Thread: OcaFX.Com - Financial News and Analysis

OctaFX.Com - Please Click Here for OctaFX Financial News








Jan 29, 2013
OctaFX.Com News Updates

OctaFX.Com - Euro rises, shares gain as Europe's outlook brightens










LONDON (Reuters) - The euro hit a fresh 14-month high and European stocks gained on Friday after economic data raised hopes that the region's downturn has eased, but moves were limited as investors await a U.S. jobs report.




Euro zone factories had their best month in nearly a year during January although the currency bloc is likely to remain mired in recession for a few more months, the latest reading of Markit's Purchasing Managers' Index (PMI) showed.
"Providing there are no further setbacks to the region's debt crisis, these data add to the expectation that the euro zone is on course to return to growth by mid-2013," said Chris Williamson, chief economist at data compiler Markit.




The euro hit a high of $1.3657 after the data came out, its highest level since November 2011. The common currency also hit a 33-month high against the yen, rising more than 1 percent to 125.96 yen.
The pan-European FTSEurofirst 300 index (.FTEU3) extended its recent gains by 0.4 percent to 1,169.14 points, near a 23-month high after solid rally since the start of the year. London's FTSE 100 (.FTSE), Paris's CAC-40 (.FCHI) and Frankfurt's DAX (.GDAXI) were up between 0.5 and 0.8 percent.




Earlier, China's official PMI for January eased to 50.4, missing market expectations for a rise and underscoring the fragility of the recovery from the economy's weakest year since 1999.
However, a separate private survey showed that growth in China's giant manufacturing sector hit a two-year high in January as domestic demand strengthened, underlining hopes the nation's economic recovery is slowly gaining momentum.
The Chinese data left MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> little changed


EURO STRENGTH




The euro has risen significantly in recent weeks as the outlook for the 17-nation currency bloc has improved, and also as investors respond to the sharply easier monetary policies of the U.S. Federal Reserve and Bank of Japan.
"The perception is that the ECB is being less supportive and is not providing as much liquidity as the other central banks are," said Andrew Milligan, head of Global Strategy at Standard Life Investments.




At the same time liquidity in the European money markets is being affected by quicker-than-expected repayments of crisis loans handed out by the ECB at the height of the bloc's crisis just over a year ago.




Banks have another two years to pay back the money if they want, but have taken the opportunity this week to return over a quarter of the 489 billion euros ($663.77 billion) they took in the first of the ECB's two "LTRO" handouts.
From now on they can pay back as little or as much of the remaining money as they want each week. After the fast start, analysts are awaiting Friday's details of next week's repayments for clues on whether the pace is likely to continue.
Money market rates (EUREON1Y=) have already risen by a quarter of a percentage point since the start the year - the equivalent of a standard ECB interest rate increase - and are likely climb by at least the same amount again if the money continues to drain rapidly from the system.
For Europe's struggling countries and the ECB this is not an ideal situation, effectively tightening monetary policy and creating unwanted stress just as economies are showing fragile signs of improvement.
JOBS EYED
Friday's U.S. nonfarm payrolls data due at 8:30 a.m. ET could be a another factor to drive the euro higher, as a strong report would knock the safe-haven dollar.




The dollar was trading at a 3-1/2 month low against a basket of currencies (.DXY) on Friday after falling 0.3 percent to 78.97 points.
Employers are expected to have added 160,000 new jobs to their payrolls in January, a marginal step up from December's 155,000 gain, according to a Reuters survey of economists. The unemployment rate is seen holding steady at 7.8 percent.
The U.S. economy unexpectedly contracted in the fourth quarter, its weakest performance since emerging from recession in 2009, and it grew just 2.2 percent in the whole of 2012.




The U.S. ISM factory survey, a national report on the state of American manufacturers, is also due at 10 a.m. ET.






Feb 01, 2013
OctaFX.Com News Updates

OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page








Feb 02, 2013
OctaFX.Com News Updates

WTI trading at $96.64/bbl






Crude oil’s near-term consolidative range at the 96.50 zone (50% of 94.95/98.22 upleg) was threatened as the negative near-term structure drives the price lower. According to Slobodan Drvenica, an analyst at Windsor Brokers Ltd., “The upside remains capped at 90.30/50 area, where the 30 January high, along with 23 August 2012 high and Fib 61.8% expansion of the wave from 84.05 lie.”


With the 4h indicators entering negative territory, a further retracement could be anticipated. Indeed, a slide below 96.50 is needed to confirm the completion of failure swing and open 96.20/00 (Fib 61.8% / round-figure) mark, ahead of key near-term support at the area of 95.50/00. At the time of writing, WTI crude has settled in the region of USD $96.64 Monday.




OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page








Feb 04, 2013
OctaFX.Com News Updates

Forex Flash: Central banks constitute major focus this week – Deutsche Bank






A major focus for the week will be on the ECB, BoE (Thursday) and RBA (Tuesday) meetings this week. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “The market is not expecting a change in policy from the ECB and BoE, although Draghi's post-ECB press conference will be closely watched in light of last week's softer bank lending survey.”


On the same day as the ECB and BoE meetings, governor-in-waiting Mark Carney will appear before the UK House of Commons Treasury Committee to be questioned by lawmakers ahead of his formal takeup of the BoE governorship. Carney's recent comments on revising the monetary policy framework will likely be a subject of questioning. With respect to the RBA, 20 out of 27 economists polled by Bloomberg (including DB) expect no change in the overnight cash rate.


OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page








Feb 04, 2013
OctaFX.Com News Updates

Forex Flash: No reason for a AUD selloff on the RBA decision - Commerzbank






Commerzbank analysts consider the RBA statement to be relatively balanced: "It is becoming clear that the RBA will take a wait and see attitude as far as domestic demand is concerned before taking further steps. After all it left the key rate unchanged at 3.0% which corresponds to our expectations", wrote analyst Antje Praefcke, adding that the stamente pointed out that the global outlook has improved, a fact that other central banks have also referred to recently, and there are only moderate changed to the domestic economy part.


As growth is slightly below the trend (but past rate cuts are beginning to show some of the expected effects) and inflation remains low, it very much looks as if the RBA wasn’t done yet with its current rate cut cycle but as if it prefers to wait for further data releases before changing rates again. "Easier conditions would in turn make things easier for areas outside the mining sector to fill the gap left by the end of the investment boom in the mining sector", he wrote.


"The RBA is clearly hoping for a soft transition in a divided economy: slowly ending investment boom in the mining sector with a simultaneous recovery in other sectors (e.g. manufacturing sector and others) thanks to lower rates", continued the Commerzbank analyst, attentive to what is coming next, but with no reason to sell the AUD massively as a result of the rate decision. "We think 1.0350-80 should hold in AUD-USD", he concluded.


OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page








Feb 05, 2013
OctaFX.Com News Updates

In a recent speech to the European Parliament, French President Francois Hollande urged the euro zone to set a mid-term target for the EUR exchange rate






In a recent speech to the European Parliament, French President Francois Hollande urged the euro zone to set a mid-term target for the EUR exchange rate and to forge a jobs policy to fight political disillusionment at reforms.


Hollande's calls ran into immediate opposition from German Economy minister Roesler who recommended that the focus should instead be on competitiveness rather than weakening the currency. Luxembourg Finance Minister Luc Frieden said the euro's level doesn't concern him at present and its strength follows the economic reality of the euro zone.


Staying in Europe, Fitch joined Moody's and S&P in assigning a negative outlook to Netherland's AAA rating. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “The outlook revision reflects Fitch's concerns over persistent banking system problems – as highlighted by the recent nationalization of SNS Reaal (the country's fourth largest banking group) - and public debt levels higher than those of top-rated peers.” Dutch 10yr yields closed 3bp higher on the day and were largely unmoved following Fitch's announcement.


OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page








Feb 06, 2013
OctaFX.Com News Updates

Forex: GBP/USD soars as Carney testimony starts






GBP/USD has soared closed to a point as in coming BoE Governor Carney is delivering his testimony to the Treasury Select Committee this morning.


He has told the group that the bank must exit unconventional policy and protect the integrity of the Pound. He added that the bar to changing monetary policy framework must be very high and central banks should be flexible on targeting inflation. Further, he believes that the BoE must enhance forecasting. The market reaction has seen Cable soar on talk that an end to easing will be targeted and spot is now currently trading at 1.5731, just below the hourly 200 MA, having made a high at 1.5767. RSI has spiked high and climbed to 76.


OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page








Feb 07, 2013
OctaFX.Com News Updates

Forex: GBP/USD holds up at 1.5700 after UK NIESR GDP






Incoming BoE Governor Carney brought the GBP/USD back above the 1.5700 psychological level after triggering a rally from 1.5650 to 1.5769 spike high with his testimony before the UK Parliament. Since then, the pair has been consolidating its position above 1.5700, even after the release of UK NIESR GDP estimate for January.


From an estimated -0.3% recession in December, the estimate of growth over the last 3 months in the UK has risen to 0.0% in January, according to NIESR.


Incoming BoE Governor Carney assured that he would not alter significantly the central bank's current monetary policy strategy but that he was in favor of introducing more stimulus for a period of time and communicating it in order to help manage market expectations. He also said that the central bank must exit unconventional policy.


The MPC decided to keep the key rate at 0.5% and the asset purchases at £375B, as expected by investors, in the meeting of February 7. “The £6.6 billion cash flow comprises the redemption payment on the gilt, as well as the cash flow resulting from the indemnity provided by HM Treasury to the Bank of England in order to cover any difference between the redemption payment and the original amount invested”, said the official statement.


“The GBP/USD currency pair continues consolidating near its minimums. I think today the pair may form any type of reversal pattern to start growing up and break the latest descending channel”, wrote Roboforex.com analyst Igor Sayadov.




OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page








Feb 07, 2013
OctaFX.Com News Updates

Forex Flash: USD/JPY year-end target at 95.00 – Scotiabank






The Japanese yen seems to have found intraday support in the boundaries of 93.10 on Thursday, after the ECB has ignited a rally in the safe havens, dragging the cross from levels around 93.70


“The upward trend in USDJPY is too strong to fight and tied into equities. Technicals are not providing any warning signals that the trend is at risk. We hold a year-end USDJPY target of 95, but expect that it could temporarily range as high as 100 before drifting back”, assessed Camilla Sutton, Chief Currency Strategist at Scotiabank.




OctaFX.Com - Please click here to see Financial News/Forex News on OctaFx official page








Feb 07, 2013
OctaFX.Com News Updates