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17 ноября, 10:16

USD Suffers on Subpoena News

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The Trump Administration is back in the spotlight with news of a report that Special counsel Robert Mueller’s investigators have issued a subpoena to more than 12 officials in the Trump administration election campaign for documents related to Russia. According to the Wall Street Journal; Mueller’s team issued the subpoena in mid-October, requesting documents and emails from more than a dozen campaign officials that include several keywords related to Russia. The subpoena does not compel testimony before a grand jury, but sources commented that Trump’s campaign was surprised by the order after voluntarily cooperating with previous requests from Mueller’s team. In fact, this is the first instance of Mueller ordering the Trump Administration to handover information. The news saw USD coming under pressure as Trump can ill-afford any more criticism of his leadership or, indeed, if Russia played a part in his election victory. The news about the subpoena overshadowed the first legislative triumph for President Donald Trump as Republicans pushed a $1.5 trillion tax overhaul through the House on Thursday. But obstacles remain in the Senate, which is refining its own version of the legislation amid objections from key GOP senators. The bill passed 227 vs 205, with 13 Republicans voting against the bill and no Democrats voting for it. Trump called the vote “a big step toward fulfilling our promise to deliver historic tax cuts for the American people by the end of the year.” EURUSD is 0.35% higher in early Friday trading at around 1.1808. USDJPY is 0.5% lower, currently trading around 112.52. GBPUSD is 0.3% higher in early session trading at around 1.3230. Gold is 0.33% higher, currently trading around $1,283. WTI is little changed overnight, currently trading around $55.48. Major data releases for today: At 08:30 GMT, ECB President Mario Draghi is scheduled to deliver a Keynote speech at the Frankfurt European Banking Congress “Europe into a New Era – How to Seize the Opportunities” in Frankfurt, Germany. At 13:30 GMT, the US Census Bureau, at the Department of Commerce, will release several sets of data: Building Permits and Housing Starts (MoM) for October along with both Building Permits and Housing Starts Change for October. With the data sets all expected to post higher releases, this could result in USD buying. If the data is below expectations we can expect to see USD selling. At 13:30 GMT, Statistics Canada will release CPI Core and CPI (MoM) for October along with CPI (YoY) for the same period. The annualized rate is forecast to come in at 1.4%, a decrease from the previous release of 1.6%. If the release is substantially different from forecast the markets will experience CAD volatility.

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16 ноября, 10:21

Positive US Data Negated by Tax Plan Opposition

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The US Labor Department released data on Wednesday showing the consumer price index edged up by 0.1% in October after climbing by 0.5% in September. The modest increase in consumer prices was in line with market expectations. CPI excluding food and energy prices climbed by 0.2% in October after inching up by 0.1% in the previous month – as expected by the markets. The US Commerce Department released data showing that US retail sales rose by 0.2% in October after spiking by an upwardly revised 1.9% in September. This slight increase beat market expectations and gives more justification for the Fed to hike rates in December as the markets are >90% expecting. Such data should have boosted USD but that was countered on news that the Senate Republican tax plan received opposition from two Republican lawmakers, a possible warning sign for the plan. This is more damning as the Republican party can’t lose more than 2 votes from their ranks for the reform proposal to pass. Data, on Wednesday, from the UK Office of National Statistics (ONS) showed UK unemployment holding at 4.3%, unchanged in the last 3 months and at its lowest rate for 42 years. The ONS also released average earnings data that, year-on-year, climbed to 2.2%. Whilst average earnings are rising, the gap to UK inflation is concerning for monetary policymakers. Currently, UK inflation is running at an annualized rate of 3% which means that real average earnings, adjusted for inflation, have dropped 0.4% from a year ago. The Bank of England Monetary Policy committee will need to digest the current, and future data, before making any change in monetary policy. The Japanese Ministry of Economy, Trade and Industry released data showing Japan’s industrial production declined less than forecast in September. Industrial production dropped to a seasonally adjusted monthly 1% in September, beating the 1.1% decrease reported earlier. This was followed by a 2% rise in August. EURUSD is 0.1% lower in early Thursday trading at around 1.1778. USDJPY is 0.2% higher in early session trading at around 113.10. GBPUSD is little changed in early trading at around 1.3172. Gold in unchanged overnight, currently trading around $1,277. WTI is 0.15% higher in early trading at around $55.56. Major data releases for today: At 09:30 GMT, UK National Statistics will release Retail Sales (MoM & YoY) for October. Month on Month data is forecast to come in at 0.1%, an improvement on the previous release of -0.8%. Year on Year data is forecast at -0.6% a significant drop from the previous release of 1.2%. The markets will likely see GBP volatility on the data release. At 10:00 GMT, Eurostat will release CPI and CPI Core (YoY) data for October. CPI is expected unchanged at 1.4% with Core CPI forecast at 0.9%, lower than the previous release of 1.1%. Expect EUR volatility if the actual release is significantly different from the forecast. At 13:30 GMT, the US Department of Labor will release Initial Jobless Claims for the week ending …

