Black Monday because of China sinks world stocks and Forex Market

Posted by Forexsq 50 days ago (
img Alarm bells rang across world stocks and forex markets on Black Monday as a near 9 percent dive in China shares and a sharp drop in the dollar and major commodities panicked investors.

European stocks were more than 5 percent in the red and Wall Street was braced for similar losses after Asian shares slumped to 3-year lows as a three month-long rout in Chinese equities threatened to get out of hand.

Oil plunged another 4 percent, while safe-haven government U.S. an German bonds and the yen and the euro rallied as widespread fears of a China-led global economic slowdown and currency war kicked in.

"It is a China driven macro panic," said Didier Duret, chief investment officer at ABN Amro. "Volatility will persist until we see better data there or strong policy action through forceful monetary easing."

Many traders had hoped that such support measures, which could include an interest rate cut, would have come from Beijing over the weekend after its main stocks markets slumpe

Oil Price Will Go Lower Than $20, Goldman Says

Posted by Forexsq 32 days ago (
img The global surplus of oil is even bigger than Goldman Sachs Group Inc. thought and that could drive prices as low as $20 a barrel.

While it’s not the base-case scenario, a failure to reduce production fast enough may require prices near that level to clear the oversupply, Goldman said in a report e-mailed Friday while cutting its Brent and WTI crude forecasts through 2016. The International Energy Agency predicted that crude stockpiles will diminish in the second half of next year as supply outside OPEC declines by the most since 1992.

“The oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016,” Goldman analysts including Damien Courvalin wrote in the report. “We continue to view U.S. shale as the likely near-term source of supply adjustment.”

Goldman trimmed its 2016 estimate for West Texas Intermediate to $45 a barrel from a May projection of $57 on the expectation that OPEC production growth, resilient supply from out

Forex Market Biggest Day in Years as Investors Flee Risk

Posted by Forexsq 49 days ago (
img Traders in the $5.3 trillion-a-day forex market were busy Monday.

New Zealand’s dollar plunged as much as 8.3 percent, the most in 30 years, pacing declines by currencies of resource-producing nations amid a global market selloff. On the flip side, haven currencies surged on concern China’s slowing economy will damp global growth, with the yen climbing the most since 2010.

The U.S. dollar fell as traders pushed out expectations for higher interest rates from the Federal Reserve. The daily range of the ForexSQ Dollar Spot index, which measures the difference, or spread, between its intraday highs and lows, rose to levels investors last saw regularly during the financial crisis seven years ago.

“You’re talking about sovereign currencies moving that much, you’re not talking about equities -- it’s quite unusual,” Peter Gorra, head of foreign-exchange trading in New York at BNP Paribas SA, said by phone. “The spreads are naturally going to reflect the illiquidity in the market.”

Forex : Depth Missing When Needed in $5.3 Trillion-a-Day Currency Market

Posted by Forexsq 29 days ago (
img Forex Market - Turbulent trading that made August the worst month for global equities since 2012 also revealed a widening crack in the world’s largest market-- foreign exchange.

Fabrizio Fiorini, chief investment officer at Aletti Gestielle SGR SpA in Milan, thought he was in luck as the financial turmoil curbed speculation the Federal Reserve would raise interest rates, sparking a stampede of dollar selling. To his dismay, he found that the gap between prices at which traders were willing to buy and sell major currencies had tripled, forcing him to pay a greater premium to purchase the greenback.

“During those two or three critical days in August, I was frustrated that liquidity, which seems to always be there when the market is quiet, disappeared when you need it the most,” said Fiorini, whose firm manages $18 billion. “Market makers are not able to provide liquidity the way they used to, and the market was too crowded with the same trades.”

The ability to exchange currenci

Wall Street stocks surges for second day on strong GDP data

Posted by Forexsq 47 days ago (
img U.S. stocks extended their rally on Thursday, raising hopes that the worst of Wall Street's recent turmoil was behind it, after further evidence that the economy was on a solid footing.

The three major indexes were up more than 2 percent in early afternoon trading and were poised for their biggest two-day gain since 2009.

Data showed that the U.S. economy grew 3.7 percent in the second quarter - better than expected and much faster than the previous estimate of 2.3 percent.

Signs that the market was stabilizing rekindled expectations of an interest rate increase this year but interest rate swap rates indicated only a 25 percent chance of a hike next month.

The market snapped a 6-day losing streak on Wednesday after New York Fed President William Dudley said the case for a September hike was "less compelling" after recent market turmoil sparked by fears of slowing growth in China.

