Treasury Announces Details Of Next Week's Long-Term Securities Auctions

Trading 07 mar 2019 Commentaire »

The Treasury Department announced the details of next week's auctions of three-year and ten-year notes and thirty-year bonds on Thursday.

The Treasury said it plans to sell $38 billion worth of three-year notes next Monday, $24 billion worth of ten-year notes next Tuesday and $16 billion worth of thirty-year bonds next Wednesday.


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BITCOIN Analysis for March 7, 2019

Trading 07 mar 2019 Commentaire »

Bitcoin has been struggling above $3,800 after the impulsive breakout which is expected to retrace a bit lower before climbing higher above $4,000 in the coming days.

The price is being held by the dynamic levels like 20 EMA, Tenkan and Kijun line as support while Kumo Cloud area is widening as strong barrier for sell pressure. The Chikou Span is still trading above the trendline which also indicates further bullish momentum. As the price breaks above $4,000 with a daily close, further bullish momentum will go on with a target towards $4250 and later towards $4500 area in the future. As the bullish bias is still strong in the solid support area, the upward pressure is expected to continue further.

SUPPORT: 3,500, 3,600, 3,800

RESISTANCE: 4,000, 4,250, 4,500

BIAS: BULLISH

MOMENTUM: NON-VOLATILE

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Euro Slides As ECB Draghi Says Economic Slowdown To Extend This Year

Trading 07 mar 2019 Commentaire »

The euro fell sharply against its major counterparts in the European session on Thursday, after the European Central Bank President Mario Draghi struck a cautious tone on Eurozone economy, saying that the weakening in economic data pointed to a moderation in growth through the current year, and downgraded inflation and growth outlook for this year and next.

In his customary press conference, Draghi stated the weaker economic momentum is slowing the adjustment of inflation towards the target of below, but close to, 2 percent over the medium term.

The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appeared to be weighed on economic sentiment, he cautioned.

"Moreover, underlying inflation continues to be muted," he told.

"While there are signs that some of the idiosyncratic domestic factors dampening growth are starting to fade, the weakening in economic data points to a sizeable moderation in the pace of the economic expansion that will extend into the current year," Draghi added.

Eurozone's growth forecasts for this year and next were cut to 1.1 percent and 1.6 percent, from the December projection of 1.7 percent.

Inflation forecast was slashed to 1.2 percent for this year and 1.5 percent for next, from the previous estimates of 1.6 percent and 1.7 percent, respectively.

At its monetary policy meeting in Frankfurt, the Governing Council left the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00 percent, 0.25 percent and -0.40 percent, respectively.

The bank announced the launch of a new series of targeted longer-term refinancing operations, or TLTRO-III, starting in September 2019 and ending in March 2021, each with a maturity of two years.

The central bank also indicated that the interest rates would remain unchanged for the rest of this year, a subtle change from the previous forward guidance on interest rates stating that low rates would prevail "through the summer of 2019."

Data from Eurostat showed that Eurozone's economic growth in the fourth quarter of 2018 matched its earlier estimates and employment gains were also unrevised.

Gross domestic product grew 0.2 percent from the third quarter, when the economy expanded 0.1 percent, revised from 0.2 percent reported earlier.

The currency held steady against its major counterparts in the Asian session, with the exception of the pound.

The euro lost 0.6 percent to near a 3-week low of 1.1255 against the greenback, from a high of 1.1320 touched at 6:15 am ET. The pair had closed Wednesday's deals at 1.1306. Should the euro continues its downtrend, 1.10 is likely seen as its next support level.

The single currency slipped to an 8-day low of 125.85 against the yen and marked a 0.5 percent slide from a high of 126.43 touched at 3:00 am ET. At yesterday's close, the pair was valued at 126.37. Next key support for the euro is seen around the 122.00 mark.

The euro dropped to 1.1346 against the franc, pulling away from a high of 1.1367 seen at 7:30 am ET. The euro was trading at 1.1363 a franc at Wednesday's New York session close. Further downtrend could see the euro possibly seeking support around the 1.12 level.

Data from the State Secretariat for Economic Affairs showed that Switzerland's jobless rate remained steady in February.

The seasonally adjusted jobless rate was 2.4 percent in February, which was the same as seen in January. The outcome matched economists' expectations.

The European currency was 0.8 percent lower at 1.5987 against the aussie, following an uptick to 1.6111 at 7:30 pm ET. The euro-aussie pair was worth 1.6078 at yesterday's close. Continuation of the euro's weakness may see it challenging support around the 1.57 level.

The euro was down 0.7 percent at 1.5111 against the loonie, after having climbed to 1.5212 at 7:00 pm ET. The euro-loonie pair was quoted at 1.5196 when it finished trading on Wednesday. The euro is likely to challenge support around the 1.49 level, if it falls again.

After strengthening to 1.6716 against the kiwi at 7:30 pm ET, the euro pulled back to hit a 2-day low of 1.6617. The pair had ended trading at 1.6707 on Wednesday. The euro is seen finding support around the 1.64 mark.

The euro eased back to 0.8576 against the pound, following an advance to a 2-day high of 0.8625 at 7:35 am ET. The currency is thus heading to pierce a 3-day low of 0.8575 set in the Asian session. The euro was worth 0.8584 per pound at yesterday's close. The euro is poised to find support around the 0.84 level.

Figures from the Lloyds Bank subsidiary Halifax and IHS Markit showed that UK house price inflation accelerated more-than-expected in February to its highest level in six months.

The house price index rose 2.8 percent year-on-year following a 0.8 percent increase in January. Economists had forecast 1 percent growth in house prices.

Looking ahead, U.S. consumer credit for January is scheduled for release in the New York session.


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ECB Slashes Eurozone Economic Outlook As It Pumps More Cash To Banks

Trading 07 mar 2019 Commentaire »

The European Central Bank slashed the euro area growth and inflation outlook on Thursday, citing the lingering uncertainties that are mainly external, and offered more cash to banks via long-term loans to boost lending to a slowing economy.

The bank also said it now expects Eurozone interest rates to remain at the current level at least till the end of this year and beyond, until inflation converges with its target of "below, but close to 2 percent".

The Eurozone growth outlook for this year was cut to 1.1 percent from 1.7 percent seen in December, the March 2019 ECB staff macroeconomic projections showed.

The outlook for next year was trimmed to 1.6 percent from 1.7 percent. The projection for 2021 was maintained at 1.5 percent.

The risks surrounding the euro area growth outlook are still tilted to the downside, on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets, the ECB said.

"While there are signs that some of the idiosyncratic domestic factors dampening growth are starting to fade, the weakening in economic data points to a sizeable moderation in the pace of the economic expansion that will extend into the current year," ECB President Mario Draghi said in his introductory statement.

"The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment."

Weaker economic momentum is slowing the adjustment of inflation towards the target, Draghi added.

The bank slashed the inflation outlook for this year to 1.2 percent from 1.6 percent predicted in December. The projection for next year was lowered to 1.5 percent from 1.7 percent. The forecast for 2021 was cut to 1.6 percent from 1.8 percent.

The impact of the slowdown in external demand, and other country and sector-specific factors on growth is turning out to be somewhat longer-lasting, the bank noted. That said, the bank expects the effect of these adverse factors to unwind in future.

Citing the futures prices for oil, the ECB said headline inflation is likely to remain at around current levels before declining towards the end of year.

"Measures of underlying inflation remain generally muted, but labor cost pressures have strengthened and broadened amid high levels of capacity utilization and tightening labor markets," the bank noted.

"Looking ahead, underlying inflation is expected to increase over the medium term, supported by our monetary policy measures, the ongoing economic expansion and rising wage growth."

Earlier on Thursday, the Governing Council left the key interest rates unchanged after the policy session in Frankfurt, as expected. Eurozone interest rates were raised last in July 2011 by 25 basis points.

"The Governing Council now expects the key ECB interest rates to remain at their present levels at least through the end of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 percent over the medium term," the ECB said.

The subtle change in the forward guidance on interest rates from the "summer" of 2019 to "the end" suggests the first interest rate hike since the 2007-09 global financial crisis would happen only next year.

The main refi rate is currently at a record-low zero percent and the deposit rate at -0.40 percent. The marginal lending facility rate is at 0.25 percent.

The bank said it will launch a new series of targeted longer-term refinancing operations, or TLTRO-III, starting in September 2019 and ending in March 2021, each with a maturity of two years.

The announcement of new TLTRO loans took most economists by surprise as they had expected the bank to only signal such a move this month and to unveil it only in April.

The ECB expects the new loans to help to preserve favorable bank lending conditions and the smooth transmission of monetary policy.

Speaking to reporters, Draghi said the latest policy decision was unanimous, and called that a positive sign for cohesiveness of the rate-setting body and its deliberations.

The bank chief added that the Governing Council stands ready to adjust all of its policy instruments as appropriate when necessary.

He said that policymakers were confident about the baseline forecast and agreed the probability of a recession in the euro are remained very low.

Draghi also noted that several policymakers proposed extending the calendar of forward guidance to March next year.

Regarding the TLTRO, the ECB Chief said nobody would take up those loans unless subsidies were offered.

He also said that negative interest rates have been quite successful and that their effect on banks' balance sheets is complex. ECB is yet to discuss specific mitigating measures.


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March 7, 2019 : EUR/USD is demonstrating a continuation bearish flag pattern.

Trading 07 mar 2019 Commentaire »

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On November 13, the EUR/USD pair demonstrated recent bullish recovery around 1.1220-1.1250 where the current bullish movement above the depicted short-term bullish channel (In BLUE) was initiated.

Bullish fixation above 1.1430 was needed to enhance further bullish movement towards 1.1520. However, the market has been demonstrating obvious bearish rejection around 1.1430 few times so far.

The EUR/USD pair has lost its bullish momentum since January 31 when a bearish engulfing candlestick was demonstrated around 1.1514 where another descending high was established then.

This allowed the current bearish movement to occur towards 1.1300-1.1270 where the lower limit of the depicted DAILY channel came to meet the pair.

Since February 20, the EUR/USD pair has been demonstrating weak bullish recovery with sideway consolidations around the depicted price zone (1.1300-1.1270).

Last week, significant bullish recovery has emerged on Tuesday. However, by the end of last week's consolidations on Thursday, the pair has failed to fixate above 1.1400 with early signs of bearish rejection.

This indicated a high probability of bearish reversal towards 1.1300-1.1250 where the lower limit of the depicted movement channel is located.

Please note that a bearish flag pattern may become confirmed if bearish persistence below 1.1250 is achieved on the daily basis. Pattern target is projected towards 1.1000.

Trade Recommendations:

Conservative traders can wait for a bearish daily candlestick closure below 1.1250 as a valid SELL signal. T/P levels to be located around 1.1170 and 1.0940. S/L to be located above 1.1350.

The material has been provided by InstaForex Company - www.instaforex.com

ECB Slashes Eurozone Growth & Inflation Forecasts

Trading 07 mar 2019 Commentaire »

The European Central Bank slashed the euro area growth and inflation outlook on Thursday, citing the lingering uncertainties mainly external.

The Eurozone growth outlook for this year was cut to 1.1 percent from 1.7 percent seen in December, the March 2019 ECB staff macroeconomic projections showed.

The outlook for next year was trimmed to 1.6 percent from 1.7 percent. The projection for 2021 was maintained at 1.5 percent.

"The risks surrounding the euro area growth outlook are still tilted to the downside, on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets," the ECB said.

The bank slashed the inflation outlook for this year to 1.2 percent from 1.6 percent predicted in December. The projection for next year was lowered to 1.5 percent from 1.7 percent. The forecast for 2021 was cut to 1.6 percent from 1.8 percent.

The downgrade to the inflation outlook largely reflected the more subdued near-term growth outlook, the ECB said.


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USD / CAD: Canadian has another exam tomorrow

Trading 07 mar 2019 Commentaire »

Today, the USD / CAD currency pair demonstrates a price pullback after a fairly powerful price spurt. In the first week of March, a Canadian fell by more than 300 points, reaching the middle of the 34th figure. Almost all the fundamental factors are playing against the Loonie - the Canadian economy is declining, inflation is slowing down, and the country's Central Bank is frightened by the decline in interest rates. This is too steep a turn of events for USD / CAD, since, at the end of last year, traders expected to continue the cycle of tightening monetary policy. But the situation has changed radically in just two months. And tomorrow's data on the labor market in Canada can complement the negative fundamental picture - at least, preliminary forecasts do not bode well for USD / CAD bears.

However, let us begin with the results of the March meeting of the Canadian regulator. Given the previous macroeconomic releases, no one expected "hawkish" rhetoric from the representatives of the Central Bank. The probability of a rate hike in March was zero, so the main intrigue was in assessing the future prospects for changes in monetary policy. And as it turned out, the representatives of the Bank of Canada joined their colleagues from the RBA, the RBNZ and the Bank of Japan, who not only withstand a pause in the matter of raising interest rates but also allow easing of monetary policy conditions.

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Keeping the rate at 1.75%, the Canadian regulator said that today it is impossible to say with certainty when the time of the next round of increase will come. Although at the beginning of the year, Stephen Poloz noted that the rate should be "over time" raised to at least the lower limit of the neutral range (2.5% -3.5%). However, judging by the rhetoric of recent statements, the parameters of monetary policy will remain as they were this year - unless the Canadian economy shows a major breakthrough in the second half of the year. Otherwise, if the negative trend gets its continuation, experts admit a rate cut of 25 basis points: the likelihood of such a scenario was not ruled out in the Central Bank.

As noted in the Central Bank, the economic downturn, which began to grow at the end of last year, was stronger and more dynamic than previously thought. And it's not just a matter of reducing the oil market: here is the weakness of the real estate market, and a reduction in consumer spending, and a significant reduction in price pressure. The trade conflict between the United States and China is also at the center of attention of members of the Canadian regulator. According to them, now the markets have entered a zone of heightened uncertainty since the development of not only the global economy but also the national one depends on the resolution of trade conflicts.

It is worth recalling that the growth of the Canadian economy has actually stopped. On a monthly basis, GDP for the second month in a row is in the negative area, at minus -0.1%. If we talk about quarterly terms, in the fourth quarter of last year, the key indicator grew by only one-tenth of a percent compared to the previous quarter. A similar trend is observed among inflation indicators. The January consumer price index in Canada rose by only one-tenth of a percent on a monthly basis, and in annual terms, the figure dropped to 1.4%. This is the weakest growth rate since October 2017.

The Bank of Canada could not ignore such weak results. Regulators have significantly eased their forecast expectations - and most importantly, removed from the text of the accompanying statement that the overnight rate "should reach the neutral range". After that, the chances of raising the rate until the end of this year have dropped to their minimum values.

The Canadian dollar reacted to this state of affairs accordingly, weakening more than 300 points against the American dollar. Today's correction looks quite logical, but the "Canadian Nonfarm", which will be published on Friday, may give the pair a new northern impetus that will allow USD / CAD bulls to test the 35th figure already. According to preliminary estimates, the unemployment rate will remain at the previous level of 5.8%. But the increase in the number of employees can collapse sharply in the negative area, up to -2.5 thousand. The forecast itself is negative, but if real numbers turn out to be weaker than forecasts, the pair's growth will continue.

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The technical picture of USD / CAD also speaks in favor of moving north. On the weekly chart, the pair is above the Kumo cloud of the Ichimoku Kinko Hyo indicator and above all its lines. The bull signal "Parade of lines" indicates the potential for further price growth. In addition, the pair is located between the middle and upper lines of the Bollinger Bands indicator. This also indicates the bullish sentiment of traders. The nearest target of the uptrend can be seen at 1.3560, this is the resistance level and the top line of the Bollinger Bands indicator on the W1 timeframe. Stop-loss can be placed in the area of support, this is the middle line of the Bollinger Bands indicator (price 1.3470).

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U.S. Labor Productivity Climbs 1.9% In Q4, More Than Expected

Trading 07 mar 2019 Commentaire »

Government shutdown-delayed data released by the Labor Department on Thursday showed labor productivity in the U.S. increased by more than expected in the fourth quarter of 2018.

The Labor Department said labor productivity climbed by 1.9 percent in the fourth quarter following a downwardly revised 1.8 percent increase in the third quarter.

Economists had expected labor productivity to rise by 1.6 percent compared to the 2.2 percent jump previously reported for the third quarter.

The bigger than expected increase in productivity, a measure of output per hour, came as output surged up by 3.1 percent and hours worked rose by 1.2 percent.

The report said unit labor costs also surged up by 2.0 percent in the fourth quarter after climbing by an upwardly revised 1.6 percent in the previous quarter.

Unit labor costs had been expected to increase by 1.6 percent compared to the 0.9 percent advance previously reported for the third quarter.

Costs rose by more than anticipated as hourly compensation spiked by 3.9 percent in the fourth quarter, matching the jump in the third quarter.

Real hourly compensation, which takes changes in consumer prices into account, increased by 2.4 percent for the second consecutive quarter.

Compared to the same quarter a year ago, productivity was up by 1.8 percent in the fourth quarter, as output jumped by 3.7 percent and hours worked increased by 1.9 percent.

Unit labor costs were up by 1.0 year-over-year amid a 2.8 percent surge in hourly compensation. Real hourly compensation was up by 0.6 percent year-over-year.


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U.S. Weekly Jobless Claims Show Modest Decrease

Trading 07 mar 2019 Commentaire »

A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report on Thursday showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended March 2nd.

The report said initial jobless claims edged down to 223,000, a decrease of 3,000 from the previous week's revised level of 226,000.

Economists had expected jobless claims to come in unchanged compared to the 225,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average dipped to 226,250, a decrease of 3,000 from the previous week's revised average of 229,250.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also fell by 50,000 to 1.755 million in the week ended February 23rd.

The four-week moving average of continuing claims still rose to 1,766,500, an increase of 4,750 from the previous week's unrevised average of 1,761,750.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for February

Employment is expected to rise by 180,000 jobs in February after jumping by 304,000 jobs in January. The unemployment rate is expected to tick up to 3.3 percent from 3.2 percent.


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*ECB Slashes 2021 Inflation Projection To 1.6% From 1.8%

Trading 07 mar 2019 Commentaire »

ECB Slashes 2021 Inflation Projection To 1.6% From 1.8%


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