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MARKET NEWS

 

31 July: American session

 

america1.png

 

Tatiana Norkina, an analyst at FBS

 

The index of the dollar with session opening subsided a little, but is still in green zone, adding about 0.05%. The reason of the decline was disappointing data on the labor market. The number of applications for unemployment benefits over the past week has grown to 302 thousand, while analysts had forecast an increase to only 301 thousand. US stock markets opened with significant decrease by more than 0.80%.

 

In currency markets, meanwhile calm prevails. After a strong strengthening of the U.S. dollar in recent days, the pair consolidated on the important levels. Thus, the EUR / USD pair stays above 1.3370 after morning testing of the 1.3400 figure, the GBP / USD continues to decline again, creating a new low of 1.6860. The USD / CHF currency pair was reduced to the 0.9075 support after another attempt to break through the figure of 0.9100 and USD / JPY is trying to storm yesterday's highs just below the 103.00 figure.

 

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MARKET NEWS

 

August 1: Asian session

 

Asia_eng.jpg

 

US dollar remains near the recent highs versus the major currencies ahead of a closely watched jobs report (NFP) that has the potential to make or break a rally that saw the greenback post its best monthly performance in over a year. Asian stocks declined following the American markets on concerns about weaker earnings.

 

USD/JPY edged up and is trading just below 103.00. AUD/USD is trading on the downside in the $0.9290 area after it spiked to $0.9315 earlier during the Asian session. Aussie initially rose after an official China’s manufacturing PMI came at the highest level in more than 2 years, but then fell after an index from HSBC turned out to have a lower final reading than the preliminary one. NZD/USD is trading in the $0.8510/$0.8490 area.

 

GBP/USD keeps testing the support of the 100-day MA at $1.6865. EUR/USD is on the downside in the $1.3380 area.

 

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MARKET NEWS

 

Key option levels (Aug. 1)

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). 

 

Here are the key options expiring today:

 

EUR/USD: $1.3274, $1.3350, $1.3375, $1.3400 (large), $1.3450, $1.3460, $1.3475, $1.3500 (large), $1.3510, $1.3525;

 

GBP/USD: $1.6955;

 

USD/JPY: 101.00 (large), 101.80, 102.25, 102.50, 102.70;

 

AUD/USD: $0.9300, $0.9330, $0.9340;

 

USD/CAD: 1.0700, 1.0745, 1.0750, 1.0775, 1.0785, 1.0795, 1.0800 (large), 1.0870, 1.0910, 1.0920.

 

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MARKET NEWS

 

Aug. 1: American Session

 

US_eng.jpg

 

Tatiana Norkina, analyst at FBS

 

The US dollar index has dipped sharply after the publication of negative statistics on the labor market. The change in the number of people employed in the non-agricultural sector of US economy in July was only 209 thousand, instead of the expected 233 thousand. The index has fallen by 0.15%, to the 81.36 mark. Stock markets are also witnessing bearish sentiment: the major stock indexes has slid by almost 0.20%.

 

Currency markets have begun to move as well. Thus, the EUR/USD pair has grawn to 1.3430 after the morning consolidation above 1.3380. GBP/USD tested the 1.6810 figure, but then returned to the ​​1.6840 area. At the moment, the bears continue pressuring. The USD/CHF rate has tumbled to the 0.9050 area, while the USD/JPY currency pair is trading just below 102.70.

 

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MARKET NEWS

 

Aug. 4: Asian session

 

Asia_eng.jpg

 

Asian stocks swung between gains and losses as investors weighed a smaller-than-forecast increase in US payrolls and the bailout of a Portuguese bank. The greenback held gains versus developed-market peers before data tomorrow predicted to show growth in services accelerated.

 

USD/JPY edged up to 102.68. AUD/USD strengthened to $0.9330, extending recovery from the Friday's $0.9275 low. Australian retail sales came well above the forecast, rising by 0.6% in June. RBA policy meeting is scheduled for tomorrow, so upbeat retail data supports the market expectations of holding rates unchanged. NZD/USD consolidates in a narrow $0.8500/20 range.

 

EUR/USD declined to $1.3420. GBP/USD is trading on the downside in the $1.6820 area.

