment Index, Japanese Producer Prices and Chinese CPI and PPI (annual).

CNBC US 10-Year Bond Yield Chart – 1M – 10 July 2019

European data reports start off with French and Italian Industrial Production followed by UK GDP, Manufacturing Production, Construction Output, Industrial Production and Goods Trade Balance.
Jerome Powell’s semi-annual testimony to the US House Financial Committee in Washington DC will have a question-and-answer session. FOMC member and St Louis Federal President speaks at a Fed function in St. Louis, Missouri. The release of the Fed’s FOMC latest meeting minutes (4 am Sydney, 11 July) round up the day’s events and reports.

Trading Perspective: FX markets are expecting Friday’s strong US Jobs report to influence Jerome Powell in his testimony with the Fed leaning to deliver no more than an insurance cut. Is it enough? The Fed made it clear that any interest rate easing would be data dependent. China and the US have agreed to re-start their trade talks. Although nothing concrete yet has been discussed.
Markets also know that Powell will not bow down to pressures from President Trump who has stepped up his criticism of the Fed and the stronger US Dollar.
The drop in US JOLTS Job Openings report last night was largely ignored from the FX price action. US Payrolls is a lagging economic indicator while the JOLTS is more forward looking.
The FOMC meeting minutes are most likely to be dovish leaning. The strong Jobs report will see a cautiously optimistic Powell, and his testimony will determine whether further interest rate cuts are in the offing.

EUR/USD – The Euro managed to rebound off its lows and hold just above the 1.12 level. After grinding lower for 3 straight days, EUR/USD looks poised to test yearly lows. The election of Christine Lagarde as new ECB President are building expectations of a more dovish leaning central bank. The latest COT/CFTC report saw speculative EUR short bets increase following a string of cuts. FX markets risk disappointment if Powell is less optimistic in his testimony. Immediate support lies at 1.1190 followed by 1.1160. Immediate resistance can be found at 1.1220 and 1.1250. Look for a likely range of 1.1190-1.1230 today with the preference to buy any Euro dips.
AUD/USD – The Aussie grinded to two-week lows after its failure last week to break above 0.7040. Broad-based US Dollar strength has weighed on the Aussie. Yesterday’s NAB Business Confidence report saw the Aussie slump 0.64% and finish as worst performing currency. AUD/USD has immediate support at 0.6920, 0.6900 and 0.6880. Immediate resistance can be found at 0.6950, 0.6980 and 0.7000. Market positioning also saw an increase in Aussie Dollar short bets in the latest COT/CFTC report. The RBA has cut rates twice in June and July. The Chinese economy has slowed down as a result of the trade war between the US and China. Market sentiment is bearish on the Aussie Battler and any US Dollar weakness will see the Aussie turn back up. Look for a likely range of 0.6920-0.6950 ahead of Powell. Prefer to buy dips.
USD/JPY – traded to just under 109 at 108.964 before settling at 108.87 at the NY close. US 10-year bond yields steadied to finish at 2.06% from 2.05% yesterday. USD/JPY has immediate resistance at 109.00 followed by 109.30. Immediate support can be found at 108.70 and 108.40. Look for a likely range of 108.60-109.10 into Powell’s testimony.

Trading View GBP USD Chart – 10 July 2019

GBP/USD – Disappointing UK economic data released last week, and the overall stronger US Dollar have weighed on the British currency. GBP/USD traded to 6-month lows at 1.24395 before settling a touch higher at 1.2465 from 1.2515 yesterday. Brexit jitters continue to dog the Pound. UK GDP, Manufacturing, Construction and Trade data are released later today.
The latest COT/CFTC report saw a build in GBP shorts to -GBP 58,900 bets from -GBP 52,600. Which is the biggest number of speculative short bets this year. Immediate support for the Pound lies at 1.2440 followed by 1.2400 and 1.2370. Immediate resistance can be found at 1.2500 and 1.2560. Much will depend on the US Dollar and Powell. Meantime look for a likely range today of 1.2440-1.2540.

Happy trading all.

Swiss Securitization Specialists Launch AMC platform for Asset Managers

July 9, 2019 by Ricardo Esteves Leave a Comment Filed Under: Industry News Tagged: AMC, CATFP, financial product, Fintech, GENTWO, Swiss ISIN

Three leading firms within the digital asset ecosystem, GENTWO, CAT Financial Products, and Aquila, have launched together an independent platform for next generation actively managed investment certificates (AMC Platform).

The new AMC platform enables Swiss asset managers to launch Swiss-compliant AMC (the next generation) with Swiss ISIN code on their own, and then make unlimited use of sophisticated portfolio management services. Individual investment products can be used on the platform as well as complete, bespoke issuance vehicles for the independent development of a complete product range or the qualitative development of an existing AMC offering.

