By www.CentralBankNews.info The Czech central bank, which earlier today left its rock-bottom interest rates unchanged, said the overall risks to inflation were slightly on the downside and monetary-policy relevant inflation will be in the lower half of the bank’s tolerance band over the whole forecast horizon.
The published presentation to a press conference by the Czech National Bank (CNB) showed that the decision to keep the two week repo rate steady at 0.50 percent was unanimous and headline inflation was expected to remain slightly above the CNB’s inflation target next year due to tax changes.
The central bank targets inflation of 2 percent and strives to ensure it doesn’t vary by more than one percentage point in either direction. The presentation showed that inflation was forecast to decline further from November’s 2.7 percent and then remain above 2 percent most of 2013 before falling below 2.0 percent in the first quarter of 2014.
The Czech economy shrank further in the third quarter, with net exports the only positive contributor, the bank’s presentation showed, and “developments in industrial production, construction output and retail sales in October continue to indicate subdued economic activity.”
The Czech Gross Domestic Product shrank by 0.3 percent in the third quarter from the second for an annual shrinkage of 1.3 percent. The CNB had forecast annual contraction of 0.8 percent.
“The labour market exhibits sign of slump,” the bank said, adding annual growth in average nominal wage gain again decelerated markedly in the third quarter. Average wages rose by an annual 1.4 percent in the third quarter, below the bank’s forecast of 2.4 percent.
The downside risks to the CNB’s inflation forecast comprise weaker domestic activity and slower wage growth; domestic price developments and developments abroad. The upside risk is higher commodity prices.
“The koruna exchange rate partially offsets anti-inflationary domestic developments,” the bank’s presentation said.
Georgia cuts rate 25 bps to 5.25%, inflation forecast cut
By www.CentralBankNews.info Georgia’s central bank cut its benchmark refinancing rate by 25 basis points to 5.25 percent, continuing its policy of cutting rates as inflation remains below the bank’s target.
The National Bank of Georgia, which has cut rates six times this year by a total of 150 basis points this year, said it was further reducing its forecasts for inflation over the next two years. It did not give specific figures, but the central bank targets inflation of 6 percent.
Georgia’s annual headline inflation rate contracted by 0.5 percent in November, down from a 0.1 percent rise in October, due to lower food prices and exchange rate fluctuations. In 2011 the inflation rate was 2.0 percent, down from 2010’s 11.2 percent.
“Due to the global crises and its impact on our main trading partner countries, economic growth and inflation is reduced. These factors are further reducing the pressure on prices in Georgia,” the bank said.
Georgia’s Gross Domestic Product expanded by an annual 7.3 percent in the third quarter, slightly down from 8.2 percent in the second quarter, but the bank said demand was weakening and the growth of remittances from abroad, especially from Europe, was slow.
But the increase in demand for tourism was contributing to a substantial growth in revenue.
Despite high liquidity in the banking sector, the bank said credit demand was modest.
www.CentralBankNews.info
Yen Drops to Lowest Level in More Than a Year against the Euro and Dollar
Tradervox.com (Dublin) – The Japanese currency has fallen to the lowest level since August 2011 against the 17-nation currency as bets the Bank of Japan will make additional stimulus increased prior to the start of a policy meeting today. This will be the first BOJ meeting since the election held on December 16. The currency had dropped to its lowest level since April last year against the US Dollar after the data showed that the country’s trade deficit grew in November. The 17-nation currency gained against the greenback for the eighth day, touching a seven-month high as optimism of US lawmakers reaching agreement on the fiscal cliff issue rose. The euro is supported by market speculations that the German business confidence improved last month.
According to Koji Iwata, a Forex Vice President at Mizuho Corporate Bank Ltd in New York, yen is likely to remain lower into the coming year. However, he added that the Bank of Japan will disappoint the market if it doesn’t add stimulus which is expected factoring in the new leadership. The two day meeting may decide to have a 2 percent inflation target, which the new Prime Minister Shinzo Abe requested the BOJ Governor Masaaki Shirikawa to agree on. Abe has also urged the BOJ to make unlimited easing to boost economic growth and curb deflation.
Japanese exports have dropped by 4.1 percent, leaving a trade deficit of 953.4 billion yen, according to a Finance Ministry report released today. The Japanese currency weakened to 11.71 yen per euro, the weakest level since August 30, 2011, before strengthening marginally to 111.65 yen at mid-day trading in Tokyo, which is 0.2 percent below its close yesterday. The Japanese yen was 0.1 percent weaker against the dollar, trading at 84.27, after touching the lowest level since April 12 2011 on December 17 of 84.48.