 

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MARKET NEWS

4 August 2014

 

Portugal rescued troubled bank

 

Portugal’s central bank unveiled a plan to rescue the nation’s second-largest lender – Banco Espirito Santo – that has been engulfed by the fall of the Espirito Santo family’s business empire. The state of this bank quickly deteriorated as on Wednesday reported a 3.6 billion euro loss in the first half of the year. BES shares lost 75% of their value in a week.

 

Now the bank is expected to be split into 2 banks – “bad” and “good”. In addition, the “good” bank called “Novo Banco” will get a money transfusion. According to sources, this will require at least half of the 6 billion euro left from Portugal’s recently exited international bailout program. This way the authorities plan to protect taxpayers from bearing the bailout cost.

 

On the one hand, the news that the bank is safe and that the depositors have been guaranteed is good. On the other hand, Portugal has now less emergency funds left. It may also worry investors that such a big bank has been hiding its problems for such a long time and raise questions about the condition of other European banks. The ECB is going to conduct banking stress tests soon. If the market feels negative about this whole issue, this may have a negative impact on euro.

 

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MARKET NEWS

 

Key option levels (Aug. 4)

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). 

 

Here are the key options expiring today:

 

EUR/USD: $1.3370, $1.3400, $1.3425, $1.3440, $1.3450, $1.3475, $1.3485, $1.3500, $1.3535;

 

USD/JPY: 101.80, 102.20, 102.25, 102.60, 103, 103.50;

 

AUD/USD: $0.9000 (large), $0.9175 (large), $0.9225, $0.9300, $0.9385, $0.9400 (large);

 

NZD/USD: $0.8485 (large);

 

USD/CAD: 1.0755, 1.0840, 1.0900, 1.0905, 1.0950 (large);

 

GBP/JPY: 172.00 (large), 172.25 (large), 173.75 (large);

 

AUD/JPY: 95.50 (large).

 

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MARKET NEWS

4 August 2014

 

CFTC: USD longs at highest since Feb

 

According to the latest CFTC report, released on Aug. 1, large traders and speculators increased their US dollar bullish bets on the week ended July 29. The overall USD long position went up from $14.12 on July 22 to $20.24 billion, the highest level since Feb. 4.

 

cot-levels1.png

 

Overall changes on the week for the major currencies showed that large speculators bet in favor of the CAD, AUD and NZD while there were weekly decreases for EUR, JPY, GBP and CHF.

 

cot-standings-weekly.png

 

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MARKET NEWS

 

The 4th of August: American Session

 

america1.png

 

Tatiana Norkina, an analyst of FBS Company


The index of the dollar keeps the equilibrium position in the support area of 80.40 increasing by 0.02% at the session opening, but the dynamics can become negative as it is inflenced by the Friday's declining due to labor market statistics that is inconsistent to analysts forecast. The stock markets are added to bullishness. Thus DJIA is increasing about 0.10%, while the S & P500 - about 0.30%.  

 

Currency pairs are mostly consolidated at Friday's close. The  EUR / USD pair is trading just above 1.3420. The British Pound Sterling attempts to gain a foothold against the American dollar (GBP / USD), however bulls cannot overcome the resistance of 1.6840. The currency pair USD / CHF has found the barrier at the 0.9065 level, and USD / JPY is going down to the support area of 102.40.

 

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MARKET NEWS

 

Aug. 5: Asian session

 

Asia_eng.jpg

 

Asian shares were under pressure after HSBC’s of China’s services industries fell to a record low of 50 points from the previous reading of 53.1. This piece of data has worsened the market’s mood which was quite positive following upbeat US earnings and relief over Portugal’s rescue of its largest bank.

 

AUD/USD edged a bit higher, testing the $0.9340 mark to the upside. Australia June trade deficit came out lower than expected at 1.68B (forecast: 2.00B). As it was widely expected, RBA left interest rates unchanged at 2.50%, maintaining the neutral monetary policy stance. Chinese PMI was poor, but according to the RBA statement, the overall outlook for the Chinese economy is positive. NZD/USD consolidates in the $0.8500/25 range. There is a Global Dairy Trade auction today in New Zealand (12:00 GMT).

