06 Lug 2018

FOREX Newsletter

           

FOREX Newsletter

July 06, 2018

 

Pulse of the Market

·      U.S jobs rose less than expected in June reined in the greenback’s recent rally

·      The euro climbed after German industrial orders had a higher-than-expected jump in May

·      Another key Brexit meeting will take place in today’s trading session

·      The British Pound continues to find support and traded higher against the US Dollar

The U.S Dollar moved off its lows against its rivals but remained under pressure amid mixed U.S economic data and a stronger euro ahead of the release of the Federal Reserve’s minutes. The U.S dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.11% to 94.09. ISM nonmanufacturing data for June showed an uptick to 59.1, beating expectations of 58.3. The services sector is a critical component of the US economy, accounting for roughly 80% of U.S. private-sector gross domestic product (GDP). A duo of reports, meanwhile, showed a mixed backdrop for the U.S. labor market as private payrolls fell short of forecasts, while initial jobless claims were in-line. Private payrolls grew by 177,000 for June, a decline from 189,000 in May, according to a report released Wednesday by ADP and Moody’s Analytics. That missed a economists’ forecast for an increase of 190,000. The U.S. Department of Labor reported yesterday that initial jobless claims for the week ended June 30 came in at a seasonally adjusted 231,000. The subdued post-holiday start for the greenback comes ahead of the minutes of Federal Reserve’s June meeting expected to reveal clues on the central bank’s monetary policy outlook. A rising euro also added pressure on the greenback amid better-than-expected German factory orders and signs that the U.S. was easing its tough stance on tariffs towards European Union carmakers. The U.S. ambassador to Germany reportedly said that President Donald Trump would suspend threats to impose tariffs on cars imported from the EU if the bloc axed duties on U.S cars. The safe-haven yen and Swiss franc were out of favor, however, despite looming U.S. and China trade tariffs expected to take effect today.
Time(GMT)   Economic Release IMP Actual Forecast Prior
00:00 Japan Labor Cash Earnings (YoY) (MAY) Medium   0.9% 0.8%
05:00 Japan Coincident Index (MAY) Medium   116.1 117.5
06:00 German Industrial Production n.s.a. and w.d.a. (YoY) (MAY) Medium   1.5% 2.0%
07:30 U.K Halifax House Prices (MoM) (JUN) Low   0.2% 1.5%
08:30 U.K Unit Labor Costs (YoY) (1Q) Medium     2.1%
12:30 Canada Net Change in Employment (JUN) High   20.0k -7.5k
12:30 Canada Unemployment Rate (JUN) High   5.8% 5.8%
12:30 Canada Hourly Earnings Permanent Employees (YoY) (JUN) Medium   3.7% 3.9%
12:30 U.S Change in Non-farm Payrolls (JUN) High   195k 223k
12:30 U.S Change in Private Payrolls (JUN) Medium   190k 218k
12:30 U.S Unemployment Rate (JUN) High   3.8% 3.8%
12:30 U.S Average Hourly Earnings (YoY) (JUN) Medium   2.8% 2.7%
12:30 U.S Average Weekly Hours All Employees (JUN) Medium   34.5 34.5
12:30 U.S Trade Balance (MAY) Medium   -$43.6b -$46.2b
14:00 Canada Ivey Purchasing Managers Index s.a. (JUN) Low     62.5
17:00 Baker Hughes U.S Rig Count (JUL 06) Medium     1047
Euro

 

The single currency climbed half a per cent to near three-week highs following strong German data, though gains were capped before the release of Fed minutes later in the day. German industrial orders bounced back in May with a stronger-than-expected jump after four consecutive monthly drops, as demand from domestic customers picked up. Overall, the EUR/USD traded with a low of 1.1648 and a high of 1.1718 before closing the day around 1.1692 in the New York session.

 

Yen

The Japanese Yen pair held firm supported by quarter-end buying as well as an absence of any fresh escalation in trade-related tensions between the United States and its major trading partners. Still, trade worries look set to dominate the market with traders increasingly worried about the impact of trade disputes. Overall, the USD/JPY traded with a low of 110.26 and a high of 110.70 before closing the day around 110.64 in the U.S session.

 

British Pound

The British Pound erased an earlier advance to slip as Chancellor Merkel’s government is said to see the U.K’s Brexit customs plan as unworkable. Sterling fell on the news, which may undermine May’s proposal on how customs will operate ahead of a meeting with her own cabinet. The pound had earlier climbed as BOE Governor said the U.K economy is supporting the case for higher rates. Overall, the GBP/USD traded with a low of 1.3202 and a high of 1.3272 before closing the day at 1.3225 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged higher against its U.S counterpart yesterday, holding near its strongest in nearly three weeks, as the greenback broadly fell and investors’ hopes rose that European car makers could be spared from U.S. tariffs. Canada runs a current account deficit so its economy could be hurt if the flow of trade or capital slows. Overall, USD/CAD traded with a low of 1.3113 and a high of 1.3158 before closing the day at 1.3132 in the New York session.

 

Australian Dollar

The Australian Dollar ambled its way through yesterday’s trading session, lifting modestly in Asia before giving back those gains in Europe. As has been the case throughout the week, it continues to be highly influenced by the gyrations in the Chinese Yuan. Conflicting reports about China’s intentions with regard to the currency have circulated in the last 36 hours, Overall, AUD/USD traded with a low of 0.7359 and a high of 0.7406 before closing the day at 0.7374 in the New York session.

 

Euro-Yen

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The Relative Strength Index is above 53 and lies above the neutral zone. In general, the pair has gained 0.43%.

 

Sterling-Yen

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 48 reading and lies below the neutral zone. On the whole, the pair has gained 0.09%.

  

Aussie-Yen

Currently, the cross is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 44 reading and lies below the neutral region. In general, the pair has gained 0.20%.

 

 

Euro-Sterling

This cross is currently trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 56 and lies above the neutral region. On the whole, the pair has gained 0.36%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating a bullish tone. The Relative Strength Index is above 48 and lies below the neutral region. In general, the pair has lost 0.03%.

 

Appendix

  

FOREX Closing Prices for July 05, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.16557 1.17188 1.16484 1.16924 0.0034
USD/JPY 110.487 110.706 110.269 110.645 0.1370
GBP/USD 1.32313 1.32728 1.32022 1.32254 -0.0007
USD/CHF 0.99234 0.99443 0.99082 0.99353 0.0005
USD/CAD 1.31403 1.31581 1.3113 1.31321 -0.0013
EUR/JPY 128.767 129.608 128.552 129.358 0.5540
GBP/JPY 146.241 146.844 145.813 146.35 0.1330
CHF/JPY 111.266 111.641 110.981 111.394 0.0780
AUD/JPY 81.541 81.9 81.242 81.752 0.1600
EUR/GBP 0.88098 0.88558 0.88051 0.88441 0.0032
EUR/CHF 1.15662 1.16173 1.15654 1.16148 0.0040
GBP/CHF 1.31359 1.31671 1.31072 1.31353 -0.0003

 

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1584 1.1616 1.1654 1.1687 1.1725 1.1757 1.1795
USD/JPY 109.94 110.10 110.37 110.54 110.81 110.98 111.25
GBP/USD 1.3124 1.3163 1.3194 1.3233 1.3265 1.3304 1.3335
USD/CHF 0.9878 0.9893 0.9914 0.9929 0.9950 0.9965 0.9986
USD/CAD 1.3066 1.3089 1.3111 1.3134 1.3156 1.3180 1.3201
EUR/JPY 127.68 128.12 128.74 129.17 129.79 130.23 130.85
GBP/JPY 144.80 145.30 145.83 146.34 146.86 147.37 147.89
CHF/JPY 110.38 110.68 111.04 111.34 111.70 112.00 112.36
AUD/JPY 80.70 80.97 81.36 81.63 82.02 82.29 82.68
EUR/GBP 0.8764 0.8784 0.8814 0.8835 0.8865 0.8886 0.8916
EUR/CHF 1.1529 1.1547 1.1581 1.1599 1.1633 1.1651 1.1685
GBP/CHF 1.3046 1.3077 1.3106 1.3137 1.3166 1.3196 1.3226

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

06 Lug 2018

Daily Market View

       

Daily Market View

Friday, July 06, 2018
          U.S Stock Market

 

DJIA S & P 500 NASDAQ
24346 2739.00 7126.25
+0.66% +0.82% +1.06%

Stocks traded higher yesterday as tech shares rose, but investors remained on edge as the U.S. prepared to slap tariffs on goods imported from China. The Dow Jones Industrial Average rose 157 points, with Intel outperforming. The gained 0.7 percent as tech climbed 1.4 percent. The NASDAQ advanced 1 percent as Facebook, Amazon, Netflix and Google-parent Alphabet all rose. The U.S. is expected to activate levies on $34 billion in Chinese-made goods on Friday, with Beijing expected to respond with its own levies on U.S goods. Trade tensions have kept a lid on equity gains recently as investors fret over the tariffs’ impact on corporate profits and the broader global economy. Sentiment around trade was lifted slightly after Reuters reported that the U.S ambassador to Germany told industry executives that President Donald Trump could hold off on implementing tariffs on European cars in exchange for concessions. General Motors shares rose as much as 2.6 percent before trading 1.2 percent higher. Fiat Chrysler also rose 6 percent.

 

 

Major Economic Releases for Today
Period Event GMT Forecast Previous

may

Japan Leading Index 05:00 106.5 106.2

may

German Industrial Production n.s.a. and w.d.a. (YoY) 06:00 1.5% 2.0%

1Q

U.K Unit Labor Costs (YoY) 08:30   2.1%

jun

Canada Net Change in Employment 12:30 20.0k -7.5k

jun

Canada Unemployment Rate 12:30 5.8% 5.8%

jun

U.S Change in Non-farm Payrolls 12:30 195k 223k

jun

U.S Unemployment Rate 12:30 3.8% 3.8%

jun

U.S Average Hourly Earnings (YoY) 12:30 2.8% 2.7%

may

U.S Trade Balance 12:30 -$43.6b -$46.2b
Dow Jones Industrial Average

The Dow Jones Industrial Average gained 0.75%. The best performers of the session were Intel Corporation, which rose 2.59% or 1.28 points to trade at 50.75 at the close. Meanwhile, Johnson & Johnson added 1.87% or 2.29 points to end at 125.00 and Procter & Gamble Company was up 1.68% or 1.31 points to 79.21 in late trade. The worst performers of the session were Chevron Corp, which fell 0.60% or 0.75 points to trade at 123.98 at the close. The Travelers Companies Inc. declined 0.14% or 0.17 points to end at 122.60 and United Technologies Corporation was up 0.02% or 0.03 points to 124.95.

 

NASDAQ 100

The NASDAQ index climbed 1.12%. The top performers were Differential Brands Group Inc. which rose 57.28% to 4.860, Xplore Technologies Corp which was up 44.90% to settle at 5.970 and Real Goods Solar Inc which gained 32.50% to close at 0.5300. The worst performers were Amedica Corp which was down 15.89% to 0.740 in late trade, American Superconductor Corporation which lost 15.72% to settle at 5.95 and Biocept Inc. which was down 16.27% to 0.175 at the close.

 

 

Oil

Oil fell on yesterday after U.S government data showed an unexpected build in crude oil stockpiles. U.S crude futures fell $1.20 to settle at $72.94 a barrel, retreating from Tuesday’s 3-1/2-year high of over $75. U.S. crude stockpiles rose 1.3 million barrels last week, according to U.S EIA data. Analysts had expected a 3.5 million-barrel decline. An unexpected build in the U.S commercial crude inventory has prompted profit-taking. Inventories at Cushing, Oklahoma, the delivery point for U.S crude futures, fell to their lowest since December 2014. The most concerning aspect for inventories is the continued decline in Cushing. On Wednesday, U.S President Donald Trump accused the Organization of the Petroleum Exporting Countries of driving up fuel prices. The OPEC Monopoly must remember that gas prices are up & they are doing little to help. OPEC together with a group of non-OPEC producers led by Russia started withholding output in 2017 to prop up the market.

