Archive - November, 2014

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During Thursday’s trading session, with light volumes due to the US Thanksgiving holiday, Oil (Brent and WTI) fell by over 6% in just a few hours. This rapid decline picked up steam, with moves of 50 cent in a matter of minutes sentiment changed, with Oil trading down to a four year low. At the beginning of Match US Oil traded over 105 dollars barrel, it is currently trading 68.50 dollars barrel, a significant move, which is concerning analysts. With many producers unable to brea…

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The second estimate for 3rd quarter UK GDP was released at 0.7% by the Office for National Statistics (ONS). The second estimate was in line with the initial release leading to a minimal weakening of GBP in the FX market. The annual GDP (between Q3 2013 – Q3 2014) grew by 3.0%, unrevised from the previous estimate. Though the release was a positive figure, the pace of growth has slowed, dragged by the trade balance. The slowdown of growth is a concern to investors that the UK eco…

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Thursday the 27th November is a public holiday (Thanksgiving) in the US, and trading hours for some of the products that we offer will be effected.The above is correct to the best of our knowledge; however there might be slight variations depending on trading platform. The trading hours might differ due to reasons beyond our control, such as liquidity providers adjusting their trading hours. If you have any questions or need further assistance, please contact us.…

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The Chinese Central bank, The PBOC has cut interest rates for the first time since 2012. The surprise move of lowering borrowing costs to counteract a cooling economy, which is on track for its lowest annual growth in 24 years (CNBC). The move to reduce rates by 25bps, to 2.75% comes into effect from the 22nd of November Following the announcement commodity currencies, specifically the Aussie Dollar strengthened from 0.8630 to trade a session high of 0.8721. Yen The move fo…

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The Bank of England minutes for the MPC meeting held 5th and 6th November were less dovish than the market had expected with the split being the same as October. The MPC split was a 7-2 vote for interest rates to be left unchanged at 0.50%, with Weale and McCatherty voting for a 25bps rate rise. The committee voted 9-0 to leave the asset purchase (QE) programme at £375bn. GBPUSD Prior to the release of the minutes, sterling was offered to session lows around 1.5590, h…

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The Bank of England will release the Monetary Policy Committees minutes for the meeting on the 6th November. The MPC voted to leave interest rates at the record low of 0.50% and the quantitative easing asset purchase programme is £375bn. The announcement was as expected, with little effect to sterling in the FX markets. The October minutes showed the vote was 7-2, with the two dissenters being Ian McCafferty & Martin Weale. Traders will be watching today’s minutes for a…

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To understand the Japanese Yen’s movement it is important to understand the term that is readily banded around as the reason for the currency’s depreciation, Abenomics. (See footnote explaining Abenomics) Further Stimulus On the 31st of January the Bank of Japan voted 5-4 surprising markets to increase its monetary base by 60 to 70 trillion Yen. The unprecedented move pushed the Nikkei to a 7 year high as USDJPY quickly depreciated. Latest Abe Announcements:…

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GBPUSD The USD has been strong across the board in recent months, as it has reasserted itself as the world’s reserve currency, with the USD Index up over 7% since the summer. Cable has trended lower since the beginning of July, trading from 1.7190 to print a new 12 month low of 1.5652 today. Is a 1.50 handle on the cards in the not too distant future, as Carney seems intent of pushing back the markets expectations of an interest rise, and the Federal Reserve looks to tighte…

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ONS data released at 9:30am, showed that the unemployment rate held steady at 6%, which was also accompanied surprisingly by an increase in wage growth. There were 30.79 million people in work. This was 112,000 more than for April to June 2014 and 694,000 more than for a year earlier. The Bank of England has held interest rates at the record low of 0.50%, with an emphasis on the economic slack, and more specifically the wage growth. These latest releases show improving employment condi…

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Three years ago the Swiss National Bank (SNB) announced a lower limit (floor) for the EURCHF exchange rate of 1.20, vowing to protect the level to stop the appreciation of the Swiss Franc. Since that date, the Head of the SNB, Thomas Jordan has regularly verbally intervened stating the central bank “would buy in unlimited amounts.” The verbal intervention has also been at times accompanied by bank buying Euro’s to hold the floor, to stop the strengthening of the CHF.…

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The Bureau of Labor Statistics will release the monthly US Jobs data (non-farm payrolls) for October at 13:30pm. The figure is closely watched by traders as t the strength of the US recovery and future Fed policy. The consensus expectation is an increase of 235,000 jobs and an unemployment rate of 5.9%, slightly below September’s +248,000. On Wednesday the ADP Private Payrolls report for September printed an increase of 230,000 jobs. Seasonal As the unemployment rate…

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The Bank of England Monetary Policy Committee held their monthly meeting today and voted to leave the bank base rate unchanged at 0.50%, and the level of asset purchases (QE) at £375bn. The announcement was expected with minimal effect on Sterling in the FX markets. The minutes of the meeting will be released at 9:30am on 19th Novemeber, and offer further details as to the potential timing and the voting members. Press Release…

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Gold and Oil (Brent and WTI) prices have sold-off dramatically in the last two weeks, with spot Gold down over $100 since 23rd October. The US dollar has been strengthening across the board, as the Federal Reserve finishes its QE programme, with the Bank of Japan starting theirs. The multi-year lows for Gold and Oil, have picked up pace, with Gold down -$30 during today’s trading session. The Oil price tumbled following the unexpected move by Saudi Arabia, who cut the price…

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The Markit/CIPS UK Construction PMI survey was released at 9:30 GMT with weaker reading than expected of 61.4 vs 63.4. The figure is well above the expansionary reading of 50.0, though pace of growth was the slowest in 5 months. Cable weakened on the released, to trade back below 1.6000, with the USD stronger across the board. Press release…

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