The Industry Spread

News and information for the global trading industry

BBM – Large Leaderboard 728 x 210
You are here: Home / Archives for FOMC

Minutes of the Monetary Policy Meeting of the Reserve Bank Board

by Leave a Comment Filed Under: Central Bank Annoucements, Central Bank News Tagged: , , , , ,

Members Present

Philip Lowe (Governor and Chair), Guy Debelle (Deputy Governor), Mark Barnaba AM, Wendy Craik AM, Philip Gaetjens, Ian Harper, Allan Moss AO, Carol Schwartz AM, Catherine Tanna

Others Present

Michele Bullock (Assistant Governor, Financial System), Luci Ellis (Assistant Governor, Economic), Christopher Kent (Assistant Governor, Financial Markets), Alexandra Heath (Head, Economic Analysis Department), Jonathan Kearns (Head, Financial Stability Department)

Anthony Dickman (Secretary), Andrea Brischetto (Deputy Secretary)

International Economic Conditions

Members commenced their discussion by noting that the slower pace of global economic activity had continued in recent months. This had been particularly evident in the manufacturing sector. Survey measures of conditions in the manufacturing sector had declined across a range of economies, although they had ticked up in China in March. Slower external demand, especially from China, had continued to weigh on export growth and the manufacturing sectors in the trade-exposed economies of east Asia, Japan and the euro area. In east Asia, the electronics cycle had turned, which had affected the region’s exports as well as investment in those economies with sizeable semi-conductor sectors.

Recent trade talks between the United States and China had taken on a somewhat more positive tone. However, the United States had also said it would consider imposing restrictions on automotive imports, which would affect large car exporters, including Germany and Japan.

In the major advanced economies, however, domestic demand conditions had remained positive, supported by an easing in financial conditions since the beginning of 2019, and were consistent with growth being around, or even above, potential. Underlying inflation had remained close to target in a number of advanced economies, but global headline inflation had declined since late 2018 because of the fall in oil prices.

Growth in consumption in the advanced economies had been supported by ongoing tightness in labour markets, which had led to an upward trend in wages growth over a number of years. In the United States, the unemployment rate had remained below levels consistent with full employment and employers had been finding it increasingly difficult to find suitable labour. Members observed that most sectors of the US labour market had experienced strong conditions and the pick-up in wages growth had been most pronounced for lower-income workers.

In Japan, consumption was expected to be supported by a bring-forward of spending ahead of an increase in the consumption tax in October 2019, as well as ongoing tightness in the labour market. In the euro area, the unemployment rate had been declining gradually and wage pressures had increased. However, employment intentions had eased in the euro area and, more sharply, in the United Kingdom in the context of ongoing uncertainty around Britain’s exit from the European Union.

The outlook for investment across the major advanced economies had been more mixed. In the United States, investment indicators had eased a little but remained above average, while investment in the euro area had weakened further. Members noted that political uncertainty in the United Kingdom and the euro area was weighing on investment in those economies. In Japan, survey measures suggested that business conditions would remain strong despite a prospective moderation in investment growth.

In China, growth in domestic demand had slowed. At its March meeting, the National People’s Congress had set a target of 6–6.5 per cent for growth in output in 2019, which was below the target of around 6.5 per cent in 2018. Members noted signs that stimulus measures implemented by the authorities over recent months were having an impact: growth in total social financing had increased a little, after slowing over the preceding year, and growth in infrastructure investment and retail spending had recovered. Residential construction activity had also increased. However, some recent indicators of production and investment in the manufacturing sector, which is more exposed to external demand, had been subdued. Exports from China to the United States had continued to decline, but China’s imports from the United States had increased a little over the first few months of 2019, after an earlier sharp decline. Australian coal shipments had continued to be affected by customs delays at Chinese ports.

Australia’s terms of trade had increased in the December quarter to be around 6 per cent higher over 2018. The terms of trade were expected to have increased further in the March quarter, although commodity price developments had been mixed since the previous meeting. Bulk commodity prices had been little changed because falls in coal prices had been largely offset by an increase in iron ore prices. Oil prices had risen, but were still 20 per cent below their recent peak in October 2018. Reflecting oil price movements in late 2018, liquefied natural gas (LNG) prices were expected to have declined over the first quarter of 2019. Other commodity prices had been little changed over the previous month.

Domestic Economic Conditions

Members commenced their discussion of the domestic economy by observing that growth had slowed markedly in the second half of 2018 compared with the first half. GDP had increased by 0.2 per cent in the December quarter and by 2.3 per cent over the year, which was below the forecasts presented in the February Statement on Monetary Policy. The soft December quarter outcome partly reflected another weak quarter of consumption growth and a larger-than-expected fall in dwelling investment. It also reflected some temporary factors, such as the weather-related disruption to resource exports and the effect of the drought. Public demand and non-mining investment had supported output growth. Members noted that the income-based measure of GDP growth had been particularly weak over the preceding year, while the expenditure-based measure had been stronger.

Growth in consumption had clearly slowed in the second half of 2018. The weakness had been concentrated in discretionary items, especially those that have historically been most correlated with housing prices and housing turnover, such as motor vehicles and home furnishings. Retail sales data and contacts in the Bank’s liaison program suggested that growth in housing-related consumption had remained soft in recent months.

Members noted that growth in household disposable income, which is an important driver of consumption growth, had been subdued for a number of years. In 2018, labour income growth had been above the very low rates seen in recent years, supported by a pick-up in growth in average hourly earnings and continued employment growth, but non-labour income growth had remained weak. Members observed that tax payments by households had been growing noticeably faster than income growth in recent years, partly because of efforts to increase tax compliance.

Dwelling investment appeared to have passed its peak, although there continued to be uncertainty about how quickly dwelling investment might decline over the forecast period. Construction of new dwellings had contracted in the second half of 2018; the largest falls in the December quarter had been for apartments in New South Wales and detached housing in Queensland. Slower housing activity had also weighed on the incomes of some building contractors and property professionals in the December quarter. There continued to be a large amount of work in the pipeline, which should support a relatively high level of building activity in the near term. Members noted that there had been a substantial rise in building approvals for high-density residential projects in February, although this series was volatile and in trend terms remained well below earlier peaks. Members also noted that population growth was expected to continue to support demand for housing over the medium term.

Conditions in the established housing market had remained weak in recent months. Housing prices had continued to fall in Sydney, Melbourne and Perth, and had declined a little in most other capital cities and regional areas. In March, Sydney prices were 13 per cent below their 2017 peak and Melbourne prices were 10 per cent below their peak. Although auction clearance rates in Sydney and Melbourne had increased over the first quarter of 2019, they remained at relatively low levels. Members noted that in Perth, housing prices had declined over the previous year, while the rental vacancy rate had declined sharply and there were signs that newly advertised rents were starting to increase. By contrast, rental vacancies in Sydney had risen, particularly in suburbs where the supply of new apartments had increased significantly.

Non-mining business investment had grown solidly in the December quarter, with non-residential construction having made the largest contribution to growth in the quarter, driven partly by strong growth in private sector infrastructure projects, such as roads and renewable energy. Forward-looking indicators, such as the substantial amount of work still to be done on private infrastructure projects, the relatively high level of non-residential building approvals and positive business investment intentions, pointed to further growth in non-mining business investment. Survey measures of business conditions had declined in late 2018, but had stabilised at above-average levels.

Mining activity had subtracted from growth in the second half of 2018, mainly reflecting ongoing declines in mining investment as remaining LNG projects approached completion. Members noted that investment required to sustain capacity and recently announced expansion projects were expected to support stronger mining investment over the medium term. Declines in resource exports, partly related to supply disruptions, had also subtracted from growth in the second half of 2018. Coal exports to China had declined by 20 per cent, partly as a result of weather-related disruptions. The longer time taken for imports of coal to clear Chinese customs in recent months was also likely to have played a role. Liaison contacts had reported that they expected to continue to be able to redirect coal shipments intended for China to other destinations. Members noted that there had been some disruptions to iron ore shipments as a result of Tropical Cyclone Veronica, which were likely to have affected iron ore export volumes in March.

The ongoing effects of the drought had weighed on farm output and income in the December quarter, and rural exports had declined; farm GDP had fallen by more than 6 per cent over the second half of 2018. Based on the latest estimates from the Australian Bureau of Agricultural and Resource Economics and Sciences, farm production was expected to improve gradually in 2019/20 assuming rainfall returned to average levels. This was a more favourable outlook than had been assumed in the forecasts presented in the February Statement on Monetary Policy. However, members noted that shortages of water in the Murray-Darling Basin had been severe and that it would take significant rainfall to increase soil moisture content from current low levels in this region.

Public demand had contributed strongly to GDP growth over 2018, supported by spending on the National Disability Insurance Scheme and aged care and health services, and investment in infrastructure. Members noted that, despite this, the overall fiscal impact on the economy had been negative because of slow growth in some other forms of government expenditure and strong growth in tax revenues.

The labour market had continued to improve in early 2019, despite the slowing in growth recorded in the national accounts through 2018. Employment had increased a little in February, following strong growth in January, and the unemployment rate had declined to 4.9 per cent, continuing the run of months with an unemployment rate at or around 5 per cent. Other measures of spare capacity, including the underemployment rate and the long-term unemployment rate, had also trended downwards. The participation rate had been relatively stable at a high level over the preceding year or so.

