Slight fall in New Business

The UK service sector registered little change in business activity during November as incoming new work fell slightly for the first time in nearly two years. A tough economic climate was commonly reported to have undermined efforts to secure new business. UK Stock! This also weighed on service sector confidence, with sentiment falling in November to the lowest of 2012 so far. After accounting for seasonal factors, the Business Activity Index recorded 50.2, compared to 50.6 in October.

ISM Services Gauge in U.S

The Institute for Supply Management’s index of U.S. non-manufacturing businesses, which covers about 90 percent of the economy, rose to 54.7 in November from the prior month’s 54.2, the Tempe, Arizona-based group said today.  ISM! Readings above 50 signal expansion, and estimates ranged from 51 to 54.7. The ISM services survey covers industries ranging from utilities and retailing to housing, health care and finance.

Daily Morning Report 04/12/2012 | Forex Trading Analysis

The Australian Dollar rallied versus the U.S. Dollar as the Reserve Bank of Australia cut the benchmark lending rate by 25 basis points to 3.00 percent which was in-line with market expectations of a 90 percent probability that the RBA would cut the cost of capital today.

Forex Bulletproof 2.0 Patented Striker Technology! The global PMI release period was off to a good start, with outperformance in Asia and mostly floundering in Europe. US failed to hold its own, with its equivalent to the PMI, the ISM Manufacturing index, falling back into contraction, to its lowest official reading of the year. Just when US economic data was turning higher, it now appears to be backpedalling.

Greece offered to buy back as much as 10-billion Euros of bonds issued in a restructuring earlier this year, as an attempt to cut its debt load. The government said they will buy back bonds in a so called Dutch auction, and the government is willing to pay an average maximum purchase price of 34.1% for bonds maturing from 2023 to 2042. 

ECB and BoE are widely expected to maintain their current policy Forex Bulletproof 2.0 Patented Striker Technology! in December, we anticipate the Governing Council to strike a more dovish tone for monetary policy as the deepening recession in the euro-area threatens price stability. ECB President Mario Draghi may show a greater willingness to ease monetary policy further. BoE appears to be slowly moving away from its easing cycle as inflation stubbornly holds above the 2% target.

Daily Afternoon Report 28/11/2012 | Forex Trading Analysis

Greece bailout agreement, most of the responding chatter has already been exhausted, and we have been left in today’s European session without a major fundamental story to guide trading. Data showing U.S. consumer confidence at a four-year high also provided a modest boost for the dollar, though a looming budget crisis tempered optimism about the American economy and kept dollar gains in check.

The agreement to provide aid for Greece did not help the market sentiment. In fact, that agreement may fail as the International Monetary Fund did not accept its terms. The inability of the US politicians to find a compromise and avoid the fiscal cliff did not help traders’ confidence either.

The Australian dollar fell against the Japanese yen and the US dollar yesterday and remained soft today. Like its Canadian counterpart, the Aussie managed to strengthen versus the euro.

Daily Morning Report 28/11/2012 | Forex Trading Analysis

 In Asian trading on Wednesday dollar traded mixed to lower against the world's major global currencies on growing fears regarding actions US policymakers need to take to steer the American economy away of the ‘’fiscal cliff’’ as time is running out. EURUSD was down on fears that despite a recent deal that will free up aid to Greece, the broader European debt crisis won't abate anytime soon. Many investors seeking safe haven opted for the yen.

Yesterday Conference Board, a market research group, reported that its index of consumer confidence rose to 73.7 in November from a reading of 73.1 in October, whose figure was revised up from 72.2. In other announcement the U.S. Census Bureau reported that core durable goods orders, which exclude volatile transportation items, rose by a seasonally adjusted 1.5% in October. Total orders for durable goods were unchanged last month compared to expectations for a 0.6% decline. Standard & Poor's/Case-Shiller home price index rose at an annualized rate of 3.0% in September from a year earlier, beating expectations for a 2.9% increase.

