Month: January 2013

By www.CentralBankNews.info     The Bank of Canada (BOC) held its target for the benchmark overnight rate steady at 1.0 percent, as expected, but said a tightening of its policy stance was less imminent than previously expected due to a more muted outlook for inflation and slower growth in household credit.
    The BOC, which has maintained a tightening stance since last April, said the global economic outlook was slightly weaker than it expected in its October policy report and the economic slowdown in Canada in the second half of 2012 had been sharper than it had anticipated so the economy would first real full capacity in the second half of 2014, later than it previously forecast.
    The BOC cut its forecast for economic growth this year to 2.0 percent, down from 2.3 percent in October, but raised its 2014 forecast to 2.7 percent from a previous 2.4 percent.
     For 2012 the BOC now forecasts growth of only 1.9 percent, down from a previous forecast of 2.2 percent. In October, the BOC had forecast that Canada’s economy would return to full capacity by the end of 2013.
     “While some modest withdrawal of monetary policy stimulus will likely be required over time, consistent with achieving the 2 per cent inflation target, the more muted inflation outlook and the beginnings of a more constructive evolution of imbalances in the household sector suggest that the timing of any such withdrawal is less imminent than previously anticipated,” the BOC said.

     The BOC’s less hawkish stance comes as a surprise to most economists who had expected the bank to maintain its tightening stance due to concern over high household debt with the ratio of household debt to income reaching a historic high of 163 percent in the third quarter.
     Based on its previous tightening stance, economist had expected the BOC to start raising interest rates, steady since September 2010, late this year or early 2014.
    Slower growth in the second half of last year was due to weaker business investment and exports and the bank said caution about high debt levels meant that households had begun to cut spending.
     Business investment and exports are expected to rebound this year though the “persistent strength of the Canadian dollar” and a lower track for foreign demand will keep exports below their pre-recession peak until the second half of 2014, the BOC said.
    Consumption is expected to grow moderately and residential investment to decline.
    “The Bank expects the trend growth in household credit to moderate further, with the debt-to-income ratio stabilizing near current levels,” the bank said.
   Inflation has softened more than the BOC had expected and consumer prices are expected to remain around 1 percent in the near term before rising gradually to the bank’s 2 percent target in the second half of 2014.
   Canada’s headline inflation rate eased to a new low for the year at 0.8 percent in November from October’s 1.2 percent and Gross Domestic Product expanded by only 0.1 percent in the third quarter from the second quarter for annual growth of 1.5 percent, down from 2.8 percent in the second quarter.

    www.CentralBankNews.info

After making a dive of 47 pips in earlier exchanges, the AUDUSD currency pair is on a rebound. The US dollar is once more anticipated to pare its gains from the Australian currency as investors take in the day’s earnings reports. Trade sentiment has favored the riskier Aussie in the New York exchanges as the equities market carries the demand.

A report by CNBC.com’s JeeYeon Park states that “Stocks reversed earlier losses to close higher for a third-straight session Tuesday, with the Dow and S&P 500 extending their recent multi-year gains, ahead of a busy week of corporate earnings and amid hope for a deal on the debt ceiling.”

A day after markets were closed for Martin Luther king day, and following President Obama’s inaugural address exhorting the nation to rise up against the political deadlock in the nation’s capital that could frustrate his second-term efforts, stocks continued to hike. The nascent corporate earnings season is seen to buoy demand for risk. Today, the following are scheduled to report their fourth quarter financial data: McDonald’s, United Tech, Abbott Labs, Coach, WellPoint, Amgen, Apple, F5 Networks, Netflix, Sandisk, Symantec, and Western Digital.

Meanwhile, in the debacle over the debt ceiling, House Speaker John Boehner indicated yesterday that Republicans will vote on an extension of the federal debt ceiling to allow Treasury to borrow money until mid-May. White House spokesman Jay Carney indicated that the president would likely sign the measure if the Congress passes it.