Employment growth over the previous year had been particularly strong in the health care & social assistance, professional services and construction industries. Over the same period, employment-to-population ratios had increased further in New South Wales and Victoria, where unemployment rates had been around historically low levels. Employment-to-population ratios had declined a little in other states more recently. Forward-looking indicators of labour demand had been mixed in recent months. Job advertisements had eased, but job vacancies reported by employers through the ABS survey had increased further as a share of the labour force in February.

Financial Markets

Members commenced their discussion of financial market developments by noting that global financial conditions remained accommodative and had eased over the preceding couple of months.

Market expectations for the future path of monetary policy in a number of economies had been lowered since the beginning of the year. This was consistent with guidance from major central banks that monetary policy would remain more accommodative than earlier expected, given downward revisions to growth forecasts and little upside risk to inflation despite increasingly tight labour markets.

At its March meeting, the US Federal Open Market Committee (FOMC) had kept the federal funds rate unchanged and announced that the decline in the Federal Reserve’s asset holdings would slow from May and cease after September, which was sooner than had been expected. The FOMC also published the quarterly update of its members’ projections for where they believed the federal funds rate was likely to be in coming years. These projections implied that the federal funds rate was likely to remain unchanged throughout the rest of 2019, followed by one increase (of 25 basis points) in 2020. By contrast, at the time of the December 2018 meeting, the median FOMC projection had been for two rate increases in 2019 and one in 2020. Policy expectations implied by financial market pricing had also been revised down since December. These implied that the next move in the federal funds rate was expected to be down.

In the euro area and Japan, financial market pricing indicated that policy rates were expected to be maintained at very low levels for an extended period, in line with recent statements by the respective central banks. In March, the European Central Bank had announced that it would roll over a long-term lending program to euro area banks. In Canada, New Zealand and Australia, financial market pricing implied that declines in policy rates were expected in the coming year or so.

Members noted that 10-year government bond yields had declined noticeably across all major markets over the preceding month. In some cases, including in Australia, yields had declined to historic lows. These declines had reflected lower expected paths for monetary policy, lower term premiums and, to varying extents, lower inflation expectations. In Germany and Japan, long-term bond yields had again turned negative, approaching the lows that had been reached in 2016. In the United States, long-term rates had moved below some short-term rates for a brief period, with market commentators noting that past episodes of yield curve inversion had tended to precede recessions. At the same time, the recent decline in risk premiums in credit and equity markets suggested financial market participants did not consider a recession to be likely.

Members observed that financing conditions for corporations had improved. Corporate bond yields had moved lower, reflecting the decline in government bond yields as well as a decline in spreads following increases in late 2018. Non-financial firms had increased their bond issuance in 2019, particularly in the US dollar high-yield sector. By contrast, issuance of leveraged loans had been more subdued, which partly reflected an easing in investors’ appetites for floating rate securities in response to the lowering of policy rate expectations. Equity markets in the advanced economies had been little changed in March, having previously rebounded from their sharp fall in late 2018.

In China, equity markets had risen particularly sharply since the end of 2018, which was likely to have reflected some easing in US–China trade tensions, as well as the authorities’ stimulus measures. Growth in total social financing had increased a little in recent months, as the authorities had taken measures to encourage bond issuance. They had also encouraged banks to provide finance to smaller private firms. To support this, the authorities had signalled additional targeted monetary easing for the period ahead. These changes had followed a slowing in the growth of total social financing over the preceding year or more as the authorities had taken measures to reduce non-bank lending, which had been an important source of funding for private firms, in order to reduce overall risks in the financial system.

In other emerging markets, conditions had been relatively stable in 2019, although Argentina and Turkey had experienced renewed depreciation of their exchange rates in response to continued macro-financial and political risks in those economies.

Members noted that there had been little change in major economies’ foreign exchange markets over the preceding month. The Australian dollar had also been little changed, remaining at the lower end of its range of recent years. The strength in commodity prices and the terms of trade had been supporting the exchange rate, while the continued decline in Australian government bond yields relative to those in other major markets had been working in the opposite direction.

Growth in housing lending to owner-occupiers had slowed to 4¾ per cent in six-month-ended annualised terms, although the monthly growth rate had increased slightly in February. Growth in housing lending to investors remained at a very low level. Housing loan approvals were materially below the levels of a year earlier, but had also increased slightly in February, with the small uptick in approvals broadly based across types of borrowers. Members observed that the slowing in housing lending over the preceding year had been driven largely by weakness in demand, particularly from investors. There had also been some tightening in lending practices. Lenders continued to compete for borrowers of high credit quality by offering lower interest rates on new loans than typically paid on existing loans.

Members noted that the major banks’ funding costs had declined over the preceding couple of months. The cost of debt funding had declined as pressures had eased in short-term money markets and bank bond spreads had narrowed. Deposit rates had also continued to edge downwards.

Funding conditions for Australian businesses more broadly were accommodative. Three-year bond yields for corporations across all major sectors had declined to record lows, reflecting the decline in both government bond yields and spreads. Bond issuance by non-financial corporations in the first quarter of 2019 had been in line with that of recent years. Growth in bank lending to businesses had remained robust, in part reflecting increased lending by the major banks, although other institutions had accounted for most of the growth. Members observed that the growth in business lending had been entirely to large businesses. Meanwhile, credit conditions for some small businesses were reported to have tightened further recently.

Financial market participants’ expectations of a rate cut had been brought forward following weaker than expected data, most notably the December quarter national accounts. Financial market pricing implied that the cash rate was expected to be lowered in the second half of 2019 and then again in 2020.

Australian Economy

Australian Economy

Financial Stability

Members were briefed on the Bank’s regular half-yearly assessment of the financial system. Overall, members noted that financial stability risks were slightly higher than six months earlier but were not especially elevated.

Globally, investors were receiving little compensation for taking on risk. Notably, risk-free rates were very low and the term premium in the United States had briefly turned negative. Furthermore, corporate bond spreads remained low. These conditions had contributed to the significant increase in borrowing by businesses since the global financial crisis. However, members noted that debt servicing costs had not increased to the same extent, given the decline in interest rates over this period. The high prices of a range of assets in this environment meant that there was heightened risk of an abrupt repricing in response to news.

Members observed that the profitability of banks globally had generally increased. In part, this reflected above-trend economic growth in the first half of 2018. However, some European banks remained fragile, given large stocks of non-performing loans, high cost structures and overcapacity. The large stock of sovereign debt held by some European banks, along with concerns about sovereign debt sustainability, raised potential issues about the resilience of some banking systems.

In China, the authorities had taken measures to contain risks in the financial system. As a result, the pace of growth in debt had slowed to below the pace of growth in the economy. However, given the earlier rapid growth in debt, China’s ratio of non-financial debt to GDP remained higher than in other economies with comparable income and even higher than in many high-income economies. Members noted that the earlier rapid growth in debt had also raised concerns about the lending standards under which those loans had been made.

In Australia, conditions in the housing market had remained weak. Housing prices had fallen further in the capital cities and regional areas. Over the preceding six months, the falls had been largest in Sydney and Melbourne, but prices in these cities had remained more than 40 per cent higher than in 2012. Falls in housing prices had resulted in some borrowers having negative equity, where the value of their loans exceeded that of their properties. Nationally, just over 2 per cent of borrowers, accounting for less than 3 per cent of housing debt, were estimated to have negative equity. Around 90 per cent of these borrowers were in Queensland, Western Australia and the Northern Territory. Members observed that negative equity by itself was not a concern for financial stability. However, if unemployment were to rise and borrowers were not able to continue to make repayments, then financial institutions would incur increased losses. Members noted that the decline in high loan-to-valuation ratio (LVR) lending in recent years was expected to lessen any losses for lenders. In recent quarters, almost all loans to investors had LVRs less than 90 per cent. By contrast, a decade earlier only 85 per cent of loans to investors had LVRs less than 90 per cent. The share of owner-occupiers with high LVR loans had also declined.

Members noted that total household payments on housing debt as a share of income had been broadly stable in recent years. Within the total, however, an increase in scheduled principal repayments had roughly offset a fall in unscheduled principal repayments. Members noted that households’ excess payments amounted to about two-and-a-half years’ worth of scheduled repayments on average. Housing loan interest payments had increased slightly as housing debt had increased.

Banks’ assets had continued to perform well overall. Although banks’ non-performing housing loans had increased, they remained low at less than 1 per cent of their total housing lending. Members noted that the increase in housing loan arrears had been driven by loans remaining in arrears for longer, on average. Banks’ business loans had been performing well, with non-performing loan rates around their lowest levels in a decade. Banks had continued to accumulate capital, with the capital ratios of the four major banks all exceeding or close to the ‘unquestionably strong’ benchmarks set out by the Australian Prudential Regulation Authority (APRA).

The tightening in banks’ housing lending practices over recent years had been accompanied by an increase in lending by non-banks, although this was still estimated to account for less than 5 per cent of total housing credit. Members noted that, while not subject to prudential regulation by APRA, non-banks’ housing lending is subject to responsible lending obligations. The available evidence suggested that the riskiness of non-bank housing lending had not increased.

Members noted that the International Monetary Fund’s Financial Sector Assessment Program report on the Australian financial system was generally positive about the resilience of domestic financial institutions and the quality of regulatory and supervisory oversight, but made several high-level recommendations for improving current arrangements.

