Record Trade Deficit could mean a RBNZ Rate Cut

Record Trade Deficit could mean a RBNZ Rate Cut
by, David Frank, Economist, Bullish University

Since October 13, the New Zealand Dollar has been salvage mode. The Kiwi has struggled to recover from a near six percent fall over the last 25 trading days. This downfall began in early September. A lot of the data that fuels strength of the local currency has been absent in the exporting nation. New Zealand relies on its exports to fuel their economy and the declining terms of trade is a tough pill to swallow. The central bank, the Reserve Bank of New Zealand (RBNZ), might be more encouraged now to cut rates at their next monetary policy meeting.

The terms of trade is the ratio of the price of exports, like diary subtracted by the price of imports which are then converted into export and import indices. You can also read the terms of trade or TOT as the relative cost of imports against the relative cost of exports. In an exporting nation like New Zealand, you always want to see the TOT rising. This means they can buy more imports with the same amount of exports. The Declining TOT means that New Zealand is paying more for imports because the price of their exports, which keep their economy moving along, are falling in terms of imports they must buy.

What does the falling terms of trade mean? The falling TOT is why New Zealand’s economy has posted its largest trade deficit on record, last week. The number came in a NZ$-1.436 billion with exports at NZ$ 3.42 billon against exports at NZ$ 4.9 billion. This rise in import prices is partly thanks to NZ$ 273 million in aircraft purchases. However, the widening trade deficit, specifically the trend, is very troubling. This data is leading traders to believe that action from the RBNZ is likely at their November 10 monetary policy meeting. However, the RBNZ is likely to be happy with the six percent drop in the Kiwi Dollar as they sold NZ$ 1 million in September.

There is some good news that inflation is likely to tick up. Still it will be short of its two percent target. As the price of crude has gone up, global inflation numbers are moving higher. However, the price of crude is, once again moving lower. Global inflation is also very unlikely to help the economy of New Zealand, as their main export is dairy, which is expected to have a volume of 4.1 over the next season. Rising core inflation, in certain countries, could also be a drag on dairy imports, pushing prices a bit lower. Thus not helping New Zealand.

The economic calendar is pretty quiet for the New Zealand Dollar this coming week. The unemployment report is due this week. The unemployment rate is expected to stay put at 5.1 percent offering no clues into RBNZ monetary policy insight. The New Zealand Dollar could remain steady, if not float higher, on a risk-off environment. In order for that to happen, data needs to come in at expectations or stronger-than-expectations. If this happens, then Forex traders will see if the Kiwi Dollar can outpace other high-yielding currencies in the Forex universe.

 

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Record Trade Deficit could mean a RBNZ Rate Cut

Record Trade Deficit could mean a RBNZ Rate Cut
by, David Frank, Economist, Bullish University

Since October 13, the New Zealand Dollar has been salvage mode. The Kiwi has struggled to recover from a near six percent fall over the last 25 trading days. This downfall began in early September. A lot of the data that fuels strength of the local currency has been absent in the exporting nation. New Zealand relies on its exports to fuel their economy and the declining terms of trade is a tough pill to swallow. The central bank, the Reserve Bank of New Zealand (RBNZ), might be more encouraged now to cut rates at their next monetary policy meeting.

The terms of trade is the ratio of the price of exports, like diary subtracted by the price of imports which are then converted into export and import indices. You can also read the terms of trade or TOT as the relative cost of imports against the relative cost of exports. In an exporting nation like New Zealand, you always want to see the TOT rising. This means they can buy more imports with the same amount of exports. The Declining TOT means that New Zealand is paying more for imports because the price of their exports, which keep their economy moving along, are falling in terms of imports they must buy.

What does the falling terms of trade mean? The falling TOT is why New Zealand’s economy has posted its largest trade deficit on record, last week. The number came in a NZ$-1.436 billion with exports at NZ$ 3.42 billon against exports at NZ$ 4.9 billion. This rise in import prices is partly thanks to NZ$ 273 million in aircraft purchases. However, the widening trade deficit, specifically the trend, is very troubling. This data is leading traders to believe that action from the RBNZ is likely at their November 10 monetary policy meeting. However, the RBNZ is likely to be happy with the six percent drop in the Kiwi Dollar as they sold NZ$ 1 million in September.

There is some good news that inflation is likely to tick up. Still it will be short of its two percent target. As the price of crude has gone up, global inflation numbers are moving higher. However, the price of crude is, once again moving lower. Global inflation is also very unlikely to help the economy of New Zealand, as their main export is dairy, which is expected to have a volume of 4.1 over the next season. Rising core inflation, in certain countries, could also be a drag on dairy imports, pushing prices a bit lower. Thus not helping New Zealand.

The economic calendar is pretty quiet for the New Zealand Dollar this coming week. The unemployment report is due this week. The unemployment rate is expected to stay put at 5.1 percent offering no clues into RBNZ monetary policy insight. The New Zealand Dollar could remain steady, if not float higher, on a risk-off environment. In order for that to happen, data needs to come in at expectations or stronger-than-expectations. If this happens, then Forex traders will see if the Kiwi Dollar can outpace other high-yielding currencies in the Forex universe.

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British Pound Seesaws on a Solid GDP

British Pound Seesaws on a Solid GDP
by, David Frank, Economist, Bullish University

Points to consider in this Forex article:

• The third quarter gross domestic product (3Q GDP) was released this morning. Came in better-than-expected at 2.3 percent economic growth.
• Service sector growth expanded 0.8 percent and other sectors fell.
• The British Pound has been volatile since the release.

The British Pound has whipsawed around since the United Kingdom released their third quarter economic growth number earlier today. At first the Pound soared higher than quickly reversed and his since regained most of its losses. Please refer to the below 5 min MT 4 chart.

[Chart]

Britain’s third quarter gross domestic product expanded at a better-than-expected clip. On a quarter on quarter bases the GDP expanded 0.5 percent. This was better than the 0.2 percent expected and below last quarter’s growth of 0.7 percent. On an annual basis, their economy expanded by 2.3 percent for the same time period. This was above last quarter’s expansion and above the 2.1 percent expected print.

Looking into today’s GDP release, by the Office of National Statistics (ONS), the numbers show that the United Kingdom has not been adversely affected by the ongoing Brexit drama or its pending Article 50 referendum with the European Union. There was a strong performance in services, which grew 0.8 percent in Q3. This offset falls in other industrial groups. The three main industrial groups all fell in the third quarter of 2016.

The numbers are an indication that the British economy is holding up better than expected than many expected. Services are the clear gain and driving force with economic growth but there are some worrying signs with other sectors. In turn, the Sterling Dollar spiked higher against its major trading partners like the US Dollar, euro and yen thanks to a strong print. The Pound then fell back lower, sharply, as British Pound sellers who are selling GBP on a hard-Brexit entered into the market. There is also some concerns that the United Kingdom’s economy is relying too heavily on its service sector for support. The British Pound has since settled down, but there is a lot of volatility in this Forex market today.

In corporate news, embattled Deutsche Bank saw a volatile day on the exchanges despite releasing better than expected third quarter numbers which showed revenue increased at a nice clip. Shares spiked three percent higher at the release only to fall flat.

The British bank, Barclays, rose by three 2.3 percent in early trade after reporting a 35% increase in third quarter profits. This is a pre-tax number.

Looking at central bank news for the day, the Swedish National Bank kept its monetary policy as is with interest rates at -0.5 percent. This sent the Swedish Krona lower against the euro. This Forex market fell from 9.7170 to 9.68. The central bank also said it would not consider rising interest rates till early 2018.

In Norway, the Norges Bank kept rates at 0.5 percent. The Norwegian central bank said household debt has increased more-than-expected. This would keep the central bank on the sidelines for the near future.

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British Pound Seesaws on a Solid GDP

British Pound Seesaws on a Solid GDP
by, David Frank, Economist, Bullish University

Points to consider in this Forex article:

• The third quarter gross domestic product (3Q GDP) was released this morning. Came in better-than-expected at 2.3 percent economic growth.
• Service sector growth expanded 0.8 percent and other sectors fell.
• The British Pound has been volatile since the release.

The British Pound has whipsawed around since the United Kingdom released their third quarter economic growth number earlier today. At first the Pound soared higher than quickly reversed and his since regained most of its losses. Please refer to the below 5 min MT 4 chart.

[Chart]

Britain’s third quarter gross domestic product expanded at a better-than-expected clip. On a quarter on quarter bases the GDP expanded 0.5 percent. This was better than the 0.2 percent expected and below last quarter’s growth of 0.7 percent. On an annual basis, their economy expanded by 2.3 percent for the same time period. This was above last quarter’s expansion and above the 2.1 percent expected print.

Looking into today’s GDP release, by the Office of National Statistics (ONS), the numbers show that the United Kingdom has not been adversely affected by the ongoing Brexit drama or its pending Article 50 referendum with the European Union. There was a strong performance in services, which grew 0.8 percent in Q3. This offset falls in other industrial groups. The three main industrial groups all fell in the third quarter of 2016.