In the Land Down Under, the recent improvement in the global economic outlook, added to rising share markets, healthy house prices and improving confidence levels are seen to steady the Reserve Bank on reducing interest rates, according to Savanth Sebastian, an economist in Sydney at a unit of Commonwealth Bank of Australia. “The central bank is unlikely to want rates to get too far from normal unless conditions take a drastic turn for the worse.”

Considering market confidence, a short-term buy position is suggested for the AUDUSD today. However, be on the lookout for probable technical corrections.

For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx Forex Trading Solutions.

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 23 January 2013, 07:30 EST

GOLD continued to hover near one-month highs above $1690 an ounce Wednesday morning, where it has spent most of this week, with dealers in India and China citing a slowdown in physical bullion demand.

Silver climbed above $32.30 an ounce, a one-month high, as stocks and commodities were broadly flat and US Treasuries gained.

“A clear break [for gold] of $1694 would take our view to bullish,” says the latest technical analysis from bullion bank Scotia Mocatta, which adds that “support is at $1666.”

“Typically we should see a lot of buying from China around this time of the year, but we are not,” one Singapore-based dealer told newswire Reuters this morning.

“They may have already stocked up for the holiday demand.”

China celebrates its Lunar New Year on February 10, a festival typically associated with a rise in gold buying.

Over in India, traditionally the world’s biggest gold buying nation, “the market remains quiet with the wedding season drawing to a close,” says a note from Societe Generale, which adds that India’s decision to raise gold import duties will have an impact on demand for small gold bars.

“Dealers [however] are expecting a revival in interest on the back of an appreciating Rupee.”

Moves to reduce the level of bullion imports will promote confidence in the Rupee, agrees HSBC Global Asset Management, which predicts increased investment flows into the country.

This year and next could see record average gold prices, according to a survey of analysts by Reuters, but the possibility of tighter monetary policy from central banks could mean the bull market reaches a “plateau”, respondents add.

The average silver price is expected to be up in 2013 compared to last year, but down on the 2011 average of $35.25 an ounce, according to the survey.

Buying gold is a good hedge in case “the system goes down”, according to Swiss investor Marc Faber, publisher of the ‘Gloom, Boom & Doom’ report.

“In the worst case scenario, in the systemic failure that I expect, it would still have some value,” Faber told an audience in Finland yesterday.

Faber also responded to comments from US economist Robert Shiller, who was also at the event and queried Faber’s recommendation to buy gold.

“You keep your US Dollars and I’ll keep my gold,” said Faber.
“We’ll see which one goes to zero first.”

In the UK, the Bank of England’s Monetary Policy Committee members voted 8-1 against extending quantitative easing at its meeting earlier this month, minutes from the meeting published this morning show.

One member, David Miles, voted to increase QE from the current £375 billion to £400 billion.

“Be in no doubt that we are ready to provide more stimulus if it is needed,” the Bank’s governor Mervyn King said in a speech in Belfast last night.

“Relying on generalized monetary stimulus alone, however, is not a panacea.”

King argued that Britain’s government should implement supply-side reform, though he did not give specifics, while also arguing that the Bank should not abandon inflation targeting after King leaves in the summer.

King’s appointed replacement, current Bank of Canada governor Mark Carney, suggested last month that a policy of nominal GDP targeting might be more appropriate, whereby the central bank aims to use policy to achieve a given nominal value of economic output.

UK unemployment meantime held steady last month at 4.8%, according to the claimant count measure.

Elsewhere in the UK, prime minister David Cameron promised Britain a referendum on whether or not the country should remain in the European Union, with a date set for 2017.

Across the English Channel, the finance ministers of eleven EU member states, including France, Germany, Italy and Spain, agreed Tuesday to look at introducing a so-called ‘Tobin tax’ on financial transactions, a move the British government opposes.

Banks in Vietnam have been told by the central bank they must settle all gold bullion loans to their customers by June 30, even though many loans are for a duration of five years or more.

“Banks may have to ask their gold borrowers to convert their loan into Vietnamese dong, or earmark money [for the bank] to buy back the gold,” one bank’s CEO says.