Considerations for Monetary Policy

In considering the stance of monetary policy, members observed that growth in the global economy had slowed over the second half of 2018 and into 2019. Trade tensions and political developments in Europe remained sources of uncertainty. At the same time, though, global financial conditions had eased in preceding months and, in China, the authorities had provided targeted stimulus to support domestic growth. In a number of economies, continued strength in labour market data and moderating GDP growth were sending different signals about the momentum in economic activity. Members noted that this was also the case in Australia. While the labour market had continued to improve in early 2019, GDP growth had slowed over 2018. Continued low growth in household disposable income and the adjustment in housing markets had weighed on household spending.

Members noted that the sustained low level of interest rates over recent years had been supporting economic activity and had contributed to progress in reducing the unemployment rate and returning inflation towards the midpoint of the target, albeit only gradually. The central scenario was for further gradual progress to be made on both unemployment and inflation. Members observed that a pick-up in growth in household disposable income was an important element of these forecasts. Given this outlook for further progress towards the Bank’s goals, members agreed that there was not a strong case for a near-term adjustment in monetary policy. Members recognised that it was not possible to fine-tune outcomes and that holding monetary policy steady would enable the Bank to be a source of stability and confidence.

Members agreed that inflation was likely to remain low for some time. Wages growth had remained low, there continued to be strong competition in the retail sector and governments had been working to ease cost of living pressures, including through their influence on administered prices. In these circumstances, members agreed that the likelihood of a scenario where the cash rate would need to be increased in the near term was low.

Members also discussed the scenario where inflation did not move any higher and unemployment trended up, noting that a decrease in the cash rate would likely be appropriate in these circumstances. They recognised that the effect on the economy of lower interest rates could be expected to be smaller than in the past, given the high level of household debt and the adjustment that was occurring in housing markets. Nevertheless, a lower level of interest rates could still be expected to support the economy through a depreciation of the exchange rate and by reducing required interest payments on borrowing, freeing up cash for other expenditure.

Taking account of the further progress expected towards the Bank’s goals, members assessed that it was appropriate to hold the cash rate steady. Looking forward, the Board will continue to monitor developments, including how the current tensions between the domestic GDP and labour market data evolve, and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time.

The Decision

The Board decided to leave the cash rate unchanged at 1.5 per cent.

Higher US Yields Boost Dollar, Euro, Pound, EM’s Retreat

by Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: , , , , , , , , , , , ,

Summary: Higher US bond yields boosted the Dollar despite a decline in Industrial Production. The benchmark US 10-year yield climbed 3 basis points to 2.59%, back to March 20 pre-FOMC levels. The Euro retreated to finish at 1.1280 (1.1302) while Sterling fell back 0.39% to 1.3051 (1.3100). Germany’s ZEW Economic Sentiment Index in March soundly beat forecasts. A solid UK Employment report failed to lift the British currency against the overall stronger Greenback. The Dollar Index (USD/DXY) rose to 97.085, up 0.15%, its highest in 4 days. Elsewhere, the Australian Dollar slumped to 0.71396 immediately following the release of the RBA minutes which traders interpreted as dovish. The Aussie Battler bounced back to close little-changed at 0.7172. A data-dump from China, the trifecta of Industrial Production, Retail Sales, Fixed Asset Investment, including Q1 GDP, will determine the fate of risk and the Aussie today. Emerging Market currencies eased. Stocks slipped at the close. The Dow was down 0.06% while the S&P 500 lost 0.03%.

Trading View - One Month US 10-year bond yield - 17 APR 2019

Trading View – One Month US 10-year bond yield – 17 APR 2019

  • AUD/USD – the Aussie closed flat at 0.7172 after testing an overnight low at 0.71396. Markets initially interpreted the RBA minutes as dovish. Policymakers were less confident in the labour and housing markets. However, the RBA did not weigh an interest rate cut.
  • EUR/USD – the Euro failed to break up through the strong resistance level of 1.1320-30 and closed at its immediate support level of 1.1280. Germany’s ZEW survey showed concerns on the region’s outlook are fading. Tomorrow’s Eurozone Trade and inflation followed by Thursday’s Euro area and Eurozone PMI’s will be closely watched.
  • GBP/USD – Sterling fell against the overall stronger Greenback to 1.3050 from 1.3100. Reports that talks between PM May and the Labour party had stalled also weighed on the Pound.
  • USD/JPY – the Dollar finished little-changed against the Yen. Higher US yields will continue to support this currency pair. Market talk of an options play with a 112.00 strike abound.

On the Lookout: It’s all about China today. Analysts are expecting the worst for the world’s second largest economy to be over with. Recent export and credit data beat expectations. China’s Q1 GDP is expected to grow at an annual 6.3% from the previous 6.4%. Improvements are forecast in China’s trifecta of Industrial Production, Retail Sales and Fixed Asset Investment. We could be in for a few surprises. Tin helmets on.
Apart from China, the Eurozone reports on its Current Account and Final Headline and Core CPI data for March. The UK follows with its Headline, Core CPI, PPI input and House Price Index. Canadian Inflation (CPI, Core CPI and Trimmed-Mean CPI) are next. US March Trade Balance rounds up today’s busy data.

Trading Perspective: Easter markets are always characterised by less liquidity which lead to break-out attempts and wider trading ranges. Often, the break-outs are temporary. Traders need to keep aware of the respective levels. Market positioning will have a greater impact in thin conditions. There may be some large options strategies lying around with expiries in the next few days. The currencies have been stuck in relatively tight ranges content to consolidate, searching for catalysts to move. There is a lot of economic data released this week, the bulk of which come today and tomorrow. Keep watch on the data.

  1. EUR/USD – The Euro slipped to its immediate support level, settling just above 1.1280. The next support level lies at 1.1250. This is a strong support level and should hold if the Euro is to continue its march higher. Immediate resistance today can be found at 1.1310 and 1.1330. Bear in mind the speculative short Euro bets are at multi-year highs. Some of those shorts will be looking to cover on any dips. Sentiment on the Single currency is still bearish which should keep the Euro between 1.1250-1.1330 for now. Prefer to buy on dips.
DAILY FX AUD USD Hourly - 17 APR 2019

DAILY FX AUD USD Hourly – 17 APR 2019

  1. AUD/USD – The Aussie had a good bounce off it’s RBA induced lows. At the end of the day, the RBA did not signal any rate cuts even if policymakers expressed less confidence on the recent labour and housing data. It’s all about China today. AUD/USD has immediate resistance at 0.7180 and 0.7210. Immediate support lies at 0.7140 and 0.7110. Speculative Aussie short bets were pared to -AUD 54,400 from the previous -AUD 55,700. Look for a likely range today of 0.7160-0.7210. Prefer to buy dips.
  2. USD/JPY – The Dollar failed to gain ground against the Yen despite the climb in the US 10-year yield. Stocks reversed to ease at the close. USD/JPY closed at 112.01 (112.04 yesterday). Overnight high traded was 112.045. Immediate resistance lies at 112.10 followed by 112.30. Immediate support can be found at 111.85 followed by 111.55. The close around 112.00 is not surprising considering reports of an Options play with the strike price at 112.00. JPY short bets are the second biggest next to the Euro. The latest COT/CFTC report (week ended April 9) saw a build-up of net JPY shorts to -JPY 71,500 bets from the previous week’s -JPY 62,700. Look to sell rallies with a likely range of 111.60-112.10 today.
  3. GBP/USD – Sterling traded to an overnight low of 1.30425 after failing to clear above 1.3100. Solid UK Employment data which saw UK Unemployment remain at 45-year low of 3.9%, and an Employment rise to 179,000 failed to lift the Pound. Sterling has immediate support at 1.3040 followed by 1.3010. Immediate resistance can be found at 1.3100 and 1.3140. Look to buy dips today with a likely range of 1.3040-1.3110.

Happy trading all.

Dollar Retreats; Upbeat China Trade Boosts AUD, Risk

by Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: , , , , , , , ,

Summary: Upbeat Chinese exports, a less-than-expected fall in Eurozone Industrial Production, and solid US earnings boosted risk assets and weighed on the US Dollar.  The Euro extended its rise to close above 1.13 (1.1303), near 3-week highs. Traders attributed part of the Euro’s climb to anticipated currency demand due to a large commercial EUR/JPY purchase. Reuters reported that Japan’s Mitsubishi UFJ Financial Group plans to purchase the aviation financing arm of Germany’s DZ Bank, according to FX traders. The Australian Dollar outperformed, jumping 0.62% to 0.7172, its highest finish since February 27. China’s trade data showed a rebound in exports last month which offset weaker imports. USD/JPY rose to 112.09 for the first time since March 5, settling at 111.99, up 0.3%. The Kiwi rallied 0.47% to 0.6763 (0.6730 Friday).
A solid start to the US earnings season boosted Wall Street stocks. The S&P 500 rose 0.7% to 2,909.00 (2,890 Friday). The US 10-year bond yield climbed 7 basis points to 2.57%.
Eurozone Industrial Production in March slipped 0.2% against a forecast drop of 0.5%. US Preliminary University of Michigan Consumer Sentiment missed at 96.9 against an expected 98.1.

Daily FX EUR USD Chart - 15 April 2019

Daily FX EUR USD Chart – 15 April 2019

  • EUR/USD – the Euro resumed its rally climbing to 1.13237 before easing to 1.1302 at the New York close. It was the first close above 1.1300 since March 25.
  • USD/JPY – The Dollar rallied against the Yen to 112.093 before easing to 111.99. USD/JPY was boosted by the anticipated commercial transaction which would involve a EUR/JPY purchase. Increased risk appetite and a higher US 10-year bond yield also helped.
  • AUD/USD – The Aussie jumped to 0.71922, highs not seen since late February before easing to close at 0.7175 in New York. Upbeat Chinese trade data and the market’s current appetite for risk are shaking a lot of the Aussie bears.