 

 

Precious and Base Metals

Gold was flat yesterday, as the U.S dollar weakened and investors awaited the minutes of the most recent U.S Federal Reserve policy meeting for clues on the pace of further interest rate hikes this year. Spot gold was unchanged at $1,256.15 ounce. U.S gold futures for August delivery settled up $5.30, or 0.4 percent, at $1,258.80 per ounce. The dollar index fell to its lowest level in more than a week while the euro climbed half a percent to near three-week highs following strong German data. The dollar’s down, giving some support to precious metals. Gold is sensitive to rising interest rates, as higher rates increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced. The minutes may point to concerns about inflation or that members want monetary policy to keep pace with fairly strong economic growth. Investors are also awaiting the release of non-farm payrolls and unemployment data today. One would not like to have any bullish bets on gold when the labor market trend is strong. Physical gold demand has been lackluster in India, the second-biggest gold consumer after China, Commerzbank said, lending no price support. Meanwhile, silver was flat at $16.05 an ounce. Palladium dropped 0.1 percent to $945.50 an ounce, while platinum declined 0.5 percent to $836 after touching its lowest since 2008 at $793 on Tuesday. It’s a speculative-driven selloff in platinum; it’s not a fundamentally driven selloff. And when we think about the fundamentals, at $800, most South African mines are losing money. So if we maintain these prices sub-$900, there will eventually be a supply-led response. Copper prices fell to their lowest level in a year Thursday, weighed down by intensifying trade tensions between the U.S. and China.

 

 

 

Wheat, Corn, and Soybeans

Soybean futures were little changed as the oilseed market consolidated after losses fuelled by an ongoing U.S-China trade dispute pushed prices to a two-year closing low on Monday. The International Grains Council on Monday cut its forecasts for 2018/19 global wheat and corn production as adverse weather dented prospects in Russia and the European Union. Traders are worried about Chinese tariffs that could be implemented from the end of the week on U.S exports.

 

Futures Settlement Price Thursday, July 05, 2018
Instrument Contract Open High Low Settlement Net Change
DJIA DJM18 24196 24360 24113 24346 135
S & P 500 SPM18 2721.75 2739.25 2712.5 2739 16.5
NASDAQ 100 NDM18 7042.75 7126.5 7016.75 7126.25 83
Hang Seng HSH18 28037 28254 27716 28197 147
Nikkei 225 NKH18 21670 21715 21435 21500 -175
FTSE 100 FTH18 7518 7563 7509 7563 42
Gold GCJ18 1257.3 1260.7 1252 1259.1 0.7
Silver SIK18 1611 1613 1595.5 1610.5 -3
Copper HGK18 286.2 287.75 282.05 284.05 -2.6
Crude Oil CLK18 74.31 74.77 72.5 73.2 -1.2
Wheat WK18 496.75 508 496 506 15.5
Soybeans SK18 846.75 850.25 838 840.75 -7.25
Corn CK18 354 357.5 349.75 352.75 0.5

 

Daily Swings  (The Pivot Levels)
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2
DJM18 23939 24026 24186 24273 24433 24520 24680
SPM18 2694.50 2703.50 2721.25 2730.25 2748.00 2757.00 2774.75
NDM18 6943.42 6980.08 7053.17 7089.83 7162.92 7199.58 7272.67
HSH18 27319 27518 27857 28056 28395 28594 28933
NKH18 21105 21270 21385 21550 21665 21830 21945
FTH18 7473.00 7491.00 7527.00 7545.00 7581.00 7599.00 7635.00
GCJ18 1245.13 1248.57 1253.83 1257.27 1262.53 1265.97 1271.23
SIK18 1582.17 1588.83 1599.67 1606.33 1617.17 1623.83 1634.67
HGK18 275.78 278.92 281.48 284.62 287.18 290.32 292.88
CLK18 69.94 71.22 72.21 73.49 74.48 75.76 76.75
WK18 486.67 491.33 498.67 503.33 510.67 515.33 522.67
SK18 823.50 830.75 835.75 843.00 848.00 855.25 860.25
CK18 341.42 345.58 349.17 353.33 356.92 361.08 364.67

         Source: – News & Quotes (Courtesy:  Reuters)         

 

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.