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US: Non farm payroll forecast – Danske Bank


FXStreet (Delhi) – Research Team at Danske Bank, suggest that today's key event is the US is non-farm payroll report and they expect a slowdown in job growth in September to 180,000 and even though this is slower than the recent trend, it is still enough, if sustained, to put additional downward pressure on the unemployment rate.

Key Quotes

“Over the past three months, the US economy has added, on average, 221,000 jobs per month - a pace that cannot be sustained in an economy where potential labour force growth is only around 150,000 per month and even lower if we do not see an increase in the labour participation rate.”

“In our view, job growth will need to drop below the 160,000 mark before the Fed will see it as an obstacle to starting the tightening cycle later this year. In terms of the unemployment rate, we expect the rate to stay unchanged at 5.1% in September but to head below 5% by year-end.”








Oct 02,2015
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NZDUSD: Bullish bias for the week ahead – Westpac


FXStreet (Delhi) – Imre Speizer, Senior Markets Strategist at Westpac, suggests that we have flipped to a bullish bias for the week ahead and if today’s break above 0.6455 is sustained, then the 0.6600 area should be targeted.

Key Quotes

“NZ data has been upbeat lately, notably dairy prices which look set to rise again at this week’s GDT auction. In addition, US data has not been compelling enough for markets to price in a rate hike this year.”

“3 months ahead: The next major target area is 0.62, a level which provided support during the middle of 2009. The two main factors expected to contribute to NZD/USD weakness during the next few months are RBNZ easing (we expect the OCR to fall to 2.5% by year end and eventually to 2.0%) and eventual Fed tightening. Disappointments on either of these fronts would call into question our multi-month bearish view.”

“1 year ahead: Our 1 year ahead forecast is 0.62, based partly on the OCR being cut to 2.0%.”








Oct 05,2015
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Global growth forecasts cut by World Bank – Deutsche Bank


FXStreet (Delhi) – Research Team at Deutsche Bank, note that the World growth forecast for 2015, 2016 and 2017 have also been cut to 2.5%, 3.0% and 3.1% from the previous 2.9%, 3.2% and 3.2%, respectively by World Bank.

Key Quotes

“World Bank has reduced its growth forecast for China just ahead of the annual IMF/World Bank meeting in Peru later this week (9-11 Oct). The World Bank now expects China 2015 GDP to come in at 6.9% vs 7.1% forecasted in April. The Bank now sees China growing at 6.7% and 6.5% in 2016 and 2017 respectively. China will likely be a key meeting agenda this time. The World Bank has also reduced 2015 growth forecasts for Indonesia, Philippines and Thailand.”









Oct 05,2015
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USD: US payroll growth first time below 2% in last one year – SocGen


FXStreet (Delhi) – Kit Juckes, Research Analyst at Societe Generale, notes that the US payroll growth peaked at 2.34%y/y in February and the slowdown continued in September, taking the growth rate below 2% for the first time in over a year.

Key Quotes

“The post-WW2 average is also 1.9% and the turn is hardly dramatic (though softening wage growth in goods-producing sectors is worrying) but the possibility that the US economic cycle has now peaked is going to be much debated. What would that mean for the dollar?”

“The market verdict since mid-day Friday is pretty clear as the dollar and yen have fallen while emerging market and high-beta G10 currencies have bounced. But is that the right response in a world lacking an alternative growth engine if the US does slow?”







Oct 05,2015
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EUR/USD clinches 1.1250 on PMIs


FXStreet (Edinburgh) - He single currency has started the week on the right footing vs. the greenback, now lifting EUR/USD to fresh session tops in the 1.1250/60 band.

EUR/USD eyes on PMIs

While market participants are still digesting the miserable prints from last Friday’s Non-farm Payrolls in the US economy (142K), the final figures from Services PMIs in Euroland has taken centre stage during the European morning, with both German and EMU readings coming in below expectations. Still in the euro area, next on tap will be the Sentix index ahead of EMU’s Retail Sales.

Spot is posting gains for the third consecutive session so far, as global markets keeps pushing back expectations of a Fed’s lift-off later in the year, which remain the main drag of the dollar so far.

EUR/USD levels to watch

As of writing the pair is advancing 0.34% at 1.1251 and a breakout of 1.1318 (high Oct.2) would target 1.1330 (high Sep.21) en route to 1.1373 (high Sep.14). On the flip side, the immediate support lines up at 1.1207 (low Oct.5) followed by 1.1150 (low Oct.2) ahead of 1.1135 (low Oct.1).