On the Lookout: Markets start off today with limited data releases ahead of the Easter shortened week with heavy data releases mid-week. Today sees US Empire State Manufacturing Index while FOMC member and Chicago Fed President Charles Evans speaks in a CNBC Squawk Box TV interview. Tuesday starts off with the minutes of the RBA’S March Monetary Policy meeting. This is followed by the UK Average Weekly Earnings, Unemployment rate and Claimant Count Change data as well as Germany’s ZEW Economic Sentiment Index.  US Capacity Utilisation and Industrial Production data for March round off the data releases. Wednesday sees China’s trifecta of Industrial Production, Retail Sales and Fixed Asset Investment as well as Q1 2019 GDP. The UK and Canada report their Headline and Core CPI data for last month. On Thursday we start off with Australia’s March Employment report, Euro-area and Eurozone Flash Manufacturing and Services data, UK, Canada and US Headline and Core Retail Sales data, as well as US Flash Manufacturing and Services PMI as well as Philadelphia Fed Manufacturing Index. Most financial centres will be closed on Friday to commemorate Good Friday.

Trading Perspective: Expect the Dollar to trade within ranges against its Rivals, albeit slightly weaker. The higher US bond yields were not matched by rises from its rivals. The US 10-year bond yield rose a whopping 7 basis points to 2.57%. Germany’s 10-year Bund Yield was up 4 basis points to 0.05%. UK 10-year Gilts yielded 1.21% from 1.15%. Japan’s 10-year JGB yield closed flat at -0.06%.

Barchart.Com USD DXY (Dollar Index) Chart - 15 April 2019

Barchart.Com USD DXY (Dollar Index) Chart – 15 April 2019

This should give the Greenback support. Market positioning still favoured the Greenback, particularly against the Euro and JPY. Net short Euro and JPY bets increased while shorts against the Pound and Australian Dollar were trimmed, according to the latest Commitment of Traders CFTC report for the week ended 9 April. On other fronts, US trade officials have signalled that a trade deal between the US and China is near. Immediate Brexit risks have been pushed back and this benefits the Pound. Politically, the IMF has voiced its concern regarding President Trump’s attempts to politicise the Fed. With liquidity expected to dry up as we approach the Easter weekend, there could be some fireworks in the making… finally.

  1. EUR/USD – The Euro has shifted its range higher after repeated downside tests failed. Speculative EUR shorts continue to grow. The latest COT report (week ended 9 April) saw speculative EUR short bets increase to -EUR 102,200 bets from the previous week’s -EUR 99,200. EUR/USD has immediate resistance at 1.1325 followed by 1.1350. Immediate support can be found at 1.1275 and then 1.1250, which is strong. A break above 1.1350 could see the Euro accelerate toward 1.1400. The 1.1250 level should hold and see the EUR/USD shift higher. Likely range today 1.1285-1.1335. Prefer to buy dips.
  2. USD/JPY – The Dollar rallied to 112.09 before easing to settle around 112.00. The 7-point climb in the US 10-year yield and increased risk appetite will support USD/JPY. For now. The latest Commitment of Traders report saw an increase in JPY shorts to -JPY 71,500 bets from the previous week’s -JPY 62,700. The Yen is the second largest shorted currency against the US Dollar. Immediate resistance lies at 112.25 followed by 112.50. Immediate support can be found at 111.70 and 111.30. Look for a likely trading range of 111.70-112.20 today. Prefer to sell rallies.
  3. AUD/USD – The Aussie’s rally has been impressive, boosted by the overall weaker Greenback, healthy risk appetite and higher iron ore prices. For almost two months the Aussie couldn’t take a trick and was depressed with many calling for a break of 0.70 US cents. AUD/USD has immediate resistance at 0.7200 followed by 0.7250. Immediate support can be found at 0.7150 and 0.7120. The latest COT report (week ended April 9) saw speculative Aussie shorts trimmed to -AUD 54,400 from –AUD 55,700. Prefer to buy dips with a likely range today of 0.7160-0.7210.
  4. USD/DXY – The Dollar Index slipped to close at 96.85, down 0.32%. The immediate support at 96.70/80 is strong and should hold initial attempts. Immediate resistance can be found at 97.00 and 97.30. The big resistance level is 97.50 which was failed to break decisively in recent weeks.

Have a good week ahead all, happy trading.

U.S. Economic Outlook and Monetary Policy

by Leave a Comment Filed Under: Central Bank Annoucements, Central Bank News Tagged: , , , , , ,

Thank you for the opportunity to participate in the Institute of International Finance’s Washington Policy Summit. Before we begin our conversation, I want to share a few thoughts about the outlook for the economy and monetary policy.1

Current Economic Situation and Outlook
The U.S. economy is in a good place and operating close to both of the Federal Reserve’s dual-mandate objectives of maximum employment and price stability. Real gross domestic product (GDP) rose about 3 percent last year, and in July, just a few months from now, the current economic expansion almost certainly will become the longest on record. The unemployment rate is near the lowest level recorded in 50 years, and average monthly job gains have continued to outpace the increases needed over the longer run to provide jobs for new entrants to the labor force. Average hourly earnings are showing a welcome increase consistent with a healthy labor market, yet inflation remains near our 2 percent objective.

FOMC

All that said, the incoming data have revealed signs that U.S. economic growth is slowing somewhat from 2018’s robust pace. Prospects for foreign economic growth have been marked down, and important international risks, such as Brexit, remain. U.S. inflation as measured by the core personal consumption expenditures (PCE) price index, which excludes volatile food and energy prices and is a better gauge of underlying inflation pressures, has been muted. And some indicators of longer-term inflation expectations remain at the low end of a range that I consider consistent with our price-stability mandate.

The considerations I just mentioned have led most private-sector forecasters to project that growth will continue in 2019 but at a somewhat slower pace than in 2018. At the Federal Reserve, in our most recent Summary of Economic Projections, the median participant on the Federal Open Market Committee (FOMC) projected that in 2019, GDP growth of 2 percent will be the modal, or most likely, outcome; that core PCE inflation will rise to 2 percent; and that the unemployment rate will fall a bit further, to 3.7 percent, by the end of the year. Again, these are modal outcomes, and, of course, my FOMC colleagues and I should and do factor in risks on either side of these projections in our policy deliberations.

Monetary Policy
Given this outlook for the U.S. economy, we decided at our March meeting that the current stance of monetary policy is appropriate.2 The federal funds rate is now in the broad range of estimates of neutral–the rate that tends neither to stimulate nor to restrain the economy. Our baseline economic projections see economic growth for the year as a whole running somewhat above the Committee’s median estimate of its longer-run trend and core PCE inflation remaining near our 2 percent objective. For these reasons, we have indicated we can be patient as we assess what adjustments, if any, will be appropriate to the stance of monetary policy.

At our March meeting, the Committee also released revised Balance Sheet Normalization Principles and Plans, and it announced that the FOMC intends to slow the runoff of our securities starting in May and to cease the runoff entirely in September.3 This decision is the culmination of discussions that we had over the previous four meetings about our operating framework and reflects our desire to converge to a balance sheet that is no larger than it needs to be to conduct monetary policy efficiently and effectively. In September, reserve balances likely will remain above the minimum level, including a buffer, consistent with this goal. In that case, we anticipate we will likely hold the size of our balance sheet at the level reached in September for a time thereafter and let the gradual increase in other (nonreserve) liabilities, such as currency, slowly shrink the level of reserves. Importantly, with this decision on the size of our balance sheet now taken, we can turn our attention in future meetings to discussing and deciding on the maturity composition of our System Open Market Account portfolio.

As you may know, last November the Federal Reserve announced that in 2019 we are undertaking a System review of our monetary policy strategy, tools, and communications practices. Information about this review can be found on the Federal Reserve Board’s website.4 In this review, we will listen to a broad range of stakeholders at public events held around the country, and we will draw on their insights as we assess how best to achieve and maintain maximum employment and price stability in the most robust fashion possible. Taking these viewpoints on board, the FOMC will begin its own discussions this summer on how we might refine our framework, and we will provide a public assessment after the review is complete.

Thank you, and I look forward to our conversation.

The Federal Reserve’s Review of Its Monetary Policy Strategy, Tools, and Communication Practices

by Leave a Comment Filed Under: Central Bank Annoucements, Central Bank News Tagged: , , , , , , , ,

I am pleased to attend this Fed Listens event on the distributional consequences of the business cycle and monetary policy. The Opportunity and Inclusive Growth Institute at the Federal Reserve Bank of Minneapolis is a natural venue for discussing this topic in the context of the broad review of our monetary policy framework that we are undertaking this year.1 In our review, we are examining the policy strategy, tools, and communication practices that the Federal Open Market Committee (FOMC) uses to pursue the Fed’s dual-mandate goals of maximum employment and price stability. I will speak this evening about the motivation for and scope of our review. We are bringing open minds to it and are seeking perspectives from a broad range of interested individuals and groups, such as the panel of researchers we heard from this afternoon and the community leaders we will hear from tomorrow. To us, it simply seems like good institutional practice to engage broadly with the public in this review as part of a comprehensive approach to enhanced transparency and accountability.2

Motivation for the Review
The Federal Reserve has been charged by the Congress with a dual mandate to achieve maximum employment and price stability, and this review will take this mandate as given. Moreover, the review will take as given that a 2 percent rate of inflation in the price index for personal consumption expenditures (PCE) is the operational goal most consistent with our price stability mandate. While we believe that our existing framework for conducting monetary policy has served the public well, the purpose of this review is to evaluate and assess ways in which our existing framework might be improved so that we can best achieve our dual mandate objectives on a sustained basis. That said, based on the experience of other central banks that have undertaken similar reviews, our review is more likely to produce evolution, not a revolution, in the way that we conduct monetary policy.

