InvestMacro Forex News

By TraderVox.com

Tradervox.com (Dublin) – Speculation Bank of England will expand its stimulus program again rose after UK’s Gross Domestic Product shrunk more than the market was expecting.  On announcement, the pound fell to its weakest in six months against the euro as investor searched for safety. The report also resulted to a decline in two-year gilt yields to a new low. Another report from the Confederation of British Industry indicated the UK manufacturing confidence dropped in July pushing the sterling pound lower against most of its major trading peers.

Nick Parsons, who is the head of research for Europe and UK at National Australia Bank Ltd, said that despite the market being prepared for a poor number in UK GDP, the data was dreadful. He predicted that there will be more interest rates cut before the end of this year and confirmed the need for more quantitative easing. The UK GDP shrunk by 0.7 percent from its previous reading when it shrunk by 0.3 percent according to the Office for National Statistics report. The market was expecting a decline of 0.2 percent. According to CBI, the gauge of factory optimism showed a decline to negative 6 from a reading of 22 in April while the hiring intentions dropped from 16 to minus 2, which is the lowest reading since October.

The sterling pound which dropped by 0.4 percent last week, dipped 0.7 percent against the euro to trade at 78.35 pence per euro at the close of day in London yesterday. The currency had earlier fallen by 1 percent during intraday trading. Against the dollar the sterling lost 0.3 percent against the dollar to trade at $1.5467. The greenback gained 0.9 percent last week while the yen climbed 1.7 percent.

Valentin Marinov who is the head of Group of 10 Foreign Exchange strategy in London at Citigroup Inc said that the poor UK data will continue to weaken the sterling pound. He noted that the reason investors were buying UK’s gilts was because of its AAA rating and since this has been reviewed downwards, the sterling is in a precarious position.

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By Central Bank News

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 26 July, 07:50 EST

The WHOLESALE-MARKET gold price leapt more than 1% inside an hour in London trade Thursday morning, setting 3-week highs above $1620 per ounce after European Central Bank chief Mario Draghi said “The ECB is ready to do whatever it takes to preserve” the single Euro currency.

“And believe me, it will be enough.”

Speaking in London one day after the gold price jumped following fresh rumors of more quantitative easing by the US Federal Reserve, Draghi did not specify plans, but did point to the high bond yields now being paid by Eurozone members such as Italy and Spain.

“To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate,” said the ECB president.

“We have to cope with the financial fragmentation, address these issues.”

Spanish bond yields retreated as debt prices rose today, while Eurozone stock markets jumped more than 1%.

The Euro currency leapt 1.5¢ within minutes of Draghi’s comments, knocking the gold price in Euros back below €42,500 per kilo – the 5-month high broken earlier on Thursday.

Gold still held just 4%, however, off September 2011’s all-time Euro high.

“It’s not obvious central banks have been effective, but they’re going to keep trying,” says John Stopford at the $98 billion UK asset manager, Investec, speaking to Bloomberg.

“Gold has shown itself sensitive to monetary policy announcements this year and any indication of further easing would buoy gold prices,” says HSBC precious metals analyst James Steel, looking ahead to Friday’s release of second-quarter US economic growth data.

“Gold has been the ultimate wealth preserver for millennia while currencies have tended to have shorter lives,” write J.P.Morgan analysts John Bridges and Shwetabh Shrivastava in a new report on the mining sector.

However, “In the short term declining inflation rates are not consistent with the case that previous monetary stimulus will drive gold prices higher,” they add.

“While we wait, investor confidence [in gold mining equities] is under pressure.”

After failing to follow gold’s sharp rise on Wednesday, silver prices also jumped today, hitting a 3-week high at $27.90 per ounce as industrial commodities including platinum also rose.

“We remain gloomy on the Euro crisis,” says a new report from Citigroup’s chief economist – and former Bank of England policymaker – Willem Buiter today,  forecasting a 90% chance of Greece quitting the 17-nation Eurozone by end-2013.

Those odds have been raised from Citi’s previous forecast of a 50-75% shot.

Picking up German magazine Speigel’s weekend claim that the International Monetary Fund won’t provide further aid to Greece once the Eurozone’s own permanent funding is in place, Citi’s report  also follows a move by the Moody’s rating agency to put German, Dutch and Luxembourg debt  on “negative outlook” by forecasting downgrades to all European sovereign states, including the UK.

