Month: March 2014

By CentralBankNews.info
    The U.S. Federal Reserve will reduce its asset purchases by a further $10 billion in April to $55 billion a month and will maintain its current policy rate at essentially zero for “a considerable time after the asset purchase program ends.”
   

Capital Trust Markets – At 17:45 EST on Wednesday, 19, Statistics New Zealand will report the GDP figure for the final quarter of 2013. The figure comes after the notoriously hawkish Reserve Bank of New Zealand (RBNZ) lived up to its reputation and hiked the nation’s official cash rate to 2.75%. The hike boosted the Kiwi through the upper channel of a flag-esque formation to year-long highs versus its US counterpart, and the NZDUSD now sits just shy of 2013 highs of 0.8675, reached during March last year.

With the ongoing situation in Crimea, risk-off assets such as the Kiwi generally struggle, but the rate hike looks to have helped it buck tradition, The question now is, can the GDP figure help sustain the momentum?

Consensus hints at final quarter growth deceleration, with expectations slated at 0.9% growth versus growth of 1.4% for third quarter 2013. As ever, a deceleration in itself would likely not pare the pair’s recent gains. A downside miss however, might spark a sentiment turnaround and initiate a sell-off. Further to this, the aforementioned highs will likely serve up some strong resistance and add an element of technical downside pressure to the mix.

The more interesting scenario is one in which the figure exceeds expectations. As reports flooded out of Crimea on Tuesday evening that shots had been fired and military officers wounded and killed, global markets looked on to gauge the severity of the situation. As mentioned, geopolitical, and now military, unrest will often cause a mass asset reallocation towards safe haven assets such as gold and the Japanese Yen. A New Zealand GDP release at 1.0% or above will serve up a situation in which a fundamental risk-off sentiment will compete with a positive outlook for the New Zealand economy; in other words, it could translate to some heavy volatility.

March 2013 highs offer an initial target and, beyond that, the July 2011 highs at 0.8843. Bear in mind however, that to reach these targets the pair will have to overcome global sentiment, something much easier said than done.

Written by Samuel Rae – Chief Currency Strategist at Capital Trust Markets

Capital Trust Markets is a fully regulated and compliant online Forex Brokerage, offering a flawless trading environment to traders of all types. The world class trading infrastructure – backed up by advanced trading tools and cutting edge trading software and technology – is combined with award winning customer support to provide a highly successful blend of customized trading solutions.

Capital Trust Markets – Thomas Jordan, Chairman of the governing board of the Swiss National Bank (SNB) is set to deliver his latest speech at the University of Bern today, at 13:45 EST. The speech comes just ahead of Thursday’s Libor rate announcement and the SNB monetary policy assessment release. Jordon is notoriously candid when it comes to these types of engagements, rarely alluding to near-term monetary policy, despite the hordes of traders willing him to do so. There are sometimes however, small clues as to his current perception of the Swiss economy, from which monetary policy decisions can be inferred. For this reason, expect some volatility in the USDCHF as we head into the US afternoon session.

The pair is currently trading around 0.8740, just shy of key support at 0.8622. For the better part of a year, the USDCHF has formed something of a falling wedge, with just a few breaks of the pattern but never a close outside. Traditionally, this reversal pattern serves up a bullish bias on completion; with the validation being a close above the upper trendline. While Jordan’s speech will likely be insufficient to boost the pair towards that level, it may catalyze some upside momentum ahead of Wednesday’s rate decision and policy report, which if compounded by the two releases, could send the USDCHF towards its target breakout level around 0.87745. With ECB rate cuts slated for as early as next month, there is a high chance that the Jordan, and the SNB, may hint at following suit. Consensus expects Thursday’s announcement to hold rates steady at <0.25% (effectively zero) but the potential for April/May negative rates remains. A dovish tone in either release could go some way towards validating the pattern.

While traditionally a reversal pattern, a downside break (especially on the higher timeframes) can serve to switch the falling wedge’s bias to bearish. With the USDCHF trading so close to the lower trendline ahead of Jordan’s speech and Thursday’s key releases, this situation has to be considered. It is unlikely that the SNB will raise rates, especially in the wake of disappointing retail sales and producer price index releases last week. In addition, The Zentrum fur Europaische Wirtschaftsforschung (ZEW) revealed its six month economic outlook index for Switzerland to be 19.0, missing expectations at 25.0 and a previous release of 28.7. Having said this, a hawkish tone that hints at the SNB refusing to follow the ECB in its rate policy could raise expectations of a lift from the current rate floor.