The numbers are an indication that the British economy is holding up better than expected than many expected. Services are the clear gain and driving force with economic growth but there are some worrying signs with other sectors. In turn, the Sterling Dollar spiked higher against its major trading partners like the US Dollar, euro and yen thanks to a strong print. The Pound then fell back lower, sharply, as British Pound sellers who are selling GBP on a hard-Brexit entered into the market. There is also some concerns that the United Kingdom’s economy is relying too heavily on its service sector for support. The British Pound has since settled down, but there is a lot of volatility in this Forex market today.

In corporate news, embattled Deutsche Bank saw a volatile day on the exchanges despite releasing better than expected third quarter numbers which showed revenue increased at a nice clip. Shares spiked three percent higher at the release only to fall flat.

The British bank, Barclays, rose by three 2.3 percent in early trade after reporting a 35% increase in third quarter profits. This is a pre-tax number.

Looking at central bank news for the day, the Swedish National Bank kept its monetary policy as is with interest rates at -0.5 percent. This sent the Swedish Krona lower against the euro. This Forex market fell from 9.7170 to 9.68. The central bank also said it would not consider rising interest rates till early 2018.

In Norway, the Norges Bank kept rates at 0.5 percent. The Norwegian central bank said household debt has increased more-than-expected. This would keep the central bank on the sidelines for the near future.

 

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There is more than Monetary Policy Dominating the Forex Markets

There is more than Monetary Policy Dominating the Forex Markets
by, David Frank, Economist, Bullish University

The predominate themes in the monetary policy regimes, and their direction with interest rates, has been the most effective force driving the Forex markets. Most Forex traders evaluate the direction of the Federal Reserve (Fed) European Central Bank (ECB) Bank of Japan (BOJ), Bank of England (BoE) and other main central banks as they are establishing fundamental positions. This makes monetary policy changes including rate changes a sensitive topic in the currency world. However, this theme alone does not reflect how influential it is or the only predominate driver of the Forex world.

While a Forex trader trades, monetary policy, alone, does not come from a simple course. Especially when looking at a Forex market like the USD/JPY. Here the motivation for exchange rate changes also comes from a change in policy from the authorities. The Fed is a good example here. The Federal Reserve is unique, from other central banks like the Bank of Japan, with its hawkish tone. They are mild, now, but the Federal Reserve is the only central bank in the world, out of the majors, considering and or raising interest rates. The Fed is tightening monetary policy at a time when its peers are ultra-dovish and either near zero interest rates or into the negative zone. Even with the disparity of tone from the Fed, the Dollar has not risen with this standing alone. Since early 2015, the almighty Buck has carved out a rather broad consolidative, sideways, trading range. The euro/dollar has done the same. If the Dollar is going to continue appreciating and inching higher, than the Fed will need to hasten its tightening schedule, pushing yields higher or its trading counterparts will need to lose ground faster.

Forex traders need to understand the changes in the policy spectrum and how it is important for the rise and fall of rates in the currency markets. However, there is a more systematic influence these themes carry along with a distortion with trader sentiment. This topic has had a large influence, as well, over the last several years. There has been a deflating rate of return as easy policy and low interest rates are taking its toll. This gives traders a less attractive backdrop to place trades. However, we have seen this changing as the Fed has developed a more hawkish tone. Volatility is starting to return. Once, again and another however, Fed has backed off the gas after its taper with its quantitative easing program in 2013 and rate hike in 2015. The Bank of Japan has also curbed its efforts from a steady dose of QE to one focused on one market-defined target. The Bank of Japan is focusing on Japanese Government Bonds (JGB) 10 year notes. They are keeping this rate at or near zero. It is now only a matter of time before the European Central Bank makes a change with its own monetary policy. The ECB is running out of debt assets to buy and will soon have to make a decision to loosen purchasing controls to buy periphery debt or taper its own massive QE program.

In closing, at some point, Forex traders will begin to lose confidence monetary policy of more than just the Japanese central bank to jump start disinflation and low economic growth. There is a huge vale gap that needs to be closed.

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There is more than Monetary Policy Dominating the Forex Markets

There is more than Monetary Policy Dominating the Forex Markets
by, David Frank, Economist, Bullish University

The predominate themes in the monetary policy regimes, and their direction with interest rates, has been the most effective force driving the Forex markets. Most Forex traders evaluate the direction of the Federal Reserve (Fed) European Central Bank (ECB) Bank of Japan (BOJ), Bank of England (BoE) and other main central banks as they are establishing fundamental positions. This makes monetary policy changes including rate changes a sensitive topic in the currency world. However, this theme alone does not reflect how influential it is or the only predominate driver of the Forex world.

While a Forex trader trades, monetary policy, alone, does not come from a simple course. Especially when looking at a Forex market like the USD/JPY. Here the motivation for exchange rate changes also comes from a change in policy from the authorities. The Fed is a good example here. The Federal Reserve is unique, from other central banks like the Bank of Japan, with its hawkish tone. They are mild, now, but the Federal Reserve is the only central bank in the world, out of the majors, considering and or raising interest rates. The Fed is tightening monetary policy at a time when its peers are ultra-dovish and either near zero interest rates or into the negative zone. Even with the disparity of tone from the Fed, the Dollar has not risen with this standing alone. Since early 2015, the almighty Buck has carved out a rather broad consolidative, sideways, trading range. The euro/dollar has done the same. If the Dollar is going to continue appreciating and inching higher, than the Fed will need to hasten its tightening schedule, pushing yields higher or its trading counterparts will need to lose ground faster.

Forex traders need to understand the changes in the policy spectrum and how it is important for the rise and fall of rates in the currency markets. However, there is a more systematic influence these themes carry along with a distortion with trader sentiment. This topic has had a large influence, as well, over the last several years. There has been a deflating rate of return as easy policy and low interest rates are taking its toll. This gives traders a less attractive backdrop to place trades. However, we have seen this changing as the Fed has developed a more hawkish tone. Volatility is starting to return. Once, again and another however, Fed has backed off the gas after its taper with its quantitative easing program in 2013 and rate hike in 2015. The Bank of Japan has also curbed its efforts from a steady dose of QE to one focused on one market-defined target. The Bank of Japan is focusing on Japanese Government Bonds (JGB) 10 year notes. They are keeping this rate at or near zero. It is now only a matter of time before the European Central Bank makes a change with its own monetary policy. The ECB is running out of debt assets to buy and will soon have to make a decision to loosen purchasing controls to buy periphery debt or taper its own massive QE program.

In closing, at some point, Forex traders will begin to lose confidence monetary policy of more than just the Japanese central bank to jump start disinflation and low economic growth. There is a huge vale gap that needs to be closed.

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FTSE maintains the Trend Support as the Pound Helps

FTSE maintains the Trend Support as the Pound Helps
by, David Frank, Economist, Bullish Markets

Points to consider in this FTSE article:

• The FTSE 100 continues to hold at trend line support.
• A daily close below this key level will not scare the bulls away until a drop below the horizontal support.
• Global risk appetite is supporting UK stocks.

The headline stock exchange in the United Kingdom (UK), FTSE 100, is moving higher from where it was after the Brexit vote. This is a positive development. Traders will continue to use this as a guide over the coming days. They should also realize that a close below the trend line support is not bearish. A change in the overall model, to bearish, probably will not occur until a break below the horizontal support pivot. However, it would suggest a weakening which could cause a pause on the long trades, especially if it extends to the mid-August levels.

Taking a broad look into London’s stock exchange, global risk appetite has been, generally speaking, supportive of their stocks. We do not have a snatch everything up environment but the overall sentiment is enough to keep equities buoyed. Overnight, the Nikkei 225 pushed higher and is now trading at its highest level since May. Both the French stock exchange and the German stock index are now nearing multi-week highs. The equity markets in the United States are, or have become, the laggards, as they continue to consolidate off all-time highs.

There is also the matter of the weak Sterling Pound that is helping stocks, primarily, UK exporters. This is supporting the FTSE 100 at the moment. There also seems to be some good deal of offshore capital moving into the British stock market. Definitely something to keep an eye on.

FTSE Technical Analysis

[chart]

Please refer to the above daily MT 4 chart for today’s daily technical analysis. As long as the British stock exchange trades above the trend line, seen on the above chart, or the peaks which are now support near the October 13 low at 6,930, then this exchange remains fairly bullish.

There is no key resistance levels until the record high of 7,129.70 to speak of. Should global stocks turn weaker or the Pound gains steam and moves higher, then expect the above mentioned support levels to remain under siege. Especially with the key event risk on tap for later today.

The European Central Bank (ECB) will be announcing their monetary policy and interest rate decision later this afternoon. While its last monetary policy decisions have done little for market reaction, will an inevitable taper with their current quantitative easing (QE) program provoke a reaction? The European Central Bank has been nearing its natural limit on viable asset classes to purchase for its QE program. Further, there is evidence the return does not justify the cost to keep this program going. When this taper does happen, we can look at the Fed’s own taper back in 2013, and the temper tantrum the financial markets threw as a guideline.

It is expected we will hear much in the way of how the central bank will taper its QE program in its after policy remarks. These could rattle markets.

 

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How Dovish will the Bank of Canada be?