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Market Trends 19.12.12
Source: ForexYard
Hey Everyone,
Below are some market trends for today.
Good luck!
-Dan
Gold- May see downward movement today
Support- 1660.89
Resistance- 1692.99
Silver- May see downward movement today
Support- 31.32
Resistance- 32.25
Crude Oil- May see downward movement today
Support- 87.81
Resistance-89.56
Dax 30- May see downward movement today
Support- 7582.96
Resistance- 7700.00
EUR/USD May see upward movement today
Support- 1.33373
Resistance- 1.3177
Read more forex news on our forex blog
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
Market Review 19.12.12
Source: ForexYard
The Japanese yen fell to a 16-month low against the euro and a fresh 20-month low against the US dollar during the overnight session, amid continued speculations that the Bank of Japan will soon initiate an aggressive monetary easing policy.
After falling close to $30 an ounce during afternoon trading yesterday amid signs of progress in US budget talks, gold was able to stage a modest upward recovery last night. The precious metal is currently trading at $1673.
Positive developments in the US budget talks also helped the euro stay within reach of a recent 7 ½ month high during overnight trading. The EUR/USD is currently trading at 1.3235.
Main News for Today
German Ifo Business Climate- 09:00 GMT
• The business climate figure is forecasted to come in slightly higher than last month’s
• A better than expected figure could help the euro extend its current bullish trend
US Building Permits- 13:30 GMT
• Expected to come in at 0.88M, slightly higher than last month’s 0.87M
• Better than expected news could help the dollar recoup some of its recent losses during afternoon trading
Read more forex news on our forex blog
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
Jim Roger Sees “Overdue Correction” Hitting Gold as Unleveraged Money Buys at 3-Month Lows
London Gold Market Report
from Adrian Ash
BullionVault
Weds 19 Dec, 07:55 EST
PRICES to buy gold with Dollars rallied from their lowest levels since late August on Wednesday morning in London, recovering 0.7% from yesterday’s drop to $1662 per ounce.
The drop came as Greece was upgraded Tuesday by the S&P ratings agency from “selective default” to “junk” status, following payment of the latest €34.3 billion in new loans from Greece’s Eurozone partners.
Versus the Dollar the Euro leapt to its highest level since May. The gold price for Eurozone investors sank to €1255 per ounce – a 6-month low almost 10% beneath October’s new record high.
“Gold on any kind of historic market basis is overdue for a nice correction,” CNBC was told by investment author and commodities-fund manager Jim Rogers overnight.
“It’s been correcting for 15-16 months now, which is normal in my view. It’s possible that gold’s correction is going to continue for a while longer.”
Tuesday saw a switch from January to February contracts in a large number of short (ie, bearish) bets on the gold price held by leveraged speculators in the US derivatives market.
Holdings at physically-backed gold trust funds traded on the stock market rose to new all-time records, according to Bloomberg.
Users of BullionVault also moved to buy the drop in prices, with previously quiet trade growing strong as gold fell Tuesday.
“Good support is seen at $1672.50 [and then] $1661.64,” says Commerzbank’s Axel Rudolph in Frankfurt in his weekly chart analysis.
“Failure at [those levels] would push the June high at $1641.01 back to the fore and neutralise our bullish outlook.
Silver prices meantime bounced off a 6-week low at $31.40 per ounce Wednesday morning, as world stock markets reached 17-month highs on Reuters’ data.
Long-dated US bonds also ticked higher, nudging 30-year Treasury yields back below 3.00% per year.
US Republican speaker Boehner meantime referred to a “Plan B” for $1-million earners in the ongoing argument over 2013’s looming fiscal cliff.
A blog on The Economist website says Democrat president Obama has agreed to switch the Consumer Price Inflation index tracked by Social Security payments to a lower measure, resulting in slower benefit rises.
Over in Japan, a small but growing number of pension funds are buying gold as a hedge against zero-bond yields and the long-term decline in equities, says a report in today’s Wall Street Journal.
“By diversifying currencies, we aim to reduce risks associated with them,” the WSJ quotes Yoshi Kiguchi, chief investment officer at Okayama Metal & Machinery Pension Fund.
It began investing in gold this March on behalf of the 260 small and mid-sized company pension schemes it runs.
Gold price chart, no delay | Buy gold online at live prices
Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver vaulted in Zurich for just 0.5% in dealing fees.
