Month: November 2012

Source: ForexYard

The AUD saw substantial gains during overnight trading, after the RBA decided to leave Australian interest rates unchanged at 3.25%. Most analysts were predicting that the rates would be lowered to 3%. The AUD/USD shot up more than 50 pips after the news was released to trade as high as 1.0436.

The euro spent most of the night at or near a recent two-month low against the USD, as investors eagerly await a Greek parliamentary vote tomorrow seen as crucial for Athens to receive a new round of bailout funds. The EUR/USD is currently trading at 1.2774.

Both crude oil and gold spent most of the night range trading, as investors continued to await the results of today’s US presidential and congressional elections before opening positions.

Main News for Today

UK Manufacturing PMI-09:30 GMT
• The British pound has taken significant losses in recent days against the US dollar
• If today’s manufacturing PMI comes in above the expected 0.3%, the pound could see a modest recovery

German Factory Orders- 11:00 GMT
• Forecasted to come in at -0.3%, well above last month’s -1.3%
• Any better than expected data could help the euro recover some of its recent losses against the USD and JPY

US Presidential/Congressional Elections- All Day
• While the official outcome of the elections likely will not be known until late tonight or tomorrow morning, analysts will be issuing predictions throughout the day which are likely to result in market volatility.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

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By Central Bank News

By Central Bank News
    Australia’s central bank kept its benchmark cash rate unchanged at 3.25 percent, defying expectations for a rate cut, and said the impact of previous rate cuts would continue to stimulate activity for some time and the outlook for the global economy was looking a bit more positive.
    The Reserve Bank of Australia (RBA), which has cut rates by 100 basis points this year, also said inflation was “slightly higher than expected” though still consistent with the bank’s medium-term target of 2 to 3 percent.
    “With prices data slightly higher than expected and recent information on the world economy slightly more positive, the Board judged that the stance of monetary policy was appropriate for the time being,” the RBA said in statement, quoting its governor, Glenn Stevens.
    Consumer prices in Australia rose 1.4 percent in the three months that ended in September from the June quarter, for a rise of 2.0 percent through the year, up from a rise of 1.2 percent through the year to the end of the June quarter.
    Referring to this year’s rate cuts, the most recent in October and September, the RBA said interest rates for borrowers were now below their medium-term average, savers were facing increased incentives to look for assets with higher returns, business demand for external funding had risen, the housing market had strengthened and share prices had risen.

    “Further effects of actions already taken to ease monetary policy can be expected over time,” the RBA said, adding that the exchange rate remains higher than expected, given lower export prices and the weaker global outlook.
    Australia’s Gross Domestic Product expanded by an annual 3.7 pct in the second quarter, down from 4.3 percent in the first quarter.
    A return to “very strong growth in consumption is unlikely” though there are signs of ongoing growth, the RBA said, adding that overall economic growth had been running close to trend in the past year,  helped by large increases in capital spending in the resource sector. However, the investment in resources is expected to peak next year, at a lower level than expected six months ago.
   The RBA said global economic growth is forecast to be a little below average for a time and risks to the outlook remain to the downside, mainly due to Europe where economic activity is still contracting.
    “Risks elsewhere seem more balanced,” the RBA said, noting the U.S. was growing moderately while “recent data from China suggest growth there has stabilized.”

    www.CentralBankNews.info

USDJPY stays in a upward price channel on 4-hour chart, and remains in uptrend from 77.43, the fall from 80.67 is likely consolidation of the uptrend. Support is at the lower line of the price channel, as long as the channel support holds, the uptrend could be expected to resume, and another rise towards 81.00 is possible after consolidation. On the other side, a clear break below the channel support will indicate that lengthier consolidation of the uptrend is underway, then range trading between 79.27 and 80.67 could be seen to follow.

Daily Forex Forecast

By MoneyMorning.com.au

The Other Race that Stops the Other Nation…

With media attention focussed on the big race this week, it may have slipped your attention that another big race is set to be run on the same day… although we won’t learn the outcome until early Wednesday morning.

I’m talking of course about the US presidential election – contested by incumbent Barack Obama and challenger Mitt Romney.

