Overnight Points of Interest
2013 May 2 by Graham
Good morning
Overnight
# European shares gave back early gains to end up only 0.07% whilst U.S shares were down from the get go, tried to rally on the FED, but were ultimately undone by a large miss in the ADP private payrolls figure. The S&P500 ended near its lows, down 0.93%.
# The ADP Payrolls figure for April was disappointingly weak coming in at +119k versus expectations of a 150k gain. The gain was the smallest in 7 months and provided more evidence that theU.S.economy is reacting to the recent tightening in fiscal policy and higher taxation. Further, the March figure of +158k was subject to a large negative revision down to +131k.
# The Fed pledged to continue its bond buying program at the $85 bio a month pace, made no mention regarding the previous ‘tapering’ talk and left policy options open saying it is “ready to raise or lower that level as economic conditions evolve”.
# Fonterra’s latest GDT milk auction showed dairy prices fell 7.3% on average from the previous event. This is a correction following the strong 60% surge from December last year to April this year. Despite the drop prices still sit 77% higher than a year ago.
# Commodity currencies took a hit with the NZD amongst the weakest. The NZD/GBP and NZD/EUR now sit toward the lower-end of ranges maintained in recent months.
# The pound (GBP/USD) was well supported by a rare piece of better than expectedUKdata. Whilst still signalling contraction by the narrowest of margins, the UK Manufacturing PMI reading was much better than analysts had expected. The gauge came in at 49.8, up from March’s upwardly revised 48.6, and well higher than the 48.5 expected.
# U.S. Crude tumbled as U.S. oil inventories reached an 82-year high amid signs of economic slowdown in the U.S. and China. Crude retreated $2.43, or 2.6 %, to settle at US$91.03 a barrel, falling the most in 2 weeks.
# Likewise Gold fell the most in 2 weeks. Gold holdings in exchange-traded products plunged 174 metric tons last month, the biggest drop ever, as prices entered a bear market and wiped $17.9 billion from the value of the funds.
Ahead
# JapanMonetary Policy Meeting Minutes
# ANZ NZ Commodity Price Index
# AustralianBuildingApprovals
# HSBCChinaFinal Manufacturing PMI
# Eurozone Final Manufacturing PMI
# ECB Interest Rate Decision
# U.S. Trade Balance
# U.S. Unemployment Claims
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 28 by Graham
Good morning
Overnight
# Europe was to the fore again with Cyprus revealing more on how it will combat the current turmoil. The EuroStoxx600 was less than enthused falling 0.45%. U.S bourses were mixed however, the S&P500 flat, the Dow down 0.22% but the Nasdaq up 0.13%.
# Cyprus announced capital controls will be in place for 4 days after the banks reopen to limit a rapid outflow of cash form the country. Cyprus will limit the use of cheques to businesses, cap cash withdrawals to 300 euros per day and scrutinize all commercial transactions over 5,000 euros when banks reopen on Thursday. Meanwhile Cyprus State TV reported tonight that the European Central Bank had sent convoys of trucks with container loads of euros to the Cyprus central bank.
# News from Italy also served to unnerve the market. Attempts by Bersani to form an Italian government came to nothing (quote: only an “insane person” would want to govern), and an Italian government bond auction went very badly with the lowest bid-cover ratio in over a decade. The poor auction pushed the 10-year yield to the highest relative to German bunds this year. The benchmark bond yield climbed 21 basis points to 4.78 %, up from 4.50% at the end of last year.
# The EUR once again bore the brunt of the market uneasiness, falling to fresh 4 month lows near 1.2750. In response NZD/EUR pushed to 7 month highs (0.6550) as the recent run of good data, including yesterday’s Fonterra payout upgrade, gave the kiwi a degree of safe haven appeal. The NZD/TWI, the measure of overall kiwi strength, is now within spitting distance of post float (1985) highs.
# Final UK GDP figures revealed the UK economy contracted by 0.3% in Q4, in line with earlier estimates as industrial production posted its biggest quarterly decline in almost four years. The figures confirm that the UK economy finished last year on a very weak footing and worryingly keeps alive the risk of a triple-dip recession.
