USD may Extend the Rally on the FOMC Hawkish Surprise

The dollar rose sharply on Friday, breaking through a corrective channel and bouncing off a key bullish support line (scenario discussed on Friday):One of the key drivers of the rally was the US inflation report. Despite the fact that consumer inflation (Core PCE) rose by 3.6%, falling short of the forecast of 3.7%, the market was more concerned about dynamics of the labor cost index in the US - in the third quarter it rose by 1.3% against the forecast of 0.9%. Recall that both the Fed and the ECB have repeatedly said that a "second round" of inflationary effects may occur if inflation seeps into wages, since in this case further growth in consumer demand and accompanying inflation can be expected. In the meantime, the annual growth rate of labor costs in the United States is now at its highest level in more than 15 years:Today, the US Dollar index is consolidating around 94 points ahead of the release of two important news this week - the decisions of the Fed and the NFP. After the latest update on labor costs data, chances are high that the Fed will announce the start of QE rollback on Wednesday. Further dollar upside will undoubtedly depend on pace of bond purchase tapering. The closest target for USD index is the previous resistance at 94.50-94.75, which the dollar is likely to test on Wednesday before the Fed decision.It should also be noted that along with increased chances of imminent tightening of the Fed's policy, long-dated US Treasury bonds are beginning to price in future slowdown in inflation, possibly pricing in Fed policy error (i.e., that Fed starts to tighten too early, harming growth and inflation). This translates into decline of the spread between 10 and 2-year US Treasury bond yields:Nevertheless, the USD retains its short-term bullish prospects.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usd-may-extend-the-rally-on-the-fomc-hawkish-surprise"
via IFTTT

The ABC of ESG funds

If you want to do well by doing good, look beyond the broader ESG category and adopt a narrower focus

from Moneyweek RSS Feed https://moneyweek.com/investments/funds/604039/the-abc-of-esg-funds
via IFTTT

The one thing that can pop the house price bubble

The Bank of England has made it clear that interest rates will rise before Christmas. And if there's one thing that can burst the house price bubble, says John Stepek, it's higher interest rates.

from Moneyweek RSS Feed https://moneyweek.com/investments/property/604038/higher-interest-rates-can-pop-the-house-price-bubble
via IFTTT

Weekly Market Outlook 01-11-21

In this Weekly Market Outlook 01-11-21, our analyst looks into the trading week ahead, possible market moving data releases across the globe and the technical analysis to accompany it!

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/weekly-market-outlook-01-11-21"
via IFTTT

USDINDEX: Wild end of the month

The USDIndex closed the week sharply higher by +0.83%. The US Dollar found support from the recent acceleration of market expectations for a Fed rate hike by the end of 2022. Last summer, the market did not expect the Fed’s first rate hike until early 2023. However, now the market is fully expecting 2 rate hikes of +25 bps at the end of 2022. That’s even more than the +20 bp rate hike forecast from the ECB. The USDIndex closed October with a negligible total decline of -0.21%. This indicates that the economic recovery in the US is still much better compared to other countries.

Remaining supply chain problems, rising prices and still strong consumer demand continue. Growth in new home sales, the first rise in consumer confidence in three months and personal spending data are on a positive note, although the third quarter GDP growth was only 2.0%, due to the increasing trade deficit. Goods spending fell 9.2% in the third quarter as the PCE deflator rose to 4.4% y/y, the highest level in more than 30 years. This further strengthens the prospect of a rate hike sooner rather than later. This week’s slate include heavy data that the market is paying attention to including ISM Manufacturing, ISM Services, ADP, FOMC Statement on Interest Rates and Non-Farm Payrolls.

USDIndex, D1

The USDIndex scored a fresh weekly high at 94.29 and closed the weekend at 94.10. Friday’s price move printed a Marubozu candle that completely covered the previous 11 trading days, with a significantly strong upside bias for the USD. The bullish support for USDIndex is seen from the 50-day moving average which remains below the price and the uptrend line acting as the dominant support diagonally. While the RSI is currently settling at 56.22 after the maneuver, overall the above confirms a bullish bias.

However the rally is still limited by the resistance at 94.54. A break of this price level will confirm the continuation of the second leg’s rebound of 89.49 to the 50.0% retracement target. On the downside, a failure at 94.54 will open the door for a retest of the 93.24 support area and a break of this level will target 91.91.