Now, you may not give a hoot about local politics, let alone what happens in the US elections. But as Dan Denning explains in this brand new video (below) there’s so much interesting stuff around the US presidential election that you never get to hear about – because it isn’t covered by the mainstream media.

Dan’s briefing (complete with slides) covers the last 50 years of American Presidential elections, this week’s election, the complexities and the constitutionality of the electoral college, the case for (and against) Federalism, and the investment implications of the US election – no matter if Obama clings on for another four years or Romney sweeps to power.

It’s called ‘Indecision 2012’ and it’s your non-mainstream guide to the American election. To watch it now, click on the image below.

If history, politics, and a discussion of the dangers of pure democracy aren’t your thing, I’d give it a miss. But if you’re a news and political junkie, this is right up your alley. To watch it now, click on the image below.

A Non-Mainstream Guide to the US Presidential Election

By TraderVox.com

Tradervox.com (Dublin) – Will BOE extend the bond-buying program or is it going to take a leap of faith by adopting the untested Lending for Funding? This is a question most investors and economists are asking themselves as the Bank of England Monetary Policy meeting draws closer. The asset purchases have lost support, with both BOE deputy governors questioning its effectiveness. The market has also reversed sentiments for additional stimulus as data from UK indicate increased economic growth. If the MPC decides to halt the asset-purchases program, the BOE will be left with the Funding for Lending Scheme as the only official policy tool to spur growth in the kingdom.

According to Steven Bell, the Chief Economist in London at hedge fund GLC Ltd, the situation is quite different from what the UK is used to as the BOE has relied on the asset-purchases program to spur growth. He noted that the search for an alternative is gathering pace. He added that the central bank will be left with the FLS incase the economy reverts. The FLS, which was established three months ago, seeks to encourage financial institutions in the country provide cheap credit to companies and households. This is different from the bond-purchases program which has trickle-down effect on companies and households.

Most of the economists in the market are forecasting that the BOE will leave the rate unchanged at 375 billion pounds. Few economists are forecasting an additional 50 billion pounds and a section of the market predict the central bank to make an additional 25 billion pound. The nine-member committee will meet on Nov. 7-8. The pound has lost 0.2 percent against the dollar to trade at $1.5996.

The minutes of the MPC last meeting showed that some members questioned the impact of another QE. Charlie Bean, one of the BOE’s Deputy Governors, noted that the businesses’ and consumers’ concerns about the economic outlook may undermine the impact of another QE. The second Deputy, Paul Tucker, admitted in September that the asset-purchases program has lost its effectiveness.

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
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

The tight race between President Barack Obama and Republican rival Mitt Romney has made for a high level of anxiety. Markets hate uncertainty, but the uncertainty about who will lead the country, and how, ends with Tuesday’s election. The election could be a turning point for markets and the economy.

In the politically packed days ahead, China’s ruling Communist party begins the 18th congress in its history on Thursday, and there is also a two-part parliamentary vote In Greece.

Legal information

Video courtesy of en.jyskebank.tv

London Gold Market Report
from Ben Traynor
BullionVault
Monday 5 November 2012, 07:30 EST

SPOT MARKET gold bullion prices rallied above $1680 an ounce Monday morning in London, having earlier fallen to a nine-week low, while stock markets edged lower and US Treasury bonds gained, with one day to go before the US presidential election.

The US Dollar Index, which measures the Dollar’s strength against other major currencies, rose to a two-month high.

“Gold is still holding the long-term uptrend support at $1631,” says the latest technical analysis from bullion bank Scotiabank.

“There is also support at $1661.”

Silver bullion rallied back to $31 an ounce, while on the commodities markets, oil was broadly flat while copper prices edged lower.

Gold remains more than 2% off where it started the month, while silver is down more than 4%, after both metals fell sharply on Friday following the release of better-than-expected US nonfarm payroll data.

Bullion dealers in Asia meantime “are not in a rush to buy because there is plenty of supply around,” one Singapore-based trader told newswire Reuters this morning.

“But if prices drop below $1650, there will be good demand and supply will tighten up.”
This Sunday sees the festival of Dhanteras in India, followed by Diwali two days later, both traditionally associated with buying gold.

“The peak marriage season is immediately after Diwali,” says Mehul Choksi, chairman of Indian jewelry group Gitanjali.

“We expect sales to grow by 35-40% this Dhanteras.”

“If gold remains at the current price level,” adds Kumar Jain at Mumbai jewelers Umedmal Tilokchand Zaveri, “jewelry sales will definitely surge as people are also buying for the marriage season.”

In the US, the so-called speculative net long position of Comex gold futures and options traders – the difference between the numbers of bullish long and bearish short contracts held by traders classified as noncommercial – fell for the third week running in the week to last Tuesday, weekly figures published Friday by the Commodity Futures Trading Commission show.

“Given the excessive length of the past weeks and a rising uncertainty among investors over the ability of QE3 to support prices and/or the longevity of the Fed’s open-ended commitment to easing, the liquidations [of long positions] are unsurprising,” says Standard Bank commodities strategist Marc Ground.

“The market is considerably less strained than it was several weeks ago — net speculative length as a percentage of open interest has come off considerably…which could see some consolidation emerge.”

With one day left before the US election, opinion polls show Barack Obama and Mitt Romney are neck and neck.

“Obama is clearly ‘favored’ by the commodities markets,” says a note from Commerzbank, “mainly because of his support for Ben Bernanke  and the ultra-expansionary monetary policy of the US Fed, [but] any ‘disappointment’ if Romney should come out on top is likely to be short-lived.”

“The financial markets might not like [an Obama win],” adds Steve Barrow, head of G10 research at Standard Bank.

“The Dollar could go down…[but] we don’t expect any weakness to last—at least not against the Euro. For here there’s something of a gap opening up between the US’s economic performance and that of the Eurozone.”

Greek prime minister Antonis Samaras has promised MPs that a fresh round of austerity measures would be “the final one”, ahead of a parliamentary vote on reforms this Wednesday. The result of the vote could influence whether or not Greece gets its next tranche of bailout money, worth €31 billion.

“The Greek risk could come to a head this week,” says Holger Schmieding, chief economist at Berenberg Bank.

“Greece matters as a trigger of potential contagion to the much bigger economies of Italy and Spain.”

The number of unemployed in Spain rose by 128,200 last month, official figures published this morning show, considerable more than expected.

Some European sovereigns could potentially reduce their borrowing costs by issuing bonds collateralized with gold bullion, CNBC reports, citing Tilburg University economist Sylvester Eijffinger.

Eijffinger is the latest economist to back such an idea, which has been proposed by the World Gold Council and which the subject of a draft paper published by the European Parliament in September.

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. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012

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.

By TraderVox.com

Tradervox.com (Dublin) – The sterling pound advanced against the euro for the second week as improvements in the UK economy dampened speculation of additional stimulus. The sterling pound remained low against the dollar, as reports last week showed that the US employers added more jobs last month than the market was expecting. The sterling’s strength against the euro came just days before the Bank of England Monetary Policy Committee meeting on November 7-8. The MPC will discuss whether to extend the asset-purchases program. It refrained from extending it in their last meeting last month.

According to Childe-Freeman, who heads foreign exchange strategy in London at Bank of Montreal, the recent news from UK has been supportive of the pound. He noted that the UK construction has particularly improved. He projected that the sterling will continue to rise against the pound as far the UK economy keeps providing positive news. He also suggested that there is decreased expectation of QE from the MPC when they meet this week.  The UK currency has been supported by the expansion reported in the construction sector.

According to a report last week, the gauge of construction activity expanded to 50.9 in October, from the 49.5 registered in September. This was better than the median market estimate of 49. The UK economy came out of a recession in the third quarter when the GDP expanded by one percent. The positive reports from the UK were supported by the Confederation of British Industry report which forecast a growth of 1.4 percent in 2013. Following these reports, most economists and analysts have changed their previous bets of Bank of England adding stimulus.

The pound advanced against the euro by 0.2 percent to 799.91 pence at the start of trading in London from last week’s close of 80.12 pence per euro. It reached its strongest level since October 2 of 79.86 pence. The UK currency was little changed against the dollar, exchanging at $1.6006 down from last week’s close of $1.6031.

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
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox