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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 Federal Open Market Committee (FOMC) minutes will be released today at 7pm (London). Traders are awaiting the release of the December meeting minutes, as it was the first time that the Fed began tapering their monthly asset purchases, a reduction of $10bn for this month. Prior monthly purchases had totalled $85bn, with a reduction to $75bn for this month. The flooding of the markets with cheap money, fuelled by central bank QE, and now the removal of the stimulus have been key them…

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Australia’s main trading partner is China, who imports a significant percentage of their raw materials from the mining nation, fuelling economic growth. The concerns over a Chinese economic slowdown from its double digit growth are an important driver for the Aussie currency. The HSBC China Manufacturing Purchasing Managers Index rose to 51.2 in September compared with a final reading of 50.1 in August. HSBC chief China economist Qu Hongbin: "The HSBC Flash China…

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The Reserve Bank of Australia (RBA) left the interest rate on hold at 2.5% ahead of the government elections on the 7th September. The Aussie dollar has weakened significantly recently as traders have tried to front run the tapering of bond purchases by the US Federal Reserve. Governor Stevens highlighted the depreciation of over 15% for the AUD since April, but reiterates the currency remains high. The majority of analysts and economists had tipped the central bank to leave rates unchanged…

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The first trading day of September and the final quarter of 2013 begin. The 5 year anniversary of collapse of investment bank Lehman Brothers is a few days away, which was one of the major casualties of the credit crunch, which has driven major economies into recession and the Eurozone to the brink of collapse. The week begins with a raft of countries releasing their manufacturing data. It began with China, as a major consumer and producer; the slowdown has been a significant concern t…

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China has been propelled to the position as a major global economic power in the last few decades. It has experienced sustained periods of unrivalled economic growth. Double digit GDP figures are something that the western world could only dream of, with the smallest positive print being hailed as a success. What has fuelled the Chinese economic growth? China has witnessed a consistent boom period, that has thrust the country to the status as the world’s second biggest econ…

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Trading through the European and US session on Monday was very quiet as there were public holidays in the US and UK, leading to limited volatility and lower trade volumes. The majority of FX crosses traded in relatively tight ranges with limited macro data to give direction. The Aussie dollar has weakened against the Greenback over the last 6 weeks; analysts have been vocal for a prolonged period that the Aussie has been overvalued. The AUD strength has been fuelled by the commodities…

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The US Federal Reserve hinted that it may accelerate their current quantitative easing programme. The FOMC said that they were “prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labour market or inflation changes.” The disappointing data from the US and stubbornly high unemployment is a concern to the Fed, citing the fiscal policy from Congress responsible for restraining economic growth. Facebook re…

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Cable traded to a 10 week high on Sterling strength, as investors believe that there the Bank of England will not do any further quantitative easing. This was compounded with the better than expected GDP figure, and avoided the anticipated triple-dip recession. The macro data from the UK was in contrast to the United States growth figures released on Friday, which were below expectations. Reuters sights the 1.5574 level as the next level of technical resistance for GBPUSD as it is the 100 da…

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Uncertainty is something that investors will attempt to avoid at all costs. Political instability, verging on a nuclear war could cause a major shift of assets into safe havens. If the current words escalate, there is a real threat of something far more worrying to occur. North Korea has increased tensions, by threatening the US with a nuclear strike. The US realises that this the state poses potential danger and has deployed a missile launcher in Guam - Guardian More than half of all…

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Dow Jones closed at an all-time record high of 14,254 FTSE 100 touches a post Lehman Brother’s intra-day high 6,342 British manufacturers must not be “blindsided” by the importance of trading with Europe because the “big future for exports” is with emerging markets, according to Jim O’Neill, chairman of Goldman Sachs Asset Management - Daily Telegraph Capital flight from Cyprus has accelerated since eurozone politicians began threatening…

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China's February non-manufacturing PMI like manufacturing, slowed to a 5-month low of 54.5 versus 56.2 in January, reinforcing the view that the recovery in the world’s second largest economy remains modest Bernanke said that premature rate increases would carry a high risk of short-circuiting the recovery The North/South house price split in the UK: According to the latest Hometrack survey, more than three-quarters of postal areas registering price gains are in London…

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Deputy Governor of the Bank of England Paul Tucker, appearing before the Treasury select committee yesterday mentioned the radical idea of negative interest rates. It seemed more of an idea, rather than the groundwork for future policy, but it highlighted the bank does have other options left to help the economy. The idea is based upon the notion, that banks are currently parking considerable sums on deposit with the central bank for safety, rather than lending to individuals and businesses.…

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Chinese HSBC services PMI which rose to a four-month high of 54.0 from 51.7 in December RBA minutes which saw the bank leave rates unchanged at 3.00% S&P credit rating agency faces lawsuit over ratings - Telegraph Hedge Funds are taking large short positions for UK retailers, in a bet that further high street chains will collapse - CityAM SGX in talks over taking a stake in LCH.Clearnet - Financial Times Ford expect to spend $5bn this year shoring up its pen…

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Happy New Year from all at Abshire-Smith, may 2013 be prosperous for you. Today is the first trading session of the New Year, please check your client emails for market trading times, or contact us if you are unsure. Many traders will have been away from their desks over the holiday period, with the majority back this morning. The US house of Representatives has passed the fiscal cliff bill, which has been discussed at length over the last 6 months. The Congressional Budget Offic…

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