Click here to access our Economic Calendar

Ady Phangestu

Market Analyst – HF Educational office – Indonesia

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /283419/
via IFTTT

109.50 Points In Profits In October, Opening November With 18.50 Points Banked

Trade alerts shared in real time & ahead of time...After closing out October with 109.50 points of profits, we open November locking in 18.50 points on long positions..Join the Tickmill Futures & Options strategy group and receive my daily complimentary tradeplan video posted before the NYSE open, request membership here http://ow.ly/7aN150EQ59sFor those traders who really want to take their futures trading to the next level, you can access daily live streamed trading sessions, providing an opportunity to look over the shoulder of an experienced money manager and watch in real time as he dissects the markets and identifies asymmetric trading opportunities. To access the real time Futures Trading with Tickmill Telegram group you must have a live funded Tickmill futures account, message me your account number on Telegram @PJM230276 and I will send you the access link, look forward to working with you there!***DISCLAIMER**** I am not a guru, I simply offer 15 years of battle scars, hard learnt & often very costly lessons that you can benefit from!#Futures #LearnToTrade #Tickmill #futures #trading #options #stocks #trader #stockmarket #daytrading #technicalanalysis #daytrader #investing #sp #futurestrading #investment #trade #investor #finance #spx #financialmarkets #eminiSP500 #PalmTreeTrader

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/109-50-points-in-profits-in-october-opening-november-with-18-50-points-banked"
via IFTTT

Britain warns France: back down in 48 hours or face trade trouble

from Forex News https://www.investing.com/news/forex-news/britain-warns-france-back-down-in-48-hours-or-face-trade-trouble-2662184
via IFTTT

Dollar Edges Higher; PCE Data Points to Early Fed Hike

from Forex News https://www.investing.com/news/forex-news/dollar-edges-higher-pce-data-points-to-early-fed-hike-2662174
via IFTTT