With the U.S. economy operating at or close to our maximum-employment and price-stability goals, now is an especially opportune time to conduct this review. The unemployment rate is at a 50-year low, and inflation is running close to our 2 percent objective. We want to ensure that we are well positioned to continue to meet our statutory goals in coming years. In addition, the Federal Reserve used new policy tools and enhanced its communication practices in response to the Global Financial Crisis and the Great Recession, and the review will evaluate these changes. Furthermore, the U.S. and foreign economies have evolved significantly since the experience that informed much of the pre-crisis approach.

Perhaps most significantly, neutral interest rates appear to have fallen in the United States and abroad.3 Moreover, this global decline in r* is widely expected to persist for years. The decline in neutral policy rates likely reflects several factors, including aging populations, changes in risk-taking behavior, and a slowdown in technology growth. These factors’ contributions are highly uncertain, but, irrespective of their precise role, the policy implications of the decline in neutral rates are important. All else being equal, a fall in neutral rates increases the likelihood that a central bank’s policy rate will reach its effective lower bound (ELB) in future economic downturns. That development, in turn, could make it more difficult during downturns for monetary policy to support household spending, business investment, and employment, and keep inflation from falling too low.4

Another key development in recent decades is that inflation appears less responsive to resource slack. That is, the short-run Phillips curve appears to have flattened, implying a change in the dynamic relationship between inflation and employment.5 A flatter Phillips curve is, in a sense, a proverbial double-edged sword. It permits the Federal Reserve to support employment more aggressively during downturns‑‑as was the case during and after the Great Recession–because a sustained inflation breakout is less likely when the Phillips curve is flatter.6 However, a flatter Phillips curve also increases the cost, in terms of economic output, of reversing unwelcome increases in longer-run inflation expectations. Thus, a flatter Phillips curve makes it all the more important that longer-run inflation expectations remain anchored at levels consistent with our 2 percent inflation objective.7

Finally, the strengthening of the labor market in recent years has highlighted the challenges of assessing the proximity of the labor market to the full employment leg of the Federal Reserve’s dual mandate. The unemployment rate, which stood at 3.8 percent in March, has been interpreted by many observers as suggesting that the labor market is currently operating beyond full employment. However, the level of the unemployment rate that is consistent with full employment is not directly observable and thus must be estimated. The range of plausible estimates likely extends at least as low as the current level of the unemployment rate. For example, in the February Blue Chip economic outlook survey, the average estimate of the natural rate of unemployment for the bottom 10 respondents was 3.9 percent, as compared with 4.7 percent for the highest 10 respondents.8

The decline in the unemployment rate in recent years has been accompanied by an increase in labor force participation, with especially pronounced gains for individuals in their prime working years.9 These increases in participation have provided employers with a significant source of additional labor input and may be one factor restraining inflationary pressures. As with the unemployment rate, whether participation will continue to increase in a tight labor market remains uncertain.

The strong job gains of recent years also has delivered benefits to groups that have historically been disadvantaged in the labor market. For example, African Americans and Hispanics have experienced persistently higher unemployment rates than whites for many decades.10 However, those unemployment rate gaps have narrowed as the labor market has strengthened, and there is some indication of an extra benefit to these groups as the unemployment rate moves into very low territory.11 Likewise, although unemployment rates for less-educated workers are persistently higher than they are for their more-educated counterparts, such gaps appear to narrow as the labor market strengthens.12 And wage increases in the past couple of years have been strongest for less-educated workers and for those at the lower end of the wage distribution.13

FOMC

Scope of the Review
Our existing monetary policy strategy is laid out in the Committee’s Statement on Longer-Run Goals and Monetary Policy Strategy.14 First adopted in January 2012, the statement has been reaffirmed at the start of each subsequent year, including earlier this year with unanimous support from all 17 FOMC participants. The statement indicates that the Committee seeks to mitigate deviations of inflation from 2 percent and deviations of employment from assessments of its maximum level. In doing so, the FOMC recognizes that these assessments of maximum employment are necessarily uncertain and subject to revision. According to the Federal Reserve Act, the employment objective is on an equal footing with the inflation objective.

As a practical matter, our current strategy shares many elements with the policy framework known in the research literature as “flexible inflation targeting.”15 However, the Fed’s mandate is much more explicit about the role of employment than those of most flexible inflation-targeting central banks, and our statement reflects this by stating that when the two sides of the mandate are in conflict, neither one takes precedent over the other. We believe this transparency about the balanced approach the FOMC takes has served us well over the past decade when high unemployment called for extraordinary policies that entailed some risk of inflation.

The review of our current framework will be wide ranging, and we will not prejudge where it will take us, but events of the past decade highlight three broad questions.

Three Questions
The first question is, “Can the Federal Reserve best meet its statutory objectives with its existing monetary policy strategy, or should it consider strategies that aim to reverse past misses of the inflation objective?”

Under our current approach as well as that of many central banks around the world, the persistent shortfalls of inflation from 2 percent that many advanced economies have experienced over most of the past decade are treated as “bygones.” This means that policy today is not adjusted to offset past inflation shortfalls with future overshoots of the inflation target (nor do persistent overshoots of inflation trigger policies that aim to undershoot the inflation target). Central banks are generally believed to have effective tools for preventing persistent inflation overshoots, but the effective lower bound on interest rates makes persistent undershoots more likely. Persistent inflation shortfallscarry the risk that longer-term inflation expectations become poorly anchored or become anchored below the stated inflation goal.16

In part because of that concern, some economists have advocated “makeup” strategies under which policymakers seek to undo, in part or in whole, past inflation deviations from target. Such strategies include targeting average inflation over a multiyear period and price-level targeting, in which policymakers seek to stabilize the price level around a constant growth path.17 These strategies could be implemented either permanently or as a temporary response to extraordinary circumstances. For example, the central bank could commit, at the time when the policy rate reaches the ELB, to maintain the policy rate at this level until inflation over the ELB period has, on average, run at the target rate.18 Other makeup strategies seek to reverse shortfalls in policy accommodation at the ELB by keeping the policy rate lower for longer than otherwise would be the case.19 In many models that incorporate the ELB, these makeup strategies lead to better average performance on both legs of the dual mandate and thereby, viewed over time, provide no conflict between the dual-mandate goals.20

The benefits of the makeup strategies rest heavily on households and firms believing in advance that the makeup will, in fact, be delivered when the time comes–for example, that a persistent inflation shortfall will be met by future inflation above 2 percent. As is well known from the research literature, makeup strategies, in general, are not time consistent because when the time comes to push inflation above 2 percent, conditions at that time will not warrant doing so. Because of this time inconsistency, the public would have to see a makeup strategy as a credible commitment for it to be successful. That important real-world consideration is often neglected in the academic literature, in which central bank “commitment devices” are simply assumed to exist and be instantly credible on decree. Thus, one of the most challenging questions is whether central banks could, in practice, attain the benefits of makeup strategies that are possible in models.

The next question the review will consider is, “Are the existing monetary policy tools adequate to achieve and maintain maximum employment and price stability, or should the toolkit be expanded? And, if so, how?” The FOMC’s primary means of changing the stance of monetary policy is by adjusting its target range for the federal funds rate. In the fall of 2008, the FOMC cut that target to just above zero in response to financial turmoil and deteriorating economic conditions. Because the U.S. economy required additional policy accommodation after the ELB was reached, the FOMC deployed two additional tools in the years following the crisis: balance sheet policies and forward guidance about the likely path of the federal funds rate.21

The FOMC altered the size and composition of the Fed’s balance sheet through a sequence of three large-scale securities purchase programs, via a maturity extension program, and by adjusting the reinvestment of principal payments on maturing securities. With regard to forward guidance, the FOMC initially made “calendar based” statements, and, later on, it issued “outcome based” guidance. Overall, the empirical evidence suggests that these added tools helped stem the crisis and support economic recovery by strengthening the labor market and lifting inflation back toward 2 percent. That said, estimates of the effects of these unconventional policies range widely.22

In addition to assessing the efficacy of these existing tools, we will examine additional tools to ease policy when the ELB is binding. During the crisis and its aftermath, the Federal Reserve considered but ultimately found some of the tools deployed by foreign central banks wanting relative to the alternatives it did pursue. But the review will reassess our earlier findings in light of more recent experience in other countries.

The third question the review will consider is, “How can the FOMC’s communication of its policy framework and implementation be improved?” Our communication practices have evolved considerably since 1994, when the Federal Reserve released the first statement after an FOMC meeting. Over the past decade or so, the FOMC has enhanced its communication practices to promote public understanding of its policy goals, strategy, and actions, as well as to foster democratic accountability. These enhancements include the Statement on Longer-Run Goals and Monetary Policy Strategy; postmeeting press conferences; various statements about principles and strategy guiding the Committee’s normalization of monetary policy; and quarterly summaries of individual FOMC participants’ economic projections, assessments about the appropriate path of the federal funds rate, and judgments of the uncertainty and balance of risks around their projections.23

As part of the review, we will assess the Committee’s current and past communications and additional forms of communication that could be helpful. For example, there might be ways to improve communication about the coordination of policy tools or the interplay between monetary policy and financial stability.

Activities and Timeline for the Review
The review will have several components.24 The Board and the Reserve Banks are currently conducting town hall-style Fed Listens events, in which we are hearing from a broad range of interested individuals and groups, including business and labor leaders, community development advocates, and academics. The conference here at the Minneapolis Fed is one of these events, as was the “Community Listening Session” hosted by the Dallas Fed in February. Several more Fed Listens events will follow in May.

In addition, we are holding a System research conference on June 4-5, 2019, at the Federal Reserve Bank of Chicago, with speakers and panelists from outside the Fed. The program includes overviews by academic experts of themes that are central to the review: the FOMC’s monetary policy since the financial crisis, assessments of the maximum sustainable level of employment, alternative policy frameworks and strategies to achieve the dual mandate, policy tools, global considerations, financial stability considerations, and central bank communications. Two sessions will feature panels of community leaders who will share their perspectives on the labor market and the effects of interest rates on their constituencies.

We expect to release summaries of the Fed Listens events and to livestream the Chicago conference. Building on the perspectives we hear and on staff analysis, the FOMC will conduct its own assessment of its monetary policy framework, beginning around the middle of the year. We will share our conclusions with the public in the first half 2020.

Concluding Thoughts
The economy is constantly evolving, bringing with it new policy challenges. So it makes sense for us to remain open minded as we assess current practices and consider ideas that could potentially enhance our ability to deliver on the goals the Congress has assigned us. For this reason, my colleagues and I do not want to preempt or to predict our ultimate finding. What I can say is that any refinements or more material changes to our framework that we might make will be aimed solely at enhancing our ability to achieve and sustain our dual-mandate objectives in the world we live in today.

ECB and FED Without Surprises, Major Pairs Flat After Brexit Extension

by Leave a Comment Filed Under: Market News - European Open Tagged: , , , , , , , , , , , , , , , , ,

Asian stocks finished mostly lower, as investors digest updates from both the European and US central banks. Yesterday, the IMF cut its GDP prediction for the third time in the last six months to the lowest since 2009. US President Donald Trump also threatened to impose tariffs on $11 billion of European Union (EU) imports as retaliation on what he claims to be unfair subsidies to Airbus. In Japan, the Nikkei225 main index added 0,11 percent to 21,711, the Hang Seng benchmark in Hong Kong finished 0.63 percent lower at 29,927. The Shanghai Composite underperformed, finished 0.80 percent lower at 3,215 and in Singapore the FTSE Straits Times index finished 0.04 percent higher at 3,330. Australian equities fell slightly on Thursday, with the ASX200 benchmark down by 0.4 percent or 24.8pts to 6198.7.

In commodities markets, Crude Oil consolidates at a five-month high and holds recent gains at 64,24 supported by OPEC’s ongoing supply cuts, geopolitical uncertainty and the US additional sanctions on Iran. The near-term upside target is the 65.00 figure, but I expect some profit taking to prevail as the black gold has reached overbought levels, the RSI trading above 70. Brent oil started the week with a gap up and trades today at $71.42/barrel also holding recent highs. Gold rebounded yesterday above $1300 at two weeks high, supported by escalating geopolitical tensions concerning Tripoli, the Libyan capital. The precious metal is trading today at $1307.50, making the daily high during Asia session at 1,309 and the low at 1,305. XAUUSD technical picture is positive, and now immediate support stands at the 50-hour moving average at $1300, which if broken can accelerate the downward move to 1293 and the 200-hour moving average. Strong resistance now stands at the $1309, the 50-day moving average, and I expect the bears to defend $1309 with full force.

European session started in mixed fashion as the Brexit deadline extended for one more time, DAX30 is 0.23 percent lower to 11,870, CAC40 is 0.16 percent higher at 5,458 while FTSE100 in London is 0.33 percent lower at 7,396 and the FTSE MIB in Milan is underperforming, trading 0.56 percent lower at 21,546.

In cryptocurrencies, Bitcoin (BTCUSD) consolidates above the 5,000 mark, and the key 200-day moving average resistance at $5,225 making the daily high at 5,338. Bitcoin will find support at the 50-hour moving average at 4,514. The rally in BTC triggered bids across the industry with Ethereum (ETHUSD) underperforming today, trading 10 dollars lower today at 171 and Litecoin (LTCUSD) lost 3 dollars to 85.55.

On the Lookout: The FOMC minutes suggested that members generally favor being patient for the remainder of the year, the European Central Bank announced that the Governing Council left the interest rate unchanged while Mario Draghi noted that the risk of recession for the Eurozone remains low for now.

In Brexit front, the EU struck a final accord and offered a flexible Brexit deadline extension until Oct 31st to the UK, leaving doors open for an early exit if the PM May manages to clinch a Brexit deal.

In its 2019 World Economic Outlook yesterday, the International Monetary Fund slashed its prediction for the rate of growth in global GDP in 2019 by 0.4 percentage points to 3.3% and that for 2020 by 0.1 percentage points to 3.6%.

Trading Perspective: In Forex markets, most majors are sticking to tight trading ranges for one more day as the ECB and FED failed to impress investors. AUDUSD is trading 0.14 percent lower at 0.7160 near a two-week high, after the government called for a Federal Election for May 18. Generally, an Australian election has not had a meaningful impact on FX markets. However, there are signs that Aussie investors can be a little hesitant in the lead-up to an election due to concerns about policy changes. Over the past five elections, the AUD has been a little soft and volatile at times in the weeks heading into an election and has stabilised once Australians have voted. Kiwi is trading 10 pips lower at 0.67.53. The US dollar index is trapped in mid 96.

brexit

GBPUSD Hourly (H1) Chart

GBPUSD consolidates between the 50 and 200-day moving average. Today the pair is trading flat at 1.3085 (low at 1.3076, high at 1.3107) as the Brexit deadline extension is likely good news for Cable. On the downside, major support will be found at 1.2977 at the 200-day moving average while solid protection can be found at the 100-day moving average around 1.2929. On the flipside, immediate resistance stands at 1.3195 the high from previous week session, and from there major resistance can be found at 1.3232 while 1.3382, the yearly high, will be met with strong supply.

In GBP futures markets, open interest shrunk by just 326 contracts on Wednesday from the previous session. Volume followed suit, down by 35.2K contracts, reversing the previous build and prolonging the erratic performance seen as of late.

EURUSD is trading flat after Mario Draghi failed to start any new trend. The pair is trading today at 1.1281 at the daily high. The pair needs to break above 1.13 to give bulls a breath and then approach the 50-day moving average at 1.1329 to establish a short term bullish momentum. Immediate support can be found at the 100-hour moving average around 1.1215. Comments from ECB and FOMC today will provide the cues for the next short term trend for the pair.

EURO remains in a negative mood following recent poor figures in the Eurozone. In fact, recent disappointing readings in the region somehow confirm that the slowdown in the bloc and the ‘patient-for-longer’ stance from the ECB could be among us for longer than expected.

On the Euro political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist and right-wing option among voters.

In Euro futures markets, traders added just 721 contracts to their open interest positions on Wednesday. In the same direction, volume increased by around 62.5K contracts.

USDJPY: The pair is trading higher today at 111,10 having hit the low at 110.89 and the high at 111.16. Major support for the pair stands at 111 round figure if the pair manages to break below the 100-day simple moving average at 111.10.  Immediate resistance for the pair stands at 112.06 the March 2019 high.

Open interest in JPY futures markets rose by 742 contracts on Wednesday, while volume shrunk by around 12K contracts, partially reversing the previous build.

USDJPY Daily Chart

USDJPY Daily Chart

USDCAD gains momentum and recovers from 1.33 to 1.3353 and then printed a fresh weekly low at 1.3292, which now acts as strong support. The pair will find extra support at 1.3285, and the 50-day moving average which if breached will drive prices down to 200-day moving average key support. On the upside, immediate resistance stands at 1.34 a break of which can escalate recent rebound towards 1.3430.

Federal Reserve issues FOMC statement

by Leave a Comment Filed Under: Central Bank Annoucements, Central Bank News Tagged: , , , ,

Information received since the Federal Open Market Committee met in January indicates that the labor market remains strong but that growth of economic activity has slowed from its solid rate in the fourth quarter. Payroll employment was little changed in February, but job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Recent indicators point to slower growth of household spending and business fixed investment in the first quarter. On a 12-month basis, overall inflation has declined, largely as a result of lower energy prices; inflation for items other than food and energy remains near 2 percent. On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed.

FOMC

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent. The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes. In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the FOMC monetary policy action were: Jerome H. Powell, Chairman; John C. Williams, Vice Chairman; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; Esther L. George; Randal K. Quarles; and Eric S. Rosengren.

Implementation Note issued March 20, 2019

ECB, Fed to Remain “Patient”; Euro, USD End Little-Changed

by Leave a Comment Filed Under: Market News - Asia Open Tagged: , , , , , , , , , , , , ,

Summary: The US Dollar and Euro closed little-changed as two of the world’s most influential central banks signalled that they are willing to keep interest rates steady. The ECB left key interest rates unchanged and reiterated that it plans to hold them at current levels for the rest of the year. The Fed released the minutes of its March 19-20 meeting where policymakers hinted they would not raise rates in 2019. FOMC officials also signalled that they would stop reducing their bond holdings by September. The Euro closed at 1.1272 in New York, little-changed from yesterday’s 1.1266. The Dollar Index (USD/DXY), a measure of the value of the US Dollar relative to a basket of foreign currencies, slipped 0.08% to 96.944 (97.02). Sterling was steady after rallying 0.2% to 1.3088. The EU Summit saw European nations agree to extend Brexit until October 31. USD/JPY closed modestly lower at 111.00 (111.15).

Investing.com US 10-Year Bond Yield Chart - 11 April 2019

Investing.com US 10-Year Bond Yield Chart – 11 April 2019

The Australian Dollar outperformed the Majors, climbing 0.57% to 0.7170 (0.7125). Emerging Market currencies rallied. The South African Rand soared 1.3% against the Greenback to 13.91 from 14.10 yesterday. Bond yields fell led by the benchmark US 10-year, down to 2.46% from 2.5%.
Wall Street stocks steadied. The DOW ended up 0.12% (26,175) while the S&P 500 rose to 2,891 from 2,878. US inflation was mixed with Headline CPI beating forecasts at 0.4% against 0.3%. Core Prices though underwhelmed at 0.1% against expectations of 0.2%. Euro-area Industrial Production in France and Italy beat forecasts. UK Manufacturing, Industrial Production and Construction Output all beat forecasts.

  • EUR/USD – the Euro was steady as she goes, grinding its way up to 1.1287 before settling at 1.1272 at the close. Overnight low traded on the Euro was 1.1230 which now forms a short-term base.
  • AUD/USD – The Aussie Dollar hit 6-week highs overnight (0.7175) boosted by the rally in EM currencies, a generally weaker Greenback as well as lessening expectations of near-term RBA rate cut. RBA Assistant Governor Guy Debelle, speaking in Adelaide yesterday, signalled that he isn’t convinced the Australian central bank needs to cut interest rates yet.
  • USD/JPY – The Dollar slipped further against the Yen, closing at 111.00 from 111.16 yesterday. The fall in US 10-year yields by 4 basis points to 2.50% was not matched by its Japanese counterpart. Ten-year JGB yielded -0.07% from -0.06%.
  • GBP/USD – Sterling rallied 0.2% to 1.3089 (1.3057) as the Eurogroup countries currently holding the EU Summit appeared to be supportive of a long Brexit extension. An agreement from the EU on an extension would initially be Sterling supportive. Reports have just been released that the EU has agreed to extend Brexit to Oct 31.

On the Lookout: The ECB and Fed both highlighted their concerns of the slowing global growth amidst the current trade tensions. The China-US trade talks saw both countries agree on enforcement agencies, which are the mechanism to policy any agreement. While it’s a first step, there is still a long way to go with other issues yet to be resolved. The EU Summit which voted to extend Brexit to Oct 31 should boost the Pound in the short term. Traders will focus on first-tier data reports from here-on-in.
Today sees the release of China’s CPI and PPI data. RBA Assistant Governor Guy Debelle speaks in Hongkong later today. Euro area reports today are Germany’s and France’s Final CPI data. US Headline and Core CPI data round off the day’s reports. FOMC members Clarida, Williams, Bullard all speak at different engagements.

Trading Perspective: With both the ECB and Fed signalling dovish outlooks, market positioning comes into play which is mildly supportive of the currencies. Speculators are long of US Dollar bets at a 3-month high. US Bond yields fell yesterday and are approaching 2.4%. Without yield support, the Dollar will find it hard to rally.

  1. EUR/USD – The Euro held most of its gains closing at 1.1271 from 1.1266 yesterday. The overnight low traded was 1.12295. A short-term base at 1.1210 is forming with the next resistance level at 1.1320. Immediate resistance lies at 1.129 followed by 1.1320. Immediate support can be found at 1.1240 followed by 1.1210. Net short Euro bets are at their biggest since December 2016 according to the latest COT report (2 April). Look to buy dips with a likely range today of 1.1255-1.1305.
Daily FX.COM - AUD USD H1 Chart - 11 April 2019

Daily FX.COM – AUD USD H1 Chart – 11 April 2019

  1. AUD/USD – The Australian Dollar rallied on the back of the generally softer Greenback. RBA Assistant Governor Guy Debelle put to rest, for now, any expectations of a near-term rate cut. He speaks again today in Hongkong. The rally in Emerging Market currencies also supported the Aussie Battler. Last, but not least, the speculators are short of Aussie bets. AUD/USD has immediate resistance at 0.7175 followed by 0.7200. Immediate support can be found at 0.7155 followed by 0.7115. Look to buy dips with a likely range of 0.7155-95.
  2. GBP/USD – The British Pound steadied above 1.30 after PM May successfully convinced EU leaders to extend the Brexit deadline to Oct 31, 2019. Upbeat UK production data released yesterday should be Sterling supportive. GBP/USD has immediate resistance at 1.3120 followed by 1.3170. Immediate support can be found at 1.3060 followed by 1.3030. Look to buy dips with a likely range today of 1.3060-1.3160.
  3. USD/JPY – The Dollar closed marginally lower against the Yen at 111.00. Immediate support at 110.60 is at risk. The next support level lies at 110.10. Immediate resistance can be found at 111.30 followed by 111.60. Given the slide in the US 10-year yield, USD/JPY should grind lower with today’s likely range 110.60-111.20.

Happy trading all.

ECB and FED on Spotlight Today

by Leave a Comment Filed Under: Market News - European Open Tagged: , , , , , , , , , , , , , ,

Asian stocks finished on a negative ground, as investors turned cautious after IMF cut its GDP prediction for the third time in the last six months to the lowest since 2009, and Brexit developments. US President Donald Trump also threatened to impose tariffs on $11 billion of European Union (EU) imports as retaliation on what he claims to be unfair subsidies to Airbus.

In Japan, the Nikkei225 main index added 0,53 percent lower to 21,687, the Hang Seng benchmark in Hong Kong finished 0.31 percent lower at 30,060. The Shanghai Composite was 0.20 percent higher at 3,246 and in Singapore, the FTSE Straits Times index finished 0.04 percent lower at 3,320. Australian equities recovered from morning’s lows to finish flat on Wednesday for the second session. The ASX 200 was down as much as 0.36 percent this morning; however, gains from the big banks and gold miners helped offset the losses.

Gold

XAUUSD Daily Chart

In commodities markets, Crude Oil rally is intact at a five-month high and holds recent gains above 64, supported by OPEC’s ongoing supply cuts, geopolitical uncertainty and the US additional sanctions on Iran. The near-term upside target is the 65.00 figure, but I expect some profit taking to prevail as the black gold has reached overbought levels. Brent oil started the week with a gap up and trades today at $70.80/barrel some cents away from the recent highs. Gold rebounded yesterday above $1300 at two weeks high, supported by escalating geopolitical tensions concerning Tripoli, the Libyan capital. XAUUSD technical picture is positive, and now immediate support stands at 50-hour moving average at $1300, which if broken can accelerate the downward move to 1293 and the 200-hour moving average. Strong resistance now stands at the $1307, the 50-day moving average, expect the bears to defend $1307 with full force.

European session started in easy tones as the Brexit deadline for leaving the European Union is getting closer and investors are awaiting Mario Draghi’s comments on Eurozone growth prospects. DAX30 is 0.18 percent higher to 11,869, CAC40 is 0.12 percent higher at 5,442 while FTSE100 in London is 0.15 percent lower at 7,414 and the FTSE MIB in Milan is trading 0.08 percent higher at 21,694.

In cryptocurrencies, bitcoin (BTCUSD) consolidates above the 5,000 mark, and the key 200-day moving average resistance is at $5,225, making the daily high at 5,271. Bitcoin will find support at 50-hour moving average at 4,514. The rally in BTC triggered bids across the industry with Ethereum (ETHUSD) outperforming today, trading now at 181 and Litecoin (LTCUSD) gains 2 dollars to 88.95.

On the Lookout: In its 2019 World Economic Outlook, the International Monetary Fund slashed its prediction for the rate of growth in global GDP in 2019 by 0.4 percentage points to 3.3% and that for 2020 by 0.1 percentage points to 3.6%.

EU leaders for one more time are set to meet to discuss and decide on whether to grant the UK another Brexit extension and, and in that case, for how long. The US inflation figures, FOMC minutes and the ECB meeting are key events later that will keep investors busy.

Key upcoming events:

10/04/2019 ECB Interest Rate Decision

10/04/2019 Emergency EU Council Meeting

29/03/2019 (12/04/2019) UK leaves the European Union

18/04/2019 Dissolvement of current EU Parliament

Trading Perspective: In Forex markets today most majors are sticking to tight trading ranges, AUDUSD is trading 0.35 percent higher at 0.7148 near a two-week high, supported by positive comments from RBA Deputy Governor Debelle on economic growth and domestic labor market, while Kiwi is also higher at 0.67.53 tracking AUD and strong commodity prices led by oil. The US dollar index ranges in mid 96 awaiting FOMC meeting for clues about the US interest rate outlook.

ecb

AUDUSD Hourly (H1) Chart

GBPUSD consolidates between the 50 and 200-day moving average. Today the pair is trading flat at 1.3072 (low at 1.3038, high at 1.3079) as investors follow the Brexit news. On the downside, major support will be found at 1.2977 at the 200-day moving average while solid protection can be found at a 100-day moving average around 1.2929. On the flipside, immediate resistance stands at 1.3195 the high from previous week session, and from there, major resistance can be found at 1.3232 while 1.3382, the yearly high, will be met with strong supply.

