4x Profit Maker

The May minutes released by the RBA came in more dovish than expected. Together with the SMP released on May 4, it suggested that policymakers are forecasting more moderate inflation levels than previously anticipated. Overall, the chance of further rate cut is a tug of war between apparently improving domestic economic indicators released recently and the foggy external environment especially in the Eurozone. The RBA acknowledged that ‘growth outside of the mining sector was expected to be below trend in the near term, affected by the high exchange rate, softer government spending and subdued conditions in the housing market and building industry’. Moreover, ‘with financial markets remaining unsettled, the risks emanating from Europe continued to cloud the global outlook’. Concerning inflation, it is expected that ‘underlying inflation (excluding the effect of … Read entire article »

Euro extends it’s broad based decline today as Greece political uncertainties continue to weigh. In additional, Benchmark Spanish 10 year yield jumped above 6.3% today as Moody’s noted that the country’s bank plan will increase the government’s debt burden. Bill auctions in Spain saw weaker demand and higher yield and exerts some pressure on the common currency, as well as European stocks. Dollar on the other hand, is broadly higher, except versus yen. Dollar index jumps to as high as 80.67 so far with additional help from sharp decline in gold, which broke 1560 level. Spain sold EUR 2.2b of 12-month bills at yield of 2.985%, sharply up from prior 2.623%. Demand was also weak with bid-to cover ratio at 1.8 times comparing with prior 2.9 times. EUR 0.711b … Read entire article »

By: DailyForex.com Greece’s political leaders failed again to find some common ground and form a coalition government to move the country forward, with the likely outcome first another election within the next few weeks and later a possible withdrawal from the Eurozone. The repercussions are already being felt in the common currency which earlier struck its lowest level in almost four months, but is also weighing across the board on high-risk currencies. As reported at 1:13 p.m. (JST) in Tokyo, the EUR/USD was trading at a low of $1.2878 on the EBS trading platform before recovering a few pips to $1.2891, a 0.2% drop from Friday’s trade in New York. Traders expect the Euro to move lower over the next few weeks, as the ECB is likely to offer some easing … Read entire article »

Euro opens the week lower as Greece step further closer to new election in June. Greek President Papoulias leaders of major parties on Sunday hopping to form a unity government but failed. The discussions would be continued today but political leaders have expressed little optimism for a result. Indeed, far-left Syriza’s leader Tsipras accused other politicians of “demanding that Syriza become an accessory to a crime” after Sunday’s meeting. He reiterated that as long as they “insist on the bailout, to a policy that the people have rejected, they cannot ensure social stability”. And, Tsipras said he will not attend today’s meeting. It’s highly likely that Papoulias will call new elections, most likely for June 10 or 17. EU finance ministers will meet today in Brussel for what’s … Read entire article »

Global risk markets tumbled last week as political uncertainty in Greece raised the odds of the country leaving Eurozone. European majors dropped against dollar and yen, with EUR/USD broke below 1.3 psychological level. But Aussie and Kiwi were even weaker on risk aversion. Dollar index broke 80 psychological level and the technical development favors further rally in near term. CRB commodity index broke recent down support of 292.39 to resume the larger down trend. Stocks were relatively resilient as DOW was only down -1.6% last week. But selloff in equities could accelerate if DOW breaks 12710 support in near term. With uncertainty in Greece continues, risk markets will remain pressured and be vulnerable to further downside. The situation in Greece is that the pro-austerity major parties New Democracy and … Read entire article »

Canadian dollar is trying to rebound against dollar in early US session as data showed stronger than expected growth in the job markets. Net change in employment came in at 58.2k in April versus expectation of 10.0k. Meanwhile, unemployment rate edged slightly up to 7.3%. Meanwhile, headline PPI in US unexpectedly dropped -0.2% mom in April and slowed more than expected to 1.9% yoy. Core CPPI also slowed to 2.7% yoy. Markets are generally steady though, with dollar and yen on a firm tone. Euro continues to hover below 1.3 level against dollar today as Greek Pasok leader Venizelos, former finance minister, is trying to form a coalition government with New Democracy and Democratic Left. Venizelos is believed to be trying to push for a plan that include lightening austerity … Read entire article »

By: DailyForex.com The Euro struck a 3½ month low against the U.S. Dollar in Asian trade as news of $2 billion over the past six weeks in trading losses by JP Morgan caused some market jitters and risk aversion. According to the report, a failed hedging strategy caused the loss of $2 billion and some analysts believe that that will wind up not being an isolated incident and may compel other investment banking firms to acknowledge their own losses. The Euro is also vulnerable to the events in Greece, specifically a political deadlock of the anti-bailout parties against the pro-bailout contingent, which may result in a second election and could spell not just a bankruptcy, but the withdrawal of Greece from the Eurozone. One meeting between the party members set for … Read entire article »

Risk aversion continues to dominate markets as equity markets were hit by surprise $2b loss off JPMorgan Chase, the biggest US bank by assets. Asian indices are broadly lower with Nikkei down -0.44%, HSI down -1.18% at the time of writing. Gold is back under pressure after failing to sustain above 1600 level on recovery. Crude oil is also soft at around 96 level. Dollar index is trying to move away from 80 level for the moment even though momentum is not too convincing yet. EUR/USD extends recent decline and is heading to 1.29 level but other pairs are staying steady in range, with firm tone in dollar and yen. Former finance minister Venizelos, the third party leader given the mandate by Greek president to form a coalition government after … Read entire article »

Dollar continues to digest recent gains in early US session. Initial jobless claims stayed below 370k level at 367k in the week ended May 5. Continuing claims also dropped by 40.5k to 3.04m. Trade deficit widened more than expected to USD -50.8b in March while import price index dropped -0.5% mom in April. Canada new housing price index rose 0.3% mom in March while trade surplus was smaller than expected at CAD 0.4b in March. BoE left rates unchanged at 0.50% and kept asset purchase target unchanged at GBP 325b too, as widely expected. No detail was released and focus will turn to quarterly inflation report to be published on May 16 and meeting minutes to be published on May 23. UK industrial production dropped -0.3% mom in March while … Read entire article »

By: DailyForex.com The Euro continues to hold close to a multi-months low versus the U.S. Dollar held there by Greece’s political deadlock. Talk of Greece leaving the Eurozone is rife once again, as without some cohesion and agreement from the government the country will be unable to obtain its next E.U./IMF tranche loan and risks bankruptcy as maturing debt obligations become due. Greece’s inability to form a coalition government, despite several attempts, could result in another election. Analysts say that will either make or break the Greek nation in terms of its continuance as a Eurozone member state as international lenders have refused to renegotiate the existing terms of the rescue fund. One analyst expects that the Euro will have a new range as a result, well below the $1.30 level; … Read entire article »