Oct 05,2015
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JPY: All roads leading towards BoJ monetary policy - MUFG

FXStreet (Delhi) – Lee Hardman, Currency Analyst at MUFG, suggests that the yen has weakened modestly in the Asian trading as investor risk sentiment has improved initially as dampened Fed rate hike expectations have for now outweighed the negative implications for the global growth outlook from the weaker payrolls report and in addition to that, Yen weakness also reflects some speculation that the BoJ could ease monetary policy further at their policy meeting this week.

Key Quotes

“The Bloomberg survey of economists captured the recent dovish shift in BoJ policy expectations. The survey revealed that 17 out of 36 economists now expect the BoJ to ease monetary policy further this month. The majority (15) expect further easing at their meeting on the 30th October with only a couple expecting further easing as early as this week.”

“It has been reported that the BoJ would like to assess more information before deciding to implement further easing. The Nikkei has reported that the BoJ may push back the current timeframe of 1H FY2016 to achieve their 2% inflation target when it is likely to lower its inflation and growth forecasts at the end of the month.”



Oct 05,2015
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Brexit on cards, if Brussels doesn’t give substantial reforms - Investec

FXStreet (Delhi) – Research Team at Investec, note that the Daily Telegraph is reporting that UK Foreign Secretary Philip Hammond said Britain will vote to leave the EU if Brussels doesn’t give in to “substantial” reforms.

Key Quotes

“Prime Minister David Cameron also said he would 'rule nothing out' if he failed to secure Britain the deal in Europe he feels they deserve, implying he could campaign for a Brexit if his terms are not met by Brussels - although sceptics would argue that Cameron would likely water down his requests before outright campaigning to leave the single market.”






Oct 05,2015
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UK Industrial production preview: What to expect in GBP/USD?


FXStreet (Mumbai) - The GBP/USD pair is trading on a strong footing ahead of the UK industrial production report, but the strength is more due to the broad based USD weakness rather than strong UK fundamentals.

UK industrial production to recoup part of the July fall

The industrial production in the UK is well-off the peak readings of 2013 and 2014, but the drop of 0.4% month-on-month (m/m) in July was slightly exaggerated. Thus, a bounce of 0.3% m/m is expected in August. On similar lines, the manufacturing activity is seen rebounding 0.4%m/m.

Still, there exists a possibility of the downside surprise. The UK PMI reports in July and August had highlighted a drop in the export orders and a slowdown in the activity. Furthermore, the UK exports have also suffered a sequential drop offlate. Hence, the rebound in the industrial production may be slower than expected. However, it may not be a shock to the markets.

Heading into the Bank of England (BOE) rate decision tomorrow, a weaker –than-expected UK PMI future would only add to BOE’s worries and leave little scope for the bank to remain hawkish.

GBP/USD Technical Levels

The spot is currently hovering around 1.5248 (50% of Apr-June rally) and the expanding triangle resistance on the daily chart. A break above the same, followed by a rally to 1.53-1.5319 (200-DMA) appears likely in case the industrial production rebounds faster than expected. On the downside, repeated failure to rise above 1.5248 could push the pair back to 1.52 levels. A break below 1.52 followed by a drop to sub-1.5170 levels appears likely in case the UK industrial production contracts.








Oct 07,2015
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UK industrial production rises more than expected in August



FXStreet (Mumbai) - The UK industrial production rose 1% m/m in Aug, beating the estimated rebound to 0.3% from July’s 0.4% drop. On an annualised basis, the figure rose 1.9%, beating the estimated rebound to 1.2%.

Manufacturing output rose 0.5% against an estimate of 0.3%. The UK Office for National Statistics (ONS) report showed the main manufacturing components contributing to the growth were the manufacture of transport equipment; the manufacture of basic metals & metal products; and the manufacture of food, beverages & tobacco.

In the 3 months to August 2015, production and manufacturing were 9.4% and 6.5% respectively below their figures reached in the pre-downturn GDP peak in Quarter 1 (Jan to Mar) 2008.







Oct 07,2015
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UK industrial production rises more than expected in August



FXStreet (Mumbai) - The UK industrial production rose 1% m/m in Aug, beating the estimated rebound to 0.3% from July’s 0.4% drop. On an annualised basis, the figure rose 1.9%, beating the estimated rebound to 1.2%.

Manufacturing output rose 0.5% against an estimate of 0.3%. The UK Office for National Statistics (ONS) report showed the main manufacturing components contributing to the growth were the manufacture of transport equipment; the manufacture of basic metals & metal products; and the manufacture of food, beverages & tobacco.

In the 3 months to August 2015, production and manufacturing were 9.4% and 6.5% respectively below their figures reached in the pre-downturn GDP peak in Quarter 1 (Jan to Mar) 2008.







Oct 07,2015
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