Written by Samuel Rae – Chief Currency Strategist at Capital Trust Markets

Capital Trust Markets is a fully regulated and compliant online Forex Brokerage, offering a flawless trading environment to traders of all types. The world class trading infrastructure – backed up by advanced trading tools and cutting edge trading software and technology – is combined with award winning customer support to provide a highly successful blend of customized trading solutions.

By Dennis Miller

You don’t have to be an expert at ferreting out a bad financial advisor; if you were, you probably wouldn’t need one in the first place. Thankfully, you don’t need to become an expert in finance to spot the red flags. We’ll go over a few key warning signs here.

Credentials and Experience

Financial advisors often have all sorts of certifications and association memberships. While many of them sound impressive, they’re actually not terribly difficult to acquire. For example, the Series 7 Test, which allows one to sell securities, is just a 250-question, multiple choice exam; one only has to answer 72% of the questions correctly to pass. Another key test, the Series 66, is only 100 multiple choice questions. These aren’t difficult hurdles to jump over.

For this reason, many advisors are not highly proficient in their trade, despite what the certifications imply. I know of someone who went to take the Series 7 Exam and told about meeting a young shoe salesman there. The shoe salesman realized that he had quite a skill in sales, so he decided he could make more money selling mutual funds than shoes. He passed the test on his first try with no prior financial experience.

We don’t want to demean all financial advisors, but this isn’t an unusual case. Most of these kinds of advisors end up at firms that follow the suitability standard—a less than optimal code of professional conduct. Professional firms that adhere to a higher, fiduciary standard would likely weed them out fairly quickly. They have a reputation to protect and can ill afford an employee of questionable ethics.

Certainly, some credentials are tougher than the Series 7, such as the Certified Financial Planner, but that still doesn’t guarantee a truly knowledgeable person. Nonetheless, the more credentials and certifications an advisor has, the better. He at least shows a willingness to learn and invest time in becoming a better advisor.

What about the advisors with actual degrees in business or finance? This isn’t a guarantee of quality either. Many a commencement speaker has referred to a degree as an opportunity to go into the world and learn. A degree in finance or business may get a person in the door of a professional firm, but one still has to learn everything in this industry from the ground up. A degree is good, but it doesn’t necessarily give a huge edge.

There’s absolutely no reason to settle for a freshly minted advisor; the more years in the industry the better. There are plenty of advisors begging for your business. Many of the top professional firms do not hire anyone who does not have a good track record of experience.

Many of the captive houses are losing a lot of their top people. They are looking for firms that are truly independent, where they can apply their skills and experience for the remainder of their careers. Demand more credentials and experience and be wary of brand new advisors.

Fees and Expenses

When it comes to fee structure, character matters over credentials. Whether you’re someone’s first client or their thousandth, he can just as easily pull the wool over your eyes with fees. You should always seek low-fee fund options. Ask for low-fee funds as well as exchange-traded funds (ETFs) and index fund options.

Professional financial advisors can go to either extreme. Some actually have a contract that stipulates anytime your money is invested in a fund where they receive a commission, that commission is credited back to your account. Other firms will take those commissions and use it to enhance the personal compensation of the advisor.

Asking your advisor to show you ETFs and low-fee fund options is a subtle test. If he or she pretends that high-fee mutual funds are the only options, then that’s definitely a red flag. In some situations, a higher-fee fund might make sense, but the advisor better have a damn good reason for it. It is our responsibility to ask for and listen to the reason and then decide for ourselves if it makes sense.

So, what’s a reasonable expense fee for a mutual fund? According to the Investment Company Institute (ICI), the actual average rate paid by mutual fund investors was 0.77% in 2012. That goes to show that investors are staying clear of the higher-fee funds. They are seeking out cheaper mutual funds, and even cheaper ETFs and index funds.

Equity funds will have slightly higher fees than money market funds and bond funds, so be aware of this difference. You might pay more than average for aggressive growth strategies or international equity funds. On average, these will charge 0.92% and 0.95% respectively. If you’re pursuing these strategies, give your financial advisor a little leeway – but not much.

Load fees are also important to understand. I’ll share a short description of various load shares, but the main takeaway is that you want a no-load fund. Think of load shares as a sales tax on your fund purchase – not a good thing.

The only situation where a load fund might be good is when you plan to hold shares for a very long time – close to a decade. Load funds will have a high upfront fee, but the annual fees are typically a bit lower, so if you’re in the fund for the very long run, they might work out. However, unless you’re committed to a very long-term investment, we suggest no-load funds.