# Moody’s says the EU’s awkward handling of Cyprus’s bailout has put extra pressure on European sovereign ratings.
# U.S Pending Homes Sales fell to 104.8 from 105.20 last month however analysts suggest the drop can be attributed to a lack of supply rather than weakening demand.
# The U.S 10 year bond is flashing warning signs with the yield now down to 1.83% from 2.09% only a fortnight ago.
# Corn supplies in the U.S., the biggest grower, are shrinking at the fastest pace in almost four decades as improving demand from ethanol refiners drains reserves already diminished by drought. Stockpiles probably fell 38 % in three months to 4.995 billion bushels (126.9 million metric tons) by March 1, the biggest drop since 1975.
Ahead - Today
# NZ Building Consents
# Australian MI Inflation Expectations
# Japan Retail Sales
# Australian Private Sector Credit
Friday
# U.S. Unemployment Claims
# U.S Final GDP
# Chicago PMI
# Japan Manufacturing PMI, CPI and Industrial Production
# University of Michigan Consumer Sentiment
Regards and good Easter break to all
G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 27 by Graham
Good Morning
Overnight
# The painful Cyprus bailout and a mixed bag of U.S data did not deter stock markets from making decent gains. The EuroStoxx600 ended up +0.17% whilst U.S stocks rose solidly. The S&P500 pushed towards recent highs, up +0.75%.
# U.S Durable Goods Orders surged 5.7 % in February the biggest monthly increase in five months. However the strong data result was driven primarily by a huge rebound in the volatile commercial aircraft orders component. Those orders rose 95.3% after a 24% in January. Orders for so-called core capital goods, which strip out volatile aircraft and defense orders and provide a better indication of the trend in business investment actually declined 2.7 %. Still, the decline followed a 6.7 % surge in January, which was the biggest one-month gain in nearly three years. Prior to February’s decline, the category had risen in three of the previous four months.
# The S&P Case-Shiller House Price Index, which tracks the 20 largest markets in the U.S., showed the biggest year-over-year gain in prices since June 2006 rising 8.1% in January. Tempering the strong showing was a separate government report showing new homes sold at a 411,000 annual rate in February, down nearly 5% from the January sales pace but up 12% from year-earlier levels.
# U.S. Consumer Confidence, as measured by the Conference Board, gave back almost all of its February rebound thanks largely to fiscal uncertainty (tax increases in January, spending cuts in March) . The Conference Board, a private research group, said its index of consumer confidence declined about 8 points to 59.7 in March from a downwardly revised 68.0 in February, first reported as 69.6. Economists had expected the index to fall, but only to 67.1.
# Just on the fiscal changes in the U.S., the tax increase was an immediate cut to take-home pay for a wide swatch of Americans, none the less confidence bounced back soon after. The sequestered cuts, on the other hand, kick in slowly, and the direct effects are concentrated among particular groups (government workers and contractors). It will take time for the effects of lower spending by these groups to filter out into the broader economy. Still, the effects will be real, with the CBO estimating fiscal tightening adding up to a detraction of 1.5% of GDP.
# U.S Crude advanced to the highest level in almost five weeks on the U.S. Durable Goods orders data. WTI Crude climbed $1.08, or 1.1 % to $95.89 a barrel.
# U.K. Retail Sales were flat this month compared with a year ago and the weakest since August.
# Italy look no closer to forming a new government, indeed the political stalemate rumbles on. Bersani’s attempt to form a workable coalition now looks doomed to fail and the chances of another election are on the up.
# Cyprus FinMin: Banks To Remain Shut Until Thurs, Big Deposits (over EUR100k) Face 40% Hit.
# S&P Cuts Euro-Zone 2013 GDP Forecast To Minus 0.5%.
Ahead
# ANZ N.Z. Business Confidence
# RBA Financial Stability Review
# UK Final GDP
# U.S. Pending Home Sales
Regards G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Market Insight Newsletter – Vol. 2, Issue 37 Futures, FX, CFDs, Equities
2013 March 25 by Company
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Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 21 by Graham
Good morning
Overnight
# European stocks regained a fraction of the recent losses, edging higher as no new news on Cyprus was forthcoming. The EuroStoxx600 ended up 0.32%. U.S stocks meanwhile, meandered in a very narrow range until the FED’s FOMC statement. Following the promise of continued monetary policy accommodation from the FED the indexes moved moderately higher with the S&P500 rising 0.67% and the Dow edging its way to another record close.