How Dovish will the Bank of Canada be?

Points to consider with this Forex article:

• The Bank of Canada (BOC) will be releasing its rate decision later today and there little expectation for them to make a move on rates.
• Investors should watch the updated forecasts. The economy in Canada has faced some headwinds as the USD/CAD Forex market has been rather strong. The Loonie rose as oil prices rose in 2016. How dovish will the BOC be today in its remarks.

Over the next couple of days, financial traders, including those in the Forex world, will see some market moving events. First up is the rate decision by the Bank of Canada. The BOC is not expected to make any change to monetary policy or any moves with the interest rates. What will be quite relevant will be the banks’ position with forward guidance as well as the updated forecasts for the Canadian economy.

The Canadian economy has been on a rollercoaster much of 2016. Coming into January, the Canadian Dollar was very weak. Then we began to see inflation on imported products such as Canadian Cauliflower. This crisis came up earlier in the year. After the election of Justin Trudeau as prime minister, he built a platform around economic stimulus. Their central bank, the Bank of Canada, took a back seat towards monetary stimulus to allow Trudeau fiscal plans to work. With the BOC taking a step back and allowing Trudeau’s policies to work, the Canadian Dollar rose some 2,000 pips in a mere three months. This was in the first quarter of 2016, from January to April.

However, the renewed strength in the Canadian Dollar was not all good. Oil prices recovered a bit, for most of this period which added more strength to the Loonie. This offset a lot of benefits from a strengthening local currency from the rise in energy prices. Exports have been horrible all year for Canada. The new question is, how much longer the BOC can wait for Trudeau’s policies to work before stepping in. So today’s forecasts will be key. Please see the below USD/CAD Forex chart.

[Chart]

In other words, today’s price action with this Forex market will be dominated by how dovish the Bank of Canada is with their post policy statement and forecasts. Should the central bank convey a message of continued economic weakness, the we will see the Loonie weaken as traders will be eying additional monetary stimulus in the short future.

 

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FTSE maintains the Trend Support as the Pound Helps

FTSE maintains the Trend Support as the Pound Helps
by, David Frank, Economist, Bullish Markets

Points to consider in this FTSE article:

• The FTSE 100 continues to hold at trend line support.
• A daily close below this key level will not scare the bulls away until a drop below the horizontal support.
• Global risk appetite is supporting UK stocks.

The headline stock exchange in the United Kingdom (UK), FTSE 100, is moving higher from where it was after the Brexit vote. This is a positive development. Traders will continue to use this as a guide over the coming days. They should also realize that a close below the trend line support is not bearish. A change in the overall model, to bearish, probably will not occur until a break below the horizontal support pivot. However, it would suggest a weakening which could cause a pause on the long trades, especially if it extends to the mid-August levels.

Taking a broad look into London’s stock exchange, global risk appetite has been, generally speaking, supportive of their stocks. We do not have a snatch everything up environment but the overall sentiment is enough to keep equities buoyed. Overnight, the Nikkei 225 pushed higher and is now trading at its highest level since May. Both the French stock exchange and the German stock index are now nearing multi-week highs. The equity markets in the United States are, or have become, the laggards, as they continue to consolidate off all-time highs.

There is also the matter of the weak Sterling Pound that is helping stocks, primarily, UK exporters. This is supporting the FTSE 100 at the moment. There also seems to be some good deal of offshore capital moving into the British stock market. Definitely something to keep an eye on.

FTSE Technical Analysis

[chart]

Please refer to the above daily MT 4 chart for today’s daily technical analysis. As long as the British stock exchange trades above the trend line, seen on the above chart, or the peaks which are now support near the October 13 low at 6,930, then this exchange remains fairly bullish.

There is no key resistance levels until the record high of 7,129.70 to speak of. Should global stocks turn weaker or the Pound gains steam and moves higher, then expect the above mentioned support levels to remain under siege. Especially with the key event risk on tap for later today.

The European Central Bank (ECB) will be announcing their monetary policy and interest rate decision later this afternoon. While its last monetary policy decisions have done little for market reaction, will an inevitable taper with their current quantitative easing (QE) program provoke a reaction? The European Central Bank has been nearing its natural limit on viable asset classes to purchase for its QE program. Further, there is evidence the return does not justify the cost to keep this program going. When this taper does happen, we can look at the Fed’s own taper back in 2013, and the temper tantrum the financial markets threw as a guideline.

It is expected we will hear much in the way of how the central bank will taper its QE program in its after policy remarks. These could rattle markets.

 

 

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How Dovish will the Bank of Canada be?

How Dovish will the Bank of Canada be?

Points to consider with this Forex article:

• The Bank of Canada (BOC) will be releasing its rate decision later today and there little expectation for them to make a move on rates.
• Investors should watch the updated forecasts. The economy in Canada has faced some headwinds as the USD/CAD Forex market has been rather strong. The Loonie rose as oil prices rose in 2016. How dovish will the BOC be today in its remarks.

Over the next couple of days, financial traders, including those in the Forex world, will see some market moving events. First up is the rate decision by the Bank of Canada. The BOC is not expected to make any change to monetary policy or any moves with the interest rates. What will be quite relevant will be the banks’ position with forward guidance as well as the updated forecasts for the Canadian economy.

The Canadian economy has been on a rollercoaster much of 2016. Coming into January, the Canadian Dollar was very weak. Then we began to see inflation on imported products such as Canadian Cauliflower. This crisis came up earlier in the year. After the election of Justin Trudeau as prime minister, he built a platform around economic stimulus. Their central bank, the Bank of Canada, took a back seat towards monetary stimulus to allow Trudeau fiscal plans to work. With the BOC taking a step back and allowing Trudeau’s policies to work, the Canadian Dollar rose some 2,000 pips in a mere three months. This was in the first quarter of 2016, from January to April.

However, the renewed strength in the Canadian Dollar was not all good. Oil prices recovered a bit, for most of this period which added more strength to the Loonie. This offset a lot of benefits from a strengthening local currency from the rise in energy prices. Exports have been horrible all year for Canada. The new question is, how much longer the BOC can wait for Trudeau’s policies to work before stepping in. So today’s forecasts will be key. Please see the below USD/CAD Forex chart.

[Chart]

In other words, today’s price action with this Forex market will be dominated by how dovish the Bank of Canada is with their post policy statement and forecasts. Should the central bank convey a message of continued economic weakness, the we will see the Loonie weaken as traders will be eying additional monetary stimulus in the short future.

 

 

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US Inflation Data Surges on Oil Prices

US Inflation Data Surges on Oil Prices
by, David Frank, Economist, Bullish University

Points to consider in this Forex article:

• September’s headline consumer price index (CPI) for the United States just matched high expectations
• Officials at the Federal Reserve Board (FRB) have been openly debating the pros and cons of higher inflation in the United States.
• US Dollar gains against the euro as the EUR/USD Forex market moves lower.

The United States just released key inflation data for the month of September with the headline print of the consumer price index or CPI. The CPI matched high expectations of an annual increase of 1.5 percent. This is beat last month’s print of 1.1 percent. The high expected level of 1.5 percent was matched. The core CPI, which does not include food or energy prices, expanded by 2.2 percent compared to the expected 2.3 percent growth. This number grew by 2.3 percent in August. This unexpected growth in the headline inflation number was driven primarily by the rise in crude oil. The price of US WTI Crude rose by 2.9 percent last month. The largest drag was from apparel prices. Seasonal sales and discounting is starting up now. This caused the price of apparel to contract by 0.7 percent.

This consumer price index report comes at a very divisive time for the United States Federal Reserve (Fed). Several Fed bank presidents have openly called on the Federal Reserve, through its monetary policy board called the Federal Open Markets Committee (FOMC) to raise the headline interest rate. These Fed officials are citing a tightening in the labor markets and a looming breakout of inflation. On the other hand, Federal Reserve Chair Janet Yellen, who just spoke at the Boston Fed conference, struck a more dovish tone towards the Fed’s upcoming monetary policy. She talked about the weakening belief in the Phillips Curve, in other words a tightening labor market could lead to more inflation. She mentioned that the best way to recover from a Great Recession is to allow the economy and inflation to overheat.

The Federal Reserve, through the FOMC, is scheduled to meet again in November to decide on monetary policy and interest rates. It is not very likely they will pull the trigger and raise rates so soon. It is more likely they will raise rates by 25 basis points in December.

There was a couple of other pieces of data just released that is supporting the US Dollar today. The consumer price index (core) rose 2.2 percent versus the expected 2.3 percent and the real average weekly earnings (August) expanded by 0.8 percent versus the expected 0.4 percent expected. This is an annual number.

Inflation Data Supports the US Dollar against the Euro

[MT 4 Chart]

Let’s take a quick look at today’s EUR/USD daily technical analysis. Please refer to the above 15 minute MT chart. After the CPI data was released, the euro fell sharply against the United States Dollar. The pair fell from the pivot near 1.1035 to 1.0947. At the time of this report, the euro was trading above the key technical support level of 1.10 at 1.1005. A daily close below this downside barrier, at 1.10, challenges the 1.0950 at first.

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US Inflation Data Surges on Oil Prices

US Inflation Data Surges on Oil Prices
by, David Frank, Economist, Bullish University

Points to consider in this Forex article:

• September’s headline consumer price index (CPI) for the United States just matched high expectations
• Officials at the Federal Reserve Board (FRB) have been openly debating the pros and cons of higher inflation in the United States.
• US Dollar gains against the euro as the EUR/USD Forex market moves lower.

The United States just released key inflation data for the month of September with the headline print of the consumer price index or CPI. The CPI matched high expectations of an annual increase of 1.5 percent. This is beat last month’s print of 1.1 percent. The high expected level of 1.5 percent was matched. The core CPI, which does not include food or energy prices, expanded by 2.2 percent compared to the expected 2.3 percent growth. This number grew by 2.3 percent in August. This unexpected growth in the headline inflation number was driven primarily by the rise in crude oil. The price of US WTI Crude rose by 2.9 percent last month. The largest drag was from apparel prices. Seasonal sales and discounting is starting up now. This caused the price of apparel to contract by 0.7 percent.

This consumer price index report comes at a very divisive time for the United States Federal Reserve (Fed). Several Fed bank presidents have openly called on the Federal Reserve, through its monetary policy board called the Federal Open Markets Committee (FOMC) to raise the headline interest rate. These Fed officials are citing a tightening in the labor markets and a looming breakout of inflation. On the other hand, Federal Reserve Chair Janet Yellen, who just spoke at the Boston Fed conference, struck a more dovish tone towards the Fed’s upcoming monetary policy. She talked about the weakening belief in the Phillips Curve, in other words a tightening labor market could lead to more inflation. She mentioned that the best way to recover from a Great Recession is to allow the economy and inflation to overheat.

The Federal Reserve, through the FOMC, is scheduled to meet again in November to decide on monetary policy and interest rates. It is not very likely they will pull the trigger and raise rates so soon. It is more likely they will raise rates by 25 basis points in December.

There was a couple of other pieces of data just released that is supporting the US Dollar today. The consumer price index (core) rose 2.2 percent versus the expected 2.3 percent and the real average weekly earnings (August) expanded by 0.8 percent versus the expected 0.4 percent expected. This is an annual number.

Inflation Data Supports the US Dollar against the Euro

[MT 4 Chart]

Let’s take a quick look at today’s EUR/USD daily technical analysis. Please refer to the above 15 minute MT chart. After the CPI data was released, the euro fell sharply against the United States Dollar. The pair fell from the pivot near 1.1035 to 1.0947. At the time of this report, the euro was trading above the key technical support level of 1.10 at 1.1005. A daily close below this downside barrier, at 1.10, challenges the 1.0950 at first.

 

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Asian Markets fall lower in Morning Trade

Asian Markets fall lower in Morning Trade
by, Staff, Bullish University

This morning, in the Asian and Pacific Rim stock and financial markets, binary options traders saw stocks get off to a weak foot. The region took a large hit when reports surfaced that China was detaining staff members from one of Australia’s largest casino companies, Crown Resorts.

Shares of the company, Crown Resorts, fell almost fourteen percent to AUD$11.15 per share after the company reported to regulators that 18 of its staff, including the vice president of international operations, Jason O’Connor were being detained by Chinese authorities. The company is working with the Australian Foreign Ministry and trade authority to make contact with them. Shares of Star Entertainment, a rival, fell 3.6 percent on the da. Shares of Hong Kong listed gaming companies, like Wynn Macau were lower this morning. Other companies like Sands China and Melco International, whose shares were down over seven percent, were also affected by the news. This caused binary options strategy to shift.

In the Down Under, the headline stock exchange, the S&P ASX 200 lost over 45 points to close at 5,388.70. Most of the exchanges sub-sectors were in the red, with the heavily weighted financials sector down 0.27 percent. It had been up 0.5 percent earlier on. The energy sub-sector was down over 0.8 percent as the price of crude oil moved lower during the Asian trading session.

Binary options traders also saw shares on the South Korean Kospi Index fell 4.95 points to close at 2,027.61. Shares of Samsung Electronics rose 0.82 percent, erasing early losses of 1.30 percent. Last week the embattled electronics company halting production and sales of its Galaxy 7 Note flagship device after a number of fires thanks to battery problems. This will cost the company more than $5 billion in operating profit losses for the fourth quarter.

In Hong Kong, the Hang Seng Index lost 0.9 percent by 3:20 HK time. Chinese stock bourses were also lower on the day. The Shanghai Composite lost over 22 points and the smaller Shenzhen Composite Index lost nearly twenty points today.

There is data coming out of China this week that will impact binary options trading strategy. The world’s second largest economy (China), will release its third quarter (Q3) gross domestic product (GDP). China will also report housing prices, industrial production data, retail sales and fixed asset investment. All of which will impact binary options trading strategy for the entire Asian and Pacific Rim this week.

In Japan, the stock markets were mostly higher today. The headline Nikkei 225 rose over 43 points to close above the key technical level of 16,900 at 16,900.12. Asian shares benefited from a weaker yen. The Japanese yen trade at 104.04 against the US Dollar at 3:20 HK time. The yen had been trading at 103.80 last week.

Shares of Japan’s major exporters were mostly higher on the day. Shares of Toyota Motor were up 0.62 percent. Shares of Nissan Motor rose 0.22 percent while shares of Mitsubishi Electric tacked on over two percent. Shares of Sony were down by 0.38 percent this morning.

Binary options traders should note that Japanese companies like a weaker yen as it tends to increase overseas profits when these companies convert the sales back into the local currency (the yen).

Other major averages in Singapore, India and Thailand all traded lower this morning to kick off the start of the week.

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Asian Markets fall lower in Morning Trade

Asian Markets fall lower in Morning Trade
by, Staff, Bullish University

This morning, in the Asian and Pacific Rim stock and financial markets, binary options traders saw stocks get off to a weak foot. The region took a large hit when reports surfaced that China was detaining staff members from one of Australia’s largest casino companies, Crown Resorts.

Shares of the company, Crown Resorts, fell almost fourteen percent to AUD$11.15 per share after the company reported to regulators that 18 of its staff, including the vice president of international operations, Jason O’Connor were being detained by Chinese authorities. The company is working with the Australian Foreign Ministry and trade authority to make contact with them. Shares of Star Entertainment, a rival, fell 3.6 percent on the da. Shares of Hong Kong listed gaming companies, like Wynn Macau were lower this morning. Other companies like Sands China and Melco International, whose shares were down over seven percent, were also affected by the news. This caused binary options strategy to shift.

In the Down Under, the headline stock exchange, the S&P ASX 200 lost over 45 points to close at 5,388.70. Most of the exchanges sub-sectors were in the red, with the heavily weighted financials sector down 0.27 percent. It had been up 0.5 percent earlier on. The energy sub-sector was down over 0.8 percent as the price of crude oil moved lower during the Asian trading session.

Binary options traders also saw shares on the South Korean Kospi Index fell 4.95 points to close at 2,027.61. Shares of Samsung Electronics rose 0.82 percent, erasing early losses of 1.30 percent. Last week the embattled electronics company halting production and sales of its Galaxy 7 Note flagship device after a number of fires thanks to battery problems. This will cost the company more than $5 billion in operating profit losses for the fourth quarter.

In Hong Kong, the Hang Seng Index lost 0.9 percent by 3:20 HK time. Chinese stock bourses were also lower on the day. The Shanghai Composite lost over 22 points and the smaller Shenzhen Composite Index lost nearly twenty points today.

There is data coming out of China this week that will impact binary options trading strategy. The world’s second largest economy (China), will release its third quarter (Q3) gross domestic product (GDP). China will also report housing prices, industrial production data, retail sales and fixed asset investment. All of which will impact binary options trading strategy for the entire Asian and Pacific Rim this week.

In Japan, the stock markets were mostly higher today. The headline Nikkei 225 rose over 43 points to close above the key technical level of 16,900 at 16,900.12. Asian shares benefited from a weaker yen. The Japanese yen trade at 104.04 against the US Dollar at 3:20 HK time. The yen had been trading at 103.80 last week.

Shares of Japan’s major exporters were mostly higher on the day. Shares of Toyota Motor were up 0.62 percent. Shares of Nissan Motor rose 0.22 percent while shares of Mitsubishi Electric tacked on over two percent. Shares of Sony were down by 0.38 percent this morning.

Binary options traders should note that Japanese companies like a weaker yen as it tends to increase overseas profits when these companies convert the sales back into the local currency (the yen).

Other major averages in Singapore, India and Thailand all traded lower this morning to kick off the start of the week.

 

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Chris Lewis Technical Analysis Series. Part 1 - Snippets

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David Frank - Weekly Economic Review - Snippets

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Chinese Markets Shrug off Weak Trade Data

Chinese Markets Shrug off Weak Trade Data
by, Staff, Bullish University

Chinese markets shrugged off weaker-than-expected trade data this morning and the rest of the Asian and Pacific Rim was relatively mixed on a day where oil lost value and there was not a lot of news to sway sentiment. Markets floated this morning making it hard for binary options traders to get a feeling on direction.

The main stock bourses on mainland China shrugged off poorer than expected trade data which confounded binary options strategy this morning. September saw China’s exports fall 10 percent, year on year in dollar denominated terms. Exports fell 1.9 percent annually last month has well. In yuan terms, exports fell 5.6 percent and imports rose 2.2 percent. The Shanghai Composite rose 0.09 percent and the Shenzhen Index gained 0.24 percent. Stocks in Hong Kong lost over 1.2 percent on the day.

In corporate news out of South Korea, shares of electronics giant Samsung Electronic rose 1.25 percent on the day. Broadly speaking the South Korean Kospi fell 0.9 percent to close to 2,015.44.

Samsung announced it was cutting its third quarter profit guidance by one third (33 percent) to 5.2 trillion won. This is in thanks to the massive recall and cancellation of their popular Galaxy Note 7 smartphone line which has been plagued by fire issues.

The Bank of Korea held their lending rate and monetary policy steady this morning. Their lending rate was kept at 1.25 percent for the fourth consecutive month. Binary options traders should note that the Korean won fell against the US Dollar. At 2:30 pm HK time the won was trading at 1,134.60 compared to 1,120 last week.

In Japan, the headline Nikkei 225 was down almost 0.4 percent thanks to the weaker trade data from China as well as a stronger yen. The USD/JPY Forex pair was trading near 103.79 by 2:20 pm HK time.

In Thailand, binary options traders saw the SET fall another 2.1 percent as their King Bhumibol Adulyadej remains in critical and unstable condition in the hospital. He is 88 years old and his health began failing after his latest hemodialysis treatment. The SET was down nearly six percent on Wednesday as the king’s health continues to fail.

In other corporate news, shares of Sony on the Nikkei exchange, rose 2.2 percent after the Japanese electronics maker released its PlayStation VR (PS VR). Suzuki Motor rose over 2.2 percent and Toyota was up 0.2 percent after the two automakers announced they would explore a partnership. Those trades trading binary options with these companies should adjust strategy as news comes in. The alliance is still not clear so there is nothing to incorporate into your strategy as of yet. The alliance will bode well for their medium term earnings forecasts as well as growth prospects for both companies.

Suzuki will benefit greatly from more efficiency and better research and development as well as capex for autonomous driving. They will also get more insight into electric drive train technology.

Taking a quick look into today’s Forex markets, binary options traders should note the US Dollar in particular. The US Dollar Index, which tracks the almighty buck against a basket of six currencies, was trading at 97.975 this morning. The GBP/USD fell 0.18 percent during the morning trading session to trade at 1.2170. There Sterling Dollar was near the 1.24 level last week.

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Chinese Markets Shrug off Weak Trade Data

Chinese Markets Shrug off Weak Trade Data
by, Staff, Bullish University

Chinese markets shrugged off weaker-than-expected trade data this morning and the rest of the Asian and Pacific Rim was relatively mixed on a day where oil lost value and there was not a lot of news to sway sentiment. Markets floated this morning making it hard for binary options traders to get a feeling on direction.

The main stock bourses on mainland China shrugged off poorer than expected trade data which confounded binary options strategy this morning. September saw China’s exports fall 10 percent, year on year in dollar denominated terms. Exports fell 1.9 percent annually last month has well. In yuan terms, exports fell 5.6 percent and imports rose 2.2 percent. The Shanghai Composite rose 0.09 percent and the Shenzhen Index gained 0.24 percent. Stocks in Hong Kong lost over 1.2 percent on the day.

In corporate news out of South Korea, shares of electronics giant Samsung Electronic rose 1.25 percent on the day. Broadly speaking the South Korean Kospi fell 0.9 percent to close to 2,015.44.

Samsung announced it was cutting its third quarter profit guidance by one third (33 percent) to 5.2 trillion won. This is in thanks to the massive recall and cancellation of their popular Galaxy Note 7 smartphone line which has been plagued by fire issues.

The Bank of Korea held their lending rate and monetary policy steady this morning. Their lending rate was kept at 1.25 percent for the fourth consecutive month. Binary options traders should note that the Korean won fell against the US Dollar. At 2:30 pm HK time the won was trading at 1,134.60 compared to 1,120 last week.

In Japan, the headline Nikkei 225 was down almost 0.4 percent thanks to the weaker trade data from China as well as a stronger yen. The USD/JPY Forex pair was trading near 103.79 by 2:20 pm HK time.

In Thailand, binary options traders saw the SET fall another 2.1 percent as their King Bhumibol Adulyadej remains in critical and unstable condition in the hospital. He is 88 years old and his health began failing after his latest hemodialysis treatment. The SET was down nearly six percent on Wednesday as the king’s health continues to fail.

In other corporate news, shares of Sony on the Nikkei exchange, rose 2.2 percent after the Japanese electronics maker released its PlayStation VR (PS VR). Suzuki Motor rose over 2.2 percent and Toyota was up 0.2 percent after the two automakers announced they would explore a partnership. Those trades trading binary options with these companies should adjust strategy as news comes in. The alliance is still not clear so there is nothing to incorporate into your strategy as of yet. The alliance will bode well for their medium term earnings forecasts as well as growth prospects for both companies.

Suzuki will benefit greatly from more efficiency and better research and development as well as capex for autonomous driving. They will also get more insight into electric drive train technology.

Taking a quick look into today’s Forex markets, binary options traders should note the US Dollar in particular. The US Dollar Index, which tracks the almighty buck against a basket of six currencies, was trading at 97.975 this morning. The GBP/USD fell 0.18 percent during the morning trading session to trade at 1.2170. There Sterling Dollar was near the 1.24 level last week.

 

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Chris Lewis - Technical Analysis Series. Part 1 - Snippets

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Bullish University with David Frank. Weekly Forex Review. W/C 9th October 2016

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Asian Markets Mixed on Crude Oil Price

Asian Markets Mixed on Crude Oil Price
by, Staff, Bullish University

Binary options traders saw a rather mixed day, this morning, in the Asian and Pacific Rim markets. They were forced to adjust binary options strategy as the price of crude fell weighing heavily on the major players in Australia’s oil industry.

In Australia, the S&P ASX 200 was up 0.1 percent as the materials sub-index rose 0.28 percent. The heavily weighted financial sub-sector rose 0.4 percent but gains were offset by a 0.93 percent drop in the energy sub-sector.

Those binary options traders, who were trading stocks on this market, had to contend with a 2.8 percent fall in Santos, Oil Search which fell 1.7 percent and Origin Energy which retreaded by over 1.4 percent.

These stocks were effected by US WTI Crude oil which fell 0.9 percent to $49.37 per barrel and the global benchmark WTI Brent which fell 0.8 percent to $51.50 per barrel. Binary options strategy had to adjust bearish with oil this morning.

In South Korea, the Kospi Composite Index lost 0.13 percent after pairing earlier losses of just over one half of a percent. Stock markets in mainland China were higher after returning from the Golden Week hiatus. The Shanghai Composite jumped over1.2 percent and the Shenzhen Composite Index was up over 1.5 percent this morning.

Looking at the markets in Thailand, the SET Index dropped over 2.6 percent on news that the 88 year old King Bhumibol Adulyadej was in unstable condition after hemodialysis. The USD/BAHT Forex pair rose 0.43 percent by noon Hong Time causing a shift in binary options strategy.

Financial markers in Hong Kong, Taiwan and Japan were all closed for public holidays today.

Looking at corporate news in Australian, the Macquarie Group rose 0.13 percent after news surfaced that the Australian make was going to acquire Green Investment Bank for £2 billion. The CIMIC Group, a Spanish controlled engineering firm, said it would offer A$3.15 a share to buy stock of rival UGL. This cash deal is at 47.2 percent premium on Friday’s close. Shares of UGL surged over 48 percent on the deal and the CIMIC Group rose 0.2 percent. Back in June, AGL warned that delays at one of its largest oil and gas projects would be hard on the bottom line. This sent shares down by 33 percent.

Australian mining plays were up over 35 percent on merger and acquisition news on Monday.

Looking at corporate news, affecting binary options strategy, in South Korea, shares of Samsung Electronics fell over three percent on news that they were suspending production on the Galaxy Note 7. Fires are continuing in the replacement models of their flagship phablet device.

Turning our attention to the Forex markets, the central bank of China set the yuan midpoint at 6.7008 against the US Dollar. This is the weakest mid-point since September 2010. The yuan floats two percent on either side of this mid-point. By 12:15 HK time, the Dollar to Yuan Forex pair was trading up at 0.45 percent to $6.6990. China’s yuan (renminbi) has been officially included in the International Monetary Fund’s basket of reserve currencies as of October 1.

Those binary options traders trading the Mexican peso noted the USD/MXN was down 1.28 percent this morning as the peso got stronger. The peso has already gained more than two percent and at its highest level in two months. The Forex markets are lengthening the odds of a Trump victory in November.

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Asian Markets Mixed on Crude Oil Price

Asian Markets Mixed on Crude Oil Price
by, Staff, Bullish University

Binary options traders saw a rather mixed day, this morning, in the Asian and Pacific Rim markets. They were forced to adjust binary options strategy as the price of crude fell weighing heavily on the major players in Australia’s oil industry.

In Australia, the S&P ASX 200 was up 0.1 percent as the materials sub-index rose 0.28 percent. The heavily weighted financial sub-sector rose 0.4 percent but gains were offset by a 0.93 percent drop in the energy sub-sector.

Those binary options traders, who were trading stocks on this market, had to contend with a 2.8 percent fall in Santos, Oil Search which fell 1.7 percent and Origin Energy which retreaded by over 1.4 percent.

These stocks were effected by US WTI Crude oil which fell 0.9 percent to $49.37 per barrel and the global benchmark WTI Brent which fell 0.8 percent to $51.50 per barrel. Binary options strategy had to adjust bearish with oil this morning.

In South Korea, the Kospi Composite Index lost 0.13 percent after pairing earlier losses of just over one half of a percent. Stock markets in mainland China were higher after returning from the Golden Week hiatus. The Shanghai Composite jumped over1.2 percent and the Shenzhen Composite Index was up over 1.5 percent this morning.

Looking at the markets in Thailand, the SET Index dropped over 2.6 percent on news that the 88 year old King Bhumibol Adulyadej was in unstable condition after hemodialysis. The USD/BAHT Forex pair rose 0.43 percent by noon Hong Time causing a shift in binary options strategy.

Financial markers in Hong Kong, Taiwan and Japan were all closed for public holidays today.

Looking at corporate news in Australian, the Macquarie Group rose 0.13 percent after news surfaced that the Australian make was going to acquire Green Investment Bank for £2 billion. The CIMIC Group, a Spanish controlled engineering firm, said it would offer A$3.15 a share to buy stock of rival UGL. This cash deal is at 47.2 percent premium on Friday’s close. Shares of UGL surged over 48 percent on the deal and the CIMIC Group rose 0.2 percent. Back in June, AGL warned that delays at one of its largest oil and gas projects would be hard on the bottom line. This sent shares down by 33 percent.

Australian mining plays were up over 35 percent on merger and acquisition news on Monday.

Looking at corporate news, affecting binary options strategy, in South Korea, shares of Samsung Electronics fell over three percent on news that they were suspending production on the Galaxy Note 7. Fires are continuing in the replacement models of their flagship phablet device.

Turning our attention to the Forex markets, the central bank of China set the yuan midpoint at 6.7008 against the US Dollar. This is the weakest mid-point since September 2010. The yuan floats two percent on either side of this mid-point. By 12:15 HK time, the Dollar to Yuan Forex pair was trading up at 0.45 percent to $6.6990. China’s yuan (renminbi) has been officially included in the International Monetary Fund’s basket of reserve currencies as of October 1.

Those binary options traders trading the Mexican peso noted the USD/MXN was down 1.28 percent this morning as the peso got stronger. The peso has already gained more than two percent and at its highest level in two months. The Forex markets are lengthening the odds of a Trump victory in November.

 

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US Stocks Lower after NFP Release

US Stocks Lower after NFP Release
by, Mike King, Bullish University

Binary options traders saw a choppy day in the US markets as Wall Street tried to make sense of the weaker-than-expected non-farm payroll report and oil prices that continue to fall.

The Dow Jones fell nearly 120 points at one point to close down almost 30 points. Companies like DuPont and Caterpillar led losers on the day.

There was also the price of oil weighing heavily on binary options trader’s minds on Friday. We have seen a number of bullish days for the black gold as investors are expecting OPEC to cap production at their cartel meeting this month. Some investors, are starting to question whether or not this deal will actually happen. This has caused some intraday volatility which has led to some strategy changing with binary options traders. This volatility has been slightly more pronounced in the international markets. Not even the British Pound was immune as binary options strategy should start looking at consolidating positions in even the Forex markets.

By late morning trade, US crude extended losses to settle 63 cents lower at $49.81. Gold futures were a bit higher in the afternoon before moving lower and recording its worst week in nearly three years.

Crude moved lower, on Friday, as did gold and the Treasuries. We are seeing some reversals in the macro universe and this is spooking some investors. Friday was a thin trading day as the United States is going into a long weekend. The US Financial markets will be closed Monday thanks to Columbus Day. Also, the bond guys were not trading on Friday.

The S&P 500 was a hare lower by 0.3 percent as material lost over 1.5 percent. The tech heavy Nasdaq Composite was down by 0.25 percent. All three of the major stock indices were trading higher, shortly after the morning bell rang.

For the week, the three indices closed lower. This ended a three week win streak for Wall Street. The SPDR S&P Bank ETF (KBE) was up over two and a half percent. This was the best week for this ETF since August 5 when it roe over three percent.

Turning out attention now to the much anticipated US non-farm payroll report. The US economy added a less-than-expected 156,000 jobs las month. The unemployment rate ticked up to five percent. Investors expected the world’s largest economy to add 176,000 new jobs and for the unemployment rate to hold at 4.9 percent. The August number was revised from 151,000 to 167,000.

This was not a good number and it was not a bad number. If you look deep into the report, and below the headline, labor force participation did inch up. This is the good news. However, a print of 200,000 new jobs would have made this report stellar. Average hourly wages did puch higher by six cents to an annual rate of 2.6 percent and the average work week ticked higher to 34.4 percent. An increase of one tenth of a percent.

The NFP was a bit of a disappointment. However not too unexpected as the labor market tends to slow as the second half of the year progresses. The number is good enough to keep things crawling forward. The US Federal Reserve (Fed) will likely not raise interest rates in November. They are likely to raise the benchmark lending rate 25 basis points in December. This should cause some volatility causing binary options traders to change strategy quickly.

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US Stocks Lower after NFP Release

US Stocks Lower after NFP Release
by, Mike King, Bullish University

Binary options traders saw a choppy day in the US markets as Wall Street tried to make sense of the weaker-than-expected non-farm payroll report and oil prices that continue to fall.

The Dow Jones fell nearly 120 points at one point to close down almost 30 points. Companies like DuPont and Caterpillar led losers on the day.

There was also the price of oil weighing heavily on binary options trader’s minds on Friday. We have seen a number of bullish days for the black gold as investors are expecting OPEC to cap production at their cartel meeting this month. Some investors, are starting to question whether or not this deal will actually happen. This has caused some intraday volatility which has led to some strategy changing with binary options traders. This volatility has been slightly more pronounced in the international markets. Not even the British Pound was immune as binary options strategy should start looking at consolidating positions in even the Forex markets.

By late morning trade, US crude extended losses to settle 63 cents lower at $49.81. Gold futures were a bit higher in the afternoon before moving lower and recording its worst week in nearly three years.

Crude moved lower, on Friday, as did gold and the Treasuries. We are seeing some reversals in the macro universe and this is spooking some investors. Friday was a thin trading day as the United States is going into a long weekend. The US Financial markets will be closed Monday thanks to Columbus Day. Also, the bond guys were not trading on Friday.

The S&P 500 was a hare lower by 0.3 percent as material lost over 1.5 percent. The tech heavy Nasdaq Composite was down by 0.25 percent. All three of the major stock indices were trading higher, shortly after the morning bell rang.

For the week, the three indices closed lower. This ended a three week win streak for Wall Street. The SPDR S&P Bank ETF (KBE) was up over two and a half percent. This was the best week for this ETF since August 5 when it roe over three percent.

Turning out attention now to the much anticipated US non-farm payroll report. The US economy added a less-than-expected 156,000 jobs las month. The unemployment rate ticked up to five percent. Investors expected the world’s largest economy to add 176,000 new jobs and for the unemployment rate to hold at 4.9 percent. The August number was revised from 151,000 to 167,000.

This was not a good number and it was not a bad number. If you look deep into the report, and below the headline, labor force participation did inch up. This is the good news. However, a print of 200,000 new jobs would have made this report stellar. Average hourly wages did puch higher by six cents to an annual rate of 2.6 percent and the average work week ticked higher to 34.4 percent. An increase of one tenth of a percent.

The NFP was a bit of a disappointment. However not too unexpected as the labor market tends to slow as the second half of the year progresses. The number is good enough to keep things crawling forward. The US Federal Reserve (Fed) will likely not raise interest rates in November. They are likely to raise the benchmark lending rate 25 basis points in December. This should cause some volatility causing binary options traders to change strategy quickly.

 

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Bullish University with David Frank. Weekly Forex Review. W/C 2nd October 2016

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Traders Look Towards Data and Tomorrow’s NFP

Traders Look Towards Data and Tomorrow’s NFP
by, Mike King, Bullish University

US stock futures are pointing to a flat open this morning as traders are eying the release of economic data and Friday’s much watched non-farm payroll report out of the United States. Binary options strategy should gear up for a fairly quiet day of consolidative trading with the major indices as well as most of the major Forex pairs.

For the most part traders, including those in binary options, have been rather focused on Friday’s release of the employment data which will provide a better look at the Federal Reserve Board’s plan to raise rates this month and in December. The NFP is due out Friday at 0830 EST.

In the oil markets, Brent crude is trading around $51.55 per barrel this morning. This is down 0.6 percent. US crude is also down 0.6 percent at $49.51 per barrel. Binary options traders should be looking at puts with the black gold.

Looking at the corporate front, in the United States today, earnings are on tap for International Speedway, Helen of Troy, and Ruby. All are set to announce before the opening bell.

In Europe, right now, the pan-European STOXX 50 is a bit lower and the Nikkei 225, in Japan, closed a tad higher as the yen lost strength. This was good for the country’s exporters.

Most of the sectors on the STOXX 50 are flat to erratic. Other exchanges, like the FTSE 100 and the CAC 40 are mixed so far on the day. Investors are eying the drop in oil prices carefully.

Bank stocks in the Eurozone are sharply higher after Citi Group recommended in a note for investors to go overweight on the sector. Some of the names, for binary options traders to note, that went buy ae Standard Chartered, BBVA, BNP Paribas and Intesa Sanpaolo.

In individual bank news, asset manager Amundi is will to pay nearly €4 billion for UniCredit’s management arm. This is sending shares of UniCredit into positive territory, and binary options traders should take note. In other European banking news, embattled Italian lender Banca dei Monte Paschi di Siena were deeply in the red hitting a new record low price.

In other corporate news, in Europe, shares of EasyJet have shed over five percent after warning investors of profit problems for the year that ended September 30. They are citing major disruptions and exchange rate fluctuations. Shares of Lufthansa have also hit a four year low on the back of this news.

Dialog Semiconductor, a supplier of Apple Inc. reported a rise in third quarter (3Q) revenue. Their price target was also alleviated by RBC and Natixis. Shares of the firm were firmly higher causing binary options traders to change strategy.

In corporate news out of Asia, shares of Samsung Electronics jumped nearly 3.78 percent after US hedge fund activist manager, published a letter for the Korean firm to reshape their corporate governance structure. This includes splitting the company and increasing the size of the dividend.

Asian and European markets are also getting a bounce from the US where stocks closed sharply higher overnight thanks to a rise in oil prices. This caused binary options traders, trading oil contracts to adjust strategy. There was also positive data from the factory sector boosting sentiment. The US services sector also improved through September. Data beat expectations for both indicators.

Other data showed that US companies created jobs at the slowest pace in six months in September. Their labor market is showing signs of tightening as the pre-cursor of the NFP, the ADP report was released on Wednesday.

All eyes will be on tomorrow’s NFP jobs report due out at 0830 EST. The ADP is considered a preview of this report, but has often not been a true indicator. The Federal Reserve watches the NFP very closely as they will be deciding monetary policy again this month.

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Traders Look Towards Data and Tomorrow’s NFP

Traders Look Towards Data and Tomorrow’s NFP
by, Mike King, Bullish University

 

US stock futures are pointing to a flat open this morning as traders are eying the release of economic data and Friday’s much watched non-farm payroll report out of the United States. Binary options strategy should gear up for a fairly quiet day of consolidative trading with the major indices as well as most of the major Forex pairs.

For the most part traders, including those in binary options, have been rather focused on Friday’s release of the employment data which will provide a better look at the Federal Reserve Board’s plan to raise rates this month and in December. The NFP is due out Friday at 0830 EST.

In the oil markets, Brent crude is trading around $51.55 per barrel this morning. This is down 0.6 percent. US crude is also down 0.6 percent at $49.51 per barrel. Binary options traders should be looking at puts with the black gold.

Looking at the corporate front, in the United States today, earnings are on tap for International Speedway, Helen of Troy, and Ruby. All are set to announce before the opening bell.

In Europe, right now, the pan-European STOXX 50 is a bit lower and the Nikkei 225, in Japan, closed a tad higher as the yen lost strength. This was good for the country’s exporters.

Most of the sectors on the STOXX 50 are flat to erratic. Other exchanges, like the FTSE 100 and the CAC 40 are mixed so far on the day. Investors are eying the drop in oil prices carefully.

Bank stocks in the Eurozone are sharply higher after Citi Group recommended in a note for investors to go overweight on the sector. Some of the names, for binary options traders to note, that went buy ae Standard Chartered, BBVA, BNP Paribas and Intesa Sanpaolo.

In individual bank news, asset manager Amundi is will to pay nearly €4 billion for UniCredit’s management arm. This is sending shares of UniCredit into positive territory, and binary options traders should take note. In other European banking news, embattled Italian lender Banca dei Monte Paschi di Siena were deeply in the red hitting a new record low price.

In other corporate news, in Europe, shares of EasyJet have shed over five percent after warning investors of profit problems for the year that ended September 30. They are citing major disruptions and exchange rate fluctuations. Shares of Lufthansa have also hit a four year low on the back of this news.

Dialog Semiconductor, a supplier of Apple Inc. reported a rise in third quarter (3Q) revenue. Their price target was also alleviated by RBC and Natixis. Shares of the firm were firmly higher causing binary options traders to change strategy.

In corporate news out of Asia, shares of Samsung Electronics jumped nearly 3.78 percent after US hedge fund activist manager, published a letter for the Korean firm to reshape their corporate governance structure. This includes splitting the company and increasing the size of the dividend.

Asian and European markets are also getting a bounce from the US where stocks closed sharply higher overnight thanks to a rise in oil prices. This caused binary options traders, trading oil contracts to adjust strategy. There was also positive data from the factory sector boosting sentiment. The US services sector also improved through September. Data beat expectations for both indicators.

Other data showed that US companies created jobs at the slowest pace in six months in September. Their labor market is showing signs of tightening as the pre-cursor of the NFP, the ADP report was released on Wednesday.

All eyes will be on tomorrow’s NFP jobs report due out at 0830 EST. The ADP is considered a preview of this report, but has often not been a true indicator. The Federal Reserve watches the NFP very closely as they will be deciding monetary policy again this month.

 

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The Dollar Hits a two Month High as Gold Tanks

The Dollar Hits a two Month High as Gold Tanks
by, Mike King, Bullish University

Overnight, the US Dollar index, which measures the US Dollar against six other global currencies hit its highest level in nearly two months. The index hit a high of 96.17 forcing binary options traders to adjust their Dollar bets.

The Dow Jones fell as much as 137 points during the day before pairing losses to close down around 85 points. Shares of 3M contributed to most of the losses. The S&P 500 was down around 0.6 percent with utilities shedding over two percent. The index hit a low below 2,150 at one point but recovered. Should we see a daily close below that key support then binary options traders could see a shift towards a major bearish momentum.

The tech heavy Nasdaq Composite was down 0.2 percent on the day. Tech stocks seesawed most of the day before closing lower.

US markets are stuck in a vacuum still and waiting on some solid news to break this monotonous range. We are in a trading range and traders should adjust their binary options strategy accordingly.

The International Monetary Fund (IMF) released its biannual World Economic Outlook (WEO) yesterday, which was largely unchanged but showed slowdowns in economic growth for advanced economies like the United States. Their economic growth is expected to slow to 1.6 percent from 2.1 percent last year. The forecast for July’s WEO was 1.8 percent expansion.

Gold futures sold off causing binary options strategy to shift rapidly. Gold fell off more than three percent to settle at $1,269.70 per ounce. Its worst trading day since 2013. The selloff in gold was due to renewed chatter from Federal Reserve Board officials showing hawkish opinions towards raising rates by December of this year. We could also see a rate hike in the election month of November. However, it is not very likely for the Fed to take a risk of rising rates during the month the United States choses its next president.

Investors were also watching embattled German bank Deutsche’s shares as the world saw a roller coaster ride thanks to worries it would be unable to pay its massive fine imposed by the US regulatory authorities. However, news surfaced that the bank could reduce its fine from $14 billion to around $5 billion. Investors have lost confidence in Deutsche Bank and this should be at the front of binary options trading strategy going forward.

In Federal Reserve Bank news, Richmond Fed President Jeffrey Lacker said there was a strong case to raise interest rates significantly as well as keeping inflation under control. He said that “Pre-emptive increases in the federal funds rate are likely to play a critical role in maintaining the stability of inflation.” Lacker is a non-voting member of the Fed’s policymaking committee (Federal Open Markets Committee or FOMC).

US Treasury yields rose after his talk as the two year note hit a yield of 0.82 percent and the benchmark 10 year yield rose to 1.68 percent.

Later in the evening, Fed President Charles Evans spoke. He is head of the Chicago Fed and he said he was okay with an imminent rate increase as long as economic data continued to warrant such a move.

Binary options traders should note that continued speeches from Federal Reserve members will continue to be noise in the background having an impact on the US Dollar and its Forex trading crosses. This week is a data heavy week with the ever watched non-farm payroll report due at the end of the week.

 

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The Dollar Hits a two Month High as Gold Tanks

The Dollar Hits a two Month High as Gold Tanks
by, Mike King, Bullish University

Overnight, the US Dollar index, which measures the US Dollar against six other global currencies hit its highest level in nearly two months. The index hit a high of 96.17 forcing binary options traders to adjust their Dollar bets.

The Dow Jones fell as much as 137 points during the day before pairing losses to close down around 85 points. Shares of 3M contributed to most of the losses. The S&P 500 was down around 0.6 percent with utilities shedding over two percent. The index hit a low below 2,150 at one point but recovered. Should we see a daily close below that key support then binary options traders could see a shift towards a major bearish momentum.