Later, the US is to release official data on new home sales, a leading indicator of economic health, as well as government data on crude oil inventories. Also the Fed is to publish its Beige Book.

Daily Afternoon Report 09/11/2012

The U.S. dollar was broadly higher against most of its major counterparts on Friday, concerns over the handling of Greece's financial woes continued to weigh, while worries over U.S. fiscal policy also persisted.

The euro came under pressure after German Finance Minister Wolfgang Schaeuble on Thursday said next week may still be too early to make a decision on granting further aid to Athens, despite a successful vote on new austerity measures. But later on EUR/USD bounced ahead of U.S. data.

Official data showed that industrial production in France dropped 2.7% in September, more than the expected 1% decline, after a 1.9% rise the previous month, while, in Italy, industrial production tumbled 1.5% in September, compared with expectations for a 1.4% drop, after a 1.7% increase the previous month.

The dollar was also higher against the pound, since earlier in the day, the official data showed that the U.K. trade deficit narrowed more-than-expected in September, hitting GBP8.4 billion from a deficit of GBP10 billion the previous month.

The Aussie came under pressure after the Reserve Bank of Australia reduced its 2013 growth outlook to 2.75%, earlier in the day.

On the other hand, the export-linked currencies found some support after data showed that industrial production in China rose by 9.6% last month, more than the expected 9.4% increase and following a 9.2% rise in September.

Concluding, the overall market sentiment continues to be weighed by concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement, which could threaten U.S. and global growth.

In recent U.S. news, consumer sentiment rose to its highest level in more than five years in November as consumers felt more optimistic about employment prospects and the outlook for the overall economy, a survey released on Friday showed. The Thomson Reuters/University of Michigan preliminary reading on the overall index on consumer sentiment came in at 84.9, up from 82.6 the month before. It was above the median forecast of 83 among economists polled by Reuters.

Daily Morning Report 08/11/2012

The New Zealand Dollar traded sharply lower versus its major counterparts as disappointing employment data came across the newswires prompting Forex traders to unwind their high yielding positions in the kiwi on speculation the RBNZ may issue a rate reduction effectively diminishing the currencies most attractive feature. The unemployment rate in New Zealand increased to 7.3 percent in the third quarter up from 6.8 percent in the second quarter while the participation rate remained at 68.4 percent.

Greek lawmakers approved a multibillion-euro austerity package early Thursday in an effort to win more bailout funds, but the measures also threaten to deepen the country's brutal recession and destabilize the country's fragile three-party coalition government. Greece's parliament must also approve a troika-approved 2013 national budget in a separate vote set for Sunday.

in Japan machine orders fell by 4.3 percent in September marking the second consecutive month of fading industrial activity while the trade deficit narrowed to -471.3 billion yen in September down from -644.5 billion the prior month.

The Australian Dollar found support as the Aussie economy added 10,700 new jobs in October, but failed to drag the unemployment rate down from 5.4 percent. 18,700 workers found full time work where 8,000 part timers lost their pay.

Daily Morning Report 05/11/2012

The Australian Dollar traded slightly higher as Australia’s trade deficit widened for the fifth consecutive month highlighted by flagging exports to all three of its largest trading partners: China, Japan and the U.S.

The Australian Bureau of Statistics reported the flow of goods declined to China by -4 %, Japan by -13% and the U.S. by -21% in September which should continue to be cause for concern by central bankers as an elevated exchange rate and global slowing were recently noted as the biggest headwinds facing the Aussie economy.

US non-farm payrolls on Friday night surpassed pundits expectations of 125,000 with an increase of 171,000 in October US stocks closed lower having been in the red for most of the day. Crude oil and Gold also were sharply lower as the US dollars strength reinforced the selling pressure on them and in turn on US equities tied to energy.

Daily Afternoon Report 02/11/2012

The October US labour market added impressive 171k non-farm jobs versus an expected 125k in the final employment report before the November elections. The US dollar gained sharply against all major counterparts, especially the Japanese Yen and gold as signs of an improving economy start to erode expectations for more incentives from the Federal Reserve. 

October’s PMI for manufacturing in the Euro-zone marked the fifteenth consecutive month of decline in sector activity. However, the 45.4 PMI outcomes were better than a previous estimate of 45.3, but that did not prevent the Euro from falling on the report.

The only other news in the session was out of China, where the PBOC released its quarterly monetary report. The PBOC said the economy is likely to keep stable with relatively fast growth, despite the fact that they see a slowing pace of global economic recovery.

Daily Morning Report 02/11/2012

The Dollar traded slightly higher across the board during Asia-Pacific session as it touched 3-day highs in USD index at 80.14 in an intraday double high, last at 80.09, just where it was 2 months ago. USD has been stronger since previous Asia-Pacific open yesterday against Pound, Euro, Swiss Franc, and specially Yen, while it's been weaker against the commodity currencies such as Aussie or Kiwi.

The U.S. economic damages inflicted by Hurricane Sandy could reach $50 billion, according to new estimates that are more than double a previous forecast. Some economists warned on Thursday that the storm could shave a half percentage point off the nation’s economic growth in the current quarter.

In other news, there have been no surprises in the Bank of Japan Monetary policy minutes from Oct4/5, with members insisting that Japan's economy faces the critical challenge of overcoming deflation.

As the statement reads, "this challenge will be met through efforts by a wide range of economic agents to strengthen the economy's growth potential and support from the financial side. It will proceed with the monetary easing in a continuous manner by steadily increasing the amount outstanding of the Asset Purchase Program." "The Bank continues to conduct monetary policy in an appropriate manner. The Bank will also do its utmost to ensure the stability of Japan's financial system, while giving particular attention to developments in global financial market" the statement adds.

Elsewhere, Australia’s Producer Price Index remains at 1.1% in 3Q, while New Zealand’s commodity prices rose for the third straight month in October, led by gains in wool and dairy products while aluminium fell. The ANZ Commodity Price Index increased 1.3% last month, with 12 commodity prices gaining two declining and three unchanged.

Daily Morning Report 31/10/2012

The dollar softened against most major currencies on Wednesday as investors sold safe-haven dollars they acquired before Sandy, a hurricane that morphed into a post-tropical giant, and continues to dump snow and rain over the northeastern U.S.

While the country continues to assess the damage, investors sold safe-harbor USD and prepped to take up other positions to play clean up and recovery. Markets were closed in the U.S. earlier for a second day, though investors who bought dollars prior to the storm's landfall began to loosen up by Asian trading on Wednesday, selling
their dollars to play recovery, which weakened the USD against its Japanese counterpart.

Elsewhere, Australian building approvals have risen for a second consecutive month in September, putting the chances of an interest rate cut from the Reserve Bank of Australia next week further in doubt. According to the Australian Bureau of Statistics total dwelling units approved increased 7.8 per cent in September, following a 6.4 per cent jump in August. That is a modest recovery from precipitous falls in July, when approvals fell 17.3 per cent. The approvals data is a leading indicator of future construction work, suggesting a return of confidence in the interest-rate sensitive housing sector.

Later Wednesday in the U.S., payroll processing firm ADP is to release a report on nonfarm payrolls, a leading indicator of private-sector job creation while the Canadian Bureau of Statistics is to announce GDP data.

Daily Afternoon Report 30/10/2012

Subsequent to a meeting in Berlin, France Finance Minister Moscovici and http://jobsmoney.blogspot.com/Minister Schaeuble declared that they are aiming for a solution to Greece by November. They both want to see Greece remains in the Euro-zone, and the solution will be discussed more in tomorrow’s Euro-group meeting. Schaeuble refused to comment on the size of the funding gap in Greece, but added that they can’t go in the opposite direction on debt reduction. Moscovici said he doesn’t want to reopen the discussion on Euro bonds.

The amount of people out of work in Germany now totals 2.94 million. The German economy has suffered because of the Euro debt crisis, and the GDP only rose 0.3% in the second quarter. Germany is the largest economy in the Euro and signs of economic suffering are Euro negative in forex markets.

Clearly, the largest story of the day is Hurricane Sandy and its impact on the East Coast of the US. It is appraised that the damages are coming up to 20 billion dollars from the hurricane and US stock markets will remain closed today, the US markets might reopen tomorrow.  

Daily Morning Report 30/10/2012

The dollar traded mixed against most major currencies on Tuesday as Sandy kept foreign-exchange trading subdued. Hurricane Sandy, now reclassified as a super storm, could have an impact on U.S economy. Preliminary estimates are that damage will range between US$10b and US$20b.

Spanish retail sales fell 10.9% in September from the same month a year ago, much worse than market expectations for a decline of 6.2%, which dampened appetite for risk and gave the dollar some support

German inflation data gave the euro and other higher-yielding currencies support.
The German Federal Statistics Bureau said consumer price inflation accelerated at an annualized rate of 2.0% in October, in line with expectations and unchanged from September.

Japan’s average household spending marked the first decline in eight months in September as lower tuitions and rents offset the effects of subsidy-backed car purchases, data from the Ministry of Internal Affairs and Communication Tuesday showed. Japan’s industrial production fell more than economists forecast, highlighting the risk of an economic contraction as the central bank decides whether to ease for the second time in two months.

Later today, ECB President Mario Draghi is due to deliver opening remarks at the Second Conference of the Macro-Prudential Research Network of the European System of Central Banks, in Frankfurt.

Daily Afternoon Report 29/10/2012

UK mortgage approvals rose for the fourth straight month in September, possibly signalling the success of the BoE’s funding for lending scheme. Home loans were up to 50,024 in September, beating expectations for 48,700, and higher than August’s revised 47,921 mortgages.  

Net consumer credit was 1.2 billion Pounds in September, according to the Bank of England. Earlier today, housing prices were reported to have fallen 0.1% in the UK according to the Hometrack Housing Survey.

As Spain is expected to contract for the fifth consecutive quarter, the heightening threat for a prolonged recession will continue to dampen the appeal of the Euro, and the European Central Bank might come under additional pressure to expand monetary policy further as the governments functioning under the single-currency become increasingly dependent on monetary support.

The ECB may have little choice but to push the benchmark interest rate further to a fresh record-low amid the weakening outlook for growth and inflation, and we may see the Governing Council carry its easing cycle into the following year as European policy makers struggle to stem the threat for contagion. The EURUSD slipped as an 11% drop in Spanish retail sales dampened the outlook for the euro-area, and the single currency may face additional headwinds.

Daily Morning Report 29/10/2012

The dollar traded higher against most major currencies on Monday, as investors snapped up safe-haven USD positions to brace for U.S. unemployment data due out later this week as well as the Bank of Japan's latest decision on interest rates.

The USD was up against the GBP, CAD, NZD, AUD, JPY and CHF in Asian session.

 Fears Greece may run into hurdles securing its next tranche of bailout money sparked the risk-off session as well.

Japan, meanwhile, is to release data on unemployment, household spending and industrial production this week, though investors were keeping a close eye on the Bank of Japan, which will announce its latest decision with interest rates and monetary policy on Tuesday.

Later Monday, the U.S. government plans to issue data on personal income and spending for September on Monday even though the government has shut down to brace for Hurricane Sandy. The Federal Reserve, however, will postpone its regularly scheduled data. The Commerce Department will post the monthly report on consumer spending on its web site at 1230 GMT, as regularly scheduled. In contrast, the Fed said it would wait until the federal government reopens to release its data, including a weekly report on selected interest rates and figures on commercial paper issuance.

Daily Afternoon Report 26/10/2012

Earlier in the day, official data showed that Tokyo's core consumer price inflation, which excludes fell by 0.4% in October, less than the expected 0.5% decline, following after a 0.4% fall the previous month.

In the U.S., real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the third quarter of 2012, according to the "advance" estimate released by the Bureau of Economic Analysis.  The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), federal government spending, and residential fixed investment that were partly offset by negative contributions from exports, non-residential fixed investment, and private inventory investment.  Imports, which are a subtraction in the calculation of GDP, decreased.

In addition to that, the dollar index rose to its highest in 1-1/2 months on Friday, helped by the U.S. currency gains against the euro as fresh worries about Greece weighed on the single currency.

Elsewhere, a preliminary report by the IMF showed on Thursday that the Greek debt will be above the target of 120 percent of GDP in 2020, hence Athens will need more reforms before emergency credit from international lenders can start flowing again.

A separate report showed that Spain's unemployment rate rose to 25.0% in the second quarter, from a rate of 24.6% the previous quarter, barely beating expectations for a rise to 25.1%.

Daily Morning Report 26/10/2012

In Europe, the IMF dropped the Irish GDP forecast to 1.1% and the Bundesbank points to downside risks of the 1.8% growth forecast in Germany. The Euro has extended its weakening against the US Dollar after the US closing bell in the back of news from APPL missing dividends estimates and news from Europe on Greece needs an additional €30 billion thru 2016.

The Aussie dollar started a rally early Wednesday morning that instigated with the surprise showing from 3Q CPI figures. The 2.0 per cent pace it does remove some pressure for aggressive cuts.

The Chinese PMI figures which printed better than expected but were 12 months into a reductionary phase. The UK Q3 GDP came much stronger-than-expected at 1% versus 0.6%.

 AUD/JPY is set to print gains for a third straight week, with traders observing for the Bank of Japan to increase its current 90 trillion Yen QE program by another 10 trillion Yen next week, according to the latest Japanese press reports.

Daily Morning Report 25/10/2012

The Great Britain pound advanced on hopes that the United Kingdom will emerge from recession. Traders turned their attention to the GDP report, released today, which is expected to show growth of 0.6% in the Q3. BoE Governor Mervyn King appears to be softening the tone on monetary policy.

German and French manufacturing data disappointed markets with PMI reporting under forecast, followed by a slew of other German data all under forecast and the EU manufacturing PMI also under forecast.  Reports are surfacing that officials from the European Union, European Central Bank and the International Monetary Fund rejected Germany’s proposal to tighten Greece’s access to the established financial aid account. With this proposal out of the way, the market is pricing in the possibility that Greece will eventually get its next tranche of aid. 

Canadian Dollar strengthened against its U.S. counterpart boosted by a hawkish statement from the Bank of Canada on Tuesday that stands in stark contrast to most other developed economies. The central bank was expected to set the currency’s direction for a second straight session, with Bank of Canada Governor Mark Carney holding a news conference following the release of its Monetary Policy Report later on Wednesday.

US new Home Sales surprised markets with a strong upward report coming in above forecast at 389k against 385k supporting a US recovery

Daily Afternoon Report 24/10/2012

The U.S. dollar was higher against the euro on Wednesday, as weak data out of the euro zone fuelled concerns over the deepening impact of the sovereign debt crisis on the region’s economy, but morning losses were erased later in the afternoon.

Meanwhile, European Central Bank President Mario Draghi is currently at a meeting in Germany’s central bank, which is to be followed by a press conference.

Later Wednesday, the Federal Reserve is to announce its benchmark interest rate and release its first monetary policy statement since the central bank announced a third round of quantitative easing in September. The U.S. was to release official data on new home sales.

Elsewhere, the Sterling found support after Bank of England Governor Mervyn King said Tuesday that policymakers would have to think "long and hard" before implementing further quantitative easing measures.

Monday 22 October 2012 Live Chart