Market analysis
Highlights:
- EUR/USD : Holds gains after U.S. payrolls report
- GBP/USD : Adds to gains and sets one-month high
- USD/JPY : Weakens as safe haven demand ebbs
- USD/CAD : Rises to 8-month highs after Canadian data
- Gold : Falls back below $1,300 after FBI clears Clinton
- Crude Oil : Stabilize after plunging to 5-week lows
EUR/USD
Holds gains after U.S. payrolls report
Euro managed to rise to near a three-week high touched following the U.S. payrolls report, which showed strength in the labor sector despite missing expectations. The U.S. payrolls report showed the economy added more jobs in October than in September, which showed the stability of the labor sector, but the dollar fell to a three-week low as the survey missed expectations. Euro capitalized on the dollar's weakness as demand rose on main currencies due to jitters regarding the U.S. presidential elections. Euro's dip against the dollar comes after the greenback pared the losses, triggering profit-taking operations after hitting three-week high, especially as sterling surges against main rivals.
Euro rose to the highest in three weeks after drawing support from dollar's slide, and amid higher demand on main currency, Euro's rise comes amid a sharp tumble in the dollar against major rivals ahead of the Fed's decisions, expected to hold policy steady, which pushed the common currency higher. Euro is recovering this week as investors head for other areas of investments ahead of the U.S. presidential elections, pushing investors away from the greenback to other currencies.
EUR/USD
GBP/USD
Adds to gains and sets one-month high
Sterling rose to a four-week high last week after the Bank of England's meeting, at which it held interest rates and policy steady and signaled no more cuts to come, which underpinned the pound, also it pushed higher against the broadly weaker dollar as concerns over the prospect of a win for Donald Trump in U.S. presidential election hit the greenback, traded close to a four-week high and was heading for its best week since March, having jumped after England's High Court put a spanner in the government's plans to forge ahead with Britain's exit from the European Union. The pound surged to a four-week high close to $1.25 after the court's decision that the government needed parliamentary approval to trigger Article 50, which will formally start the process of exiting the EU it remained close to that high at $1.2480. The pound started climbing earlier in the week when Mark Carney said he would stay as head of the Bank of England for an extra year to help with a smoother Brexit negotiation process. Dollar was little changed against the other major’s currencies, as investors awaited the release of key U.S. jobs data later in the day and remained cautious ahead of next week’s presidential election.
GBP/USD
USD/JPY
Weakens as safe haven demand ebbs
Yen held weaker as safe haven flows ebbed following news that the FBI stood by its earlier recommendation that no criminal charges were warranted against Democrat Hillary Clinton for using a private email server and after Japan wages data and Bank of Japan minutes set an easier tone. The BoJ said that several board members want a push to increase inflation expectations in a sustainable way, according to minutes of the September meeting. As well, Japan reported average wages rose 0.2% as expected in September, the first rise in two months, but much slower than the increase in corporate profits. Firms are reluctant to raise wages amid uncertainty over global and domestic growth. Last week, the dollar slid against a basket of the other major currencies on Friday as investors remained on edge ahead of the upcoming U.S. presidential elections, despite the solid U.S. employment report. Investors are currently pricing in a 66.8% chance of a rate hike at the Fed's December meeting.
USD/JPY
USD/CAD
Rises to 8-month highs after Canadian data
USDCAD seemed to be the only USD related pair that was unaffected by the general USD weakness that was seen across the markets last week. The USD weakness had been caused largely by the confusion surrounding the victor in the upcoming US Presidential elections. Till a couple of weeks back, all the opinion polls had suggested an easy and straight forward victory for Hillary but things seem to have changed over the last week with Trump gaining on Hillary and this has caught the markets by surprise and shock. It was only last week that the markets started pricing in an unlikely Trump victory (which still seems unlikely though) and this caused the USD to fall against all currencies except the CAD. The CAD, on its part, has been severely affected by the falling oil prices. The oil prices had enjoyed a jumped over the previous weeks due to the decision of the OPEC producers to cut production but lately, there have been cracks in the agreement with countries like Iraq and Iran refusing to join the proposed cuts. This has made oil give back its gains and fall around 10% over the last week and this has severely affected Canada whose economy depends a lot on oil prices. Falling oil prices are not good for the CAD and hence, over the last week, we saw the CAD and USD falling and this has helped the USDCAD to remain in a tight range over the whole of last week. Statistics Canada reported that the number of employed people rose by 43,900 in October, beating expectations for a 10,000 decline, after an increase of 67,200 the previous month. The unemployment rate remained unchanged at 7.0% last month, as expected. However, Canada’s trade deficit widened to C$4.08 billion in September from C$1.99 billion the previous month, confounding expectations for a deficit of C$1.70 billion.
USD/CAD
Gold
Falls back below $1,300 after FBI clears Clinton
Gold prices reversed losses to end higher on Friday as nervousness ahead of the upcoming U.S. presidential election offset a solid U.S. jobs report for October that supported that case for a December rate hike by the Federal Reserve. Gold for December delivery on the Comex division of the New York Mercantile Exchange was up $2.5, or 0.19%, to settle at $1,305 a troy ounce after sliding to $1,296 earlier. Gold had hit high of $1,307.00 on Wednesday, the highest level since October 4. Recent opinion polls have pointed to an increasingly uncertain outcome for the U.S. presidential election, rattling global financial markets and pressuring the dollar lower. The greenback remained on the defensive despite data showing that the U.S. economy continued to create jobs at a steady pace in October, although at a slightly slower rate than forecast. The U.S. economy added 161,000 jobs in October from the prior month, the Labor Department said. The unemployment rate ticked down to 4.9% last month from 5% in September. The data supported the view that the U.S. central bank will hike interest rates at its next policy meeting in December. Gold prices fell back below the $1,300-level during North American hours on Thursday, pulling back from the prior session's one-month high as the U.S. dollar and global stocks stabilized. The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending October 29 increased by 7,000 to 265,000 from the previous week’s total of 258,000. Analysts expected jobless claims to hold steady at 258,000 last week. The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 54.8 last month from 57.1 in September.
The Federal Reserve said the case for a rate hike by the end of the year remains in place as it held rates steady as expected on Wednesday, adding few tweaks to its statement that still short of sending a very strong signal. The policymaking Federal Open Market Committee voted 8 to 2 to continue targeting the 0.25% to 0.50% range for the fed funds rate, where it has been since liftoff last December. In the week ahead, investors will be focusing their attention on the outcome of Tuesday’s U.S. presidential elections.
GOLD
Crude Oil
Stabilizes after plunging to 5-week lows
Oil futures tumbled to multi-month lows on Friday and booked their biggest weekly loss in almost a year amid mounting skepticism over the implementation of a planned deal by OPEC to limit production. Prices fell sharply on Friday after Reuters, citing an OPEC source, reported that Saudi Arabia threatened to raise its oil production at a meeting of OPEC experts last week if Iran refused to cap its output. A short time later, Bloomberg News reported that OPEC Secretary General Mohammed Barkindo denied that the Saudis made the threat. OPEC reached an agreement to cap output to a range of 32.5 million to 33.0 million barrels per day in talks held in Algeria in late September. However, the 14-member oil group said it won’t finalize details on individual output quotas until its next official meeting in Vienna on November 30. The possibility that producers could walk away empty-handed from the November meeting looms large after Iraq, Iran, Nigeria and Libya all signaled they might not take part in the proposed production cut deal. Russia’s unclear stance is also fueling uncertainty.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in December slumped 59 cents, or 1.32%, to end the week at $44.07 a barrel. The contract dropped to $43.57 earlier, the lowest level since September 20. Prices stayed lower after oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 9 to 450, resuming its rise following its first dip in roughly four months in the previous week. New York-traded oil futures lost $4.63, or 9.5%, on the week, as investors reacted to a record weekly surge in U.S. crude inventories. New York-traded oil futures lost $4.63, or 9.5%, on the week, as investors reacted to a record weekly surge in U.S. crude inventories. The U.S. Energy Information Administration said that crude oil stockpiles rose by a whopping 14.4 million barrels to 482.6 million last week, which the EIA considered to be “historically high levels for this time of year”. In the week ahead, politics are expected to overshadow market fundamentals, with most of the focus falling on Tuesday's U.S. Presidential Election. Meanwhile, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer. Oil traders will also keep an eye out for monthly reports from the International Energy Agency and the Organization of Petroleum Exporting Counties on Thursday and Friday respectively for fresh supply-and-demand signals.
CL
MAJOR DATA RELEASED DURING LAST WEEK
| Event | Actual | Previous | |
| NZD | ANZ Business Confidence | 24.5 | 27.9 |
| EUR | German Retail Sales m/m | -0.014 | -0.003 |
| GBP | Net Lending to Individuals m/m | 4.7B | 4.7B |
| EUR | CPI Flash Estimate y/y | 0.005 | 0.004 |
| EUR | Core CPI Flash Estimate y/y | 0.008 | 0.008 |
| EUR | Prelim Flash GDP q/q | 0.003 | 0.003 |
| CAD | RMPI m/m | -0.001 | -0.007 |
| USD | Core PCE Price Index m/m | 0.001 | 0.002 |
| USD | Personal Spending m/m | 0.005 | -0.001 |
| USD | Chicago PMI | 50.6 | 54.2 |
| CNY | Manufacturing PMI | 51.2 | 50.4 |
| CNY | Non-Manufacturing PMI | 54 | 53.7 |
| CNY | Caixin Manufacturing PMI | 51.2 | 50.1 |
| JPY | BOJ Outlook Report | ||
| JPY | BOJ Policy Rate | -0.001 | -0.001 |
| JPY | Monetary Policy Statement | ||
| AUD | Cash Rate | 0.015 | 0.015 |
| AUD | RBA Rate Statement | ||
| JPY | BOJ Press Conference | ||
| EUR | French Bank Holiday | ||
| EUR | Italian Bank Holiday | ||
| GBP | Manufacturing PMI | 54.3 | 55.5 |
| CAD | GDP m/m | 0.002 | 0.004 |
| USD | ISM Manufacturing PMI | 51.9 | 51.5 |
| NZD | GDT Price Index | 0.114 | 0.014 |
| CAD | BOC Gov Poloz Speaks | ||
| NZD | Employment Change q/q | 0.014 | 0.024 |
| NZD | Unemployment Rate | 0.049 | 0.05 |
| AUD | Building Approvals m/m | -0.087 | -0.018 |
| NZD | Inflation Expectations q/q | 0.017 | 0.017 |
| EUR | Spanish Manufacturing PMI | 53.3 | 52.3 |
| EUR | German Unemployment Change | -13K | 0K |
| GBP | Construction PMI | 52.6 | 52.3 |
| USD | ADP Non-Farm Employment Change | 147K | 202K |
| USD | Crude Oil Inventories | 14.4M | -0.6M |
| CAD | Gov Council Member Wilkins Speaks | ||
| USD | FOMC Statement | ||
| USD | Federal Funds Rate | <0.50% | <0.50% |
| JPY | Bank Holiday | ||
| AUD | Trade Balance | -1.23B | -1.89B |
| CNY | Caixin Services PMI | 52.4 | 52 |
| EUR | Spanish Unemployment Change | 44.7K | 22.8K |
| GBP | Services PMI | 54.5 | 52.6 |
| GBP | EU Membership Court Ruling | ||
| GBP | BOE Inflation Report | ||
| GBP | MPC Official Bank Rate Votes | 0-0-9 | 0-0-9 |
| GBP | Monetary Policy Summary | ||
| GBP | Official Bank Rate | 0.0025 | 0.0025 |
| GBP | Asset Purchase Facility | 435B | 435B |
| GBP | MPC Asset Purchase Facility Votes | 0-0-9 | 0-0-9 |
| GBP | BOE Gov Carney Speaks | ||
| USD | Unemployment Claims | 265K | 258K |
| USD | Prelim Nonfarm Productivity q/q | 0.031 | -0.006 |
| USD | Prelim Unit Labor Costs q/q | 0.003 | 0.043 |
| USD | ISM Non-Manufacturing PMI | 54.8 | 57.1 |
| USD | Factory Orders m/m | 0.003 | 0.004 |
| GBP | MPC Member Cunliffe Speaks | ||
| AUD | RBA Monetary Policy Statement | ||
| AUD | Retail Sales m/m | 0.006 | 0.005 |
| CAD | BOC Gov Poloz Speaks | ||
| CAD | Employment Change | 43.9K | 67.2K |
| CAD | Unemployment Rate | 0.07 | 0.07 |
| CAD | Trade Balance | -4.1B | -2.0B |
| USD | Average Hourly Earnings m/m | 0.004 | 0.003 |
| USD | Non-Farm Employment Change | 161K | 191K |
| USD | Unemployment Rate | 0.049 | 0.05 |
| USD | Trade Balance | -36.4B | -40.5B |
| CAD | Ivey PMI | 59.7 | 58.4 |
| GBP | MPC Member Forbes Speaks | ||
| USD | FOMC Member Fischer Speaks | ||
MAJOR DATA COMING OUT THIS WEEK (Time zone GMT)
| Date | Time | Event | Forecast | Previous | |
| 11/7/2016 | 7:00am | EUR | German Factory Orders m/m | 0.002 | 0.009 |
| 11/7/2016 | 8:30am | GBP | Halifax HPI m/m | 0.003 | 0.003 |
| 11/7/2016 | All Day | EUR | Eurogroup Meetings | ||
| 11/8/2016 | Tentative | CNY | Trade Balance | 366B | 278B |
| 11/8/2016 | 9:30am | GBP | Manufacturing Production m/m | 0.005 | 0.002 |
| 11/8/2016 | All Day | EUR | ECOFIN Meetings | ||
| 11/8/2016 | 1:30pm | CAD | Building Permits m/m | 0.104 | |
| 11/8/2016 | 3:00pm | USD | JOLTS Job Openings | 5.67M | 5.44M |
| 11/8/2016 | 8th-12th | USD | Mortgage Delinquencies | 0.0466 | |
| 11/8/2016 | All Day | USD | Presidential Election | ||
| 11/8/2016 | 4:20pm | CAD | Gov Council Member Schembri Speaks | ||
| 11/8/2016 | 5:00pm | GBP | MPC Member Haldane Speaks | ||
| 11/8/2016 | 11:50pm | JPY | Current Account | 1.98T | 1.98T |
| 11/9/2016 | 1:30am | CNY | CPI y/y | 0.021 | 0.019 |
| 11/9/2016 | 1:30am | CNY | PPI y/y | 0.009 | 0.001 |
| 11/9/2016 | 9:30am | GBP | Goods Trade Balance | -11.3B | -12.1B |
| 11/9/2016 | 10:00am | EUR | EU Economic Forecasts | ||
| 11/9/2016 | 3:30pm | USD | Crude Oil Inventories | 14.4M | |
| 11/9/2016 | 6:00pm | GBP | MPC Member Haldane Speaks | ||
| 11/9/2016 | 8:00pm | NZD | Official Cash Rate | 0.0175 | 0.02 |
| 11/9/2016 | 8:00pm | NZD | RBNZ Rate Statement | ||
| 11/9/2016 | 8:00pm | NZD | RBNZ Monetary Policy Statement | ||
| 11/9/2016 | 9:00pm | NZD | RBNZ Press Conference | ||
| 11/10/2016 | 1:30pm | CAD | NHPI m/m | 0.002 | 0.002 |
| 11/10/2016 | 1:30pm | USD | Unemployment Claims | 267K | 265K |
| 11/10/2016 | 2:15pm | USD | FOMC Member Bullard Speaks | ||
| 11/11/2016 | 1:00am | AUD | RBA Assist Gov Debelle Speaks | ||
| 11/11/2016 | All Day | EUR | French Bank Holiday | ||
| 11/11/2016 | All Day | CAD | Bank Holiday | ||
| 11/11/2016 | All Day | USD | Bank Holiday | ||
| 11/11/2016 | 2:00pm | USD | FOMC Member Fischer Speaks | ||
| 11/11/2016 | 3:00pm | USD | Prelim UoM Consumer Sentiment | 87.4 | 87.2 |
| 11/11/2016 | 3:50pm | CAD | BOC Gov Poloz Speaks | ||
Disclaimer
√ Moving Average Convergence/Divergence (MACD) : MACD uses different exponential moving averages to generate buy and sell indicators. The lower pane of the chart shows two lines: a Differential Line and a Signal Line. The Differential Line is the difference between a short and long-period exponential moving average, typically 12 and 26 periods. The Signal Line is typically a 9-period exponential moving average. When the DL crosses the SL from above, a sell indicator is generated, and when it crosses from below a buy signal is generated.
√ Relative Strength Index (RSI): This is a momentum indicator that measures a security\'s price in relation to itself. The lower pane of the chart shows a line that fluctuates on a scale of 0 to 100. Typically buy signals are generated at 30 and sell signals are generated at 70. If the line breaks 30, the security is oversold, and a reversal is imminent. If the line breaks 70, it is overbought and is due for a downward correction.
This report is provided by our experts in the research group for information purposes only and is deemed reliable but provides no guarantee as to its accuracy or completeness. Trust Capital S.A.L. will not be accountable for any decision based on the contents of this report. This document is not and should not be construed as an offer to sell or solicitation of an offer to purchase or subscribe for any investment or service. Trust Capital S.A.L. has based this document on information obtained from sources it believes to be reliable but which it has not been independently verified. Trust Capital S.A.L. makes no guarantees, representations or warranties and accept no responsibility or liability as to its accuracy or completeness. Expressions of opinion herein are subject to change without notice.
©Copyright, Trust Capital S.A.L.
ALL RIGHTS RESERVED.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Trust Capital S.A.L.
No comments:
Post a Comment