• Front-End Load Shares – typically called Class A Shares.With these funds, you pay a percentage of your assets when purchasing the fund. The maximum one can be charged by law is 5.4%, which is an enormous amount. Think about it. You’re down 5.4% on day one. However, many investors get a discount through employer-sponsored retirement plans, so the average front-end load share paid for an equity fund by the average investor is 1%. Going through a financial advisor, it will likely be slightly more. Match that with a 0.77% average annual expense fee, and you’re still considerably behind right off the bat.
• Back-End Load Shares – typically called Class B Shares.As you might have guessed, you pay a percentage of assets when redeeming the fund rather than at purchase. However, the fee will often decrease the longer one holds the shares. Essentially, the mutual fund company wants to get your money one way or the other, through years of annual fees or through the back-end fee. Either way, you’ll end up paying.
• Level-Load Shares – typically called Class C Shares.These shares are a combination of back-end load shares and no-load shares. The back-end fee will be lower than regular back-end load shares, but the annual fee will be higher.
• No-load sharesAs the name suggests, there is no back-end or front-end load fee here. However, the annual fees are slightly higher. Unless you plan to hold a fund for nearly a decade, you will save money by going with a no-load fund. As more people are figuring this out, they are flocking to these funds.

Some advisors will want to put you into the front-end or back-end funds. That’s how they get a cut of the deal. However, you should insist on a good reason why, and ask for a much cheaper fund or ETF alternative. If push comes to shove, you can always ignore your advisor and call the mutual fund company directly to purchase the no-load funds. That might seem like a mean thing to do to your advisor, but then again, charging someone unnecessary fees sometimes as high as 5.4% isn’t nice either.

Remember that understanding these fees and other product alternatives isn’t just about cash in your pocket. It’s about understanding the character of your advisor. If he’s not getting you the best deal available, then that’s certainly a red flag.

Check for a History of Fraud

This one seems like a no-brainer, but we’ll make it easier with links to several sites that track advisor and broker improprieties. Here are a few places to check:

• The Financial Industry Regulatory Authority (FINRA)This organization is the same one that administers the Series 7 Exam. Its search tool lets you find out how long an advisor has been registered and if he has any history of incidents. It will even tell you whether or not someone has been fired. Once you’ve selected an advisor’s name, make sure to click on the detailed report link which specifies everything from a complete employment history to descriptions of specific damages and incidents.You can also look up information about individual firms such as their assets under management and the size of their average client.
• SEC Investment Advisor Public DisclosureThis is another site with much of the same information as the FINRA site.
• North American Securities Administrators Association (NASAA)This site has a couple of interesting ways to find out more about offenses in your state. First, you may browse its contact list of state regulators, or you may also view its list of state enforcement websites.

Excessive Trading

Since some advisors are paid on commission, they have an incentive to constantly make trades, a practice also known as “churning.” When a broker is constantly pestering you with reasons to buy and sell, this can be a little obvious. However, there are other areas where they can trick you into buying or selling more than necessary. For example, they can insist on regularly fine-tuning or rebalancing your portfolio to make sure all the allocations are even. If a portion of your portfolio has really become overweight or underweight from gains or losses, this might be appropriate; but rebalancing your portfolio on a monthly basis for very small changes just isn’t necessary. This practice can trick a lot of people since it seems sincere and appears to make sense.

Your portfolio should need rebalancing only once or twice a year, or when there’s been a large move up or down in the market. Otherwise, an attempt to rebalance is suspect.

No Research Department

One of the benefits of big-name companies is that they come with extensive, professional research departments. As a result, their recommendations come from proper due diligence. If you have more questions about a certain company, the advisor can find out more about the investment through the equity research department.

However, this might not always be the case with small, independent financial advisors. Although many don’t have full research departments, they can still pay for research from other sources. If a company doesn’t have a source for research, you should be concerned about the quality of its recommendations.

Sure, some investments might still be appropriate without a full research department. For example, if the advisor recommends extremely diversified funds, then this really isn’t a problem. But if your advisor is recommending purchases of Microsoft, Coca-Cola, and IBM but really has no research to back these recommendations, that’s a problem.

We want to reinforce that we should delegate – not abdicate – our nest egg to a professional financial advisor. Trust is paramount. There are many good professionals available who have earned their clients’ trust year in and year out. That is the advisor we all are looking for. While watching out for these five items doesn’t guarantee a good financial advisor, it certainly will weed out the worst apples.

It can be difficult to find a financial advisor who will always come to you with the cheapest and best options. Some financial advisors have all the wrong incentives in place. However, knowing their compensation structure and the other available options helps to keep you in the driver’s seat.

Keep in mind that some advisors are fee-based or don’t receive commissions or kickbacks from mutual funds, so they necessarily avoid some of the conflicts of interest mentioned above. You can search for fee-based advisors in your local area on The National Association of Personal Financial Advisors (NAPFA) website. This is a good place to start, but make sure you still get a clear explanation of a prospective company’s fee structure.

To sum it up, don’t fall for high fees and big-load funds, and watch for excessive trading. Seek out credentials, experience, and a clean record. Ultimately, an advisor can’t force you into anything. If one offers expensive products, push back and ask for cheaper options, or find another advisor. If you find a good one, hold on to him or her. They are worth their weight in gold.

The Money Forever team is here to help you sift through the rubble and find the exceptional advisors. If you’d like to receive more information on how to find an advisor to prescribe the right financial solutions for you, please check out our special report, “The Financial Advisor Guide.” If you are not already a subscriber, you can still get your own copy HERE.

By CentralBankNews.info
    The Central Bank of Iceland held its policy rates steady and eased up on its previous warnings about the need for rate hikes to curb inflation, saying short-term expectations for inflation had declined while long-term expectations still remain well above the bank’s target.
    “Because inflation is lower, the krona stronger, and wage increases smaller than was forecast in February, the medium-term inflation outlook has improved from previous estimates,” said the central bank, which kept its benchmark seven-day lending rate at 6.0 percent in 2013 after raising it by 125 basis points in 2012.
    Iceland’s inflation rate eased to 2.1 percent in February from 3.1 percent in January, the lowest rate since February 2011. The bank said data showed that over the past two years, wage costs per man-year had risen considerably less than previous data had suggested and last year’s wage deals would apply to most of the labour market.
    The central bank targets inflation of 2.5 percent and last month forecast that inflation in 2014 would average 2.7 percent, rising to 3.4 percent in 2015.
    The central bank has been warning about the need for rate hikes for many months and in February it said that its policy stance could be tightened sooner than expected due to the outlook for growth.

    The central bank has forecast Gross Domestic Product growth of 2.6 percent in 2014 and 3.7 percent in 2015 and the bank said the outlook for increased growth in demand will, other things being equal, call for an increase in the interest rates.
     However, measures that support monetary policy, including medium-term fiscal policy, could offset this while improvements to the economy’s supply side could weaken the inflationary effects of increased demand.
    “Whether there is scope for a nominal interest rate reduction will depend on developments in inflation and inflation expectations in coming months,” the bank said.
    Further ahead, the bank said real interest rates “must be raised” if the expected outlook materializes but the extent of the increases would depend on inflation.
    Iceland’s GDP expanded by 0.3 percent in the fourth quarter of 2013 from the third quarter for annual growth of 3.8 percent, down from 4.9 percent in the third quarter.
  The Icelandic krona rose 10 percent in 2013 and has continued to rise this year. Against the U.S. dollar, the krona was trading at 112.85 today, up 2.7 percent this year.

    http://ift.tt/1iP0FNb

By HY Markets Forex Blog

Crude prices were seen trading lower on Wednesday as the tension in Ukraine eases, reducing the negative impact on the market.

The North American West Texas Intermediate (WTI) for April delivery came in 0.42% lower trading at $98.49 per barrel on the New York Mercantile Exchange at the time of writing, while the Brent crude fell 0.11% lower to $106.68 per barrel at the same time.

Crude – Ukraine

On Tuesday, the Russian President Vladimir Putin signed a treaty on Crimea joining the Russian Federation.

Following the signing of treaties, President Vladimir Putin said he was not interested in seizing any other part of Ukraine, however the Western nations, including the US and the European Union imposed travel bans and sanctions against Russian and Ukrainian officials responsible for the Crimean referendum.

Crude – Other news

According to reports from the American Petroleum Institute (API), the US crude oil inventories added 5.9 million barrels in the last week, while gasoline stocks dropped by 1.4 million barrels.

Reports from the US Department of Energy Information Administration (EIA) are expected to be released later in the day.

Investors are also focusing on the outcome of the Federal Reserve’s (Fed) March policy meeting which will end later in the day. Analysts are expecting the US central bank to reduce its monthly bond purchases by another $10 billion to $55 billion.

Meanwhile in Iran, the Persian Gulf broke sanctions imposed by the Western nations for the fourth consecutive month in February, as it sold over 1 million barrels a day.