GENTWO, a securitization specialist of next generation financial products, provides unrestricted access to its platform with its innovative next-generation issuance setup. CAT Financial Products (CATFP), a Swiss-based fintech firm specialized in structured products, ensures a smooth interface to the market and its
participants and provides access to its reporting technology. Aquila acts as custodian and clearing bank. Together they are setting a new standard in the Swiss AMC market and add value for Swiss asset managers and their clients.

AMC

Asset managers can use Active Managed Certificates (AMC), launched via GENTWO’s off-balance-sheet issuance setup, to implement their portfolio strategies and innovative ideas with particular flexibility and effectiveness.

Self-launched AMCs no longer carry a bank issuer risk and are not otherwise subject to many of the typical restrictions that occur with most traditional issuers of structured products. This allows for genuine issuer management with several other structured products being easily and conveniently integrated in a single AMC, mixed with other assets or instruments such as stocks, bonds or funds.

Asset managers can also reduce their operating expenses and also from the outset avoid tracking errors within their investment strategy as they can manage all accounts with identically managed asset allocation through a single AMC.

Philippe A. Naegeli, Chief Executive Officer of GENTWO, commented: “Our new platform speaks for the functioning of a modern market concept. Pursuing future-oriented innovation strategies alone is becoming rarer today. Modular composite expertise that are purely for a specific purpose are proving to be much more promising. By developing innovation strategies together, financial services providers (including banks) can easily and simply increase the relevance of their existing or new business model without much extra effort. This is the only way to generate growth for the market as a whole.”

Giuliano Glocker, Chief Executive Officer of CAT Financial Products, said: “In July 2018, together with GENTWO, we launched the first global platform for issuing actively managed certificates with one of the worldwide biggest online brokers as custodian and trading agent. We are very pleased to be launching another platform together with GENTWO and also with Aquila as a strong third partner. The outlook on the new opportunities is a further incentive for us. A much broader customer
base can now benefit from our range of services.”

Markus Angst, Managing Director of Aquila Custodian Bank, added: “We are banking partners in this partnership and look forward to successfully working together with GENTWO and CAT Financial Products. Merged core competencies form supply concept along the value chain The scope of the new platform, however, goes beyond the launch of investment products. As a custody and clearing bank, Aquila provides unlimited banking services. Process transparency, risk control, profound specialist knowledge as well as many years of experience provide the best possible conditions for this. CAT Financial Products AG (CATFP) is one of the leading Swiss investment solutions providers in the Structured Products market.

Strong Payrolls Gain Boosts US Dollar to More Than 2-Week Highs

July 8, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, CFTC, ECB, EUR-USD, financial services, Fintech, FX trading, GBP-USD, Sino-U.S. trade talks, USD/JPY

Summary: A strong US Jobs gain of 224,000 in June boosted the Dollar Index to more than two-week highs at 97.443 before settling at 97.174. The increase in Non-Farms Payrolls was the highest in 5 months and beat median analysts forecasts of +160,000. The Unemployment Rate rose to 3.7% from 3.6%, still near a 50-year low. Wages slowed to 0.2% from 0.3%, still running at an annual pace of 3.1%. May’s Payrolls gain was revised slightly lower to +72,000 from +75,000. US bond yields surged. The benchmark 10-year rate was up 9 basis points to 2.04%, the biggest one-day rise since early January. The Euro dropped 0.57% to end at 1.1227 after German Factory Orders fell more than expected. Sterling closed 0.54% lower at 1.2527 after hitting fresh 2019 lows at 1.2481. The Aussie fell to 0.6980 (0.7025), while the Kiwi slumped 1.1% to 0.6625 from 0.6691. USD/TRY (Dollar/Turkish Lira) gapped 2.1% higher to 5.78 from 5.62 after Turkish President Erdogan sacked the head of the central bank for refusing to cut rates.

Trading VIew – USD DXY Chart – 08 July 2019

German Factory Orders fell 2.2% against a forecast fall of 0.1% and a previous rise of 0.4%. Canada created a total of 27,700 jobs in June while the Jobless rate was unchanged at 5.5%. Japanese Core Machinery Orders released this morning saw order fall to -7.8% more than forecasts of -3.6%. Bank Lending in Japan was also lower at 2.3% from 2.6%.

EUR/USD – The Euro closed at 1.1227 after trading to an overnight and over 2-week low at 1.25074. Weaker-than-expected German factory output and a broad-based US Dollar rally pressurised the Single currency.
AUD/USD – The Aussie reversed gains after failing to break above 0.7050, closing 0.83% lower to 0.6980. The Australian Dollar was still above it’s weekly low at 0.6960.
USD/JPY – the Dollar rallied to 108.50 from 107.80 on Friday boosted by the surge in the US 10-year treasury yield.
GBP/USD – finished lower on overall US Dollar strength to 1.2527 from 1.2577. The British Pound hit January 2019 lows at 1.24813 before rallying at the close.