Daily Market Outlook, November 1, 2021

Daily Market Outlook, November 1, 2021 Overnight Headlines Biden Signals Confidence Congress Will Pass His Economic Agenda Yellen: Reciprocal Lowering Of Tariffs Could Help Ease Inflation Goldman Now Sees Fed Hiking Rates In July As Inflation Lingers US And EU Agree Deal To Ease Tariffs On Steel And Aluminium German Finance Minister-In-Waiting Demands Hard Line From ECB Britain Steps Up Post-Brexit Dispute With France Over Fishing China's Manufacturing Activity Expands Amid Weak Supply: Caixin Japan's Ruling LDP Secures Sole Majority In Lower House Election Australian Bonds Bounce To Erase Much Of Friday's Panicked Rout Dollar Holds Firm As Fed Decision Looms; Yen Dips On LDP Victory Oil Prices Fall After China Releases Reserves Of Gasoline, Diesel Japanese Stocks Jump After Ruling Party Secures Election Victory The Week Ahead Central banks in focus as Fed, BoE and RBA meet Central banks take centre-stage this week with the Federal Reserve, Bank of England and Reserve Bank of Australia set to hand down policy decisions.The Fed is widely expected to announce it will taper its $120 billion monthly bond buying program by $15 billion. With recent U.S. data showing inflation pressures building, the market now expects the Fed to start contemplating rate hikes in the months ahead. The data will make it more difficult for Chair Jerome Powell to maintain his "inflation is transitory" line with confidence. Any hawkish tilt in the Fed's message should keep the U.S. dollar well supported. The BoE meets on Thursday and Refinitiv's BOEWATCH shows the market pricing in a 52% chance of a rate rise from the current 0.10%. The BoE has to weigh higher inflation against the fragility of the UK economy. If they hold off from hiking, sterling will likely fall – even if their guidance is clearly hawkish. Perhaps the most intriguing meeting will be Tuesday's RBA decision, with the Australian bond market mounting a huge challenge of the central bank's yield curve control policy. Most economists believe the market is running way ahead of itself in pricing the scale and speed of rate hikes, so it wouldn't be surprising to see the RBA push back against this view, though a change in forward guidance is likely; preview. U.S. non-farm payrolls cap busy global data calendar This week's full calendar of top-tier data takes on increased importance with major central banks tightening or on the brink of tightening. U.S. non-farm payrolls for October on Friday will as usual be a key event for markets. The latest Reuters poll shows a median forecast of +413,000 jobs, while the unemployment rate is expected to fall to 4.7% from 4.8%. With inflation, especially wage inflation now a key metric for markets, the average hourly earnings component will be in focus; gains of 0.4% month-on-month and 4.9% year-on-year are expected. Other U.S. data includes ISM manufacturing and non-manufacturing, factory orders, trade, ADP jobs and weekly jobless claims. Euro zone PMIs highlight the European calendar in the week ahead. Other data includes unemployment, retail sales and producer prices, and German industrial orders and output. The UK only has PMI data due. China data includes Caixin PMIs and October trade numbers, following Sunday's disappointing official PMIs. Japan's calendar is limited to PMIs and household spending. Australia data includes building approvals, housing finance September trade balance and Q3 retail trade. New Zealand has unemployment data, while Canada is due to release PMIs, trade and employment data.CFTC Data Speculative traders trimmed their bullish bets on the USD for a third week running, taking the aggregate dollar long position, measured against the major currencies we monitor in this report, down USD1.8bn week over week to USD20.5bn. This remains a quite significant, but not excessive, USD long position that has ample room to grow. The CAD saw the largest positioning change over the week. Gross CAD longs rose and gross CAD short positioning fell, resulting in a USD1.15bn swing in net positioning over the week to register a small USD268mn net long. Investors have been holding net CAD shorts since late August; the CAD has appreciated around 2.5% against the USD since then. Firm commodities and Bank of Canada policy tightening prospects should sustain and drive additional net long interest in the CAD. Speculators may be warming to commodity FX; net NZD longs rose USD177mn to a modest USD638 while the huge net AUD short that has developed since April was trimmed again this week, albeit by just USD40mn. The overall position (equating to more than 75k contracts) remains near the recent all time peak (86k contracts), however and which still leaves the AUD prone to a short squeeze. MXN net speculative shorts continue to rise slowly (USD118mn), but surely, however, reaching a little over USD1bn (43.3k contracts, the largest net short since early 2017). Investors remain bearish on the prime funding currencies; net EUR shorts were trimmed a modest (USD129mn) to USD1.6bn while investors added nearly USD500mn to the significant net JPY short of USD11.7bn (107k contracts, the biggest bearish bet on the JPY since late 2018). Net CHF shorts rose just over USD250mn to USD2.6bn (19.4k contracts, the largest CHF short since late 2019) After chopping around flat since July, speculative accounts added a little more decisively to GBP positioning this week, amid speculation that the Bank of England may raise interest rates shortly. Net GBP longs jumped USD1.1bn to USD1.6bn and take net longs back to July’s level. Meanwhile, inflation worries are lifting interest in gold, with net longs advancing USD43bn.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls )EUR/USD: 1.1535 (251M), 1.1600 (400M), 1.1625 (919M), 1.1650 (208M)USD/CHF: 0.9260 (270M), 0.9320 (858M)GBP/USD: 1.3700 (305M)AUD/USD: 0.7480 (433M), 0.7520-25 (323M), 0.7550 (361M), 0.7600 (500M)USD/CAD: 1.2350 (747M)USD/JPY: 113.65-75 (441M), 114.25-35 (260M). EUR/JPY: 129.90 (226M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.17 Bullish above Steady in Asia but vulnerable after bearish outside week EUR/USD opened 1.1565 after falling over 1.0% on Friday Pair traded in a 1.1551/68 range in Asia and is 1.1555 into the afternoon EUR/USD is vulnerable after completing a bearish outside week Friday Support is at the Oct 12 low at 1.1522 and break targets 1.1490 Resistance is at the 21-day MA at 1.1598 and break eases downward pressure EUR/USD unlikely to wander too far ahead of FOMC and US payrolls this weekGBPUSD Bias: Bearish below 1.37 Bullish above. Tests key support – move below 1.3550 viable Steady towards the top of a 1.3663-1.3687 range with occasional heavy flow UK business sentiment slips but stays at elevated levels-Lloyds Charts; 5, 10 & 21 day moving averages conflict, daily momentum studies slip 21 day Bolli bands contract - positive setup has reverted to neutral Oct upper 21 day Bolli rejection and close below 1.3696 21 DMA is bearish Targets a test of the rising 1.3542 lower 21 day Bolli as seen in September 1.3672, 38.2% of the October rise is close initial, and resilient support Asian 1.3663 low and 1.3696 21 day moving average initial support resistanceUSDJPY Bias: Bullish above 112.50 Bearish below USD/JPY back up on 114 on USD rally Friday, Asia today 114.03-26 EBS This despite lower long US rates, Treasury 10s @1.574% well below 1.60% Risk on though as Japan's ruling LDP maintains majority in elections Nikkei gaps up at open, from 29,267 to 29,633, now +2.2% @29,538 USD/JPY still seen heavy from @114.50, 114.69 spike high October 20 Even more JPY shorts out there according to CFTC data... Option expiries not really a factor till Thursday, few large till Thursday JPY crosses better bid? Some more than others, AUD/JPY 85.51-94 CAD/JPY 91.97-92.32, EUR/JPY 131.80-132.00 EBS, GBP/JPY 155.83-156.33 Japan Oct mfg PMI 53.2, flash 53.0, in expansion mode above 50AUDUSD Bias: Bearish below 0.75 Bullish above AUD/USD opened 0.7513 after closing Friday at 0.7520 Lower open likely due to weaker than expected China PMI on weekend AUD/USD traded in a 0.7506/24 range and was around 0.7510 into the afternoon Consolidation may continue ahead of key RBA decision tomorrow Resistance at 200-day MA validated by repeated failures to break Support is at the 10-day MA at 0.7502 and break eases upward pressure

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-november-1-2021"
via IFTTT

Market Update – November 1 – A Wild start

The markets were volatile through October as uncertainties over inflation, growth, and central bank reaction functions provided mixed directional signals. After early declines following record high inflation rates, both bonds and stocks ended in the green.  Canada was an underperformer as the BoC trimmed QE and then ended it last week. The markets look for hawkish outcomes from the FOMC and BoE this week.The Reserve Bank of Australia also decides policy on Tuesday, with markets challenging the central bank’s contention that rates won’t rise until 2024.