The gold price in Sterling whipped violently as the Euro currency jumped and the Dollar fell, eventually trading unchanged by lunchtime in London at £1035 per ounce – back where it stood when the Bank of England announced another £50 billion injection of quantitative easing three weeks ago.

“We might see a bit more selling if the gold price stays above $1605 an ounce,” warned a Singapore-based dealer to Reuters overnight, with other Asian traders reporting a rise in scrap supply after Wednesday’s 1.5% jump.

But “physical buying has been supportive over the past week,” says a report from Standard Bank, and “Indian buying has also begun to show signs of improving.

“Seasonally, Indian demand for physical gold usually picks up in August ahead of the wedding season. Gold futures market participants in India are already anticipated this, as seen in their positioning.”

Adrian Ash
BullionVault

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 today vaulted in Zurich on $3 spreads and 0.8% 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.

By Central Bank News
    The central bank of the Philippines cut interest rates by 25 basis points to 3.75 percent, as expected by some economists, the third time this year the Bangko Sentral Ng Pilipinas has cut rates.
    Lower inflation allowed the bank to cut rates to help buffer the economy against a weaker global economy, the bank said in a statement.
    “On balance therefore the benign inflation outlook provides room for a reduction in policy rates as a pre-emptive move against the risks associated with the global slowdown,” the bank said.

    The Philippine inflation rate eased to 2.8 percent in June from 2.9 percent and gross domestic product rose by 6.4 percent in the first quarter from the same quarter last year.
    The Philippine central bank has a medium-term inflation target of 4 percent, plus or minus one percentage points for 2012-2014.
     The bank said price pressures have been receding and the risk is to the downside as pressures on commodity pressures are abating due to the weaker global outlook.
    “In the advanced economies, financial market stress continues to build up, and there remain concerns about the prospects for urgent fiscal adjustments and reforms. While the Philippine economy can rely on the resilience of domestic spending to sustain growth, additional policy support would serve as a buffer against strong global headwinds,” the bank said.
    The Philippine central bank’s overnight borrowing, or reverse repurchase rate facility (RRR), was cut to 3.75 percent, and it also cut the overnight lending or repurchase facility (RP) by the same amount to 5.75 percent. The overnight borrowing rate was already cut in January and March, each time by 25 basis points.
    
    www.CentralBankNews.info

Source: ForexYard

The euro saw gains across the board yesterday, after positive comments from an official at the European Central Bank regarding the euro-zone’s ability to combat the region’s debt crisis led to risk taking in the marketplace. At the same time, analysts continued to caution traders that any euro gains may be temporary due to rising Spanish bond yields. Today, US news is likely to create the most market volatility. Traders will want to pay attention to the Core Durable Goods Orders, Unemployment Claims and Pending Home Sales figures. Should any of the news indicate growth in the US economy, the dollar could see gains against the euro during the afternoon session.

Economic News

USD – Batch of US Indicators Set to Impact Dollar

The dollar fell against most of its main currency rivals yesterday, following positive euro-zone news which led to risk taking among investors. That being said, analysts were quick to warn that the overall trend for the dollar was still bullish, as global economic news remained negative. Still, the AUD/USD advanced close to 90 pips during the European session, eventually reaching as high as 1.0306. Against the Swiss franc, the dollar tumbled more than 75 pips to trade as low as 0.9867.

Turning to today, dollar traders will want to monitor a batch of US news that could potentially lead to market volatility. At 12:30 GMT, the Core Durable Goods Orders and Unemployment Claims are both scheduled to be released, followed by the Pending Home Sales figure at 14:00. Both the Core Durable Goods Orders and Pending Home Sales are forecasted to come in below last month’s figures. If the news comes in as expected, the greenback could see further losses during the evening session.

EUR – Euro Gains May be Temporary

Positive comments from an official at the European Central Bank regarding the euro-zone’s ability to combat the debt crisis in the region resulted in risk taking in the marketplace, which in turn led to broad gains for the common currency. The EUR/USD was up over 100 pips over the course of the day, reaching as high as high as 1.2169 before staging a downward reversal. The pair found support at the 1.2130 level. Against the Japanese yen, the euro saw gains of around 95 pips to peak at 95.18 before correcting itself toward the end of European trading.

Today, euro traders will want to continue monitoring any developments and announcements out of the euro-zone. Analysts are warning that given the current state of the Spanish economy combined with fears that the region’s debt crisis is impacting Germany, any gains the euro makes are likely to be temporary at best. Furthermore, if any of today’s news out of the US shows growth in the American economy, the euro could see losses against the dollar in afternoon trading.

Gold – Gold Advances Past $1600 amid Risk Taking

Risk taking in the marketplace due to positive euro-zone news sent the price of gold up more than $25 an ounce yesterday. A bullish euro typically leads to gains for gold, as it becomes cheaper for international buyers. The precious metal peaked at $1605.83 during mid-day trading before staging a mild downward reversal to stabilize at the $1602 level.

Today, gold traders will want to continue monitoring any developments in the euro-zone, particularly with regards to bond yields in Spain, which recently soared due to aid requests from several regions in the country. Should the euro once again turn bearish today, the price of gold could fall as a result.

Crude Oil – Crude Oil Tumbles Following US Inventories Figure

The price of oil tumbled by well over $1 a barrel during afternoon trading yesterday, after the US Crude Oil Inventories figure came in well above analyst expectations. The US data is typically used by investors to gauge demand in the world’s leading oil consuming country. After falling as low as $87.42 a barrel, crude staged a minor upward correction to reach the $87.60 level.

Turning to today, oil traders will want to pay attention to a batch of US news, set to be released at 12:30 and 14:00 GMT. If any of the data indicates expansion in the US economy, investors may take the news as a sign that oil consumption will increase, which could result in the commodity turning bullish during afternoon trading.

Technical News

EUR/USD

The Relative Strength Index on the weekly chart has crossed into oversold territory, indicating that this pair could see upward movement in the coming days. This theory is supported by the Slow Stochastic on the same chart, which is currently forming a bullish cross. Going long may be a wise strategy for this pair.

GBP/USD

A bullish cross has formed on the daily chart’s MACD/OsMA, signaling that an upward correction could occur in the near future. Furthermore, the Williams Percent Range on the weekly chart has fallen into oversold territory. Opening long positions may be the right choice for this pair.

USD/JPY

While the weekly chart’s Williams Percent Range has dropped into oversold territory, most other long term technical indicators place this pair in the neutral zone. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

USD/CHF

A bearish cross on the weekly chart’s Slow Stochastic appears to be forming, indicating that a downward correction could occur in the near future. Additionally, the Relative Strength Index on the same chart has crossed into overbought territory. Going short may be the wise choice for this pair.

The Wild Card

Platinum

The Williams Percent Range on the daily chart is currently in oversold territory, indicating that an upward correction could take place in the near future. Furthermore, the Slow Stochastic on the same chart has formed a bullish cross. Forex traders may want to open long positions ahead of a possible upward breach.

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.

Article by AlgosysFx
New Zealand’s Official Cash Rate (OCR) was kept at 2.5 percent by the Reserve Bank of New Zealand (RBNZ) Governor Alan Bollard, saying that the bank is monitoring the Euro region for any signs of deterioration. “New Zealand’s trading-partner outlook remains poor, with several Euro area economies in recession,” Bollard said in a statement. “It remains appropriate for the OCR to be held at 2.5 percent.” The OCR has been untouched for 11 straight meetings, since March of last year, to allow for the economy’s recovery after its second largest city, Christchurch, was hit by the deadliest earthquake in 80 years.

Europe’s economic troubles worsened this week as Spanish borrowing costs reached unsustainable levels, and after its two regions signified that it would seek financial help from the government to pay their debts. With the situation in the Euro Zone getting out of hand, European Central Bank Council Member Ewald Nowotny said that there were arguments favoring to give the region’s rescue fund a banking license, which would enable it to have access to ECB lending. Such comment boosted demand for South
Pacific nation’s currencies.

Economic recovery in New Zealand has not been strong as initially anticipated, with a lagging rebuild in Canterbury and struggling retail sector as household demand weakened. But Bollard said that it should “grow modestly over the next few years,” as the rebuilding of earthquake-hit Christchurch is anticipated to boost the construction industry. He also adds that the economic outlook remains in line with that described in the June monetary policy statement, which is a forecast of 3 percent in 2014, slower than the 3.7 percent-projection in March. The June statement of monetary policy was written at a time when the Greece held a second general election, after the winners of the first elections failed to form a coalition
government.