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15 ноября, 10:27

Data Boosts EUR Can CPI Boost USD?

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EUR received a boost on Tuesday, as data from Destatis showed German Preliminary GDP climbed to 0.8% in Q3, beating forecasts of 0.6%. In addition, Q1 growth was adjusted higher to 0.9% from the previous 0.7%. The recent increase in exports and business investment appears to be the main driver behind the improvement, as consumer and government spending were stable through the quarter. Germany’s economy is now growing at an annualized rate of 2.8% the best growth the country has seen for 6 years. Whilst the economy is growing there is very little inflationary pressure as German inflation is well below target. With the German economy doing well, the markets expect this growth to precipitate to other member states and, as a result, EUR climbed over 1% on Tuesday. The upward momentum has carried through overnight with EURUSD touching 1.18 in early trading. Data from the US on Tuesday indicated producer prices rose 0.4% last month, which beat expectations. The data helped boost PPI to 2.8% in the 12 months up to October, for the largest yearly increase in wholesale inflation in nearly 6 years. The markets will now be focusing on US consumer inflation data later today. Forecasts are calling for a slight increase. The current CME Group’s FedWatch tool puts the probability of a December rate hike of a quarter point at 91.5%. If, however, today’s data is weak, that may reduce the probability of a December rate hike by the Fed. EURUSD is currently trading around 1.1795. USDJPY is 0.25% lower in early Wednesday trading, at around 113.15. GBPUSD is 0.2% lower in early session trading, at around 1.3140. Gold is little changed overnight, currently trading around $1,281.25. WTI is slightly higher, currently trading around $55.28. Major data releases for today: At 09:30 GMT, UK National Statistics will release Average Earnings (including and excluding Bonus) for the previous 3 months and current year to September. Both data sets are expected to come in at 2.1%, a slight fall from the previous reading of 2.2%. With inflation outpacing earnings in the UK, the markets will be interested to see if the gap can be closed that will determine future monetary policy decisions. At 13:30 GMT, the US Census Bureau will release Retail Sales (MoM) for October. Retail Sales are forecast to come in at 0.0%, a significant decline from the previous reading of 1.6%. If consumer spending has zero growth, the markets will expect to see a lower CPI reading that will be released at the same time. At 13:30 GMT, the US Census Bureau will release a plethora of data related to CPI, with the main focus being on CPI & CPI excluding Food & Energy (YoY) for October. CPI is forecast to come in lower at 2.0% from the previous release of 2.2%. CPI excluding food & energy is forecast to be unchanged at 1.7%. Any significant deviation from the forecast will likely cause USD volatility. At 15:30, the US Energy Information Administration will release Crude …