# In a virtually unchanged statement the Fed said it would stick to its stimulus program, buying $85 billion in bonds each month to support the economic recovery. The fate of the program presumably cemented for even longer as the central bank lowered its forecast for the U.S. economy, cutting growth estimates slightly from December projections. The Fed reduced its forecast saying the economy would expand at no greater than 2.8%, down from a projected maximum of 3% made in December. Regarding the promise to keep policy intact until unemployment reaches 6.5%, most members of the committee don’t see the unemployment rate, currently 7.7%, reaching that level until 2015.
# Minutes from the Bank of England’s March policy meeting showed a minority of three members called for expanding the bank’s asset-buying program but also noted concerns over the potential impact of a rapid fall by the pound on the central bank’s credibility. ”Further monetary stimulus might increase that risk. It might also lead to an unwarranted depreciation of sterling if it were misinterpreted as a lack of commitment to maintaining low inflation in the medium term,” the minutes said.
# Also in the UK, British finance minister George Osborne has admitted that economic growth there this year will be half the 1.2 %t that was forecast just three months ago, but said he would not change course on austerity. GDP for the last year turned out to be a little higher than the OBR forecast in December, but this year their output forecast is reduced to 0.6 % growth. And despite the recession in the Eurozone, the OBR’s central forecast today is that we [will] avoid a second quarter of negative growth here in the UK,” Osborne told lawmakers.
# Concerns about Cyprus were clearly evident at an auction of German government bonds, seen as a European safe haven. The sale of 3.36 billion euros in new 10-year securities drew strong demand and sold at an average yield of 1.36 p%, the lowest auction price since July last year.
# Banks in Cyprus to remain closed Thursday & Friday – Govt Official.
# Ratings agency Fitch said it will conduct formal review of UK this year including analysis of latest budget; current rating AAA & outlook negative.
# Spain’s PM Says Expects To Cut Current Economic Forecasts.
# The number of Britons claiming unemployment benefit fell in February to a 20-month low. The Office for National Statistics said the number of people claiming jobless benefit dropped by 1,500 last month to 1.542 million – the lowest level since June 2011.
# Commodities gained in tandem with the better stock market tone, Copper advanced 1.2% whilst Crude climbed 0.9%, the most in 2 weeks.
# The NZD/USD continued to languish ahead of this morning’s Q4 GDP result. A deteriorating Current Account balance, the continuing drought and the RBNZ’s less hawkish tone at the last meeting all weighing. The kiwi sits at the bottom of its ranges at 0.8220 USD and 0.7920 AUD.
Ahead
# N.Z. Q4 GDP
# Japan Trade Balance
# Australian RBA Bulletin
# China HSBC Flash Manufacturing PMI
# N.Z Credit Card Spending
# European Manufacturing PMI’s
# U.K. Retail Sales
# U.S. Employment Claims
# U.S Flash Manufacturing PMI
# U.S. Philadelphia Fed Manufacturing Index
Big day ahead, good luck
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 20 by Graham
Good morning
Overnight
# The Cyprus bailout drama continued to weigh on European equities with the ‘big board’ EuroStoxx600 closing down 0.45%. U.S. bourses were mixed, but generally heavy, with the S&P500 declining for the 3rd straight day the longest stretch of declines since a 5 day run lower in December. The ‘blue chip’ Dow rose marginally however, up 0.04%
# The Cypriot parliament voted against the controversial bank bailout deal hatched with the EU over the weekend. 36 members of parliament voted no, 19 abstained from voting and no one voted in favor of it. Rejection of the tax effectively blocks a 10 billion-euro EU bailout deal that Cyprus needs to save its banks and ensure government workers continue to receive their salaries. Parliament was presented with a ‘plan B’ whereby accounts holding below 20,000 euros were exempt from the new tax, but that concession was insufficient to convince MPs to accept it. A failure to agree on a bailout package (and some form of ‘deposit tax’) may result in Cyprus getting booted out of the Eurozone however a vote ‘for’ is rather unpalatable too. The uncertainty is likely to weigh on investor confidence a bit longer as there is simply no prior precedent.
