Stocks falls in volatile trading after Fed minutes

Posted by Forexsq 12 days ago (
img U.S. stocks fell in choppy trading on Wednesday as minutes from the latest Federal Reserve meeting highlighted concern over the state of the global economy, driving markets to question the likelihood that the Fed will raise rates next month.

The minutes showed policymakers continued to express broad concerns about lagging inflation and the weak world economy even as the U.S. job market improved further. Market expectations for a Fed hike in September fell from one in two to roughly one in three after the minutes were published.

Utilities stocks .SPLRCU, sought by investors when Treasuries yields are seen remaining lower for longer, sharply outperformed the benchmark index with a 0.4 percent gain.

Energy stocks .SPNY posted the most losses on the S&P 500 as crude oil fell 5 percent on the day, even as the U.S. dollar also weakened.

“It looks like based on commodity prices, China, wages not really picking up, that [Fed officials] are not getting any closer to meeting their i

U.S. Jobless claims edge up; labor market still improving

Posted by Forexsq 12 days ago (
img The number of Americans filing new applications for unemployment benefits unexpectedly rose last week, but the trend remained consistent with solid labor market momentum that could keep the Federal Reserve on track to raise interest rates this year.

Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 277,000 for the week ended Aug. 15, the Labor Department said on Thursday.

Claims for the prior week were revised to show 1,000 fewer applications received than previously reported. Economists had forecast claims slipping to 272,000 last week. A Labor Department analyst said there were no special factors influencing the data and no states had been estimated.

Prices for U.S. Treasuries fell slightly after the data, while stock index futures were pointing to a lower open on Wall Street. The dollar dipped against a basket of currencies.

Minutes from the Fed's July 28-29 policy meeting published on Wednesday showed the U.S. central bank upbeat o

Nigeria Vows to Fight Forex Betting on Naira Devaluation

Posted by Forexsq 12 days ago (
img Nigeria’s central bank vowed to fight off speculators taking bets that the naira will be devalued after Kazakhstan became the latest country to abandon control of its currency.

“We haven’t seen any reason so far to institute a change in the foreign-exchange policies,” Ugochukwu Okoroafor, a spokesman for the Central Bank of Nigeria, said by phone from Abuja on Thursday. “The preponderance of foreign currency in the country has led to speculative attacks on the naira. People who have done it in the hope we’ll devalue will be hurt.”

After imposing trading restrictions in February to prevent dollars from fleeing Africa’s largest economy, importers have been unable to pay suppliers, a thriving black market has sprung up in foreign banknotes and a collapse in government oil revenue amid sliding crude prices has left teachers unpaid.

Kazakhstan’s decision to drop its peg for the tenge, which led to a 23 percent drop against the dollar, intensifies pressure on countries to let their

U.S. Existing home sales rise to eight-year high

Posted by Forexsq 12 days ago (
img U.S. home resales rose more than expected in July to their highest level since 2007, a sign the U.S. housing market was heating up and could provide more support for the overall economy.

The National Association of Realtors said on Thursday existing home sales increased 2 percent to an annual rate of 5.59 million units.

June's sales pace was revised slightly lower to 5.48 million units from the previously reported 5.49 million units.

Economists polled by Reuters had forecast home resales falling to a 5.44 million-unit pace last month. Sales were up 10.3 percent from a year ago.

A string of strong reports on the U.S. housing market supports the view that the U.S. economy is building up steam and closing in on the point when the Federal Reserve will hike interest rates to keep it from overheating.

The gain in home resales in July was driven by increases in America's South and West, regions that were hit hard by the housing bust of the 2007-09 recession.

Nationwide, the

Who's Next in the Currency Market's Race to the Bottom?

Posted by Forexsq 11 days ago (
img Kazakhstan just intensified the global currency war.

By allowing a 23 percent plunge in the tenge, central Asia’s biggest oil exporter signaled a new wave of devaluations in developing nations forced to compete against weaker currencies. Egypt and Nigeria look the most vulnerable to John-Paul Smith, the ex-Deutsche Bank AG strategist who predicted Russia’s 1998 crisis and this year’s China’s rout.

To Bernd Berg, a London-based strategist at Societe Generale SA, African currencies like the naira and those of former Soviet Union countries “will be next.”

Developing nations are under increasing pressure from weaker currencies in China and Russia, plunging prices for commodity exports and the prospect of higher U.S. interest rates. Kazakh President Nursultan Nazarbayev, who earlier this year pledged to avoid any sharp depreciation, said today’s adjustment was essential to avoid a recession.

“The major commodity exporters are the most vulnerable,” Smith, who founded Ecstrat, a

ISM and Manufacturing PMI leak for July

Posted by Forexsq 29 days ago (
img ISM's latest manufacturing report for July leaked on Monday morning.

The reading came in at 52.7, below the consensus forecast of 53.5 that was also the prior month's print and a year-to-date high. A reading above 50 indicates expansion, and so despite the slowdown, US manufacturing is still in good shape.

The employment measure fell to 52.7 from 55.5. New orders increased slightly to 56.5 from 56.0. Production jumped to 56.0 from 54.0.

The report had been scheduled for release at 10:00 a.m. ET. After the numbers crossed the wires, the Institute for Supply Management published the report on their website.

A respondent in the survey for the report noted a "summer slow-down", and others bemoaned lower oil prices with the expectation that they'll fall further.

In a note to clients after the data, Capital Economics' Adam Collins wrote, "Looking ahead, the manufacturing sector will probably continue to struggle as the dollar has appreciated further recently and overseas dema

Oil Price sinks 4 percent and hits new low on China

Posted by Forexsq 8 days ago (
img Oil prices fell more than 4 percent to fresh 6-1/2-year lows on Monday after Chinese stock markets suffered their biggest one-day drop since the global financial crisis, intensifying worries over the outlook for global oil demand.

