*New Zealand Q3 Seasonally Adjusted Current Account Deficit NZ$2.6 Billion

Trading 18 déc 2018 Commentaire »

New Zealand Q3 Seasonally Adjusted Current Account Deficit NZ$2.6 Billion


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Japan Trade Data On Tap For Wednesday

Trading 18 déc 2018 Commentaire »

Japan will on Wednesday release November numbers for imports, exports and trade balance, highlighting a modest day for Asia-Pacific economic activity.

Imports are expected to climb 12.0 percent on year, slowing from 19.9 percent in October. Exports are called higher by 1.1 percent, down from 8.2 percent in the previous month. The trade deficit is pegged at 630.0 billion yen following the 449.3 billion yen shortfall in the previous month.

New Zealand will see Q3 data for current account, with forecasts calling for a deficit of $5.935 billion. That follows the NZ$1.619 billion shortfall in the three months prior. The GDP ratio is expected to slide 3.6 percent after falling 3.3 percent in Q2.

Australia will see November figures for skilled vacancies; in October, vacancies were down 0.5 percent on month.

The central bank in Thailand will wrap up its monetary policy meeting and then announce its decision on interest rates; the bank is expected to hike its benchmark lending rate by 25 basis points, from 1.50 percent to 1.75 percent.


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Oil Futures Plunge Sharply, Settle Near 16-month Low

Trading 18 déc 2018 Commentaire »

Crude oil prices plunged sharply on Tuesday amid rising concerns about excess supply in the market. The fall was so steep that crude futures settled at their lowest level since August 2017.

Doubts over the impact of planned production cuts led by OPEC to rebalance the oil market, and reports about higher inventory builds and forecasts of record shale output in the U.S. weighed on crude oil.

In its latest Petroleum Administration for Defense District report, the Energy Information Administration said U.S. petroleum exports have increased over the past several years to become an important factor in global oil markets. The report said U.S. petroleum product exports reached 5.2 million barrels per day in 2017.

Meanwhile, investors were awaiting the release of weekly inventory reports from the American Petroleum Institute and Energy Information Administration.

Crude oil futures for January ended down $3.64, or 7.3%, at $46.24 a barrel.

On Monday, crude oil futures ended down $1.32, or 2.6%, at $49.88 a barrel, the lowest settlement since early October 2017.

Fears of a likely drop in energy demand in the near term have risen following recent disappointing data on industrial production and retail sales growth in China.

The European Central Bank Mario Draghi's warning last week that the "balance of risks is moving to the downside," and the lowering of GDP and inflation forecasts for the eurozone too suggest a likely notable drop in energy demand.


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Gold Futures Settle At Over 5-month High

Trading 18 déc 2018 Commentaire »

Gold prices edged higher on Tuesday, as the U.S. dollar stayed a bit sluggish ahead of the Federal Reserve's monetary policy statement, due on Wednesday.

The Fed is widely expected to raise interest rates for the fourth time this year. However, the focus will be on the accompanying statement, which will provide an indication with regard to future increases.

Traders appeared to be betting on hopes the Fed will pause monetary tightening sometime next year. Recently, Fed Chair Jerome Powell had commented that interest rates in the U.S. were "just below" neutral.

Recent weak economic data out of China and the downward revision of Japanese forecasts for economic growth and inflation for the current and next financial years supported gold's uptick.

Gold futures for February ended up $1.80, or 0.1%, at $1,253.60 an ounce, the highest settlement since 10 July 2018.

On Monday, gold futures ended up $10.40, or 0.8%, at $1,251.80 an ounce.

Silver futures for March settled at $14.701 an ounce, down $0.058 from Monday's close.

Copper futures for March ended at $2.6645 per pound, down $0.090 from previous close.

In economic news, a report from the Commerce Department showed a substantial increase in U.S. housing starts in the month of November with a spike in new construction of multi-family homes more than offsetting a continued decrease in new construction of single-family homes,

The report said housing starts jumped by 3.2% to an annual rate of 1.256 million in November from the revised October estimate of 1.217 million.

Economists had expected housing starts to edge down to a rate of 1.225 million in November, from the 1.228 million originally reported for the previous month.

The report also said building permits surged up by 5% to an annual rate of 1.328 million in November from the revised October rate of 1.265 million. Building permits had been expected to dip to a rate of 1.259 million from the 1.263 million originally reported for October.


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Treasuries Extend Upward Move Ahead Of Fed Announcement

Trading 18 déc 2018 Commentaire »

Treasuries moved higher over the course of the trading session on Tuesday, extending the upward move seen over the two previous sessions.

Bond prices gave back ground after an initial move the upside but bounced back more firmly into positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.2 basis points to 2.825 percent.

The continued strength among treasuries came as traders looked ahead to the Federal Reserve's monetary policy announcement tomorrow afternoon.

With the Fed widely expected to raise interest rates by a quarter point, traders are likely to closely scrutinize the central bank's accompanying statement and forecasts for clues about future rate hikes.

Ahead of the announcement, President Donald Trump has been urging the Fed to refrain from its gradual pace of raising rates.

"Don't let the market become any more illiquid than it already is," Trump said in a post on Twitter. "Stop with the 50 B's. Feel the market, don't just go by meaningless numbers. Good luck!"

On the U.S. economic front, the Commerce Department released a report showing a substantial increase in U.S. housing starts in November, as a spike in multi-family starts more than offset a continued drop in single-family starts.

The Commerce Department said housing starts jumped by 3.2 percent to an annual rate of 1.256 million in November from the revised October estimate of 1.217 million.

Economists had expected housing starts to edge down to a rate of 1.225 million from the 1.228 million originally reported for the previous month.

The report also said building permits surged up by 5.0 percent to an annual rate of 1.328 million in November from the revised October rate of 1.265 million.

Building permits, an indicator of future housing demand, had been expected to dip to a rate of 1.259 million from the 1.263 million originally reported for October.

The Fed announcement is likely to be in the spotlight on Wednesday, overshadowing a report on existing home sales in November.


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Dollar Little Changed Ahead Of Fed Decision

Trading 18 déc 2018 Commentaire »

The dollar got off to a weak start Tuesday, but has since pared its losses against its major rivals. The currency is now little changed overall on the day, as investors turn cautious ahead of tomorrow's policy decision from the Federal Reserve.

The Fed is widely expected to raise interest rates by a quarter point Wednesday afternoon. Traders are likely to closely scrutinize the central bank's accompanying statement and forecasts for clues about future rate hikes.

With a spike in new construction of multi-family homes more than offsetting a continued decrease in new construction of single-family homes, the Commerce Department released a report on Tuesday showing a substantial increase in U.S. housing starts in the month of November.

The Commerce Department said housing starts jumped by 3.2 percent to an annual rate of 1.256 million in November from the revised October estimate of 1.217 million. Economists had expected housing starts to edge down to a rate of 1.225 million from the 1.228 million originally reported for the previous month.

The report also said building permits surged up by 5.0 percent to an annual rate of 1.328 million in November from the revised October rate of 1.265 million. Building permits, an indicator of future housing demand, had been expected to dip to a rate of 1.259 million from the 1.263 million originally reported for October.

The dollar dropped to a low of $1.1402 against the Euro Tuesday, but has since rebounded to around $1.1350.

Germany's business confidence eased for a fourth straight month in December to its lowest level in two years, as businesses were increasingly worried about the political developments in Europe and a slowing global growth, suggesting that the biggest economy in the euro area may slide into a technical recession.

The Ifo Business Climate Index dropped to 101 from 102 in November, the Munich-based Ifo Institute said Tuesday. Economists had expected a score of 101.7.

The buck fell to a low of $1.2705 against the pound sterling Tuesday, but has since bounced back to around $1.2625.

The greenback dropped to a 1-week low of Y112.248 against the Japanese Yen Tuesday, but has since rebounded to around Y112.575.


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BITCOIN Analysis for December 18, 2018

Trading 18 déc 2018 Commentaire »

Bitcoin has been quite impulsive with the recent bullish momentum, leading the price towards $3,500-600 area. The price is currently residing inside the resistance area of $3,500-600 area from where it is expected to push higher towards $4,000 in the coming days if it manages to break above $3,600 area with a daily close. The dynamic levels such as 20 EMA, Tenkan and Kijun line is working as dynamic support, whereas breaking above 200 EMA signaled the upcoming bullish pressure. As the price remains above $3,000 area, the bullish pressure is expected to continue. Moreover, a daily close above $3,600 is expected to lead the price towards $4,000 area in the future.

SUPPORT: 3,000, 3,350, 3,500

RESISTANCE: 3,600, 4,000

BIAS: BULLISH

MOMENTUM: VOLATILE but IMPULSIVE

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Brexit and the euro: Theresa May makes an interesting move. The US dollar continues to weaken before tomorrow’s Fed decision

Trading 18 déc 2018 Commentaire »

The euro continues to rise against the US dollar, as many traders close their positions before the Federal Reserve decision on interest rates tomorrow. On the one hand, the probability of raising the rate to 2.5% is very high. But on the other hand, how the Fed will behave next year remains a mystery. .

Donald Trump's recent statements about the inadmissibility of raising interest rates, as well as a weak report on industrial production and inflation indicate that Fed economists may not see the results on GDP growth in the 4th quarter of this year, which they are counting on.

Eurozone

In the meantime, the weak data that has arrived today on the German economy was ignored by traders. However, the European currency, which is currently growing, is not so much strong as the American dollar shows weakness amid talk of an impending recession and a financial crisis.

According to the report of the Institute Ifo, the index of business sentiment in Germany in December of this year fell more than economists had expected. This indicates that the largest European economy will continue its weak growth against the backdrop of tensions in trade relations.

Despite the leading nature of the data, the German business sentiment index on Tuesday dropped to 101 points against 102 points in November, while economists expected the index to be 101.6 points in December. Ifo noted that concern is growing in a number of German companies. Many of them noted the deterioration of the business environment.

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The decrease in the Ifo index also confirms that the growth of the German economy is slowing.

As for the technical picture of the EUR/USD pair, a fixation above the upper border of the side channel of 1.1385 will indicate a further likelihood of European currency growth to highs in areas 1.1420 and 1.1450. However, one should not forget that tomorrow the decision of the Fed on interest rates will be published, which can drastically affect the market situation. Failing to fix above resistance 1.1385 could cool down the buyers of risky assets, which will lead to a correction in the trading instrument to the support area 1.1360 and 1.1315.

Great Britain

The significant weakness of the American dollar is also indicated by the growth of the British pound, which seemingly due to major political differences cannot strengthen its position.

It has become known that the leader of the Labor Party of Great Britain, Jeremy Corbyn, may offer to submit a vote of no-confidence to Prime Minister Theresa May, as it was recently in the Conservative Party.

Such a proposal may come from the fact that yesterday, Theresa May refused to bring the Brexit agreement to a vote in parliament before the Christmas holidays. This suggests that May intends to schedule a vote on the agreement for the week starting on January 14, which leaves even less time to work out and change the current Brexit agreement, which does not suit the British Parliament. From another point of view, the Prime Minister of Great Britain will leave even less time for parliament to reflect on such a maneuver, as there will be nothing at all until March 2019.

As for the technical picture in the GBP/USD pair, apparently, the demand for the pound is unlikely to be supported above the large resistance of 1.2690, which limits the upward correction. An unsuccessful consolidation above this range may lead to the closure of a number of long positions and the demolition of buyers' stop orders, which will return the GBP/USD pair to the lows of the day in the 1.2610 area.

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Trump Launches Second Round Of Payments To Farmers Impacted By Tariffs

Trading 18 déc 2018 Commentaire »

President Donald Trump announced Monday he has directed Agriculture Secretary Sonny Perdue to launch a second round of payments to farmers impacted by the U.S. trade war with counties such as China.

"Today I am making good on my promise to defend our Farmers & Ranchers from unjustified trade retaliation by foreign nations," Trump said in a post on Twitter.

"I have authorized Secretary Perdue to implement the 2nd round of Market Facilitation Payments," he added. "Our economy is stronger than ever-we stand with our Farmers!"

A statement from the Agriculture Department said producers of certain commodities will now be eligible to receive Market Facilitation Program payments for the second half of their 2018 production.

The second round of aid includes approximately $4.9 billion in direct payments to producers of certain commodities, bringing the total payments to farmers to nearly $9.6 billion.

"The President reaffirmed his support for American farmers and ranchers and made good on his promise, authorizing the second round of payments to be made in short order," Perdue said.

"While there have been positive movements on the trade front, American farmers are continuing to experience losses due to unjustified trade retaliation by foreign nations," he added. "This assistance will help with short-term cash flow issues as we move into the new year."

The announcement of the second round of payments to farmers comes after Trump and Chinese President Xi Jinping recently announced a 90-day trade truce.

Last week's news that Chinese state-owned companies purchased U.S. soybeans for the first time in more than six months was seen as evidence China is making good on its pledges to the U.S.

(Photo: Marc Nozell)


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U.S. Housing Starts Jump 3.2% In November Amid Spike In Multi-Family Homes

Trading 18 déc 2018 Commentaire »

With a spike in new construction of multi-family homes more than offsetting a continued decrease in new construction of single-family homes, the Commerce Department released a report on Tuesday showing a substantial increase in U.S. housing starts in the month of November.

The Commerce Department said housing starts jumped by 3.2 percent to an annual rate of 1.256 million in November from the revised October estimate of 1.217 million.

Economists had expected housing starts to edge down to a rate of 1.225 million from the 1.228 million originally reported for the previous month.

Multi-family starts soared by 22.4 percent to an annual rate of 432,000, although the spike was partly offset a 4.6 percent drop in single-family starts to a rate of 824,000.

The report also said building permits surged up by 5.0 percent to an annual rate of 1.328 million in November from the revised October rate of 1.265 million.

Building permits, an indicator of future housing demand, had been expected to dip to a rate of 1.259 million from the 1.263 million originally reported for October.

While single-family permits crept up just 0.1 percent to a rate of 848,000, multi-family permits shot up by 14.8 percent to a rate of 480,000.

On Monday, the National Association of Home Builders released a separate report unexpectedly showing a continued deterioration in homebuilder confidence in the month of December.

The report said the NAHB/Wells Fargo Housing Market Index dropped to 56 in December after tumbling to 60 in November. Economists had expected the index to inch up to 61.

With the unexpected monthly decrease, the housing market index tumbled to its lowest level since hitting 54 in May of 2015.


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