# Disturbingly, NZ could face the same type of ‘haircut’ should a bank fail here http://www.stuff.co.nz/business/money/8446573/Kiwis-could-face-Cyprus-style-trim
# At the latest fortnightly Fonterra auction milk prices soared another 14.8%. This is the 7th consecutive fortnightly gain and brings prices to 38% above December levels and a significant 77% above the cycle lows of May 2012. Tempering the apparent good news was data showing that the price rises were driven by a 20% drop in NZ volumes, which by my maths, means NZ Inc. will actually take a step back with this result.
# U.S. builders started more homes in February and permits for future construction rose at the fastest pace in 4 ½ years. Housing starts rose annual rate of 917,000. That’s up from 910,000 in January, and it’s the second-fastest pace since June 2008. The gains are likely to grow even faster in the coming months. Building permits, a sign of future construction, increased 4.6 percent to 946,000
# Investor sentiment in Germany inched higher in March to the highest level for more than three years, with analysts convinced that the outlook for Europe’s top economy remains bright. The widely watched ZEW investor confidence index edged up to 48.5 points in March from 48.2 points in February. That is its highest level since April 2010 (politics in Italy and the Cyprus even may take the gloss off the next one!)
# UK inflation, as measured by the Consumer Prices Index, rose to 2.8% in February from 2.7% pressured higher from rising gasoline costs and mirroring the U.S result of last week.
# Italy Jan Industrial Output rose a solid 0.8% m/m but only due to an overhaul of data used to calculate the index. Annually the result cemented a 3.6% decline.
# Gold jumped to a 3 week high on fears Europe slates crisis may escalate.
Ahead
# NZ Current Account
# Japan Bank Holiday
# China Foreign Direct Investment
# UK MPC Meeting Minutes
# U.S. FOMC Statement
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
NZD/GBP – Are we justified up here?
2013 March 13 by Graham
Hi
The NZD/GBP has been trading around multi –decadal highs of late. With the drought and the spectre of what I think will potentially be a more dovish than expected RBNZ tomorrow is the NZD really justified up here?
I’m a trend trader at heart and I don’t really like to pick tops but…
The market is chatting about the 8.1% annualised rise in NZ house prices (data released yesterday) and how upset the RBNZ will be about that. But the central bank is clearly working to the introduction of ‘macro prudential tools’ as they call it, to restrain house prices without using the ‘blunt’ instrument which is the official cash rate. You see, the RBNZ hate hitting housing with a rise in the cash rate because that usually comes with a higher currency which hurts the tradeable sector. They’re forever between the rock and the hard place so to speak.
The moderate knowledge I have about these new tools can quickly be summed up here in the NBR article http://www.nbr.co.nz/article/downside-risk-use-macro-prudential-tools-warns-rbnz-bd-136767
Simply put, the introduction of these tools will to some degree limit the need for rate hikes surely?
This impending change and the drought make me very wary of NZD strength at the moment. On the other side of the equation the U.K economy has its own problems for sure but the fact that GBP/USD has fallen 16 big figures in 10 weeks suggest to me the NZD/USD could easily play catch up resulting in a lower cross. Indeed, currently I think the GBP/USD is actually due a bounce from last night’s price action.
Looking at the chart of the NZD/GBP cross yesterday was the beautifully, and emotively named ‘hanging man’……..you don’t need to think too hard about whether that’s a good sign or a bad sign huh? Downside follow through is beginning immediately after in today’s trade. I have high expectations for a move lower as a result
NZDGBP – click here to view chart
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 13 by Graham
Good morning
Overnight
# Equity markets are essentially unchanged this morning after narrow, listless sessions. The EuroStoxx600 ended up 0.04% and the S&P500 down 0.23% whilst the rampant Dow ended up by the barest of margins at +0.01%. The Dow winning streak of 8 consecutive daily gains is the longest in 2 years.
# The U.S. National Federation of Independent Business released an interesting report. They said their small-business confidence index edged up 1.9 points to 90.8% in February, but it remained low by historical standards. Companies cited weak sales as the biggest problem. Some 33% of small-business owners said sales were lower in the past three months compared to the prior three months, while only 19% reported higher sales in the same span. “While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed,” said NFIB chief economist Bill Dunkelberg.
# Sterling weakened, but then bounced strongly after dismal U.K. Industrial Production figures underlined fears of a triple-dip recession. The U.K. Office for National Statistics said Industrial Production recorded a 1.2% monthly fall in January, while manufacturing output declined 1.5%. Economists had forecast both measures to rise by 0.1%. GBP/USD fell from 1.49 to 1.48 and has returned to trade at 1.49 this morning. After such an extended decline (1.64 to 1.48 in a bit over 10 weeks) the price action of the last 24 hours is suggestive of a (tradable?) correction.
# U.S 10 year treasury yields dipped a touch but remain over the psychological 2.0% level at 2.02% from a recent high of 2.09% and a low of 1.83% last week.
# Gold broke out of its recent lethargy, rising nearly US$20 during the session. Suggestions that the Bank of England will be forced to undertake more easing programs following the UK Industrial Production figures supported the precious metal which has been under the gun this year. After 12 straight years of annual increases, gold has fallen 5 % this year as mounting confidence that economies are recovering cut haven demand. Gold rose from $1,579.00 to $1,598.00 before settling at $1,592.00.
# Crude Oil rose for the 4th straight day despite OPEC pumping 30.31 million barrels a day last month, up from 30.24 million in January and the most since November, according to OPEC estimates. Further U.S. supplies are forecast rise to the most in almost three decades in 2013, OPEC estimated.
Ahead
# N.Z Food Price Index
# Westpac Australian Consumer Sentiment
# Australian Home Loans
# EuroZone Industrial Production
# U.S. Retail Sales
# U.S. Business Inventories
Regards G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2013 March 6 by Graham
Good morning
Overnight
# A raft of good European ‘services’ data drove European stocks sharply higher whilst another services report out of the U.S. drove the Dow to new all-time highs, endorsing the move seen in the ‘leading’ Dow Transports sector late last year. The EuroStoxx600 rose a hefty 1.81% whilst the S&P500 is up 0.93% currently.
# All the scheduled European services PMI’s came in at or above expectations, albeit still mired in contractionary territory with readings below the all-important 50 mark.
# EuroZone Retail Sales surprised on the topside rising 1.2% on the month, well above the +0.3% expected.
# The UK PMI services PMI rose to the highest level since September, coming in at 51.8 vs. 51.0 expected.
# The U.S. ISM non-manufacturing index kept the party humming, registering a rise to 56.0 from 55.2 previously and expectations of 55.00. Economists’ expectations of a small decline were blown away, with the index racking up its 38 consecutive monthly expansion. Amazing really. The growth in this index appears tightly linked to the significant improvement in U.S housing.
# A stunning 10.4% surge in milk prices was seen at last night’s Fonterra auction. Prices are now up 23% on a year ago and a full 54% above their mid-May 2012 lows. The auction result will need to be seen in the context of lower volumes however, thanks to the worsening NZ drought. Indeed, auction volumes were down 14% compared to forecast.
# The currency markets were relatively subdued in comparison to the stocks fervour, with most pairs largely unchanged from levels late yesterday.
Ahead
# Australian Q4 GDP data
# U.S. ADP Non-Farm Employment change
# Bank of Canada Interest Rate Decision
# U.S Factory Orders
# U.S. FED Beige Book
Regards G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Market Insight Newsletter – Vol. 2, Issue 35 Futures, FX, CFDs, Equities
2013 March 4 by Company
Please click hereto view the latest copy of our newsletter.
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Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities