Australian Up against the Kiwi on Employment Reports

By TraderVox.com

Tradervox.com (Dublin) – The Aussie appreciated against the kiwi for a third straight day after data from Australian showed that payrolls increased in July while unemployment increased in New Zealand. The Australian dollar reached its strongest in four months against the New Zealand counterpart as regional shares advanced on Chinese inflation data which is projected to offer positive news in the Asia’s largest economy. A report on retail sales and industrial production in China is expected to be released today in Beijing.

Talking about the Australian job’s data, Andrew Salter, who is a Currency Strategist at Australian & New Zealand Banking Group Ltd in Sydney said that it was on balance and better than market expectation. He also predicted that the Aussie-kiwi pair will continue to increase this week. As the Australian currency was doing well in the market, the ten-year government bond yields gained 0.02 percentage point to reach 3.34 percent. However, in New Zealand, the two-year swap rate dropped by 0.05 percentage point to reach 2.78 percent today. The MSCI Asia Pacific Index for regional stocks increased by 0.9 percent, making this the fourth day in a row for the Asian stocks to rise.

The number of people who got employment in July rose to 14,000 according to a report from the Statistics Bureau in Australia. This was higher than the market prediction of 10,000 people. The unemployment rate in the country dropped to 5.2 percent in July from 5.3 percent registered in June. Report from China indicated that consumer prices increased by 1.8 percent in July while the Producer Price Index dropped by 2.9 percent. In Wellington, a Statistics New Zealand report showed that employment fell by 0.1 percent for the second quarter while unemployment rate increased from 6.7 percent to 6.8 percent.

The Australian currency advanced by 0.4 percent against the New Zealand counterpart to trade at NZ$1.3021. The Aussie increased against the US dollar to trade at $1.0613, which is the strongest since March 20.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
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AUD/CAD: Loonie Poised to Falter Against Aussie on Economic Data

Article by AlgosysFx

The AUD/CAD looks set to reverse its technical course on lower oil prices, as well as positive economic data from Australia. Amid signs of weakening demand in the US – Canada’s biggest trade partner – and slowing growth in Germany, crude consumption is on a shortfall. Since oil is a major export of the Maple Leaf, faltering oil prices are likely to debilitate the demand for the Canadian dollar.

On signs of economic distress, oil futures dropped for the first time in four days by as much as 0.9 percent. Data from the American Petroleum Institute showed that crude consumption declined 4 percent to 15.9 million barrels a day last week, which constitutes the biggest percentage decrease in a month. Likewise, gasoline usage was the lowest in the past months, according to the API figures.

In a speech at the Global Business Leaders Conference in London yesterday, Bank of Canada Governor Mark Carney acknowledged that the nation’s housing market has begun to ease and the growth of household debt is slowing. He recognized that this is in part due to recent actions by the federal government and the country’s banking regulator, adding that policy makers are prepared to take further measures to stem increases in debt if needed.

The economic docket today is perceived to show that Housing Starts for the month of July slowed down from the prior month. Economists forecast a figure of 212,000 for last month to rival the 223,000 optimistic statistic that beat estimates of 203,000. Should the projections prove accurate, this would post the second lowest data in five months, adding to analyses of an ease in the property market. Also, StatsCan is deemed to put on record that Trade Balance last June stayed in the negative for the third straight month. From a minus 0.8 Billion figure for May, the recent data is to show that the deficit widened to minus 0.9 Billion. These fundamental news are seen to hurt the prospects of the Loonie today.

In contrast, the number of people employed in Australia rose by 14,000, according to the Australian Bureau of Statistics earlier. This Employment Change exceeded the 10,200 median estimate. Further, the jobless rate fell to 5.2 percent last month from a revised 5.3 percent in June. These economic data led the Aussie dollar to rise; also as regional shares climbed following Chinese inflation data that could offer room for further easing in Asia’s biggest economy. With these economic news today, a long position is advised for the AUD/CAD exchanges, to the detriment of the Canadian currency.

Get more news and analysis at AlgosysFx Forex Trading Solutions

 

Gold Seeks “Foothold Above $1600”, China Stimulus “Likely to be Positive for Gold”

London Gold Market Report
from Ben Traynor
BullionVault
Thursday 9 August 2012, 07:00 EDT

WHOLESALE MARKET prices to buy gold bullion hovered in a tight range around $1615 an ounce for much of Thursday morning in London – marginally above where they started the week – before dipping slightly around lunchtime, while stock markets also edged lower following gains earlier in the week.