 

USD/JPY edged down testing levels below 102.50. EUR/USD is little changed in the $1.3420 area. GBP/USD edged up to $1.6870.

 

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MARKET NEWS

 

Key option levels (Aug. 5)

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). 

 

Here are the key options expiring today:

 

EUR/USD: $1.3340, $1.3350, $1.3450 (large), 1.3525, 1.3550;

 

GBP/USD: $1.6850;

 

USD/JPY: 101.05, 101.15, 101.40, 101.60, 101.75, 101.80, 101.85, 102.00 (large), 102.50 (large), 102.75, 102.95, 103.00, 103.15, 103.50

 

AUD/USD: $0.9200, $0.9205, $0.9250, $0.9275, $0.9320, $0.9340, $0.9420;

 

USD/CAD: 1.0770, 1.0775, 1.0800, 1.0845, 1.0870, 1.0875;

 

EUR/GBP: 0.7905, 0.7930, 0.8000.

 

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MARKET NEWS

 

Aug. 5: European session

 

Europe_eng.jpg

 

EUR/USD slid to $1.3388. There was a mixed economic data from the euro area. The region’s composite PMI turned out to be lower than expected (53.8 vs. 54) as services PMI came a bit below forecasts. Retail sales met the forecasts rising by 0.4% (y/y growth was 2.4% vs. 1.2% expected).

 

UK July Services PMI rose to the highest level since December 2013, exceeding the expectations (59.1 versus 58.1 forecasted and 57.7 in June). GBP/USD jumped into the $1.6890 area on the news, testing the 100-day MA to the upside. EUR/GBP dipped to 0.7930.

 

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MARKET NEWS

 

Aug. 5: American Session

 

US_eng.jpg

 

Tatiana Norkina, analyst at FBS

 

The US dollar has been strengthening today against the weakening of the EU currency after the release of mixed data on the eurozone. At the opening session, the dollar is adding about 0.23%, testing the 81.60 mark. At the same time, stock markets have opened with a decrease of over 0.20%. A little later, at 18:00, they expect appearance of data on industrial orders for the past month and business activity in the services sector (ISM).

 

Currency markets are also facing strengthening of the dollar against the major world currencies. The EUR/USD pair has fallen to the lows of three days ago - the 1.3380 figure. The pound has tried to gain foothold (GBP/USD), but has again returned to the opening level - 1.6860. The USD/CHF currency pair has broken the 0.9085 resistance upwards and is currently recovering to the July highs, while USD/JPY has grown to 102.70 after testing the 102.40/102.45 support.

 

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MARKET NEWS

 

Aug. 6: Asian session

 

Asia_eng.jpg

 

Asian shares fell after US equities dropped to a 2-month low amid escalating tensions in Ukraine as Russian President Vladimir Putin ordered a response to US and European sanctions. MSCI Asia Pacific Index dropped 0.7%. Japanese Nikkei 225 slid by more than 1%.

 

USD/JPY is trading in the 102.55 area after it peaked yesterday to 102.90. EUR/USD edged down to the recent lows at $1.3360. GBP/USD slid by 20 pips from $1.6880.

 

NZD/USD extended the decline to $0.8430 after the weak dairy auction. Even a lower-than-expected unemployment rate (5.6% vs. 5.8% forecasted) couldn’t prevent the kiwi from falling. NZ employment growth slowed to 0.4% in June (forecast: 0.7%). AUD/USD consolidates in a narrow $0.9300/9290 range.

 

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MARKET NEWS

 

Key option levels (Aug. 6)

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). 

 

Here are the key options expiring today:

 

EUR/USD: $1.3380 (large), $1.3400 (large), $1.3465, $1.3500, $1.3600, $1.3680;

 

GBP/USD: $1.7000;

 

USD/JPY: 102.00 (large), 102.30, 102.80 (large);

 

AUD/USD: $0.9300 (large);

 

USD/CAD: 1.0800 (large), 1.0895, 1.1000.

