Treasuries Give Back Ground But Close Well Off Worst Levels

Trading 08 août 2019 Commentaire »

After moving sharply higher over the past several sessions, treasuries gave back some ground during trading on Thursday.

Bond prices climbed well off their worst levels in afternoon trading but remained in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.2 basis points to 1.716 percent.

With the increase on the day, the ten-year yield rebounded after ending Wednesday's trading at its lowest closing level in almost three years.

The pullback by treasuries came as a report from the Chinese customs office showing unexpected annual growth in Chinese exports reduced the appeal of safe haven assets like bonds.

The report said Chinese exports in July were up by 3.3 percent compared to the same month a year ago, while economists had expected a 2 percent decrease.

While the report also showed a 5.6 percent year-over-year drop in Chinese imports, that was smaller than the 8.3 percent slump expected by economists.

The data has eased concerns about the impact of the U.S.-China trade dispute even though it reflects a period before the latest escalation in the trade war.

Meanwhile, China's central bank set the midpoint for the yuan above 7.00 per dollar the first time in a decade, but it was not as weak as many had expected.

Treasuries climbed off their worst levels following the release of the results of the Treasury Department's auction of $19 billion worth of thirty-year bonds, which attracted average demand.

The thirty-year bond auction drew a high yield of 2.335 percent and a bid-to-cover ratio of 2.24, which matched the average bid-to-cover ratio from the ten previous thirty-year bonds auctions.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Earlier this week, the Treasury revealed its auction of $38 billion worth of three-year notes and $27 billion worth of ten-year notes both attracted below average demand.

On the U.S. economic front, the Labor Department released a report unexpectedly showing a modest decrease in first-time claims for unemployment benefits in the week ended August 3rd.

The report said initial jobless claims dipped to 209,000, a decrease of 8,000 from the previous week's revised level of 217,000.

Economists had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week.

A report on producer prices may attract attention on Friday, as traders hope tame inflation data will inspire the Federal Reserve to continue cutting interest rates.


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Gold Futures Settle Lower As Stocks Rise On Chinese Data

Trading 08 août 2019 Commentaire »

Gold prices drifted lower on Thursday, as traders chose riskier assets such as equities after data showed China's exports unexpectedly rose in the month of July despite the ongoing U.S.-China trade dispute.

Stocks were back in demand after the People's Bank of China set the onshore yuan's reference rate at 7.0039 against one dollar, the weakest point in over 11 years.

The dollar index, which moved in a tight band of about 15 points, was up 0.04% at 97.59 around mid afternoon.

Gold futures for December ended down $10.10, or about 0.7%, at $1,509.50 an ounce.

On Wednesday, gold futures for December settled at $1,519.60 an ounce, gaining $35.50, or about 2.4% for the session.

Silver futures for September ended down $0.260, at $16.936 an ounce, while Copper futures for September settled at $2.6075 per pound, gaining $0.0365.

According to the data released by the Customs Office, China's exports rose 3.3% in the month, compared to forecasts for a 2% drop. On the other hand, imports fell 5.6%, less than the expected 8%.

In U.S. economic news, a report from the Labor Department said first-time claims for U.S. unemployment benefits unexpectedly showed a modest decrease in the week ended August 3rd.

The report said initial jobless claims dipped to 209,000, a decrease of 8,000 from the previous week's revised level of 217,000. Economists had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average crept up to 212,250, an increase of 250 from the previous week's revised average of 212,000.

A report released by the Commerce Department showed wholesale inventories were unchanged in the month of June.

The report said inventories of durable goods rose by 0.3% for the second straight month amid jumps in inventories of computer equipment and furniture.

On the other hand, inventories of non-durable goods fell by 0.4% in June after a 0.6% increase in May, partly reflecting a steep drop in inventories of drugs.


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Thirty-Year Bond Auction Attracts Average Demand

Trading 08 août 2019 Commentaire »

Finishing off this week's announcements of the results of its long-term securities auctions, the Treasury Department revealed Thursday that its auction of $19 billion worth of thirty-year bonds attracted average demand.

The thirty-year bond auction drew a high yield of 2.335 percent and a bid-to-cover ratio of 2.24.

Last month, the Treasury sold $16 billion worth of thirty-year bonds, drawing a high yield of 2.644 percent and a bid-to-cover ratio of 2.13.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.24.

Earlier this week, the Treasury revealed its auction of $38 billion worth of three-year notes and $27 billion worth of ten-year notes both attracted below average demand.


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August 8, 2019 : The GBP/USD Pair remains trapped until Bullish Breakout is achieved above 1.2230.

Trading 08 août 2019 Commentaire »

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Since May 17, the previous downside movement within the depicted bearish channel came to a pause allowing the recent sideway consolidation range to be established between 1.2750 - 1.2550.

On July 5, a bearish range breakout was demonstrated below 1.2550 (the lower limit of the depicted consolidation range). Hence, quick bearish decline was demonstrated towards the price zone of 1.2430-1.2385 (where the lower limit of the movement channel came to meet the GBPUSD pair).

On July 18, a recent bullish movement was initiated towards the backside of the broken consolidation range (1.2550) where another valid SELL entry was offered few weeks ago.

Moreover, Bearish breakdown below 1.2350 facilitated further bearish decline towards 1.2320, 1.2270 and 1.2125 which correspond to significant key-levels on the Weekly chart.

The current price levels are quite risky/low for having new SELL entries. That's why, Previous SELLERS were advised to have their profits gathered.

Recently, weak signs of bullish recovery were demonstrated around 1.2100.

This may push the GBPUSD to retrace towards 1.2260 then 1.2320 if sufficient bullish momentum is maintained above 1.2230.

On the other hand, The price zone of 1.2320 - 1.2350 (backside of the broken channel) stands as a prominent SUPPLY zone to be watched for new SELL positions if the current bullish pullback pursues towards it.

Trade Recommendations:

Intraday traders are advised to look for early bullish breakout above 1.2230 for a counter-trend BUY entry.

Conservative traders should wait for the current bullish pullback to pursue towards 1.2320 - 1.2350 for new valid SELL entries.

S/L should be placed above 1.2430. Initial T/P level to be placed around 1.2279 and 1.2130.

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

August 8, 2019 : EUR/USD Pair is demonstrating a Long-term BULLISH Reversal Pattern.

Trading 08 août 2019 Commentaire »

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Back in June 24, the EURUSD looked overbought around 1.1400 facing a confluence of supply levels.

Thus, a bearish movement was initiated towards 1.1275 followed by a deeper bearish decline towards 1.1235 (the lower limit of the previous bullish channel) which failed to provide enough bullish support for the EUR/USD pair.

In the period between 8 - 22 July, sideway consolidation-range was established between 1.1200 - 1.1275 until a triple-top reversal pattern was demonstrated around the upper limit.

Shortly after, evident bearish momentum (bearish engulfing H4 candlestick) could bring the EURUSD back below 1.1235.

Early bearish breakdown below 1.1175 facilitated further bearish decline towards 1.1115 (Previous Weekly Low) where temporary bullish rejection was demonstrated before bearish breakdown could take place on July 31.

On July 31, Temporary Bearish breakdown below 1.1115 allowed further bearish decline towards 1.1025 (lower limit of the depicted recent bearish channel) where significant signs of bullish recovery were demonstrated.

Risky traders were advised to look for bullish persistence above 1.1050 as a bullish signal for Intraday BUY entry with bullish target projected towards 1.1115, 1.1175 and 1.1235.

It's already running in profits. S/L should be advanced to 1.1160 to secure more profits.

This Week, the depicted Key-Zone around 1.1235 has been standing as a prominent Supply Area where TWO Bearish Engulfing H4 candlesticks were demonstrated.

Yesterday , another bullish visit was demonstrated towards 1.1235 where bearish rejection was anticipated.

Thus, the EUR/USD remains trapped between 1.1235-1.1175 until breakout in either directions (probably to the downside).

Bearish breakdown below 1.1175 is mandatory to allow further bearish decline towards 1.1125-1.1115 where another intermediate-term bullish position can be offered (The right shoulder of the expected reversal pattern).

Trade recommendations :

Conservative traders should wait for a deeper bearish movement towards 1.1125-1.1115 for a valid BUY entry.

S/L should be placed just below 1.1080 while initial T/P levels should be located around 1.1160 and 1.1200.

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

Philippines Cuts Interest Rates Further As Economy Slows

Trading 08 août 2019 Commentaire »

The Philippine central bank slashed the key interest rate on Thursday, citing a benign inflation outlook and slowing growth. The Monetary Board of the Bangko Sentral ng Pilippinas, or BSP, decided to lower the overnight reverse repurchase facility rate by 25 basis points to 4.25 percent. The move was in line with economists' expectations. "The Monetary Board believes that the benign inflation outlook provides room for a further reduction in the policy rate as a pre-emptive move against the risks associated with weakening global growth," the bank said. The previous change in the rate was a surprise quarter-point reduction in May, which was the first since 2016, after the economy expanded at the weakest pace in four years in the first quarter.

The bank also reduced the reserve requirement for banks by 200 basis points spread across three instances from end-May to late July to 16 percent. In November, the bank had raised its benchmark interest rate by 25 basis points to 4.75 percent.

The pace of growth slowed further in the second quarter, official data revealed earlier on Thursday. Gross domestic product grew 5.5 percent in the three months to June after a 5.6 percent expansion in the first quarter. Economists had forecast 5.9 percent growth. Inflation slowed to 2.4 percent, its lowest level in two years, in July, official data revealed earlier this week. Citing its latest projections, the BSP said inflation is likely to settle within the inflation target of 3.0 percent ? 1 percentage point for 2019 up to 2021.

"The risks to the inflation outlook continue to be seen as broadly balanced for 2019 and 2020, while they are seen to tilt to the downside for 2021," the bank said. While the potential adverse effects of a prolonged El Ni?o episode to inflation have subsided, weaker global economic prospects continue to temper the inflation outlook, the BSP added. The central bank said the outlook for domestic growth remains firm on a possible recovery in household spending and the faster implementation of the government's infrastructure spending plans.

"We expect the BSP to cut policy rates again by 25 bps at the September meeting given previous comments from Governor [Benjamin] Diokno pointing to a total of 50 bps worth of rate cuts before the end of the year," ING economist Nicholas Mapa said.

"Furthermore, we expect the BSP to reduce reserve requirements (RRR) further in the 4Q after it completes its 2019 rate cut cycle to help infuse fresh liquidity into the market."

The trade war escalation between China and the U.S. is causing concerns of a severe global economic slowdown.

This was one among the major reasons why the Federal Reserve slashed its funds rate last week, the first such move since 2008.

Central banks across the world are busy following suit with those in New Zealand, India, and Thailand cutting their rates this week.


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U.S. Wholesale Inventories Unexpectedly Unchanged In June

Trading 08 août 2019 Commentaire »

With a drop in inventories of non-durable goods offsetting an increase in inventories of durable goods, the Commerce Department released a report on Thursday showing wholesale inventories in the U.S. were unchanged in the month of June.

The Commerce Department said wholesale inventories were virtually unchanged in June after climbing by 0.4 percent in May. Economists had expected inventories to rise by 0.2 percent.

The report said inventories of durable goods rose by 0.3 percent for the second straight month amid jumps in inventories of computer equipment and furniture.

On the other hand, inventories of non-durable goods fell by 0.4 percent in June after a 0.6 percent increase in May, partly reflecting a steep drop in inventories of drugs.

The Commerce Department also said wholesale sales dipped by 0.3 percent in June after falling by 0.6 percent in May.

While sales of durable goods edged up by 0.1 percent amid a spike in furniture sales, sales of non-durable goods slid by 0.7 percent due in part to a slump in apparel sales.

Even with the drop in sales, the report said the inventories/sales ratio for merchant wholesalers was unchanged from the previous month at 1.36.


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*U.S. Wholesale Inventories Unchanged In June

Trading 08 août 2019 Commentaire »

U.S. Wholesale Inventories Unchanged In June


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

South Africa Manufacturing Output Drops In June

Trading 08 août 2019 Commentaire »

South Africa's manufacturing output declined in June, preliminary data from Statistics South Africa showed on Thursday.

Manufacturing output dropped a non-adjusted 3.2 percent year-on-year in June, following a 0.4 percent rise in May.

The biggest negative contribution came from petroleum, chemical products, rubber and plastic products, basic iron and steel, non-ferrous metal products, metal products and machinery, and wood and wood products, paper, publishing and printing.

On a monthly basis, manufacturing output fell 1.5 percent in June, following a 1.9 percent in the previous month. Output dropped for a second straight month.


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Ireland Inflation Lowest In 5 Months

Trading 08 août 2019 Commentaire »

Ireland's consumer price inflation slowed to its lowest level in five months in July, after rising in the previous month, figures from the Central Statistics Office showed on Thursday.

The consumer price index rose 0.5 percent year-on-year in July, which was slower than 1.1 percent increase in June. In May, inflation was 1.0 percent.

Prices of housing, water, electricity, gas and other fuels rose 4.0 percent and those of alcoholic beverages and tobacco grew by 2.5 percent.

Meanwhile, prices for communications and furnishings, household equipment and routine household maintenance declined 6.8 percent and 3.8 percent, respectively.

On a monthly basis, consumer prices fell 0.2 percent in July, reversing a 0.2 percent rise in the previous month.

The HICP followed trends similar to the CPI in July.


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