“Gold seems to have gotten a foothold above the $1600 level and seems to be relatively stable,” says Robin Bhar at Societe Generale

“It’s still showing this correlation to riskier assets. We’ve seen a bit of a rally in the oil market and equities, and gold has kept a par with those moves.”

Prices to buy silver also ticked lower towards the end of Thursday morning, dipping to $28.04 per ounce, while other commodities were broadly flat.

“Like gold, silver is showing no trend momentum,” says technical analysts at bullion bank Scotia Mocatta.

“We continue to watch the $28.40 level on the upside and $27 on the downside.”

Chinese consumer inflation continued to fall last month, dropping to 1.8% – down from 2.2% in June – according to official consumer price index (CPI) data published Thursday.

Producer price inflation fell further into negative deflationary territory, while industrial production and retail sales growth both slowed.

With inflation falling and the economy showing signs of slowdown, “the numbers confirm that the door for more monetary easing is open,” reckons Dariusz Kowalczyk, economist at Credit Agricole.
“[However], we expected CPI inflation rise from now on, reaching 3.8% at year end.”

“Any relaxation of monetary policy is likely to be very positive for gold,” adds Nomura analyst Saeed Amen in London.

“Gold isn’t fully pricing in further easing.”

Over in India, which lost its position as the world’s biggest gold buying nation to China in the six months to March, jewelers are finding that some consumers are opting to buy gold in less quantity, purchasing smaller items of gold jewelry, Mineweb reports.

“People do make their annual jewelry purchases at this time,” says precious metal retailer Madhukar Jha.

“Marriage season will soon be here and the high gold price will not stop purchases.”

As the Rupee has fallen on currency markets, the Rupee price to buy gold has continued to set records this year, despite the wholesale market  Dollar price retreating from last September’s $1920 per ounce high.

India’s new finance minister Palaniappan Chidambaram meantime described gold bullion as “not a productive asset” earlier this week, as he laid out his plans to boost investment and the economy.

“In 2007-08, savings touched 36% of GDP. It is now down to 32% of GDP,” Chidambaram said.

“One of the reasons may be a perceived lack of attractive investment opportunities and instruments.

Hence the attraction of gold, but gold is not a productive asset and the demand for gold worsens the current account deficit.”

Chidambaram added that government policies will be announced “to attract more people to invest in mutual funds, insurance policies and other well-designed instruments”.

Pranab Mukherjee, Chidambaram’s predecessor as finance minister and now India’s president, argued in June that Indians should invest in “wealth generating” assets rather than buy gold.

Mukherjee twice raised import duties on bullion in the first half of the year, as well as gold sales taxes, sparking a three-week strike by many of India’s gold jewelers.

Here in London, Standard Chartered is seeking legal advice over whether it can take action against the New York State Department of Financial Services, after the regulator accused the bank of being a “rogue institution” over dealings with Iran.

“Our reputation has been damaged,” Standard Chartered chief executive Peter Sands told the Financial Times.

“It’s not worth pretending that isn’t the case.”

Shares in Standard Chartered were the FTSE’s biggest gainers during Thursday morning’s trading, regaining some ground after falling sharply following the DFS allegations. StanChart’s share price however remained more than 10% below where it closed last Friday.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

 

 

EUR Takes Losses Following German Data

Source: ForexYard

The euro took losses against several of its main currency rivals yesterday, after worse than expected economic data out of Germany led to risk aversion in the marketplace. That being said, analysts were quick to say that expectations for future ECB action to lower Spanish and Italian borrowing costs would likely limit any euro losses. Today, traders will want to pay attention to a batch of US data that has the potential to inject volatility in the marketplace. At 12:30 GMT, the Trade Balance and Unemployment Claims figures will be released. If either signals growth in the US economy, risk taking may resume, which could help the euro recoup some of yesterday’s losses.

Economic News

USD – US Data Set to Impact Markets Today

The US dollar saw a mixed day in the marketplace yesterday, as risk aversion resulted in gains against currencies like the CHF, while British news led to significant losses against the GBP. The USD/CHF advanced more than 50 pips during European trading, eventually peaking at 0.9743 before staging a slight downward correction and finding support at the 0.9730 level. The GBP/USD advanced more than 100 pips over the course of the day, after the Bank of England Governor refrained from announcing a new round of monetary easing, as some investors had been expecting. The pair traded as high as 1.5669 before dropping to the 1.5640 level.

Today, a batch of US news has the potential to lead to market volatility. Traders will want to pay attention to the Trade Balance and Unemployment Claims figures, set to be released at 12:30 GMT. While the US trade balance is forecasted to have slightly improved last month, the number of Americans filing for first time unemployment insurance is expected to have increased from last week. If any of the news signals a downtrend in the US economic recovery, risk aversion could return to the marketplace which may benefit safe-haven currencies like the greenback during afternoon trading.

EUR – Continued Hopes for ECB Action Limit Euro Losses

The euro took losses against several of its main currency rivals yesterday after a worse than expected German indicator led to risk aversion in the marketplace. The EUR/USD fell close to 60 pips as a result, eventually reaching as low as 1.2326. The EUR/GBP also took significant losses after the Bank of England refrained from announcing any new monetary easing steps to boost the British economic recovery. The pair fell almost 70 pips over the course of European trading to trade as low as 0.7878.

Turning to today, euro traders will want to pay attention to the ECB Monthly Bulletin, set to be released at 8:00 GMT. The bulletin provides an overview of the ECB’s economic forecast for the euro-zone. A positive outlook could help the common-currency recoup some of yesterday’s losses. In addition, traders will also want to continue monitoring announcements related to ECB plans to limit borrowing costs in Spain and Italy. Any details regarding the plan may result in risk taking and help the euro over the course of the day.

Gold – Gold Advances despite Risk Aversion

Gold saw fairly significant gains during mid-day trading yesterday, despite risk aversion in the marketplace which typically leads to losses for the precious metal. Analysts attributed the bullish movement to expectations that the ECB will soon move to initiate a new round of stimulus to boost ailing euro-zone economies. Gold moved up close to $14 an ounce yesterday to peak at $1616.55 before staging a slight downward correction.

Today, gold traders will want to pay attention to the US Trade Balance and Unemployment Claims figures, both set to be released at 12:30 GMT. Should either of the indicators come in worse than forecasted, investors may shift their funds away from higher-yielding assets which could cause the price of gold to turn bearish.

Crude Oil – US Inventories Figure Helps Crude Extend Gains

The price of crude oil advanced during European trading yesterday, as a lower than forecasted US Crude Oil Inventories figure signaled to investors that demand in the world’s leading oil consuming country has gone up. Crude advanced over $1.50 a barrel, reaching as high as $94.68 before staging a downward correction later in the day.

Today, traders should pay attention to US news and its impact on risk sentiment among investors. Any better than expected news could help boost risk taking and may also be taken as a sign that demand for crude in the US is still increasing. In such a case, oil could see additional gains during afternoon trading.

Technical News

EUR/USD

A bearish cross on the daily chart’s Slow Stochastic indicates that this pair could see downward movement in the near future. Furthermore, the Williams Percent Range on the same chart is in overbought territory. Traders may want to open short positions.

GBP/USD

Most long-term technical indicators show this pair range-trading, meaning that no defined trend can be determined at this time. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

USD/JPY

The Bollinger Bands on the daily chart are narrowing, indicating that this pair could see a price shift in the near future. Furthermore, the Williams Percent Range on the weekly chart has dropped into oversold territory, signaling that the price shift could be upward. Going long may be the smart choice for this pair.

USD/CHF

The daily chart’s Slow Stochastic has formed a bullish cross, meaning that an upward correction could form in the near future. In addition, the Williams Percent Range on the same chart is currently close to being in oversold territory. Going long may be the wise choice for this pair.

The Wild Card

AUD/USD

The Relative Strength Index on the daily chart is close to crossing over into overbought territory, signaling that a downward correction could occur. Furthermore, the Slow Stochastic on the same chart has formed a bearish cross. Forex traders may want to open short positions ahead of a possible downward breach.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

 

Forex Daily review- 09.08.2012

Forex Daily review brought to you by REAL FOREX | www.Real-forex.com

EUR/USD
Yesterday the market did not do anything remarkable and basically continued to move without a specific direction. The good data that came from Australia gave some fuel to the ascending moves on the majors.
 
On the other hand, both economical releases that came from China came out worse than it’s previous and it shows there is a deceleration in China in parameters like personal consumption, building expenses, industrial production and retail sales. Those releases are more important to the world than the Australian data, therefore it will have a strong impact on the decisions of the traders regarding the direction of the market on the opening of the London session.
From a technical point of view, on a 4 hour EUR/USD chart the pair is moving in an ascending price channel and currently located on its high lip.
 
the main trend is descending, therefore we will look for Short trades rather than Long.
On the last 3 days the pair was correction the last sharp move upwards and still located under the Bollinger’s moving average, which is a sign for the continuation of the correction.
Possible trade can be selling on the breaking of the 1.2365 price level with a stop above the daily peak and target on the lower lip of the price channel.
 
You can see the chart below:
 eur/usd
 
 
Important announcements for today:
09.30 (GMT+1) GBP – Trade Balance
13.30 (GMT+1) CAD – Trade Balance
13.30 (GMT+1) USD – Trade Balance
13.30 (GMT+1) USD – Unemployment Claims
 

What This ‘Junk’ Tells You about Stock Prices

By MoneyMorning.com.au

Our old pal, Australian Wealth Gameplan editor Dan Denning has just returned from a big investment conference in Vancouver, Canada.

He tells us the subject on most people’s lips was the so-called bond bubble.

That’s the theory that US government bond yields are so low, they couldn’t possibly go any lower.

Well, many thought that in 2010 when the 10-year US government bond yielded 3.5%. The belief was that no-one would accept less than that in return for lending money to the government for 10 years.

They were wrong.


Today, the same US government bonds yield 1.62%. Investors will lend to the US government for 10-years at super-low rates. So, is there a bond bubble or not? And either way, what does it mean for your investments? We’ll look at that today…

Of course, you’ve got to remember that it isn’t just normal investors piling into government bonds. The biggest investor in US government debt is the US Federal Reserve.

So one branch of the government owns the debt of another branch of the government. (Yes, we know the Fed is a private company, but let’s be honest, one has consumed the other…arguably the Fed has consumed the State.)

And no longer are central bankers quietly running the economy in the background. The global cabal of bankers now openly run and direct governments.

Even last weekend’s edition of the Australian Financial Review admitted it with the front-page headline, ‘Exclusive: The man who really runs Australia’. Underneath was a photo of grim-faced Reserve Bank of Australia governor, Glenn Stevens.

A New Public Holiday

And to understand the influence of central banks, you only have to see the hysteria leading up to the RBA’s interest rate decision.

Yesterday, one online property newsletter devoted no fewer than seven out of eight headlines to the RBA decision…along with the RBA emblem and a heading proclaiming it was ‘Interest rate decision day’.

It won’t be long before the blind public honour central bankers in the same way as other prophets. Perhaps soon we’ll celebrate ‘Interest rate decision day’ with the exchanging of gifts or the giving of chocolate.

On the other hand, maybe they’ll precede each decision with a lavish parade with cheering crowds…Nuremburg style. We don’t know about you, but the RBA emblem has something of a menacing, totalitarian look:

It reminds us of another menacing symbol.

But maybe that’s just us. Anyway, there’s no doubt bond yields have tumbled. Even the 10-year Aussie government bond yield is now only 3.34%. That’s much lower than a year ago when the rate was 5%.

But what about other yields? Such as corporate bonds and dividend yields.

A Mixed Bag of Yields


If you look at the yield of A-rated corporate bonds, like US government bonds, these too have sunk to multi-year lows:

Source: www.epreferreds.com


A-rated two-year bond yields stand at about 1%. That’s much lower than the 5% yields before the financial meltdown in 2008. And much lower than the 12% peak during the meltdown.

But yield behaviour isn’t uniform. Yes, government and corporate bond yields are a lot lower than five years ago. But the same isn’t so for another group of corporate bonds…junk bonds.

As the following chart shows, US junk bond yields, which are currently just over 7%, are trading at their 2003-2007 average:

So what does that mean?

Well, arguably, despite junk bond yields appearing to be relatively high at 7.6%, it’s worth remembering that Italian and Spanish 10-year bond yields are 5.93% and 6.78% respectively.

In other words, investors put high-risk CCC-rated bonds on an equal risk-rating with Italian and Spanish government debt. That’s despite analysis from the Stern School of Business showing CCC-rated bonds have a 22% chance of default within a year!

It just goes to show the market’s lack of confidence in the Eurozone.

5 Stocks Still to Buy

The other yields still looking good are stock market yields. The only question is whether these yields are sustainable. In other words, are dividend yields high because investors expect companies to cut the dividend?

That’s possible. But if it does happen, it suggests stock prices have this potential already built in. Meaning, if companies do cut dividends, the price decline may not be too severe.

In our view, that makes it worthwhile to punt on a few beaten-down blue-chip stocks.

A few weeks back we listed five stocks that you should think about buying for your share portfolio. The stocks are a mixture of growth and yield. We recommended you look at Harvey Norman [ASX: HVN], JB Hi-Fi [ASX: JBH], Myer Holdings [ASX: MYR], Qantas [ASX: QAN], and Toll Holdings [ASX: TOL].

We still rate them as a buy today for anyone who’s looking to add a few stocks to their portfolio. (Although remembering what we wrote yesterday, it doesn’t mean you have to buy all five. Any two or three of these stocks have the potential for growth and dividends…providing you’re happy to take on the risk.)

The point we’d make is you can wait a long time for an obvious bubble to pop. Whether it’s house prices, stocks or bonds, asset prices have a habit of going much higher (or lower) than most think possible.

So if you’re sitting on the sideline, waiting for the bond bubble to burst and the economy to collapse before you buy stocks, good luck, because there’s a chance you could have a long wait.

We don’t know when the US bond bubble will burst. It could be next week, or it could be in 10 years. But we know one thing for sure, we’ve got no intention of sitting around waiting for it to happen.

Because right now, for investors who are prepared to stick their necks out and take a calculated risk, there are a whole bunch of stocks selling at discount prices.

As we’ve said many times, that doesn’t mean investing your whole wealth in the stock market. But if you don’t have at least a 10-20% exposure to top quality blue-chips and a 5-10% exposure to speculative small-caps, you’re potentially missing out on some big gains in the years ahead.

Cheers,
Kris

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What This ‘Junk’ Tells You about Stock Prices

Nokia Forecasted to Turn Bearish

Source: ForexYard

printprofile

Over the last week, shares in Nokia have jumped from $2.13 to a high of $2.64 after the company announced that it would only be using Microsoft software in its smartphones from now on. That being said, traders should be aware that technical indicators are signaling that the company’s stocks may have entered overbought territory, and could see a downward correction in the near future. As can be seen in the chart below, the Relative Strength Index is approaching the overbought zone, while the Slow Stochastic has formed a bearish cross. This may be a good time for traders to open short positions ahead of a possible downward correction.

nokia 9.8

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Central Bank News Link List – Aug 9, 2012

By Central Bank News

    Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news

Indonesia keeps rate steady, expects solid growth

By Central Bank News
    Indonesia’s central bank kept its benchmark overnight reference rate, the BI rate, unchanged at 5.75 percent, as widely expected, saying it expects the country’s economy to remain solid during the current global slowdown due to buoyant domestic consumption and investment.
    Nevertheless, Bank Indonesia noted that exports had declined in the second quarter, reflecting the global slowdown and lower commodity prices.
    “The current policy rate is considered consistent with inflation forecast, which is expected to remain low and contained within its target range of 4.5%±1% in 2012 and 2013,” Bank Indonesia said in a statement following a meeting of its board of governors. BI cut its key rate by 25 basis points in February.
    Surprising many economists, Indonesia’s economy expanded by 6.4 percent in the second quarter from a year ago, up from a revised 6.3 percent in the first quarter.
    For 2012 the central bank expects growth between 6.1 and 6.5 percent, rising to 6.3-6.7 percent in 2013, supported by private consumption and investment.

    Consumer prices in Indonesia rose 0.70 percent in July from the previous month for a year-on-year rate of 4.56 percent, but the central bank said the rise was due to seasonal factors and a shock to food prices.
    BI noted that the current account deficit rose in the second quarter due to lower exports and accelerating imports, both of raw materials and capital goods. But the bank said it expects the deficit to decline in the second half of the year to a level that “will not compromise macroeconomic stability.”
    “Some factors underpinning that estimation are a better global economy and commodity prices supported by some policies undertaken by Bank Indonesia and the government,” BI said, adding that strong investment and imports of capital goods in recent years is expected to boost the capacity of the domestic economy and thus reduce its dependence on imports.
     It added that international reserves at the end of July were $106.6 billion, or 5.6 months worth of imports and government debt service.
    www.CentralBankNews.info

Market Review 9.8.12

Source: ForexYard

printprofile

The euro took moderate losses against the US dollar last night, but remained bullish overall as investor anticipation regarding potential ECB action to lower Spanish and Italian borrowing costs kept risk sentiment high. Additionally, better than expected Australian employment data caused investors to shift their funds to higher yielding assets, including the aussie. The AUD/USD advanced close to 60 pips during Asian trading to reach a fresh 4 ½ month high at 1.0612. The pair is currently trading at 1.0590.

Main News for Today

ECB Monthly Bulletin- 08:00 GMT
• The bulletin outlines the ECB’s economic forecast for the euro-zone
• A positive outlook could lead to more risk taking in the marketplace, which may help the euro against the US dollar and yen

US Unemployment Claims- 12:30 GMT
• Analysts are forecasting today’s figure to come in slightly higher than last week’s
• If the news comes in higher than 371K, the dollar could see additional losses against the JPY in afternoon trading

US Trade Balance- 12:30 GMT
• The trade balance figure is forecasted to come in at -47.4B, slightly better than last month’s -48.7B
• Any better than expected data could help the dollar recoup some of its recent losses against the EUR and AUD

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.