Article by AlgosysFx Forex Trading Solutions

Article by Investment U

In focus this week: how 3D printing will change manufacturing, a quiet tech company with a huge new market and the SITFA

3D printing will change how almost all manufacturing is done and alter the supply chain for many industries. Industries that make things as big as airplanes will be able to make parts as big as wings without cutting or bending any metal.

According to the Journal, the car parts business will make parts from their digital library and have no inventory. It will store all of its parts in digital form and make them as they are needed on site. Star Trek in our lifetime.

The CEO of 3D Systems Corp., a manufacturer of 3D printers, said in the article that printers cost as little as $500 and up to $1.5 million, can be placed anywhere and will eliminate the need for shipping and warehousing in most industries. That will reshape business as we know it and will create too many cost savings for this to not be a massive industry.

Military applications will allow replacement parts to be made in the field and will drive this market in its early years.

It will be a huge advantage for entrepreneurs who can manufacture ideas without the cost of a facility or distant manufacturing firms.

According to the Journal, EU companies, Arcam (STO: ARCM) and SK, are leading the business in printers for small metal objects, and Asian companies are in on the game, as well.

GE is using 3D printers for ultra sound applications, Pratt and Whitney for compressor blades and Honeywell for heat exchangers.

Boeing is using it to make 300 parts for its aircraft.

This industry is in its infancy, there are still issues about affordable raw materials, but it will drive almost all manufacturing in the future and it must be a part of every portfolio.

 A Quiet Tech Giant

NCR is the world’s leading supplier of ATMs. I don’t know about you, but I don’t know how we lived before them.

This isn’t a leading edge technology play, but it’s in virtually every bank, mall, hotel and street corner, and according to the Barron’s they pay for themselves quickly.

According to Barron’s, NCR is the play because of their ability to deliver real cost savings in a number of markets and they’re the technological leader in the business. NCR currently derives half of its profits in North America and the rest in Asia, the EU and Latin America.

They’re looking at compounded annual growth going forward of 15% to 20% and recently upped their EPS forecast.

According to the Barron’s article, NCR has 50,000 ATMs in banks in just the U.S. and has a new market of another 175,000 more in smaller regional and local banks, and ATM growth in Asia and South America is expected to be explosive

RBC has a $28 target on the stock and projections put the price at $59 per share from its current $23.

The company also has big growth opportunities in self-check out applications in food markets and in the emerging market of travel for self-check out at airports and rental cars kiosks.

Most of the areas NCR has dominance in are in their infancy and NCR will, as it always has, work its way into all of them and stay on top.

This is hardly a state-of-the-art play, but it’s one with a huge market that’s constantly growing.

Finally, the SITFA

This week it goes to all those engineers out there who have been killing themselves trying to beat car thieves with new gadgets that are supposed to make it harder to steal cars.

The problem, thieves adapt.

Despite advances with coding access, touch starts, break away gear shifts and steering columns to prevent forcing a car into gear, thieves are doing a good job of keeping up with any technological advances.

Manufacturers have made headway with some of the newer designs; on-board GPS to track thieves, electronic keys that know their owners, electromechanical steering columns. But thieves still got $4.5 billion worth of cars last year.

Car thieves’ answer to all these devices designed to stop them. Forget about it, now they just use a tow truck and take your car where they can dismantle all the prevention devices.

Stranger yet, the most-stolen car, 1994 Honda Accord. Nobody ever said car thieves were discerning. Slick, but not discerning.

Article by Investment U

Article by Investment U

Many experts, analysts and pundits are trying to take on the massive task of summarizing the entire Supreme Court’s decision on the Affordable Care Act in about 500 words or less.

This approach doesn’t work. In our evolving 24/7 news cycle, it’s a necessity to churn something out even if it isn’t fully vetted. Most knee-jerk reactions were a response to which side of the fence you practiced and preached your politics. Either Obamacare will bring healthcare to the downtrodden in this country or it’s the beginning of the European socialist revolution.

It’s neither. It’s just the law of the land at the moment. Our country’s history is fraught with laws passed that were thought to be the spark of the Apocalypse. Laws have come and gone and we are still here. Now those who take the practical approach to a changing political backdrop are those who in the end profit from those changes. Healthcare reform is here. What we need to do is look at it as it all comes to light and a better understanding, and then act accordingly.

A few days ago, I wrote a piece on the new investment tax that’s derived from this legislation. Depending on your income and investment structures, you may need to protect your assets. Now, I see another aspect of the law that will have a profound effect on the healthcare industry and may provide investment opportunities going forward.

How the ACA Affects the Medicaid/Medicare Businesses

As we know, the individual mandate was ruled constitutional. However, the Court did limit Medicaid expansion by limiting the federal government’s power to put an end to states’ funding.

The court also ruled that the federal government can’t punish states that don’t comply with the Affordable Care Act’s purpose of expanding Medicaid coverage. So there will be no withholding of funds to those Red States who oppose the law down to the core of their Governor’s souls (insert Rick Scott and Rick Perry). States have the ability to expand coverage, but they can’t be forced to.

Why does this matter? It shakes up the landscape of the industry, which the markets have shown since day one of the ruling. It’s a negative for major health insurance companies, but a positive for Medicaid companies.

Private Sector Growth in Healthcare Will Get Worse

Here’s the situation with the major managed care health providers – such as UnitedHealth (NYSE: UNH), WellPoint (NYSE: WLP), Aetna (NYSE: AET), Cigna (NYSE: CI) and Humana (NYSE: HUM). When you look at their quarterly earnings reports, you see all the growth is coming from public programs like Medicare and Medicaid. The private sector business is lagging and not seen as very profitable any more.

Many people thought healthcare reform would be a boom to the entire industry. However, when you actually look at the law, that assumption proves not to be true. Even though an individual mandate brings in millions of new users, insurers will have a hard time expanding their bottom lines.

Look at what they will no longer be able to do:

• No longer will an insurer be able to deny coverage to citizens because they have pre-existing conditions.
• Insurers will be required to spend at least 80% of patients’ premiums on medical care. If they do not, the law requires them to send rebate checks to those people.
• The majority of insurers spend a lot more than 20% on administrative expenses, which will cause some serious belt-tightening in regards to expensing.
• The law will make it very difficult for insurers to frivolously raise prices.

Upholding “Obamacare” means that there is now an earnings cap on this sector. This, however, doesn’t mean that the industry is done.

Where’s the Growth?

Before the ruling, the managed care heavyweights saw all their growth coming from the public sector. Let’s take a look at the numbers of the two biggest players in the market.

UnitedHealth and WellPoint each claim around 34 million members and have now become major players in Medicare by means of their Medicare Advantage and Medicare supplement plans, and Medicaid. Last year, UnitedHealth’s public sector membership went up nearly 7% in contrast to their private sector membership, which increased a little over 4%.

WellPoint’s growth in the public sector one-upped them. Their Medicare enrollment was up around 17% in 2011while Medicaid enrollment grew 6.3%.

Insurers specializing in Medicaid plans for low-income persons and families, such as Amerigroup (NYSE: AGP) and Molina Healthcare Inc. (NYSE: MOH), have gained the most. This is due mainly to the expansion of Medicaid eligibility in the states.

And as soon as the ruling was announced, Medicaid companies saw a relief rally because Chief Justice Roberts stated that the federal government’s ability to cut funding for Medicaid programs was limited by the law.

Where Does the Industry Go From Here?

One word sums up what’s likely on the way for the healthcare insurance industry: “consolidation.” On July 9, WellPoint said it would buy Amerigroup for $4.9 billion. That deal has been the catalyst for a whole lot of speculation concerning the other managed care heavyweights like Humana, Cigna, Aetna and UnitedHealth, that they’re now in the market for other Medicaid/Medicare providers due to the ACA ruling.

WellPoint’s deal came at a 43% premium. However, it’ll give the provider 4.5 million new state-sponsored healthcare accounts, and also contribute some dual eligible managed care customers. The move will add to WellPoint’s 65 million-plus healthcare customers.

Who’s next? Look for the likes of other Medicaid/Medicare providers like Molina Healthcare, Centene (NYSE: CNC) and WellCare (NYSE: WCG) to be considered as possible purchasing targets. As of last week, these equities were up over 15% on rumors that they’re next on the list to be bought.

The big boys now see where the market is headed and are looking to buy them a piece of the pie.

Good Investing,

Jason

Article by Investment U