InvestMacro

Article by ForexTime

It’s remarkable that just hours after President Donald Trump suddenly axed his highly anticipated June summit with Kim Jong-Un in Singapore, North Korea unexpectedly offered an olive branch.

North Korea has stated that they remain open-minded in giving “time and opportunity” to the United States and are willing to meet Trump “at any time in any way”. With the nation also calling the planned summit “desperately necessary” to mend the US – North Korea relationship, the doors could still be open for a summit to take place. Markets will be paying very close attention to how the Trump administration responds to North Korea’s conciliatory stance. Any further signs of de-escalating tensions between the US and North Korea could revive risk sentiment.

Asian stocks were on the defensive during early trade, as North Korea’s measured response to the abrupt summit cancellation slightly soothed investor jitters. European markets rebounded after the olive branch from North Korea and this improving sentiment could support Wall Street in the afternoon.

Sterling quivers as GDP disappoints

This has already been a terrible trading week for the Pound, as cooling inflation figures dented expectations over the Bank of England raising UK interest rates in August.

Matters worsened on Friday following reports that UK economic growth dropped to its lowest rate since 2012. UK GDP growth slowed to 0.1% in the first quarter of 2018 according to the second estimate, which immediately damaged buying sentiment towards the Pound. Today’s disappointing growth figures may weigh heavily on sentiment while also forcing investors to scale back bets on a BoE rate hike anytime soon.

Taking a look at the technical picture, the GBPUSD remains bearish on the daily charts as there have been consistently lower lows and lower highs. Repeated weakness below the 1.3400 level could invite a decline towards 1.3320 and 1.3250, respectively.

Dollar steady ahead of Powell speech

King Dollar was steady against a basket of major currencies this morning ahead of the upcoming speech from Fed Chair Jerome Powell.

He will be addressing financial stability and central bank transparency before the Sveriges Riksbank Conference in Stockholm later today. The Greenback could appreciate further is Powell sounds hawkish and offers fresh insight into the Fed’s monetary policy tightening path beyond June. With the widening interest rate differential still favouring the Dollar and expectations elevated over an interest rate hike in June, Dollar strength is likely to remain a dominant market theme.

Taking a look at the technical picture, the Dollar Index remains heavily bullish on the daily charts. A decisive breakout above 94.00 could encourage an incline higher towards 94.20 and 94.50, respectively.

Is the Oil bull run over?

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By Orbex

UK second revised GDP to show no change

Intraday Analysis 25th May 2018

The U.S. dollar was seen falling slightly on the day. Economic data showed the release of the German final GDP data for the first quarter. The quarterly pace of GDP was seen rising 0.3%, unchanged from the previous estimates.

Retail sales from the UK showed an increase of 1.6% on the month. This was higher than the forecast of 0.8%. The previous month’s data was also revised to show a decline of 1.1% which was slightly better than the initial estimates.

The ECB released its meeting minutes which showed that officials were concerns that the slowdown would continue further than expected.

Economic data for the day will see the release of the second GDP estimates for the first quarter. Median forecasts estimate that the first quarter GDP remained unchanged at 0.1%. Later in the day, the U.S. trading session is expected to see the release of core durable goods orders. Forecasts point to a 0.5% increase. However, the headline durable goods orders are expected to fall 1.3%, declining almost half from the gains made in March.

The BoE Governor Mark Carney and Fed Chair Jerome Powell are expected to speak later in the day.

Intraday Analysis 25th May 2018 EURUSD

EURUSD (1.1710): The EURUSD was trading within Wednesday’s range as price action attempted to post intraday gains before pulling back lower. The EURUSD briefly tested 1.1730 level before easing back. The inside bar formation could trigger a near term breakout off Wednesday’s highs and lows. On the 4-hour chart, price action continues to remain in a consolidation mode that is now shaping out into a descending wedge pattern. An upside breakout could trigger a move toward 1.1846 – 1.1824 level of resistance.

How do you think the EUR will progress? If you feel confident enough, why not open an account and trade?

Intraday Analysis 25th May 2018 USDJPY

USDJPY (109.57): The USDJPY broke down below the support level of 109.57 – 109.43 as price action fell just a few pips above the next main support at 109.90. The rebound off this level saw prices retesting this support level which is likely to act as support. In the near term, we expect to see USDJPY most likely to decline back for a firm retest of support at 108.90. To the upside, in the event of a breakout above the support/resistance level, then we can expect further gains to push USDJPY back to 110.85 level of resistance.

Intraday Analysis 25th May 2018 XAUUSD

XAUUSD (1302.77): Gold prices posted some modest gains as price action managed to touch the resistance level near 1304 – 1301 level. Price action is required to breakout above this resistance level in order to post further gains. The next main target to the upside will be at 1325 level. To the downside if price slip below the resistance, then we expect to see further consolidating taking place within 1304 – 1301 level and 1282 support.

Article by ForexTime

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By CentralBankNews.info
      Angola’s central bank unified its marginal lending facility with its basic interest rate as the BNA rate, which it said would now reflect the effective cost of providing liquidity to commercial banks.
      As part of the change, the National Bank of Angola (BNA) lowered the rate on its marginal lending facility by 200 basis points to 18.00 percent, the existing basic interest rate.
      The BNA also lowered the ratio on mandatory reserves in national currency liabilities by 200 basis points to 19.0 percent while the rate on the liquidity absorption facility was kept at zero percent.
      The adoption of a unified rate is the latest move by the central bank to change its monetary operations following the arrival of Jose Massano as BNA governor in October last year.
       In January the BNA replaced its fixed exchange rate regime with a floating exchange rate regime with bands and began auctions to set a reference rate for the kwanza, which subsequently depreciated.
       Against the U.S. dollar, the kwacha has been dropping steadily since the new exchange rate regime began on Jan. 9, with the kwacha today trading at 234.7 today, down 29.3 percent.
       The BNA said the latest change was aimed at improving the effectiveness of its monetary policy instruments and thus contribute to macroeconomic stabilization and a sound financial system.
       In the future, the central bank’s monetary policy committee will now meet bi-monthly, with the next meeting scheduled for July 20.
       Angola’s inflation rate declined for the sixth consecutive month in April to 20.22 percent and was sharply down from just over 41 percent in December 2016.
       The monetary base, which became an operational variable of monetary policy in November last year, shrunk by 2.48 percent in April for a year-on-year increase of 10.11 percent, BNA said.
       Credit issued in the national currency grew by 0.88 percent in April from March for an annual increase of around 8.73 percent, the BNA said, while it sold a total of 596.33 million euros for accumulated sales this year of 2.842.13 billion euros.
       Gross International reserves declined to $US17.55 billion in April from $17.70 billion in March, enough to finance 7.31 months of imports.
        Earlier this week the International Monetary Fund (IMF) welcomed the reform program adopted by President Joao Lourenco, which took over from Jose Eduardo dos Santos last September, vowing to root out an endemic culture of corruption. Dos Santos had been in power almost 38 years.
        Lourenco’s reform program envisages upfront fiscal consolidation, greater exchange rate flexibility, reducing public debt to 60 percent of Gross Domestic Product, improving the public debt profile, settling domestic payments arrears and enhancing anti-money laundering.
        The rise in crude oil prices is giving Angola an opportunity to address its macroeconomic imbalances after the plunge in oil prices in 2014 was met by fiscal tightening and foreign exchange restrictions. In the run-up to the August 2017 elections, the government then embarked on fiscal expansion and a pegged exchange rate that further eroded fiscal and external buffers.
        The IMF welcomed Angola’s transition to greater exchange rate flexibility and the new monetary policy framework that is anchored on base money targeting consistent with an inflation objective.
        But it also stressed the need for the central bank to gradually phase out direct foreign exchange sales and to set a clear strategy and timetable for eliminating foreign exchange restrictions.
        The IMF forecast that Angola’s economy would expand 2.2 percent this year, up from an estimated 1.0 percent last year, and 2.5 percent in 2019.
       Inflation is seen declining to an average of 27.8 percent this year from 2017’s estimated 31.7 percent and then easing further to 17.1 percent in 2019.

      www.CentralBankNews.info

Article by ForexTime

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Article by ForexTime

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By Orbex

Daily Forex Market Preview, 24/05/2018

It was a busy day for the markets yesterday with a number of economic releases lined up. The Eurozone flash services and manufacturing PMI’s showed that activity in both the sectors fell to 18-month and a 16-month low. This brought the Eurozone composite output index to an 18-month low.

The euro was little changed on the news although the common currency was trading broadly weaker. In the UK, the inflation data showed that consumer prices rose at a pace of 2.4% which was less than forecast. The core inflation rate was seen rising at 2.1%, which also missed estimates of a 2.2% increase. The weak inflation data stoked speculation that it could delay the Bank of England’s rate hike plans for the month of August. The British pound was seen weakening after the release.

The NY trading session saw the release of Markit’s flash manufacturing and services PMI’s which were broadly in line with estimates.

The Fed meeting minutes were released yesterday. The data did not add any new information to the markets. The minutes revealed that officials were upbeat about the economy and that the next rate hike would be appropriate. The minutes confirmed the market views that the FOMC will be hiking interest rates at the next Fed meeting June.

Data for the day ahead starts off with the German final quarterly GDP estimates. Forecasts point to an unchanged print of 0.3% in the first quarter. The BoE Governor Mark Carney is scheduled to speak earlier in the day. The UK’s retail sales report is due later with estimates showing a 0.8% increase on a monthly basis.

The ECB will be releasing the monetary policy meeting minutes thereafter. Data from the U.S. will see the release of the existing home sales report. Fed members are also scheduled to speak over the day.

Planning to trade the ECB minutes? Do it with Orbex… Open your account now.

EURUSD intra-day analysis

EURUSD (1.1700): The EURUSD currency pair slipped past the 1.1730 level of support to briefly touch down to 1.1672 level before pulling back. Price action remains subdued at the current levels although the EURUSD could be seen attempting to post a reversal in the near term. The 4-hour Stochastics continues to remain the oversold level and a breakout above 1.1730 on a 4-hour basis could potentially signal a move to the upside. Still, price action needs to breakout from the falling price channel to confirm this upside in price.

USDJPY intra-day analysis

USDJPY (109.46): The USDJPY currency pair fell sharply as price action failed to capitalize on a modest rebound. USDJPY is now seen trading near the support level at 109.57 – 109.43 region. We can expect to see a rebound in price action in the near term. However, the gains are likely to be short lived but there is a potential for USDJPY to retrace the losses all the way back to the resistance level at 110.85. In the near term, a break down below the current support level could signal a decline to the next lower support at 109.90.

XAUUSD intra-day analysis

XAUUSD (1295.19): Gold prices continue to remain consolidating near the current levels. Price action is seen stuck between the 1304 – 1301 level of resistance and 1282 level of support. We expect this sideways movement to continue until price breaks out from either of these levels. To the upside, a close above 1304 – 1301 resistance could signal a move toward 1325 level. To the downside, a break down below 1282 would keep gold prices subdued to test the 1250 support.

By CentralBankNews.info
      After weeks of speculation and pressure on the lira’s exchange rate, Turkey’s central bank raised its its late liquidity lending rate by 300 basis points to 16.50 percent and said it would use all available instruments in pursuit of price stability and continue to maintain a tight policy stance until there is a “significant improvement” in the outlook for inflation.
      The Central Bank of the Republic of Turkey (CBRT) said after an extraordinary meeting of its monetary policy committee that elevated levels of inflation and inflation expectations continue to pose a risk and it had “decided to implement a strong monetary tightening to support price stability.”
      The rate hikes comes after top government economic officials on Monday met to discuss measures, including moves by the central bank, to address the pressure on the lira and accelerating inflation amid growing investor discomfort with President Tayyip Erdogan’s determination to exercise control over monetary policy after June 24 elections and thus erode central bank independence.
       In response to the sharp rate hike, the lira jumped 6.6 percent to 4.56 to the U.S. dollar from a record low of 4.86. However, the lira is still almost 17 percent below its rate at the start of 2018.

       The previous increase of the rate on the bank’s late liquidity window – used by banks to access funds shortly before local markets’ close – came on April 25 when the rate was raised by 75 basis points.
      Keeping some of its power dry, the central bank left its benchmark one-week repurchase rate steady at 8.0 percent along with its other policy rates.
      While the repo rate has been kept steady November 2016, the CBRT has been tightening its policy stance by other means, including the late liquidity lending rate, the rate it pays on local lenders’ U.S dollar reserves and required reserve ratios, and raising volume of foreign exchange deposits to boost the value of the lira and slow down inflation.
       On April 30 the central bank said it was moving closer to using a single interest rate as a policy rate, something analysts have long hoped for as the current system with multiple rates has made monetary policy less predictable and transparent,.
      Turkey’s headline inflation rate rose to 10.85 percent in April from 10.23 percent in March while core inflation rose to 12.2 percent.
       Last month the central bank raised its 2018 inflation forecast to 8.4 percent from 7.9 percent but retained its 2019 forecast of 6.5 percent and its medium-term outlook for inflation of 5 percent.
       The CBRT’s monetary policy committee had been scheduled to meet on June 7.

       www.CentralBankNews.info

Article by ForexTime

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

New Report from Four Twenty Seven Analyzes Exposure to Climate Hazards in U.S. Muni Market 

• Sea Level Rise: The mid-Atlantic, particularly New Jersey, Virginia, North Carolina and Florida, has the highest exposure to coastal flooding in the United States, with the Bay Area and Pacific Northwest also highly exposed in several of their coastal cities and counties.
• Cyclones/Hurricanes: The majority of cyclone risk in the United States is concentrated in the Southeast, given its geographic proximity to the Gulf of Mexico and the tropical Atlantic Ocean. The coastal Mid-Atlantic and Northeast are also exposed to cyclones, but they tend to be less frequent than in the Southeast and somewhat weaker on average after interacting with land or cooler ocean waters.
• Extreme Rainfall: The Midwest is particularly exposed to heightened flood risk due to changing rainfall patterns. Recent advancements in attribution science show extreme rainfall to be the main driver of recent floods rather than 20th century agricultural practices, as was largely believed to be the case until recently.
• Heat Stress: The highest heat stress scores tend to be centered in the Southeast and Midwest, concentrated in Missouri and western Illinois and fanning out to the Great Plains, Mississippi River Basin, and Florida.
• Water Stress: Key watersheds for agricultural production such as the Central Valley aquifer system in California and the Ogallala Aquifer in the Great Plains are highly exposed to water stress. The agriculturally-dominated areas of Bakersfield, Delano, and Visalia, CA along the Central Valley Aquifer are among the ten cities most exposed to water stress. Similarly, municipalities along the Ogallala Aquifer in the Great Plains also rely heavily on agriculture and are among the most exposed to water stress.

A full copy of the report can be found via this link – Four Twenty Seven US Muni Report

ABOUT FOUR TWENTY SEVEN: 

Four Twenty Seven (427mt.com) is the leading provider of market intelligence on the impacts of climate change for financial markets. We tackle physical risk head on by identifying the locations of corporate production and retail sites around the world and their vulnerability to climate change hazards such as sea level rise, droughts, floods and tropical storms, which pose an immediate threat to investment portfolios.

Four Twenty Seven’s ever-growing database now includes close to one million corporate sites and covers over 2000 publicly-traded companies. We offer subscription products and advisory services to access this unique dataset. Options include data licenses, an interactive analytics platform, and company scorecards, as well as reporting services, scenario analysis, and real asset portfolio risk assessments.

Four Twenty Seven has won multiple awards for its innovative work on climate risk and resilience and our work has been featured by Bloomberg, the Financial Times and the UNFCCC. Four Twenty Seven was founded in 2012 and is headquartered in Berkeley, California with offices in Washington, DC and Paris, France.