On the Lookout: Markets will now fix their eyes on a series of Fed speakers which start and finish with speeches to different audiences from Jerome Powell. The Federal Reserve President starts off with a speech tomorrow at a Fed Reserve Boston function. FOMC members Bullard and Quarles are also scheduled to speak mid-week. Powell’s testimony on Wednesday and Thursday before the US House Financial Services and Senate Banking Committee in Washington DC are this week’s highlights given Friday’s strong labour report.
Stocks futures were modestly lower on Friday due to the US fourth of July holiday trade. However, they managed to hold up well as markets still see a high probability of a Fed rate cut this month.
Today sees Australian ANZ Job Ads, and Japanese Current Account data for Asia. Europe starts off with German Industrial Production and Trade Balance. Eurozone Sentix Investor Confidence rounds up the Euro area reports. The US reports on its Consumer Credit for June.

Trading Perspective: The headline driven jobs report and thin markets boosted the Dollar Index to more than two-week highs. Moderate wage gains and downward revisions to April and May payrolls added to evidence of a slowing US economy.
Market positioning for the week ended 02 July saw total net speculative US Dollar long bets climb back to +USD 86,500 contracts from +USD 51,900. Net USD longs rose against the Pound, Euro and Aussie. Against the Japanese Yen, Dollar longs fell.

Investing.Com US 10-YEAR Bond Yield Chart – 08 July 2019

The strong one day rise in US bond yields also occurred in thin markets. The 10-year yield was up 9 basis points to 2.04%. This is still lower than March’s 2.42%.

Daily FX EUR USD Chart 08 July 2019

EUR/USD – The Euro slumped to an overnight low at 1.12074 before rallying to close at 1.1227. Broad based USD strength, weaker German factory output, and the appointment of the dovish-leaning Lagarde to the ECB have all weighed on the Single currency. Immediate support at 1.1200 held on Friday. If that is broken convincingly, the next support lies at 1.1180. Immediate resistance can be found at 1.1260 and 1.1280. Look for a likely range today of 1.1200-50. Prefer to buy dips.
AUD/USD – the Aussie fell back to 0.69574 before rallying to 0.6980 at the close. The Aussie’s failure to break above 0.7050 and broad-based US Dollar strength pushed the Battler lower. Net speculative Aussie short bets increased to -AUD 66,300 contracts from -AUD 64,900 in the latest COT/CFTC report (week ended July 2). AUD/USD has immediate support at 0.6960 followed by 0.6920. Immediate resistance can be found at 0.7000 and 0.7030. Look to trade a likely range today of 0.6965-0.7015. Prefer to buy dips.
USD/JPY – The Dollar bounced against the Japanese Yen to finish at 108.50 after an overnight high to 108.637. The strong US jobs report and surge in the US 10-year yield boosted this currency pair. USD/JPY has immediate resistance at 108.60 followed by 108.80 and 109.00. Immediate support can be found at 108.10 and 107.80. The latest COT/CFTC report saw speculative short JPY bets pared further to -JPY 10,100 from the previous week’s -JPY 16,600. Which is practically near square. Look to trade a likely range of 108.25-108.85.

Happy trading all.

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.

Bank for International Settlements Setting Up Innovation Hub Centre in Singapore

July 4, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: Bank, Fintech, Innovation Hub Centre

Singapore, 30 June 2019… The Monetary Authority of Singapore (MAS) welcomes the announcement by the Bank for International Settlements (BIS) to establish an Innovation Hub Centre in Singapore. The Hub Centre in Singapore, along with Hub Centres in Basel and Hong Kong, is a key pillar in a new BIS Innovation Hub initiative ^[1] to foster collaboration within the central banking community on FinTech issues.

The move by the BIS to set up an Innovation Hub Centre in Singapore reflects Singapore’s position as a leading international FinTech centre, with an advanced FinTech ecosystem. In collaboration with other central banks, the Singapore Hub Centre aims to develop the technology architecture for an efficient and secure digital global financial system and facilitate experiments in the application of technology to enhance financial regulation. The Singapore Hub Centre will commence operations as soon as the institutional arrangements ^[2] for its establishment have been finalised.

Mr Ravi Menon
Managing Director
Monetary Authority of Singapore
Mr Ravi Menon, Managing Director, MAS, said, “A wave of technological innovations is sweeping across financial services. To fully harness the benefits of these innovations while ensuring the resilience of the financial sector, central banks must also innovate – to modernise the technology infrastructure and regulatory arrangements that underpin digital finance and the digital economy. The BIS Innovation Hub initiative provides a compelling platform for central banks to collaborate in this effort, so as to maximise the benefits of cross-border digital connectivity and commerce. MAS looks forward to working closely with the BIS and the global central banking community to advance this visionary and important agenda.”

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