The tech heavy Nasdaq Composite was down 0.2 percent on the day. Tech stocks seesawed most of the day before closing lower.

US markets are stuck in a vacuum still and waiting on some solid news to break this monotonous range. We are in a trading range and traders should adjust their binary options strategy accordingly.

The International Monetary Fund (IMF) released its biannual World Economic Outlook (WEO) yesterday, which was largely unchanged but showed slowdowns in economic growth for advanced economies like the United States. Their economic growth is expected to slow to 1.6 percent from 2.1 percent last year. The forecast for July’s WEO was 1.8 percent expansion.

Gold futures sold off causing binary options strategy to shift rapidly. Gold fell off more than three percent to settle at $1,269.70 per ounce. Its worst trading day since 2013. The selloff in gold was due to renewed chatter from Federal Reserve Board officials showing hawkish opinions towards raising rates by December of this year. We could also see a rate hike in the election month of November. However, it is not very likely for the Fed to take a risk of rising rates during the month the United States choses its next president.

Investors were also watching embattled German bank Deutsche’s shares as the world saw a roller coaster ride thanks to worries it would be unable to pay its massive fine imposed by the US regulatory authorities. However, news surfaced that the bank could reduce its fine from $14 billion to around $5 billion. Investors have lost confidence in Deutsche Bank and this should be at the front of binary options trading strategy going forward.

In Federal Reserve Bank news, Richmond Fed President Jeffrey Lacker said there was a strong case to raise interest rates significantly as well as keeping inflation under control. He said that “Pre-emptive increases in the federal funds rate are likely to play a critical role in maintaining the stability of inflation.” Lacker is a non-voting member of the Fed’s policymaking committee (Federal Open Markets Committee or FOMC).

US Treasury yields rose after his talk as the two year note hit a yield of 0.82 percent and the benchmark 10 year yield rose to 1.68 percent.

Later in the evening, Fed President Charles Evans spoke. He is head of the Chicago Fed and he said he was okay with an imminent rate increase as long as economic data continued to warrant such a move.

Binary options traders should note that continued speeches from Federal Reserve members will continue to be noise in the background having an impact on the US Dollar and its Forex trading crosses. This week is a data heavy week with the ever watched non-farm payroll report due at the end of the week.

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Bullish University Review by Kevin Stanley

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Asian Markets have a mixed showing on Tuesday

Asian Markets have a mixed showing on Tuesday
by, Mike King, Bullish University

Asian markets were relatively mixed this morning with little volatility. Shares of Hong Kong listed Evergrande Group surged higher thanks to plans for a spin-off on the Shenzhen market. Binary options traders are likely to have a quiet day today.

In Japan, their headline stock bourse, was up a mere 0.6 percent and shares in Hong Kong, on the Hang Seng Index fell 0.2 percent. Offering a relatively flat strategy for binary options trading. Shares of China’s Evergrande Group surged 8.9 percent on the Hong Kong market after plans to spin-off most of their property assets and list them on the Shenzhen Stock Exchange crossed the newswires. The company said it would be the controlling shareholder of Shenzhen Real Estate, after the state-backed Shenzhen property developer issued new shares.

This morning, the Reserve Bank of Australia (RBA), as expected, held its monetary policy and main cash rad steady at 1.5 percent. The RBA said that they would assess previous cuts in August and May of next year.

After the monetary policy decision by the RBA, the headline stock bourse barely budged, which meant that binary options strategy did not have to change. The headline bourse in The Down Under was down about 0.1 percent in the early afternoon (Hong Kong (HK) time). The materials sub-index pared early losses to rise 0.3 percent and the energy sub-index was up 0.7 percent.

In corporate news, out of Australia, gaming developer Aristocrat Leisure jumped over 1.6 percent after reaching a cross-license agreement with US based International Game Technology. Shares of Aristocrat Leisure are trading at a nine year high as binary options strategy is changing a bit.

The South Korean benchmark, the Kospi Composite Index was also up a fraction on the day. Make up and cosmetic companies go a boost when China announced they would remove a consumption tax on non-luxury cosmetic products. In turn, they would adjust the luxury cosmetic tax from 15 to 40 percent. This goes into effect, retroactively to October 1. The news helped to boost South Korea larges cosmetic companies like Amorpacific and LG Household & Healthcare. Shares of Cosmax were also boosted as they plan to open a factory in China. This will help boost share on the South Korean stock exchange, changing binary options strategy.

In other corporate news, out of South Korea, Samsung Group’s bio pharm manufacturing unit, BioLogics, is planning an initial public offering that should raise $2.04 billion.

Turning our attention to the Reserve Bank of India, the bank is set to announce its first monetary policy decision on new bank Governor Urjit Patel. The new governor is expected to act on the side of caution and keep rates as is. However, there is a high risk of a substantial increase of capital inflows into India that could trigger a cut if he tries to be too forward-looking. Binary options traders who trade the Indian Rupee will have to play close attention to this news. With that said, he is likely to keep the main cash rate at 6.5 percent today.

Looking at the GBP/USD, this Forex market has moved to a new 31 year low this morning and in afternoon trade yesterday. Theresa May, the prime minister of the United Kingdom, said that Article 50 is set to happen by March of 2017. The GBP/USD was trading at $1.2830 by noon Hong Kong time as binary options traders are looking at a near-term bearish strategy for this market.

There is now a clearer time table for the United Kingdom’s final divorce from the European Union. They are planning for a two year round of negotiations to leave the Eurozone. Binary options traders should carefully asses what this means when it applies to the British Pound and its Forex crosses. The GBP/USD has near term support lining up near 1.28 this morning as European markets get set to open.

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Asian Markets have a mixed showing on Tuesday

Asian Markets have a mixed showing on Tuesday
by, Mike King, Bullish University

Asian markets were relatively mixed this morning with little volatility. Shares of Hong Kong listed Evergrande Group surged higher thanks to plans for a spin-off on the Shenzhen market. Binary options traders are likely to have a quiet day today.

In Japan, their headline stock bourse, was up a mere 0.6 percent and shares in Hong Kong, on the Hang Seng Index fell 0.2 percent. Offering a relatively flat strategy for binary options trading. Shares of China’s Evergrande Group surged 8.9 percent on the Hong Kong market after plans to spin-off most of their property assets and list them on the Shenzhen Stock Exchange crossed the newswires. The company said it would be the controlling shareholder of Shenzhen Real Estate, after the state-backed Shenzhen property developer issued new shares.

This morning, the Reserve Bank of Australia (RBA), as expected, held its monetary policy and main cash rad steady at 1.5 percent. The RBA said that they would assess previous cuts in August and May of next year.

After the monetary policy decision by the RBA, the headline stock bourse barely budged, which meant that binary options strategy did not have to change. The headline bourse in The Down Under was down about 0.1 percent in the early afternoon (Hong Kong (HK) time). The materials sub-index pared early losses to rise 0.3 percent and the energy sub-index was up 0.7 percent.

In corporate news, out of Australia, gaming developer Aristocrat Leisure jumped over 1.6 percent after reaching a cross-license agreement with US based International Game Technology. Shares of Aristocrat Leisure are trading at a nine year high as binary options strategy is changing a bit.

The South Korean benchmark, the Kospi Composite Index was also up a fraction on the day. Make up and cosmetic companies go a boost when China announced they would remove a consumption tax on non-luxury cosmetic products. In turn, they would adjust the luxury cosmetic tax from 15 to 40 percent. This goes into effect, retroactively to October 1. The news helped to boost South Korea larges cosmetic companies like Amorpacific and LG Household & Healthcare. Shares of Cosmax were also boosted as they plan to open a factory in China. This will help boost share on the South Korean stock exchange, changing binary options strategy.

In other corporate news, out of South Korea, Samsung Group’s bio pharm manufacturing unit, BioLogics, is planning an initial public offering that should raise $2.04 billion.

Turning our attention to the Reserve Bank of India, the bank is set to announce its first monetary policy decision on new bank Governor Urjit Patel. The new governor is expected to act on the side of caution and keep rates as is. However, there is a high risk of a substantial increase of capital inflows into India that could trigger a cut if he tries to be too forward-looking. Binary options traders who trade the Indian Rupee will have to play close attention to this news. With that said, he is likely to keep the main cash rate at 6.5 percent today.

Looking at the GBP/USD, this Forex market has moved to a new 31 year low this morning and in afternoon trade yesterday. Theresa May, the prime minister of the United Kingdom, said that Article 50 is set to happen by March of 2017. The GBP/USD was trading at $1.2830 by noon Hong Kong time as binary options traders are looking at a near-term bearish strategy for this market.

There is now a clearer time table for the United Kingdom’s final divorce from the European Union. They are planning for a two year round of negotiations to leave the Eurozone. Binary options traders should carefully asses what this means when it applies to the British Pound and its Forex crosses. The GBP/USD has near term support lining up near 1.28 this morning as European markets get set to open.

 

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Bullish University: Summary of Trades for September 2016.

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