14 ноября, 10:19

Chinese Data Disappoints

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China’s economy has been robust throughout 2017 as a continued recovery in manufacturing and industrial sectors, a healthy property market and surprisingly strong exports have helped push growth in the first three quarters close to 6.9%. However, data on Tuesday from the Chinese National Bureau of Statistics showing fixed-asset investment growth declined to 7.3%, through January to October, below forecasts of a 7.4% growth. Further disappointing data showed year-on-year industrial output coming in at 6.2% in October and significantly lower than September’s strong release of 6.6%. Many believe this contraction in growth is likely to continue in the coming months, albeit at a very moderate pace, as China looks to limit the risk of debt, which slows demand, and its push to improve pollution that has negatively impacted factory output. Consumer data is also showing signs of waning as Retail Sales (YoY) for October came in at 10%, missing forecasts of 10.4% and below the previous months reading of 10.3%. With President Xi Jinping stating that “China will focus on quality over speed as it pursues economic growth” and restating the need to improve pollution and reduce riskier lending, it is likely that China will struggle to move towards a more domestic demand driven economy. The markets are now focused on today’s gathering of several central bankers in Frankfurt, Germany, who are taking part in an ECB organized event. The central bankers, including the Fed’s Janet Yellen, the BoE’s Mark Carney, the ECB’s Mario Draghi and the BoJ’s Haruhiko Kuroda, will participate in a panel titled: “At the heart of policy: challenges and opportunities of central bank communication”. Needless to say, the markets will be keenly listening to any hints on future monetary policy that could cause market volatility. EURUSD is slightly higher in early Tuesday trading at around 1.1672. USDJPY is little changed, trading at around 113.65. GBPUSD is unchanged overnight, currently trading around 1.3115. Gold is 0.15% lower in the early trading session at around $1,276.50. WTI is 0.15% lower in early Tuesday trading at around $56.82. Major data releases for today: At 07:00 GMT, the Statistical Office of the European Union, Destatis, will release the Harmonized Index of Consumer Prices (YoY) for October. The statistical methodology results in an index of Consumer Prices correlated across all EU member states to define and assess price stability. Consensus is calling for an unchanged reading of 1.5% – any significant deviation from the forecast could see EUR volatility. At 08:05 GMT, the CEO of the Federal Reserve Bank of Chicago and current FOMC member Charles Evans is scheduled to speak at the European Central Bank Conference in Frankfurt, Germany on the topic of “Communications Challenges for Policy Effectiveness, Accountability and Reputation”. At 9:00 GMT, Sabine Lautenschläger, a member of the European Central Bank’s Executive Board, is scheduled to speak at the opening discussion at the Banking Supervision, Resolution and Risk Management Conference during 20th Euro Finance Week in Frankfurt, Germany. At 9:30 GMT, UK National Statistics will release Consumer Price …

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09 ноября, 10:22

Kiwi Gets a Boost

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Earlier today the Reserve Bank of New Zealand (RBNZ) left their Official Cash Rate (OCR) unchanged at a record low of 1.75% – as the markets had forecast. More importantly was the RBNZ revising inflation forecasts upwards, which is likely to signal an increase in interest rates earlier than previously predicted. RBNZ acting Governor Spencer stated after the announcement “Monetary policy will remain accommodative for a considerable period,” & “the exchange rate has eased since the August statement and, if sustained, will increase tradables inflation and promote more balanced growth.” The RBNZ had set an inflation target of between 1% and 3% and now expects inflation to reach 2% in Q2 of 2018, a full 3 quarters earlier than previously expected. Because of inflationary pressure, the markets are forecasting a rate hike by the end of next year. Following the announcement, NZDUSD rose from around 0.6922 to just above 0.6970. NZDUSD has suffered in the second half of this year, after reaching a high in July of around 0.7550 the Kiwi slumped to lows around 0.6830 earlier this month. Today’s announcement gives a much needed “boost” to the Kiwi. Wednesday’s EIA report surprised the markets with an unexpected increase of oil inventories. The markets had been expecting another drawdown around -2.8M that continues a trend seen over the past few releases. For the week ending November 3rd US Crude Oil inventories rose 2.2M as supplies increased, while production jumped to a record all-time high. The major focus is the fact that US production increased 67,000 bpd to 9.62 Million bpd – the highest since data was readily available in 1983. The increase in US production can only undermine OPEC’s supply cuts to boost the price of crude. EURUSD is unchanged in early Thursday trading at around 1.1600. USDJPY is -0.25% lower, currently trading around 113.55. GBPUSD is 0.15% higher in early trading at around 1.3135. NZDUSD is currently trading around 0.6960. Gold is 0.30% higher, currently trading around $1,285. WTI is currently trading -0.20% lower at around $56.95. Major data releases for today: At 09:00 GMT, the European Central Bank launches a new publication, the Economic Bulletin, to replace the ECB Monthly Bulletin. It will be published two weeks after each Governing Council meeting. At 10:00 GMT, the European Commission will release Economic Growth forecasts as compiled by the Directorate General for Economic and Financial Affairs (DG ECFIN). At 13:30 GMT, the US Department of Labour will release Initial Jobless Claims for the week ended November 3rd and Continuing Claims for the period ended October 27th. The previous release of Initial Claims of 229K is expected to be bettered, with forecasts calling for a release of 232K. Continuing Claims are expected to come in at 1885K, a minor increase on the previous release of 1884K. Any significant deviation from forecast will see USD volatility. At 15:00 GMT, the UK National Institute of Economic and Social Research will release an estimate of UK GDP. This release occurs 1 month before the …

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08 ноября, 10:11

Data & Polls Pressure Sterling

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Sterling suffered downward pressure on Tuesday as the latest monthly report from the British Retail Consortium showed non-food sales slumping in October to the lowest levels in 5 years. Total sales crept up 0.2% from a year earlier, like-for-like sales slipped 1%, a reversal from the 1.9% rise in September. British consumers continue to experience a squeeze on their incomes as wage growth is behind inflation, driven by the continued weakness in GBP following the Brexit vote in 2016. More pressure was added on GBP following the release of a poll, conducted by ORB International for The Telegraph, that showed public confidence in Prime Minister May’s ability to deliver a strong Brexit had fallen to a record low. 66% of those polled disapprove of the way the Government is handling negotiations with the EU. Prior to the snap election in June, the percentage of disapprovers stood at 45%. The poll also suggested that public confidence in Prime Minister May has fallen sharply with only 26% believing she will “get the right deal for Britain in the Brexit negotiations” – in June this stood at 44%. With several key members of the Conservative Party suffering suspensions, due to sexual harassment allegations, and Foreign Secretary Boris Johnson damaging international relations following his recent remarks concerning the imprisonment of a British dual national in Iran, many are wondering if Theresa May’s tenure as Prime Minister may be near its end. In the US, reports are circulating that Senate Republican leaders are considering a 1-year delay in the implementation of a major corporate tax cut to comply with Senate rules. USD had seen a recent improvement against its peers on expectations that President Trump’s Administration would deliver on their pledge to reduce taxes, which would help economic growth and lift interest rates. With the prospect of delays, USD will lose much of its appeal and could give back its recent gains. EURUSD is 0.12% lower in early Wednesday trading at around 1.1600. USDJPY is 0.2% lower in early session trading at around 113.75. GBPUSD is little unchanged in early trading at around 1.3172. Gold is 0.25% higher, trading around $1,278.50. WTI is little changed overnight, currently trading around $57.15. Major data releases for today: At 08:00 GMT, the European Central Bank is scheduled to hold a non-monetary policy meeting in Frankfurt, Germany. At 13:15 GMT, the Canadian Mortgage and Housing Corporation will release Housing Starts (YoY) for October. The forecast is calling for 210K new homes constructed against the previous release of 217.1K. We can expect to see CAD volatility if the release is significantly different from expectations. At 15:30, The US Energy Information Administration will release Crude Oil Stocks change for the week ended November 3rd. The forecast is for another draw of -2.8M compared to the previous draw of -2.435M. The EIA report never fails to cause volatility in both WTI and Brent, especially if the release is wildly different from expectations.

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07 ноября, 10:18

Eurozone to Close the Year on a Strong Note

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Data released on Monday indicates that the Eurozone economy is on target to close out 2017 strongly. The latest Markit composite PMI fell to 56.0 in October, slightly lower than the previous months reading of 56.7, but well above the key 50 zone indicating positive sentiment for growth. PMI data showed the 2 largest economies, Germany and France, have remained strong. Not all PMI data was positive, as Italian growth slowed and Spain saw its mainstay services sector falling to its lowest level in 9 months. The decline in sentiment in Spain is not surprising given the political crisis that has developed following the Catalonian referendum, with many businesses concerned for their future. An investor sentiment index, released by Sentix, indicated that sentiment has grown to a level not seen in over 10 years – all attributed to a growing economy. With robust economic growth, which is likely to create upward inflationary pressure, the ECB’s recent decision to finally scale back Quantitative Easing can only help in accelerating Eurozone growth. Earlier this morning, the Reserve Bank of Australia left interest rates unchanged (as expected) at 1.5%, for the 15th month in a row. RBA Governor Philip Lowe said the board expects the current low inflation rate to gradually lift as economic growth improves, stating; “Inflation remains low, with both CPI and underlying inflation running a little below 2%”. The markets are now looking ahead to the RBA’s latest quarterly outlook report (the November Statement on Monetary Policy), due on Friday, which might prove to be more insightful about future policy than today’s interest rate decision. The report is not expected to have changes for growth and inflation forecasts. However, AUD could see volatility if there are any significant changes to the inflation picture, specifically if the report indicates any possible delays to the timing of a rate hike. EURUSD is unchanged in early Tuesday trading at around 1.1608. USDJPY is 0.25% higher to currently trade around 114.00. GBPUSD is little changed overnight, currently trading around 1.3170. Gold is 0.2% lower in early session trading at around $1,279.50. WTI is 0.16% higher, trading at around $57.50. Major data releases for today: At 15:00 GMT, the UK National Institute of Economic and Social Research will release a 3-month estimate for UK GDP (August to October). The report is released 1 month ahead of the official GDP report and has been known to be highly accurate. At 19:00 GMT, Bank of Canada Governor Stephen Poloz will be speaking before the CFA Montreal and the Montreal Council on Foreign Relations on the topic of Central banks’ ability to understand inflation. Any hints to future Canadian Monetary Policy will see volatility in CAD.

06 ноября, 10:13

Trump: “JOBS, JOBS, JOBS!”

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Data released on Friday showed US job growth accelerated in October after hurricane-related disruptions in the prior month, but a sharp retreat in average earnings and an increase in the number of people leaving the workforce caused concern on the robustness of the labor market. Nonfarm payrolls increased by 261K in October as 106K leisure and hospitality workers returned to work. This was the largest gain since July 2016 but below forecasts of an increase of 310K. The data for September was revised to show a gain of 18K jobs instead of the previously reported decline of 33K. Average hourly earnings disappointed the markets, falling by 1%. The reduction results in the year-on-year increase dropping to 2.4%, the smallest since February 2016. In September earnings increased 0.5% lifting the annual increase in that month to 2.9%. Whilst the data was below forecasts, the job growth underscored the recent Fed statement that “the labor market has continued to strengthen” and has done little to change expectations of a rate hike in December. More upbeat data came in the form of the unemployment rate at 4.1%, a rate not seen in 17 years. President Trump tweeted after the data release “JOBS, JOBS, JOBS!” There was more “up-beat” jobs news on Friday, with Statistics Canada releasing data that showed the Canadian economy added 35,300 jobs in October, as the number of full-time positions swelled by 88,700, while part-time employment dropped by 53,400 jobs. The increase in jobs came as the unemployment rate increased to 6.3%, up from 6.2% in September, as more young people started looking for work. The positive news was short-lived as Statistics Canada also reported a $3.2-billion trade deficit for September compared with an initial estimate of $3.4 billion. The deficit was caused as both exports and imports dropped 0.3% – which signals demand is slowing – as many had anticipated for H2 after the stellar H1 performance. EURUSD is little changed from Friday’s close. Currently, EURUSD is trading around 1.1612. USDJPY is at 3+ month highs in early Monday trading at around 114.30. GBPUSD is little changed in early Monday trading at around 1.3072. Gold is currently trading around $1,270. WTI is 0.5% lower in early session trading at around $55.90. Major data releases for today: At 08:15 GMT, Markit Economics will release Spanish Services PMI for October. Whilst not normally an impactful data release, the markets will be keen to see what impact the Catalan Independence vote has had on business sentiment in Spain. The forecast is for 55.5 down from September’s release of 56.7. A release wildly away from consensus could see EUR volatility. At 08:55 GMT, Markit Economics will release German Services and Composite PMI for October. As the largest economy in the Eurozone, the markets will be looking for any indications that German business executives are still confident in the economy. Both releases are expected to come in unchanged with Services PMI at 55.2 and Composite PMI at 56.9. We can expect EUR volatility if …

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03 ноября, 10:34

Sterling Falls on Rate Rise

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In line with market expectations, the Bank of England raised the UK base rate to 0.5% (from 0.25%) on Thursday. The rise, the first in 10 years, was widely expected as the UK has seen inflation well above the Bank of England’s target rate of 2.0% (3.0% in September), with Governor Carney stating “The pace at which the economy can grow without generating inflationary pressures has fallen relative to pre-crisis norms. This reflects persistent weakness in productivity growth since the crisis and, more recently, the more limited availability of labour.” Whilst the rate hike was already “priced-in” by the markets, GBP suffered losses of 1.8% against EUR and 1.5% against USD following the announcement. Many attribute the downward pressure on GBP because of Governor Carney hinting that rates would rise twice more in the next 3 years, with rates edging up to 1% by the end of 2020. The future pace of rate rises is exceptionally slow and it is based on a relatively gloomy growth outlook which resulted in the markets selling GBP against its peers. To no surprise, President Trump nominated Jerome Powell as the next Federal Reserve Chairman on Thursday at the White House. Trump stated: “He’s strong, he’s committed, he’s smart” and “I am confident that with Jay as a wise steward of the Federal Reserve, it will have the leadership it needs in the years to come.” The position requires Senate confirmation, but Mr. Powell is likely to get broad support from the Republican Senate majority. The Fed is expected to raise its benchmark interest rate again in December, likely Ms. Yellen’s final act as Fed Chair. Under Mr. Powell’s leadership, the Fed will likely continue its projected path of raising its interest rate 3 more times next year, as well as continuing to pare back its massive Fixed Income portfolio. The markets are now focused on today’s Nonfarm Payrolls report for October, scheduled to be released at 12:30 GMT. Market expectations for a strong number were recently re-enforced with the ADP National Report showing the US private sector hired 235K workers in October, the most in 8 months. EURUSD is little changed in early Friday trading at around 1.1665. USDJPY is currently trading around 113.96. GBPUSD, after a significant drop on Thursday, appears to be holding steady in early session trading at around 1.3075. Gold is unchanged overnight, currently trading around $1,277. WTI is 0.16% higher in early Friday trading at around $54.95. Major data releases for today: At 12:30 GMT, the US Department of Labor will release Nonfarm Payrolls for October. Market consensus is expected to show that the US economy added 310K jobs in October. In September, the economy shed jobs for the first time in 7 years, following disruptions from Hurricanes Harvey & Irma. NFP never fails to cause general market volatility, and this release will be no different, with expected volatility regardless of the number released. At 12:30 GMT, US average hourly earnings (MoM & YoY) for October will be …