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The post Crude Futures Edges Lower as Ukraine Tension Eases appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By HY Markets Forex Blog

Gold prices dropped for a third straight session on Wednesday, as the market waits for the conclusion of the US Federal Reserve’s (Fed) March policy meeting later in the day, as the situation in Ukraine continues to be in the spotlight.

Gold futures for April delivery edged 0.27% lower to $1,355.40 an ounce at the time of writing, while silver futures declined 0.11% to $20.840 an ounce at the same time.

Holdings in the world’s largest bullion-backed exchange-traded fund, SPDR Gold Trust; came in at 812.78 tons on Tuesday.

Gold – Fed Meeting Conclusion

The Federal Reserve’s March policy meeting continues on Wednesday and expected to conclude the meeting later in the day. Following the cuts of $10 billion at the prior two meetings, analysts are expecting the central bank to continue to reduce its monthly bond purchases by another $10 billion to $55 billion  and continue that pace at every meeting before ending the program at its October 28-29 policy meeting.

The Fed Chair Janet Yellen will be holding a press conference after the meeting.

Gold – Ukraine

On Tuesday, the Russian President Vladimir Putin signed a treaty making the Crimea peninsula officially a part of the Russian Federation.

As the Western nations, including the US and the European Union assured more sanctions on Russia for his drive to annex Crimea.

The tension in Ukraine continues to boost gold prices, making the precious metal a safe haven asset as gold has risen by 13% this year.

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The post Gold Prices Drops Ahead Fed Meeting Conclusion appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

U.K. Unemployment has remained the same at 7.2%, and the Claimaint Count Change was better then expected at -34.6K, down from -33.9K last month.

Capital Trust Markets – GBP/USD (cable) has been consolidating in a tight channel for over a month now, grinding lower at a very slow pace while maintaining a bullish trend on the large timeframes. Cable fell as low as 1.6544 in yesterdays trading, bouncing off the support of the channel with a bullish pin bar.

Within the channel there is a steeper bearish configuration based on the most recent three swing highs and the 200 simple moving average on the 1H timeframe. While price remains below 1.6664, cable will remain bearish in the short term. Selling rallies remains the preferred trading strategy at this point, with a stop loss above the afore mentioned level.

In the large picture, the bullish trend will degrade considerably if GBP/USD breaks below 1.6544, where the support lies for the current channel formation. MACD is showing increased weakness on the Daily timeframe; as it is approaching negative territory we are about to exit the current slow grind and see some increased volatility.

For bullish scenarios, a break above 1.6664 should lead to yet another test of the channel resistance around 1.6763 area.

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Prepared by Alexandru Z., Chief Technical Analyst at Capital Trust Markets

Capital Trust Markets is a fully regulated and compliant online Forex Brokerage, offering a flawless trading environment to traders of all types. The world class trading infrastructure – backed up by advanced trading tools and cutting edge trading software and technology – is combined with award winning customer support to provide a highly successful blend of customized trading solutions.

USDCAD:  With USDCAD extending its Tuesday rally  and breaking out of its symmetrical triangle, further bullish offensive is envisaged in the days ahead. The warning is that it must break and hold above the 1.1192 level and the 1.1223 level to prevent a return into that triangle. Further out, resistance is seen at the 1.1300 level and subsequently, the 1.1350 level. Its daily RSI is bullish and pointing higher supporting this view. Conversely, support comes in at the 1.1153 level, its Mar 12 2014 high. Bulls may come here and turn the pair back up but if that fails to occur, further decline could occur towards the 1.1100 level and then the 1.1050 level. Further down, support is located at the 1.1000 level, its previous week low. All in all, USDCAD faces further bullish risk.

Article by www.fxtechstrategy.com

Article By RoboForex.com

Analysis for March 19^th, 2014

DJIA Index

Index is still being corrected. Probably, wave [2] is taking the form of zigzag pattern with wave (B) being completed inside it. In the near term, price is expected to start falling down inside wave (C).

More detailed wave structure is shown on H1 chart. It looks like after completing bearish impulse inside wave (A), Index started forming ascending zigzag pattern. On minor wave level, market finished wave C of (B). During the day, instrument may start forming initial descending impulse.

Crude Oil

Yesterday Oil formed bearish impulse inside wave 1 and started correction. Most likely, the second wave will continue for the next several days. During local correction, I opened short-term buy order.

As we can see at the H1 chart, after finishing the fifth wave inside the first one, Oil started forming bullish impulse inside wave [A]. Probably, market may reach new maximum during the day.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.