Inaction by the Chinese government following an 11 percent rout in local stock markets last week encouraged a free-fall in global equities and other commodities on Monday. As a consequence, losses on the pan-European FTSEurofirst 300 .FTEU3 index for this month added up to as much as 1 trillion euros.

"Today's falls are not about oil market fundamentals. It's all about China," Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt, told Reuters Global Oil Forum.

"The fear is of a hard landing and that things get out of the control of the Chinese authorities."

Brent oil LCOc1 was trading down $1.85, more than 4 percent, at $43.61 a barrel at 0950 GMT, after touching an intraday low of $43.28, its weakest since March 2009.

U.S. light cr

RBA Holds Rates, Omits Reference to Need for Currency Drop

Posted by Forexsq 28 days ago (
img Australia left its interest rates unchanged and omitted a reference to the need for the local dollar to fall further. The currency jumped more than 1 percent.

Central bank Governor Glenn Stevens and his board kept the cash rate at a record-low 2 percent, as predicted by markets and economists following reductions in May and February.

Stevens said in Tuesday’s statement the exchange rate “is adjusting to the significant declines in key commodity prices” after it fell through 73 U.S. cents in July. It is the first time in 18 months that he hasn’t signaled the currency was too high.

“It does look like they’ve watered down their jawboning of the currency,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. “If you draw a longer bow it kind of waters down their easing bias because part of the reason you have such a bias is to keep pressure on the currency.”

Australia has so far had little success in stimulating industries a

The Fed Is Looking at a Very Different Dollar Than Wall Street

Posted by Forexsq 8 days ago (
img By many popular measures, the dollar has traded sideways for the last six months. Then there's the Federal Reserve's measure.

The greenback is surging, according to an index the Fed created to track the U.S. currency versus 26 of the country's biggest trading partners. It's risen 1.3 percent beyond a 12-year high reached in March, when the central bank fired the first of a series of warnings that a stronger dollar may hurt growth and lower inflation.

At a time when the Fed's tightening path has become one of the biggest drivers in the $5.3 trillion-a-day foreign-exchange market, the discrepancy between Wall Street's view -- largely based on the dollar's performance against the euro and the yen -- and that of policy makers may lead to a jolt for investors expecting recent ranges to persist. The rapid trade-weighted appreciation this quarter has come mostly against big exporters such as China and Mexico, and it undercuts the Fed’s goal of quicker inflation. It may trigger further

Payrolls in U.S. Climbed 215,000 in July in Broad-based Gain

Posted by Forexsq 25 days ago (

Employers added 215,000 jobs in July and the unemployment rate held at a seven-year low of 5.3 percent, signs of further progress in the U.S. labor market that’s keeping the Federal Reserve on the path toward raising interest rates as soon as next month.

The gain in payrolls last month followed a 231,000 advance in June that was bigger than previously estimated, a Labor Department report showed Friday in Washington. While the data also showed a pickup in hours worked, average hourly earnings climbed a less-than-forecast 2.1 percent from a year earlier, indicating little momentum in wage growth.

The persistent pace of hiring this year indicates companies are sanguine about prospects for demand in the face of a tempered global growth outlook. Better job security that leads to bigger wage gains could encourage consumers to spend more freely and provide more momentum for the economy.

“Trend job growth is rock solid,” said Ryan Sweet, a senior economist at Moody’s Analytics In

Black Monday because of China sinks world stocks and Forex Market

Posted by Forexsq 8 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

Dollar swings up, stocks dip after solid U.S. jobs data

Posted by Forexsq 25 days ago (
img The dollar gained and Wall Street stock futures extended losses as U.S. jobs data came near enough to expectations to bolster bets the Federal Reserve will raise rates for the first time in nearly a decade this year.

The data showed 215,000 jobs were added in July, slightly below a Reuters poll of 223,000 jobs, but the unemployment rate held at a seven-year low of 5.3 percent and there were signs that wages were beginning to pick up.

U.S. stock futures extended earlier losses, dropping 0.2 percent on the day SPc1. The Dow Jones industrial average was set for its seventh day of losses - its worst run in four years.

The U.S. dollar jumped against a basket of other currencies .DXY, climbing 0.4 percent on the day to a four-month high of 98.271.

U.S. Treasury yields were flat at 2.23 percent as were European benchmark German yields.

European stocks .FTEU3 moved up slightly after the data, although the index remained down 0.3 percent on the day.

The prospect of higher ra

Forex Market Biggest Day in Years as Investors Flee Risk

Posted by Forexsq 7 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.”

U.S. economy gains 215,000 jobs in July

Posted by Forexsq 25 days ago (
img America's economy is in good but not great shape this year.

The U.S. economy added 215,000 jobs in July. Economists surveyed by forexSQ predicted the economy would add 216,000 jobs. Anything above 200,000 is considered very solid.

The unemployment rate stayed the same at 5.3%, which is its lowest point since April 2008, according to the Labor Department. That's considered near full employment.

"Job growth is quite strong," says Jim O'Sullivan, chief economist at High Frequency Economics, a research firm in New York. "This pace of employment growth is clearly strong enough to keep the unemployment rate trending down."

Wage growth -- the missing piece to America's economic progress -- remained sluggish in July. Average hourly earnings only rose 2.1% compared to the prior year. Wage growth is the reason many Americans haven't felt the benefits of the economy's recovery. The Federal Reserve wants to see annual wage growth closer to 3.5%.

"Wage growth numbers are still tame,

Wall Street stocks surges for second day on strong GDP data

Posted by Forexsq 5 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

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