(c) BullionVault 2012
Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
Norway holds rate steady, sees higher rate “further out”
By www.CentralBankNews.info Norway’s central bank kept its policy rate steady at 1.5 percent, as expected, saying that country’s inflation was low while economic growth among its trading partners was weak and their interest rates very low.
But Norges Bank maintained an upward bias in its policy guidance, quoting Deputy Governor Jan Qvigstad as saying that “developments in the Norwegian economy give reason to believe that inflation will gradually pick up. This suggests that the key policy rate can be raised further out.”
At its last meeting in October, the central bank delayed an increase in its policy rate until 2013 due to low inflation and low interest rates worldwide. In its previous policy report from June, the central bank had forecast an increase in its policy rate by the end of 2012.
The central bank, which has cut rates twice this year, said there was still considerable uncertainty surrounding global economic developments though credit risk premiums have declined and euro area countries have agreed on actions that may improve the situation.
Since the bank’s October policy report, economic developments have been in line with projections and the Norwegian economy was “growing at a solid pace,” the bank said.
Norway’s total Gross Domestic Product contracted by 0.8 percent in the third quarter from the second’s 1.0 percent growth while GDP for mainland Norway expanded by 0.7 percent in the third quarter from the second.
Norway’s inflation rate was steady at 1.1 percent in November from October. Norges Bank targets 2.5 percent annual inflation.
Taiwan holds rate steady, sees improved 2013 outlook
By www.CentralBankNews.info Taiwan’s central bank held its benchmark interest rates unchanged, as expected, saying the current policy rate was conducive to maintaining price stability and promoting economic growth in light of a modest economic recovery, subdued inflationary pressures and global economic uncertainties.
But the Central Bank of the Republic of China, which has held its discount rate steady at 1.875 percent since June last year, struck an optimistic tone about next year, saying the domestic economy was forecast to expand by 3.15 percent in 2013 as exports and private investments are likely to revive on the back of a gradual economic recovery while consumption remains steady.
“Recent developments point to signs of stabilization for the global economy, with an improved outlook for 2013,” the bank said after a meeting of its board.
The central bank said the Taiwan dollar’s exchange rate was in principle determined by the market but when there is “excess volatility and disorderly movements” with adverse implications for economic and financial stability, “the CBC will step in to maintain an orderly market.”
Earlier this month the central bank intervened in the foreign exchange market to ease the upward pressure of the TWD, which has appreciated some 4.5 percent against the U.S. dollar this year.
It said the euro zone recession has eased, the U.S. economy looks set for moderate expansion, China has regained growth momentum and Asian emerging economies also see a rebound in prospect. However, the bank added there were still risks from the U.S. fiscal cliff and Europe’s debt crises.
The central bank’s board set a M2 growth target of 2.5-6.5 percent for 2013.
Taiwan’s economy picked up speed in the third quarter, expanding by 0.98 percent from the second for annual growth of 1.13 percent, reversing a 0.18 percent contraction in the second.
The central bank said the economy was estimated to have expanded by 2.97 percent in the fourth quarter from the third.
Inflation, which fell to 1.59 percent in November from October’s 2.36 percent, was estimated at 1.93 percent for 2012 and is forecast to fall to an annual rate of 1.27 percent next year due to expected steady international commodities and lower base effect for fruit and vegetables, the bank said.
The central bank’s market operations have been aimed at managing liquidity, it said, adding that banks’ excess reserves were steady at $21.6 billion and for the first 11 months of the year loans and investments by banks grew by an annual rate of 5.03 percent and the M2 annual growth rate averaged 4.22 percent, sufficient to meet the economy’s needs and support growth.
AUD/USD: Greenback Holds its Gains over the Aussie
The US dollar is looked forward to make gains over its Australian counterpart as the fiscal cliff negotiations continue to drag, but mostly on growth concerns in the land Down Under.
In another episode of the fiscal cliff drama, House Speaker John Boehner aims to use a vote on his alternate budget proposal to highlight Republican opposition to tax increases sought by President Barack Obama. All boiling down to the dynamics of the negotiations, market participants are set for another grueling series of pressure tactics.
As reported on Bloomberg by Kathleen Hunter & Roxana Tiron, the speaker’s proposal would permanently extend current tax rates on incomes below $1 Million a year and prevent the expansion of the alternative minimum tax. Based on studies of previous proposals, the bill would raise between $300 Billion and $400 Billion over the next decade, though an official estimate was not available as of last night. The plan would also set tax rates for capital gains and dividends at 20 percent on income higher than $1 Million. A tax already set to take effect in 2013 would push the total top rate on investments to 23.8 percent. The bill would continue current estate-tax rules that set the per-person exemption at $5.12 Million, indexed for inflation, with a top rate of 35 percent.
The house speaker’s ‘Plan B’ highlights Republican opposition to tax increases sought by the president. Boehner’s push for a House vote on his proposal is seen as a pressure tactic to force Obama to accept deeper spending cuts and a higher threshold for rate increases by showing how hard it will be to win Republican support for any tax increase. Senate Majority Leader Harry Reid and other Senate Democrats were among those rejecting Boehner’s plan, adding that the measure “can’t pass the Senate.”
With the fiscal cliff deadline looming nearer, and as Republicans continue to oppose tax hikes for the wealthy, investments could filter into the safety of the Greenback until stronger signs of progress come out.
Meanwhile, the Asian commodity dollar is on a decline for a third day on concern that the South Pacific nation’s economy is slowing and could be in store for more interest-rate cuts by the Reserve Bank of Australia. An interview published in the Australian Financial Review has RBA Governor Glenn Stevens saying that a seamless “handover” from mining to other drivers of economic growth could not be absolutely guaranteed.
Taking these fundamental news into account, a sell bias can be considered for the AUDUSD today. Technical price corrections are still likely, especially after Standard & Poor’s raised the credit rating of Greece from selective default to B- with a stable outlook, which could give a boost to risk demand.
For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx Forex Trading Solutions.
Trading the ABC Sentiment Shifts Ahead Of The Crowd
By David Banister, ActiveTradingPartners.com
Spotting the 3 day rest B wave for profits
One of the most obvious keys to successful trading or investing is buying low and selling high. The problem being if it was that easy to pinpoint those low and high points then all traders would be batting 1000%. What we use at my ATP service is a combination of fundamental analysis and catalyst spotting inter-twined with charting techniques. Most of our work revolves around buying substantial dips in a strong stock, 3x ETF’s, or reversal patterns. 3x ETF’s are great for short term swings as they function almost exclusively on crowd behavioral patterns, but it also applies to individual stocks.
In all cases what traders really need to spot ahead of the masses of investors is a subtle shift in sentiment. That key pivot point where the negative sentiment whether it be short term or long term is about to run out of gas, and the bullish sentiment is going to take over and reverse the stock or ETF higher or break the position out of a base pattern.
One of the most common patterns amongst many that we use as trigger points is the ABC pattern. This is a situation where the stock or ETF recently had a strong run. That run produced a flurry of over-optimistic sentiment and is reflected in the high spike in the stock from the prior base. We call this the “A Wave High” pivot point. This is where many of the traders who chase short term performance come in with a bang, right near the top.
The next key component is obviously then the “B Wave” pattern. There are many different formations for B Wave patterns, the one we will look at today is the “3 day rest” pattern.
B waves simply serve to work off the overbought sentiment of the crowd and remove the chasers who came into the trade high, at a loss. As the stock pulls back hard initially in the B Wave, stop losses are triggered by those with discipline. However, many traders continue to buy more of the position a bit early during this crucial B Wave pattern and then later they also get stopped out. Finally, Margin Calls are common and more stops are triggered and the B wave winds down and sentiment is horrible.
At that strategic bottoming area of the B Wave correction is where you want to start scaling long into the position for the ensuing reversal to the upside. Sometimes these are very short term trades as in 48 hours or so, and sometimes they are several weeks long depending. Many of the B waves on daily charts are what we term a “3 Day Rest” pattern, spotting these is very profitable.
Below we have a very recent sample 3 day rest B Wave pattern in a stock my firm recommended prior to a 15% one day move a few days after we alerted it, this being Vivus (VVUS). This produced an 11% net gain inside of 4 trading days after a 15% one day pop C wave rally. The two charts below show the 10 day chart with the 3 day rest pattern which we scaled into, and then the C wave to the upside. Also shown is a longer term chart where you can see the pattern as well. We traded this same pattern in ANR recently for 9-11% gains inside of 48 hours as well.
If you’d like to learn more about trading sentiment and catalysts for profitable Swing Trading, then join us at ATP. Go to ActiveTradingPartners.com and subscribe by using coupon code AD499ATP in the coupon code field at the bottom of the sign up form. Sign up for quarterly and the discount will be applied at checkout, and you will get The Market Trend Forecast for free as well.
David Banister