 

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MARKET NEWS

6 August 2014  

 

EUR/USD fell to new low at $1.3332

 

EUR/USD slid on the negative economic data. According to the figures released today, Italian GDP contracted by 0.2% in Q2. In addition, the euro zone’s retail PMI slipped from 50.0 to 47.6. German factory orders released earlier today fell by -3.2%.

 

The sentiment is also worsened by the reports that European airlines are confronting possible disruptions in service to northern Asia as Russia considers curbing flights across Siberia to retaliate for sanctions imposed because of the Ukraine crisis.

 

EUR/USD renewed 2014 low sliding to $1.3332.

 

eurusddaily.png

 

Chart. Daily EUR/USD

 

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MARKET NEWS

 

Aug. 7: Asian session

 

Asia_eng.jpg

 

Asian shares outside of Japan fell as tensions mounted over Ukraine. Russian President Vladimir Putin yesterday ordered restrictions on imports for one year from countries that have imposed or supported sanctions against Russia. The MSCI Asia Pacific Index dropped 0.4%.

 

AUD/USD dropped by more than 100 pips, hitting the lowest level since early May ($0.9260). Australian labor market came much worse than expected with unemployment rising by 0.4% to 6.4% and employment falling by 0.3K (forecast: +13.5). NZD/USD weakened to $0.8450, but holds above the yesterday’s low of $0.8420.

 

USD/JPY rose to 102.45 as Nikkei 225 is up by 0.22%. EUR/USD is trading in the $1.3380 area. GBP/USD is little changed in the $1.6850 zone.

 

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MARKET NEWS

7 August 2014

 

Bank of England: what to expect?

 

The Bank of England policy meeting (Thursday, 11:00 GMT) will likely be a non-event for the markets as monetary policy will likely remain unchanged. However, policy minutes release on August 20 will likely be more interesting, disclosing the internal MPC sentiment. 

 

Given the expected slowdown in the UK economy in H2, there is now a high chance we won't see higher interest rates until the year 2015. We have to keep in mind the upcoming Scottosh referendum (September 18) and the potential negative effect from sanctions against Russia. 

 

GBP/USD consolidates around $1.6830 ahead of the meeting. The bearish pressure on the cable will likely itensify followig the policy announcement. 

 

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MARKET NEWS

7 August 2014

 

Insight into the ECB's decision

 

It’s time for another meeting of the European Central Bank and Mario Draghi’s press conference which starts at 12:30 GMT.

 

Analysts at BK Asset Management compare the euro zone’s economic data ahead of this meeting with those ahead of the July one. Their conclusion is that the data in the euro area isn’t too bad, and the negative impact on euro may be limited. At the same time, the ECB is still expected to sound dovish given the problems in the euro zone’s banking sector and low inflation.

 

To a table below we may add a slide in Italy GDP, which made the markets worry about the indebted economies of the region, and a decline in German factory orders reported yesterday.

 

ECB_0814.jpg

Source: BK Asset Management

 

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MARKET NEWS

7 August 2014

 

ECB Draghi's press conference

 

Monetary policy

 


ECB has accelerated preparations for ABS purchases (QE)

ECB unanimous in its commitment to use unconventional measures

interest rates will remain at present levels for an extended period

TLTRO take up of between 450-850 bln euros

ECB is working on the preparations for ABS purchases in the expectations that the ECB will go ahead with them.


 

Economy

 


downside risks to economic outlook persist

recovery remains weak, fragile and uneven

EUR statistics remains contradictive: there are both strong and weak data

geopolitical risks have certainly risen in the past few months 

it's now hard to evaluate economic influence of sanctions

there is a potential risk of higher energy prices


 

Inflation

 


inflation expectations remain firmly anchored

forecast has not been lowered

cut of inflation forecasts or diminished credit growth are needed to launch QE

short-term inflation will remain low

inflation will gradually increase in 2015-2016


 

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MARKET NEWS

 

The 7th of August: American Session

 

america1.png

 

Tatiana Norkina, an analyst of FBS Company

 

The number of unemployment compensations in the United States decreased to 289 thousand this past week, while analysts had been expecting the increase of 305 thousand. This information strengthened greatly the American dollar, which is currently being recovered by more than 0.20%.

 

The US stock markets were also opened with the bull rally. DJIA adds to its value about 0.30% and the S & P500 - more than 0.40%. 

 

The currency pair EUR / USD has fallen to the yesterday's lows of 1.3335 at the session opening. The pair GBP / USD also has decreased to the level of 1.6820, but the bulls are trying to correct the prices to 1.6840 now. As to the currency pair USD / CHF, it has returned to the figure of 0.9100 after testing the support level of 0.9070. The bulls do not give up in the case of the pair USD / JPY, holding the prices above 102.20.

 

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MARKET NEWS

 

Aug. 8: Asian session

 

Asia_eng.jpg

 

USD/JPY slid to 101.60. Japanese yen and Swiss franc climbed after President Barack Obama authorized targeted air strikes in Iraq, increasing demand for safe havens amid geopolitical conflicts in Ukraine and across the Middle East. Asian stocks declined. The Bank of Japan kept monetary policy unchanged. It will also conduct a press conference later today.

 

AUD/USD extends the decline, falling to $0.9230. The RBA monetary policy statement revealed that the bank cut inflation and growth forecasts. Australian regulator maintains the view that AUD is high by historical standards and will likely depreciate over time. NZD/USD dipped to $0.9440. Gold and oil prices went moved higher in the session.

 

EUR/USD dipped to $1.3343 before returning to the $1.3360 area. GBP/USD fell to $1.6800.

 

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MARKET NEWS

 

Key option levels (Aug. 8)

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). 

 

Here are the key options expiring today:

 

USD/JPY: 101.50 (large), 101.80, 102.00 (large), 102.15 (large), 102.30, 102.50 (large), 103.50 (large);

 

EUR/USD: $1.3200 (large), $1.3300 (large), $1.3330, $1.3400 (large), $1.3425 (large), $1.3500 (large);

 

AUD/USD: $0.9275 (large), $0.9300 (large), $0.9315, $0.9315 (large);

 

USD/CAD: 1.0825, 1.0850, 1.0860, 1.0920, 1.0930, 1.0950 (large), 1.0975 (large), 1.1000 (large);

 

NZD/USD: $0.8450;

 

EUR/AUD: 1.4300;

 

EUR/GBP: 0.8000.

 

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MARKET NEWS

 

August, 8: American Session

 

america1.png

 

Tatiana Norkina, FBS analyst 

 

American dollar demonstrates mixed dynamics today. After morning decline in the area of ​​support 81.40, the index consolidated just above. At the opening of the American session the rise to 81.53 is observed in the positive statistics from the United States. However, index value is situated in the red zone: -0.09%.

 

Stock markets opened in mixed directions. Thus, DJIA loses about 0.50%, while the S & P500 rose to 0.20%.

 

Currency pair EUR / USD today returned to the figure of 1.3400, which continues to consolidate at the moment. Negative data influenced trading of GBP / USD pair: UK trade deficit widened to 9.41 billion pounds. Therefore, the pair updated minimums, down to the level of 1.6790. Currency pair USD / CHF has formed a new low for the last five days - 0.9045, but is now trading just above 0.9060 . There was also formed a new low pair USD / JPY, which fell today to 101.50. However, the bulls have already played part of the fall, returning the market to the 102nd figure.

 

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MARKET NEWS

 

Aug. 11: Asian session

 

Asia_eng.jpg

 

USD/JPY is trading above 102.00 after spiking down to 101.50 on Friday. Yen weakened as concernы about tensions in Ukraine eased after reports last week that Russia is seeking to mediate between Kiev and rebel forces. MSCI Asia Pacific Index advanced 1.2%. Nikkei 225 is up by more than 2%.

 

Commodity currencies met a moderate demand in the session. AUD/USD recovered to $0.9285, but remains just a little bit above the recent 2-month lows. NZD/USD edged up to $0.8470. Kiwi remains supported by the 200-day MA. There are no significant releases on the agenda in Australia and New Zealand today. Gold price dipped to $1306.05.

 

EUR/USD is trading in the $1.3400 area. GBP/USD is trying to hold above $1.6770 after Friday’s sell-off.

 

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