"I think in terms of sharp drops, the worst is probably behind us but it's going to take a

Retail Sales in U.S. Rise as Consumers Unshaken by Turmoil

Posted by Forexsq 28 days ago (
img Retail sales in the U.S. climbed for a second straight month, a sign consumers may be looking past recent volatility in financial markets.

The 0.2 percent increase in August followed a 0.7 percent gain in July that was larger than previously reported, Commerce Department figures showed Tuesday in Washington. The median forecast of 84 economists surveyed by Bloomberg called for a 0.3 percent advance.

Although confidence has taken a hit from stock-market turmoil and global-growth concerns, the data show households are still putting their savings from cheap energy to work. More jobs and higher pay would go a long way in supporting household spending, which Federal Reserve policy makers are watching as they consider raising interest rates as soon as this week.

“The trend is strong and robust,” said Gregory Daco, head of U.S. macroeconomics at Oxford Economics USA in New York, who correctly forecast the increase in retail sales. Tuesday’s data shows spending is “resistant to outsi

Oil Price Jumps Most in Three Years on Faster U.S. Economic Growth

Posted by Forexsq 47 days ago (
img Oil price jumped the most in more than six years, caught up in a relief rally that swept the globe as the U.S. economy grew more than predicted.

West Texas Intermediate futures rose 10 percent, the biggest gain since March 2009. U.S. gross domestic product grew at a 3.7 percent annualized rate in the second quarter, exceeding all estimates of economists surveyed by Bloomberg. The Standard & Poor’s 500 Index headed for its biggest two-day gain since 2009 as Chinese shares snapped a five-day losing streak.

Prices extended gains after Royal Dutch Shell Plc issued a force majeure on Bonny Light exports from Nigeria as it worked to repair two crude pipelines shut because of thefts and a leak.

Oil had slumped below $40 this week as concern over slowing demand in China fueled volatility in global markets. Prices are down about 31 percent from this year’s closing peak in June on speculation that a world supply glut will be prolonged. OPEC members are sustaining output while U.S. stoc

Fed leave rates unchanged, FOMC Statement

Posted by Forexsq 26 days ago (
img The U.S. Federal Reserve kept interest rates unchanged on Thursday in a nod to concerns about a weak world economy, but left open the possibility of a modest policy tightening later this year.

In what amounted to a tactical retreat, the U.S. central bank said an array of global risks and other factors had convinced it to delay what would have been the first rate hike in nearly a decade.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term," the Fed said in its policy statement following the end of a two-day meeting. It added the risks to the U.S. economy remained nearly balanced but that it was "monitoring developments abroad."

However, the central bank maintained its bias towards a rate hike sometime this year, while lowering its long-term outlook for the economy. Fresh economic projections showed 13 of 17 Fed policymakers still foresee raising rates at least o

Japanese Stocks Day Trader Made $34 Million

Posted by Forexsq 46 days ago (
img Japanese Stocks Day Trader Made $34 Million, While a lot of investors were hitting the panic button Monday, a Japanese day trader who’d made a big bet against the market timed the bottom almost perfectly and narrated a play-by-play of the trade to his 40,000 Twitter followers. He claims to have walked away with $34 million.

As financial markets got crazy this week, many people turned cautious. Some were paralyzed. Not the 36-year-old day trader known by the Internet handle CIS.

“I do my best work when other people are panicking,” he said in an interview Tuesday, about an hour after winding up the biggest trade of a long career betting on stocks. He asked that his real name not be used because he’s worried about robbery or extortion. To support his claims, he shared online brokerage statements showing his trades second by second.

CIS had been shorting futures on the Nikkei 225 Stock Average since mid-August, wagering it would fall. By the market close on Monday, a paper profit

Job growth seen accelerating, leaving Fed closer to hike

Posted by Forexsq 11 days ago (
img U.S. employers likely added jobs at a brisk pace in September, a sign that the labor market is near full strength and could push the Federal Reserve to raise interest rates at one of its two remaining meetings this year.

The Labor Department's monthly employment report, due on Friday at 8:30 a.m. EDT (1230 GMT), will almost certainly show the U.S. economy is growing enough to push the jobless rate lower in the coming months.

Economists surveyed by Reuters forecast U.S. payrolls outside of farming rose by 203,000 last month, bouncing back from softer job growth in August despite worries a China-led global economic slowdown is sapping America's strength.

"The U.S. economy is alive and kicking," said Phil Lachowycz, an economist at Fathom Consulting in London.

The jobless rate was expected to hold steady at 5.1 percent in September because some workers who gave up jobs hunts in harder times were expected to return to the labor force.

But economists estimate that the econom

OPEC Oil Price drop and OPEC concerned about it

Posted by Forexsq 43 days ago (
img OPEC Oil Price drop and concerned the OPEC drop in oil prices - trading near multi-year lows - and is ready to talk to other producers, an article in an OPEC publication issued on Monday said.

"Today's continuing pressure on prices, brought about by higher crude production, coupled with market speculation, remains a cause for concern for OPEC and its members — indeed for all stakeholders in the industry," the commentary in the latest OPEC Bulletin said.

The Organization of the Petroleum Exporting Countries renewed its openness for dialogue with other producers. OPEC has refused to cut its own output without help from outside producers such as Russia, which have also declined to lower supply.

"OPEC, as always, will continue to do all in its power to create the right enabling environment for the oil market to achieve equilibrium with fair and reasonable prices."

"As the Organization has stressed on numerous occasions, it stands ready to talk to all other producers. But this

Payrolls Rise Less Than Forecast, U.S. Jobless Rate Steady

Posted by Forexsq 11 days ago (
img Payrolls rose less than projected in September, wages stagnated and the jobless rate was unchanged as people left the workforce, signaling the global slowdown and financial-market turmoil are rippling through the world’s largest economy.

The addition of 142,000 jobs followed a revised 136,000 gain the prior month that was lower than previously estimated, a Labor Department report showed Friday in Washington. The median forecast in a Bloomberg survey of 96 economists called for a 201,000 advance. The jobless rate held at 5.1 percent, and wage growth was unchanged.

The weak report vindicates the Federal Reserve’s decision to delay an interest-rate increase last month. Cooling overseas markets, a stronger dollar and lower oil prices that are hampering exports and manufacturing raise the risk that employers will hesitate before taking on more staff.

A weaker-than-expected report “would chip away at confidence about the strength of the expansion,” Ryan Sweet, a senior economist at

Draghi Unveils Revamped QE Program as ECB Downgrades Outlook

Posted by Forexsq 40 days ago (
img Mario Draghi unveiled a revamp of quantitative easing to allow for more purchases of each euro member’s debt as the weaker global outlook prompted a wholesale reduction of officials’ economic forecasts through 2017.

The European Central Bank president said in Frankfurt on Thursday that the Governing Council has now set a potential purchase limit of 33 percent of any given bond, from 25 percent previously. The euro slid to a two-week low as Draghi said the emerging-market rout threatened global expansion and that consumer prices may barely grow this year.

“The information available indicates a continued, though somewhat weaker, economic recovery and a slower increase in inflation rates compared with earlier expectations,” Draghi told reporters. “Taking into account the most recent developments in oil prices and recent exchange rates, there are downside risks” to the inflation forecast, he said.

The move to reset the ECB’s stimulus program after a six-month review, which will b

Ben Bernanke: More execs should have gone to jail for causing Great Recession

Posted by Forexsq 8 days ago (
img This season, Ben Bernanke was able to sit through an entire Nationals game.

During the financial meltdown in 2008, the then-chairman of the Federal Reserve would buy a lemonade and head to his seats two rows back from the Washington Nationals dugout, a respite from crisis. But often he would find himself huddling in the quiet of the stadium's first-aid station or an empty stairwell for consultations on his BlackBerry about whatever economic catastrophe was looming.

"I think there was a reasonably good chance that, barring stabilization of the financial system, that we could have gone into a 1930s-style depression," he says now in an interview with USA TODAY. "The panic that hit us was enormous — I think the worst in U.S. history."

With publication of his memoir, The Courage to Act, on Tuesday by W.W. Norton & Co., Bernanke has some thoughts about what went right and what went wrong. For one thing, he says that more corporate executives should have gone to jail for their misde

Euro Drops as ECB Adjusts Bond-Buying Cap, Sees Downside Risks

Posted by Forexsq 40 days ago (
img The euro forex currency fell to a two-week low as the European Central Bank signaled it’s able to increase monetary stimulus to counter downside risks to growth and inflation.

The shared currency weakened versus all but one of its 16 major counterparts after President Mario Draghi said policy makers adjusted the parameters of their bond-buying program and lowered economic forecasts. The ECB raised the limit on its bond purchases under its quantitative-easing program to 33 percent per issue from 25 percent previously.

“Dovish Draghi taking markets by surprise,” said Valentin Marinov, head of Group-of-10 currency research at Credit Agricole SA’s corporate and investment-banking unit in London. Policy makers are “highlighting that they can adjust the size of QE if needed and finally signal that September 2016 may not be the end of QE.”

The euro dropped 0.8 percent to $1.1142 at 1:48 p.m. London time and touched $1.1124, its weakest level since Aug. 20. It dropped 0.9 percent to

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