In GBP futures markets, open interest traders added more than 1K contracts to their open interest positions on Tuesday, while volume extended the choppy performance, rising by around 41.2K contracts.

EURUSD yesterday managed to break into the three-month trading range for one more time. The pair is flat today 1.1266 just shy of yesterday high. The pair needs to break above 1.13 to give bulls a breath and then approach the 50-day moving average at 1.1329 to establish short term bullish momentum. Immediate support can be found at the 100-hour moving average around 1.1215. Comments from ECB and FOMC today will provide the cues for the next short-term trend for the pair.

EURO remains in negative mood following recent poor figures in Eurozone. In fact, recent disappointing readings in the region somehow confirm that the slowdown in the bloc and the ‘patient-for-longer’ stance from the ECB could be among us for longer than expected.

On the Euro political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist and right-wing option among voters.

In Euro futures markets, open interest shrunk by more than 1.7K contracts on Tuesday, according to preliminary figures from CME Group. In the same line, volume reversed two consecutive builds and decreased by around 14.2K contracts.

USDJPY: The Bank of Japan on Monday cut its assessment for three of the country’s nine regions, the biggest number of downgrades in six years, suggesting that the hit to exports and factory output from slowing overseas demand is broadening, The pair is flat today at 111,16 having hit the low at 111.05 and the high at 111.24. Major support for the pair stands at 111 round figure if the pair manages to break below the 100-day simple moving average at 111.10.  Immediate resistance for the pair stands at 112.06, the March 2019 high.

Open interest in JPY futures markets shrunk by around 3.8K contracts on Tuesday from Monday’s final 169,698 contracts, the first drop after four consecutive builds. On the other hand, volume increased by nearly 22K contracts.

USDCAD consolidates just above 1.33 having lost almost 70 pips earlier this week, erasing the gains of the previous week. It printed a fresh weekly low at 1.3292, and it is holding near the bottom, with the bearish tone intact. The pair will find support at 1.3285, and the 50-day moving average which if breached will drive prices down to 200-day moving average key support. On the upside, immediate resistance stands at the 100-hour moving average at 1.3346 while more supply for the USD will be met at the 200-hour moving average around 1.3360.

Yen Outperforms, Dollar Climbs Off Lows, Ends Little-Changed

by Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: , , , , , , , , , , , , , , ,

Summary: The Yen outperformed, rising 0.3% against the US Dollar as fears of a global recession resurfaced. The IMF downgraded its outlook on the global economy while the Trump administration threatened tariffs on the European Union. China-US trade talks are still unsettled. Risk appetite and the Dollar Yen took a hit. USD/JPY slid 0.30% to 111.16 from 111.48 yesterday. The Dollar Index (USD/DXY) recovered to end little-changed at 97.020 (97.062 yesterday) after falling to 96.858, two-week lows. Sterling slipped to 1.3055 from 1.3065 as the EU looked set to force the UK to delay Brexit for as long as a year. The Euro finished at 1.1265 (1.1262) after trading to 1.1284, a 2-week top. The risk-off mode hit Wall Street stocks, ending an 8-day rally. The DOW slid 0.74% to 26,143. The S&P 500 lost 0.6% to 2,878.
Treasuries rose pushing bond yields lower. The US 10-year bond yield slid back to 2.50% (2.52%).
US JOLTS (Job Openings and Labour Turnover Survey) for February fell to 7.09 million from 7.58 million in January, the lowest level since March 2018.

  • EUR/USD – The Single currency rallied to 1.1284, fresh 2-week highs where it faced strong resistance, slipping back to end flat at 1.1265. The ECB is expected to keep rates unchanged, but traders will be looking at the Press Conference after the meeting. Policymakers may further delay their 1st rate hike to early 2020.
Trading View - 3M USD JPY Chart - 10 April 2019Trading View - 3M USD JPY Chart - 10 April 2019

Trading View – 3M USD JPY Chart – 10 April 2019

  • USD/JPY – The Yen outperformed all currencies, climbing 0.3% against the US Dollar as risk appetite soured. US 10-year treasury yields slipped to 2.5% from 2.52%. USD/JPY closed at 111.16 after trading to 110.979.
  • GBP/USD – Sterling closed marginally lower at 1.3055 (1.3065). British PM May is set to meet with European political leaders to try and break the Brexit gridlock ahead of the EU’s crucial summit meeting on Brexit.
  • AUD/USD – The Aussie Dollar rallied to a high of 0.71527 mainly on the back of a generally weaker Greenback. Australian Home Loans for March saw an unexpected rebound, up 2% against a forecast fall of 3%. AUD/USD slid back to finish at 0.7125 in New York.

On the Lookout: A busy, first-tier event day lies ahead with the ECB’s policy meeting, US CPI report (March), the EU’s Council Summit meeting on Brexit and the FOMC’s March meeting minutes.
Other data releases are mostly second-tier. Japanese Bank Lending and Preliminary Machine Orders (March) start off the day. Euro-area data follow next with French and Italian Industrial Production reports for March. First-tier UK Manufacturing Production, Construction Output, Goods Trade Balance, and Industrial Production data follow next. All eyes will then be on the European Central Bank’s policy meeting, the EU Summit, US Inflation Report and March FOMC Meeting minutes release.

Trading Perspective: The Dollar Index (USD/DXY), of which almost 60% of its weight is the Euro, bounced off it’s lows to close mildly down at 97.020 (97.062). This is just above it’s immediate support. The Euro pared gains ahead of today’s ECB meeting where most analysts expect no change in policy. Traders will look for additional details on the ECB’s Longer Term Repurchase Operations (TLTRO).
Market positioning highlighted by Saxo Bank’s feature article on the Commitment of Traders report (week ended 2 April) saw Total Speculative (non-commercial) US Dollar longs rise to a 3-month high of +USD 27.5 billion. The Greenback saw rises against all 9 IMM currencies except the Canadian Dollar. The increase was primarily due to a 24% jump in Euro short contracts to -EUR 99,184 contracts, the equivalent of which is -EUR 12.4 billion according to the Saxo Bank report. This spells danger for USD longs, and Euro shorts. As the robot in the old 60’s television series “Lost In Space” used to warn Will Robinson – “danger, danger ..”

Saxo-Bank Bloomberg COT Report (week ended 2 Apr) - 10 APR 2019

Saxo-Bank Bloomberg COT Report (week ended 2 Apr) – 10 APR 2019

  1. EUR/USD – The Euro was unable to break up through immediate and strong resistance at 1.1285. This remains a barrier today, a break of which should see 1.1325 next. Immediate support lies at 1.1240 followed by 1.1200. With the ECB meeting looming, look for the Euro to consolidate between 1.1245-85 first up. Look to buy any dips toward 1.1200-40 area. The big short squeeze could be just around the corner.
  2. USD/JPY – The Dollar is slip-sliding against the Yen in the current environment. The 2-basis fall in the US 10-year yields was not matched by its Japanese counterpart. The latest COT report for the week ended 2 April saw net speculative JPY shorts to their biggest since January (-JPY 62,741 vs previous week’s -JPY 62,121). USD/JPY has immediate support at 110.90-111.00 (overnight low 110.979). The next support level lies at 110.50. Immediate resistance can be found at 111.35 followed by 111.55. Look to sell rallies with a likely range today of 110.90-111.30.
  3. AUD/USD – The Aussie slipped back to 0.7125 from its high of 0.71522 on the market’s risk-off stance and lower assets. At the end of the day, the Australian Dollar is quoted against the US Dollar. Any further general USD weakness will translate into Aussie strength. The latest COT report saw net speculative Aussie short contracts to their highest since November 2018 (-AUD 55,743 contracts). AUD/USD has immediate support at 0.7115 followed by 0.7090. Immediate resistance can be found at 0.7150 followed by 0.7180 and 0.7200. Look to buy AUD/USD on dips toward 0.7110 today.

Happy trading all.

More than just a news source

Social Media

  • facebook
  • twitter
  • linkedin

Subscribe

Register now to receive the latest news and information for global trading industry.

Copyright © 2016 — The Industry Spread Pty Ltd • All rights reserved. • Privacy Policy • Disclaimer

The information contained on this website is of a general nature only. The information does not constitute advice or a recommendation on any course of action and does not take into account your personal circumstances, financial situation or individual needs. We strongly recommend you to seek independent professional advice or to conduct your own independent research before acting upon any information contained on this website.

Information presented on this website includes but is not limited to those of brokers and technology and service providers. You should be cautious about any information on this website and should consider its source. Various factors, including personal or corporate ownership, may influence the information. The information contained on this website is only as accurate as at the date it was published. References to past performance is no guarantee of future performance.

Please read our Terms and Conditions.

All rights reserved.

This website, and the information which it contains, is the intellectual property of The Industry Spread Pty Ltd (ACN 612 938 360) and its affiliates and licensors, and is protected from unauthorised copying and dissemination by Australian law, international conventions and other intellectual property laws. All The Industry Spread product and service names and logos are owned The Industry Spread Pty Ltd. All other company and product names and logos are trademarks or registered trademarks of their respective owners in certain countries.