Many gold owners in Vietnam have had difficulty selling their bullion since the number of dealers authorized to trade was reduced after a central bank decree came into effect last week.

Japan’s biggest bullion retailer Tanaka Kikinzoku Kogyo meantime reported that it bought more gold from people than it sold last year for the eighth year running.

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 2013

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.

Source: ForexYard

The yen saw significant gains against both the euro and US dollar throughout yesterday’s trading session, after the Bank of Japan announced that their measures to increase inflation were not quite as strong as forecasted. Meanwhile, crude oil saw gains following better than expected German news which led to risk taking in the marketplace. Today, the main piece of economic news is likely to be the British Claimant Count Change at 9:30 GMT. A better than expected figure could boost higher-yielding assets during mid-day trading.

Economic News

USD – Dollar Takes Moderate Losses amid Investor Risk Taking

The US dollar took modest losses against several of its higher-yielding currency rivals during European trading yesterday, following a better than expected German ZEW Economic Sentiment figure, which led to risk taking in the marketplace. The USD/CHF lost more than 40 pips during mid-day trading, eventually reaching as low as 0.9274, before bouncing back to 0.9300 later in the day. The GBP/USD advanced close to 60 pips after the German data was released. The pair traded as high as 1.5879 before dropping back to 1.5855.

Today, a lack of significant news out of the US means that any dollar fluctuations are likely to come as a result of international indicators. The British Claimant Count Change could lead to additional losses for the greenback if it comes in above the forecasted 0.3K. Additionally, the dollar could take losses against the CAD if the Bank of Canada voices optimism regarding the future of the Canadian economy at the BOC Press Conference, scheduled for 16:15 GMT.

EUR – Euro Reverses Gains vs. USD

A significantly better than expected German ZEW Economic Sentiment figure helped the euro gain more than 70 pips against the US dollar during morning trading yesterday. That being said, the common-currency was not able to maintain its bullish trend, and began falling shortly after the news was released. The EUR/USD dropped from a peak of 1.3366 to 1.3296 by the end of the European session. Against the British pound, the euro fell some 50 pips during mid-day trading to eventually reach as low as 0.8380.

Any significant euro movements today are likely to come as a result of the British Claimant Count Change and MPC Meeting Minutes, both scheduled to be released at 9:30 GMT. Analysts are forecasting the Claimant Count Change to indicate a worsening employment situation in the UK, which if true, may generate risk aversion among investors and cause the euro to extend yesterday’s losses. Furthermore, if the MPC Meeting Minutes signal any kind of economic slowdown in England, riskier currencies like the euro may turn bearish.

JPY – BOJ Decision Turns Yen Bullish

The Japanese yen saw major gains against both the US dollar and euro yesterday, after the Bank of Japan announced that the steps it will be taking to increase inflation turned out to not be as aggressive as originally forecasted. The USD/JPY fell more than 150 pips during Asian and early morning trading, eventually reaching as low as 88.35. The EUR/JPY lost more than 240 pips during the same time period to trade as low as 117.31.

Turning to today, yen traders will want to pay attention to British employment data and its impact on risk taking in the marketplace. If unemployment in the UK increased last month, investors may shift their funds to safe-haven assets, which would give the JPY an additional boost.

Crude Oil – US Inventories Data Set to Impact Crude Prices Today

The price of crude oil gained close to $0.80 a barrel during European trading yesterday, after positive German economic sentiment data led to risk taking in the marketplace. The commodity traded as high as $96.41 during the mid-day session, before a downward correction brought prices to the $96.05 level.

Today, oil traders will want to pay attention to the US Crude Oil Inventories figure, scheduled to be released at 15:30 GMT. Following last week’s lower than expected figure, crude oil prices saw a significant boost. If today’s news once again comes in below the expected figure, it will likely be taken as evidence that demand for oil in the US is increasing, which would help the commodity remain bullish.

Technical News

EUR/USD

A bearish cross has formed on the daily chart’s MACD/OsMA, indicating that a downward correction could occur in the near future. This theory is supported by the Williams Percent Range on the weekly chart, which is currently in overbought territory. Opening short positions may be the smart choice for this pair.

GBP/USD

The Williams Percent Range on the weekly chart has crossed into oversold territory, indicating that an upward correction could occur in the near future. Furthermore, the Slow Stochastic on the daily chart has formed a bullish cross. Traders may want to open long positions for this pair.

USD/JPY

The Relative Strength Index on the weekly chart has crossed into overbought territory, indicating that a downward correction could occur in the near future. This theory is supported by the Williams Percent Range on the same chart, which has formed a bearish cross. Opening short positions may be the wise choice for this pair.

USD/CHF

While the MACD/OsMA on the weekly chart has formed a bullish cross, most other long-term technical indicators show this pair trading in neutral territory. Traders may want to take a wait and see approach for this pair, as a clearer trend may present itself in the coming days.

The Wild Card

USD/ZAR

The Slow Stochastic on the daily chart has formed a bearish cross, signaling that a downward correction could occur in the near future. Additionally, the Relative Strength Index on the same chart is approaching the overbought zone. This may be a good time for forex traders to open short positions ahead of possible downward movement.

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.

By www.CentralBankNews.info

Source: ForexYard

Hey Everyone,

Below are some market trends for today.

Good luck!

-Dan

Gold- May see upward movement today
Support- 1683.01
Resistance- 1702.91

Silver- May see upward movement today
Support- 31.79
Resistance- 32.51

Crude Oil- May see downward movement today
Support- 95.44
Resistance-97.25

Dax 30- May see downward movement today
Support- 7635.00
Resistance- 7758.94

EUR/USD May see upward movement today
Support- 1.3186
Resistance- 1. 3396

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.

Source: ForexYard

The yen extended its bullish run against both the US dollar and euro last night, following the Bank of Japan’s decision earlier in the week to initiate weaker than expected monetary easing steps. The USD/JPY fell 60 pips during the Asian session, while the EUR/JPY lost 94 pips.

Meanwhile, a worse than expected Australian CPI figure resulted in the AUD/USD falling close to 40 pips. The pair, which traded as low as 1.0526, has since staged an upward recovery and is currently stable at 1.0550.

Main News for Today

UK Claimant Count Change- 09:30 GMT

• The British unemployment figure is forecasted to come in at 0.4K, significantly higher than last month’s
• If today’s news comes in at or above the expected level, risk aversion could drive higher-yielding currencies, like the GBP, EUR and AUD, lower during mid-day trading

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.

USDJPY breaks below the upward trend line on 4-hour chart, suggesting that a cycle top has been formed at 90.24 on 4-hour chart, and consolidation of the uptrend from 82.11 is underway. Range trading between 87.79 and 90.24 would likely be seen in a couple of days. As long as 87.79 support holds, the uptrend could be expected to resume after consolidation, and a break above 90.24 could signal resumption of the uptrend. On the downside, a breakdown below 87.79 support will suggest that the uptrend from 82.11 has completed at 90.24 already, then deeper decline to 86.00-87.00 area is possible.

Daily Forex Analysis

By MoneyMorning.com.au

It amazes how anyone can be bearish on China’s economy  when its has just grown FIVE-FOLD in the space of ten years.

That’s right. My name is Alex Cowie — and I’m bullish about China.

It’s not exactly the most popular view in this office, but it’s what I believe.

We’ve had a great few emails recently asking us what we’re playing at, like this one from Phil:

‘Did I miss something? I’m not sure whether you guys have short memories, but what happened to your big predictions of China going bad?’

Well, one of the good things about working here is that no one tells you what to believe. There is no ‘party line’ we have to tow. Most of the Editors are bearish on China.

But I’m pretty much the odd one out. I’ve been unashamedly bullish on China for years now.

In fact in the January Diggers & Drillers newsletter, I’m shouting my pro-China view from the rooftops.

Because thanks to China, I actually think that the big trade of 2013 is to buy the best of the Australian resource market’s beaten up  junior mining stocks…

Now I’m not saying this because China just announced the first increase in its annual economic growth rate for two years. If you missed it, on Friday the December quarter GDP jumped to 7.9%, from 7.4%.

China’s Economy Grows for the First Time in Two Years

Source: Trading Economics

Any kind of improvement in China’s growth statistics is good news for resource stocks of course. As the world’s biggest consumer of commodities, Chinese economic growth will generate a jump in commodity demand.

But a single jump in quarterly growth isn’t the reason I’m making a Tarzan-like battle-cry for copper, iron ore and coal.

It’s something else altogether — something political — that makes me believe that 2013 will be the most incredible turn around year for the beaten up mining juniors.

Now I can’t give too much away as that would be unfair to paying readers of Diggers & Drillers. But I’d like to share with you a snippet to give you an idea of what I think’s in store for the year:

‘…I want to go on record today as saying that CHINA IS DOING JUST FINE.

 ‘The China bears like to overlook that the latest growth rate of 7.9% is above target (and never mind that 7.9% is still stellar growth by any standards).

‘And let’s remember that 7.9% growth today adds far more to China’s economy — and therefore requires more commodities — than 13% growth did when China was a third of the size.

 ‘So I want to start my first letter of the year by telling you the China-bears are about to be forced to eat their words, as it drives the next leg up in resource stocks. This month’s copper stock tip won’t be the only one looking at a 260% gain.

‘…This [infrastructure spending] will require vast amounts of commodities. I reckon mining stocks are just about to be reminded of what it feels like to have China screaming for more of their product.

‘And the good news for you is that this comes right at a time when junior stocks in the industrial commodities of copper, iron ore and coal are dirt cheap.

‘To me this spells out the perfect recipe for what should be the big trade of 2013.’

And they really are dirt cheap.

After selling off since early 2011, many good quality mining juniors in iron ore, coal and copper are now less than half the price they were two years ago.

This includes the ones with good, profitable projects, and strong growth prospects ahead.

The first Diggers & Drillers tip of the year is a copper stock, but there will soon be other tips in juniors involved with iron ore, coal, as well as the less well known minor ingredients of steel.

Starting with copper was a ‘no brainer’.

The reason was the price had done next to nothing for 12 months.

That may sound like fuzzy logic, but think about it. There was every reason for copper to collapse last year — the markets were about to crash, China’s economy was supposedly collapsing, and the financial markets were apparently about to implode — Yet Copper held firm all year.

No Worries for Dr Copper in 2013

Source: Stockcharts

I’m expecting the Chinese economy to have a good year in 2013, and as the world’s biggest consumer of copper by far — at 43% of global consumption — the copper price could be in for an increase. And sure enough, China has just set an all-time record for copper imports.

Back in 2010 I made the same case, and the other guys here thought I was nuts. But you can see in the chart, copper rose by over 60% in twelve months.

Now I’m not expecting that to happen again, but a 10-20% rise is possible. The technical chart looks quite bullish to me, and the fundamentals look good too.

So copper was the first industrial metal to kick the year off with.

But as readers of Diggers & Drillers will find out over the next few months, coking coal and iron ore are in hot pursuit.

Dr Alex Cowie

Editor, Diggers & Drillers

Join Dr Alex Cowie on Google +

From the Port Phillip Publishing Library

Special Report: The Big Money Secret of Ironstone Mountain

Daily Reckoning: A North Korean Investment Opportunity

Money Morning: How Central Banks Are Letting Inflation Get Out of Control

Pursuit of Happiness: Are You Brave Enough to Break From Technology?

Diggers and Drillers:
Why You Should Invest in Junior Mining Stocks

By MoneyMorning.com.au

For a view on the future of the Chinese economy, who better to ask than its businessmen? I had the chance to talk to two while I was in Hong Kong and Guangdong over Christmas.

The first, Jim, never went to school. He was working in a Hong Kong factory at the age of nine, where he made just £4 a month — all of which went to his family. Today, he lives in a large house in Hong Kong, has four cars, is a member of the prestigious Jockey Club and thinks nothing of betting a few thousand pounds on the horses at Happy Valley.

Jim has three fine and well educated sons, but he wonders whether they will do as well as he has without the incentive of an escape from poverty. After working for others for several years, he set up his own clothing factory in China, he made a good business supplying customers in Europe, and provided many jobs for loyal and grateful staff.

The new China: From exporting clothes to farming sea cucumbers

But Jim no longer thinks it is possible to make much money in the clothing trade. ‘Chinese wages are just too high now’, he explained. And he has another reason for closing his factory: the land on which it stands is now worth millions. So he is selling up, but business is in his blood and he explained his new plan.

The new Chinese government, he told me, is intent upon doubling the living standards of the population. For that to happen it must improve its agricultural economy. So twenty million peasant farmers will be moved into the cities, their small holdings will be consolidated into large ones and subjected to the most efficient methods of factory farming.

But Jim does not envisage riding a tractor. He has his eyes on the sea cucumber, to my Western tastes a rather unpleasant rubbery marine creature, but one nonetheless that the Chinese prize highly. Indeed, I saw a small box on sale for about £1,000.

It is not just the taste that the Chinese savour but also the sea cucumber’s health-giving qualities which reputedly are effective against arthritis, cancer, gum disease and impotence. As the Chinese become wealthy they want to eat better, and the ageing population is increasingly concerned for its health.

With the blessing of the government, crucial to any enterprise in China, Jim reckons that the sea cucumber is a juicy business opportunity. He is looking for a suitable spot along the coast to start his marine farm.

‘China’s growth is good for another twenty years’

The other businessman is Lee. He too started with nothing, but now lives in a penthouse flat in Panyu and with a partner owns a business with a £5m turnover. This enterprise provides sound systems for hotels and other buildings and is clearly dependent to a large extent on the continuation of the Chinese construction boom.

Lee showed me the new headquarters of the business, now taking shape in Panyu. His new office will extend to a roof garden, where he is hoping to grow some plants and practise his putting. But I’d say he won’t have too much time for that.

The business now employs thirty people, but the new office can accommodate eighty. The target is to grow the turnover to ten million and Lee does not think that should be a problem.

China’s growth, he reckons, is good for at least another twenty years, and he had some interesting things to say about the new government.

This, he believes, is a government of technocrats. The new leaders are not just favoured sons, but are intelligent and practical. The new premier has already spoken out against corruption, and demanded that official banquets are less lavish. Whether to maintain its grip on power, to improve the lot of the Chinese people or to poke a finger at the West, the government is determined to promote growth and modernisation.

A tip from a Chinese businessman

Neither Jim nor Lee see any threat to the sustainability of China’s boom. Indeed once the underlings of the new administration have taken the places of those recently departed the whole Chinese system, whereby an edict from on high filters down through the system to approve favoured projects, should crank up once again.

My conclusion? That Chinese influence on the global economy, via demand for resources, luxury goods, and overseas travel, will only increase. And the tip from a Chinese businessman is: ‘Everything in China starts with politics. The Chinese economy will pick up in 2013 – and so will the stock market.’

Tom Bulford
Contributing Writer, Money Morning

Publisher’s Note: This article first appeared in MoneyWeek

From the Archives…

Here’s Another Reason to Buy Gold at the ‘Bottom’

18-1-2013 – Kris Sayce

CBA Shares Priced for Perfection

17-1-2013 – Kris Sayce

Will Germany’s ‘Gold Grab’ Send the Gold Price Higher?

16-1-2013 – Murray Dawes

Why Coking Coal Could Out Perform Iron Ore

15-1-2013 – Dr Alex Cowie

This Blue-Chip ‘Secret Signal’ Says Buy Resource Stocks Now

14-1-2013 – Dr Alex Cowie