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02 ноября, 10:27

UK Interest Rates in Focus

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The Bank of England is widely expected to raise UK interest rates for the first time in 10 years today. An expected 0.25% rise, to 0.5%, will push UK interest rates back to pre-Brexit levels. UK inflation climbed to a 5 year high of 2.9% in August, significantly above the Bank of England’s Monetary Policy Committee (MPC) target of 2% and September saw the rate increase to 3%. Recent data has indicated that the UK economy is performing better than expected, with growth rising to 0.4% in Q3 which, to many, is an indication that a rate hike will not adversely affect growth. The MPC stated in September that a “majority” of members believed that some withdrawal of stimulus would be appropriate if the economy continues to grow at a steady pace. The markets are “pricing-in” a 91.2% probability of a rate hike today. If the BoE does not raise rates the markets will put downward pressure on GBP. If rates rise, as expected, there may only be slight upward pressure on GBP, as the markets have already factored in a hike. Regardless of the announcement, we are likely to see volatility in GBP. In the US on Wednesday, the US the Federal Reserve, as expected, kept interest rates unchanged. The Fed underscored recent data that indicates solid economic growth and a strengthening labor market. The markets are now expecting the Fed to hike rates in December. The ADP employment report on Wednesday said the private sector added 235K jobs last month, more than the 196K the markets had forecast. The better-than-expected ADP data suggests an improving job market, even aside from the recent storms. Such strong data is indicating the US has the resiliency to endure a rise in interest rates. The markets will be looking ahead to Friday’s always impactful Non-Farm Payroll release for further confirmation of a robust labor market, which will, inevitably, underscore the likelihood of a December rate hike. EURUSD is 0.3% higher in early trade at around 1.1656. USDJPY is 0.2% lower in early Thursday trading at around 113.90. GBPUSD has edged 0.3% higher overnight ahead of today’s interest rate decision. GBPUSD is currently trading around 1.3285. Gold has gained 0.36% on USD weakness to currently trade around $1,278.75. WTI is little changed, currently trading around $54.35. Major data releases for today: At 09:00 GMT, the Bundesagentur für Arbeit published by the German Statistics Office will release the Unemployment Rate s.a. & Change for October. The rate is forecast to be unchanged at 5.6% with the change forecast at -11K, which is not as strong as the previous release of -23K. At 09:30 GMT, the UK Chartered Institute of Purchasing & Supply and Markit Economics will release UK PMI Construction for October. The forecast is expected to show a slight decline to 48.0 from September’s release of 48.1. At 12:00 GMT, the Bank of England will announce its interest rate decision. The markets are expecting a hike of 0.25%, taking UK interest rates to …

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01 ноября, 10:15

Markets Await FOMC

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On Tuesday, the Bank of Japan made no changes to its huge monetary stimulus plan even as it reduced its inflation forecasts. The BoJ board voted, 8-1, to maintain the central bank’s yield curve control program and asset purchases. The board kept its view that its 2% inflation target is likely to be met at the start of the fiscal year that begins in April 2019. Governor Kuroda continued to stress the importance of maintaining monetary easing as the world major Central Banks are moving towards monetary normalization. However, this is whilst the Japanese economy is seeing its longest expansion since 2001, with equities at their highest level in 20 years and a labor market that is the tightest for several decades. Data released by Eurostat on Tuesday showed economic growth beat forecasts in Q3. Preliminary GDP climbed 0.6% in Q3 from Q2. That is down slightly from the upwardly-revised 0.7% quarter-on-quarter growth in Q2, but ahead of a forecasted estimate of 0.5%. In addition, the Eurozone Unemployment Rate dropped to 8.9%. Unemployment below 9% has not been seen for nearly 8 years. Year-on-year GDP rose to 2.5% in the Q3, up from a 2.3% annual increase in Q2, again beating expectations of a 2.4% rise. The markets are focusing on today’s US Federal Reserve’s two-day policy meeting for indications on future monetary tightening. The Fed has raised rates twice since January and currently forecasts one more hike by the end of the year as part of a tightening cycle that began in late 2015. The Fed is expected to leave interest rates unchanged but the markets will be looking for any new indications that the Fed will, as expected, hike rates in December. EURUSD is slightly lower in early Wednesday trading at around 1.1634. USDJPY is 0.2% higher in early session trading at 113.85. GBPUSD is currently unchanged, trading around 1.3275. Gold is 0.3% higher overnight, currently trading around $1,274. WTI is 0.15% higher in early trade at around $54.81. Major data releases for today: At 09:30 GMT, the UK Chartered Institute of Purchasing & Supply and Markit Economics will release Markit Manufacturing PMI for October. Forecasts are calling for a lower reading of 55.8, from the previous 55.9. At 13:45 GMT, Markit Economics will release US Markit Manufacturing PMI for October. The forecast is for the release to be unchanged at 54.5. At 14:00 GMT, the Institute for Supply Management (ISM) will release US ISM Prices Paid and ISM Manufacturing PMI for October. Prices Paid is forecast to come in lower at 68 from the previous release of 71.5, with PMI also forecast lower at 59.5 from the previous 60.8. At 14:30 GMT, the US Energy Information Administration (EIA) will release EIA Crude Oil Stocks change for the week ending October 27th. The forecast is calling for a drawdown of -2.575M compared to the previous small increase in stocks of 0.856M. The markets will be looking for any significant deviation from the forecast as this will cause volatility …