Equities generally managed to rally as the massive amount of liquidity still in the system combined with good earnings results to overshadow concerns over growth amid headwinds from supply shortages, bottlenecks, covid, and elevated costs. 

• USD (USDIndex 93.45) jup to 3-week high to major peers on Monday as quickening inflation in the United States boosted the case for earlier Fed interest rate hikes ahead of a policy decision on Tuesday.
• Japan’s election boosted hopes for fiscal stimulus with PM Kishida managing to preserve an outright majority for his Liberal Democratic Party – Topix and JPN225 are up 2.2% and 2.6% respectively.
• China official manufacturing PMI slumped for a 7th consecutive monthly drop and leaves the index at its lowest level since October 2019. –  Hang Seng and CSI 300 are currently down -0.95% and -0.33% respectively.
• German retail sales unexpectedly slumped -2.5 m/m in September.
• US Yields (10yr up at 1.56%).
• USOil steadied to $81.10.
• Gold another volatile day (1810-1792) cannot hold $1800 and trades at $1794 now.
• FX markets, Strong USD, weak Yen – USDJPY rallied to 114.38, Cable capped by 1.3800 trades at 1.3642, EURUSD 1. 1545. AUD also struggled as yields corrected

Today – Another important week for central bank decisions that includes Fed and BoE announcements. Data releases today focus on final manufacturing PMIs for the Eurozone and the UK, which are likely to confirm that supply chain disruptions are weighing on output, while price pressures increases. US and Canadian Manufacturing PMI are also due.

Biggest FX Mover @ (06:30 GMT) GBPAUD (+0.63%) GBP giving up some gains ahead of BoE meeting. Faster MAs steadied, MACD signal line & histogram colling but still negative, RSI 46 and neutral. H1 ATR 0.0019, Daily ATR 0.01090.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /283390/
via IFTTT

Ruble Forecast: Potential Reversal Ahead?

Good day,The USD/RUB broke the level of 70.50. The pair is likely to target the level of 71.50, which might brake to facilitate the potential jump. So, it could be worth waiting for the price movements to arise around the level of 71.50 to understand what is going to happen next.Oil broke the uptrend. The asset might potentially pull back to the level of 86.70 from which it might undergo correction and drop. So, we shall observe what oil is about to do next week.Oil managed to get back in the broken downtrend, securing the bullish trap and closing with a very strong black candle on Friday to signify potential drop till the level of 1720.00.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/ruble-forecast-potential-reversal-ahead-01-11-21"
via IFTTT

Dollar Up, Yen Down Over Surprise Japan Election Result

from Forex News https://www.investing.com/news/forex-news/dollar-up-yen-down-over-surprise-japan-election-result-2662100
via IFTTT

Dollar holds firm as Fed decision looms; yen dips on LDP victory

from Forex News https://www.investing.com/news/economy/dollar-holds-firm-as-fed-decision-looms-yen-dips-on-ldp-victory-2662070
via IFTTT

Key Economic Events and Reports for the Week Ahead

Next week, markets will undoubtedly focus on two key events - the FOMC decision and release of the Non-Farm Payrolls report. The Fed meeting will take place earlier, on Wednesday, that’s why the relevance of NFP report will be much lower than usual.Rising inflation around the world is forcing central banks to cut stimulus and, in the case of emerging economies, rather aggressively raise rates. The Fed is expected to start with reducing monthly asset purchases (QE) and is expected to announce this decision next week. The key uncertainty is the pace of QE tapering: if the announced pace is higher than the market expects, then Treasury interest rates are likely to react upward, and the dollar may strengthen against other currencies. The moderate pace of tapering is unlikely to disappoint the dollar, as the Fed's intention to announce the start of QE tapering in November has already been priced in by the market. Thus, the risks for the dollar are shifted towards continuation of the rally.The Non-Farm Payrolls report will be released next Friday and, as mentioned above, will most likely have a negligible impact on the market, since labor statistics are primarily interesting because the Fed is guided by the dynamics of employment in making decisions on monetary policy. Since the Fed's stance will be known already on Wednesday, the NFP release will likely receive tepid market response.It is also worth watching next week for the events such as the Australian Central Bank's monetary policy decision, the Bank of England's interest rate decision, and the ADP US employment change report on Wednesday.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/key-eonomic-events-and-reports-for-the-week-ahead-31-10-2021"
via IFTTT