Euro-Area Bonds Climb as Coeure Says ECB to Expedite Purchases

Posted by Forexsq 78 days ago (http://www.bloomberg.com)
img Euro-area government bonds advanced as European Central Bank policy makers reasserted their commitment to the asset-purchase program that pushed yields across the region to record lows earlier this year.

Benchmark German 10-year yields dropped to the lowest level in a week after Executive Board member Benoit Coeure said on Monday the ECB will increase the pace of purchases under its quantitative-easing program in May and June. The central bank is ready to extend its bond-buying plan if needed, Governing Council member Christian Noyer said separately in Paris on Tuesday.

“The ECB is signaling its determination to maintain the bond-purchase program and accelerate the process before the summer due to liquidity concerns,” said Nick Stamenkovic, a fixed-income strategist at broker RIA Capital Markets Ltd. in Edinburgh. “This is supportive for European government bonds.”

Germany’s 10-year bund yield fell nine basis points, or 0.09 percentage point, to 0.56 percent at 9:32 a.m. Lond

U.S. Index Futures Fall as Consumer Prices Show Inflation Pickup

Posted by Forexsq 74 days ago (http://www.bloomberg.com)
img U.S. stock-index futures fell, after data showing the fastest rise in consumer prices in two years bolstered speculation the Federal Reserve will be forced to raise interest rates soon.

E-mini futures on the S&P 500 expiring in June slipped 0.2 to 2,124.25 at 9:06 a.m. in New York, after the underlying index Thursday reached its fourth all-time high in six sessions. Contracts on the Dow Jones Industrial Average declined 23 points, or 0.1 percent, to 18,235. Markets are closed Monday for the holiday.

“Any time you do get a little bit stronger data, people kind of flinch,” said Matt Maley, an equity strategist at Miller Tabak & Co. in Newton, Massachusetts. “Their first reaction is that the Fed is getting what it wants to raise rates. The stock market is at new highs and a little overbought on a near-term basis, and people are taking some chips off the table ahead of the long weekend.”

A report Friday showed the cost of living excluding food and fuel rose at a faster pace than

Dollar Drop Signals World’s Best Forecaster to Start Buying

Posted by Forexsq 120 days ago (http://www.bloomberg.com)
img It’s time for investors who bailed on the dollar in the past few weeks to get back in, says the most-accurate currencies forecaster.

The greenback has tumbled 4.3 percent versus the euro since touching a 12-year high last month amid speculation the Federal Reserve will delay raising interest rates, in part because the dollar’s strength is hurting U.S. economic growth. That concern is overblown, according to ING Groep NV, which topped Bloomberg’s rankings of foreign-exchange analysts for the second quarter in a row.

“The market is now pricing in a very subdued pace of the tightening cycle -- we disagree,” Petr Krpata, a foreign-exchange strategist at ING in London, said on April 1 by phone. “We just see the latest correction as a perfect opportunity to get into the trade again.”

Even with the recent reversal, the dollar has rallied between 3.7 percent and 29 percent against all of its major peers since mid-2014 as the Fed’s plans to raise interest rates attracted cash to the U

U.S. private sector adds 237,000 jobs in June: ADP

Posted by Forexsq 34 days ago (http://www.reuters.com)
img U.S. private employers added 237,000 jobs in June, the biggest gain since December, suggesting further improvement in the jobs market which may allow the Federal Reserve to raise interest rates later this year, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP NationalEmployment Report would show a gain of 218,000 jobs.

May private payroll gains were revised up to 203,000 from an originally reported 201,000 increase, which was the smallest rise since January 2014.

The report is jointly developed with Moody's Analytics.

The ADP figures come ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Thursday, which includes both public and private-sector employment.

Economists polled by Reuters are looking for total U.S. employment to have grown by 230,000 jobs in June, down from May's 280,000 increase. The unemployment rate was forecast to slip to a seven-year low of 5.4 percent from 5.5 per

U.K. Services Growth Hits Seven-Month High as Economy Picks Up

Posted by Forexsq 120 days ago (http://www.bloomberg.com)
img U.K. services growth accelerated to a seven-month high in March as the broader economy gained momentum in the first three months of 2015.

Markit Economics said Tuesday its Purchasing Managers’ Index rose to 58.9 from 56.7 in February. Economists had forecast 57, according to the median estimate in a Bloomberg News survey. A reading above 50 indicates expansion.

The report, taken together with data last week on manufacturing and construction, suggests the economy will grow 0.7 percent this quarter after a 0.6 percent increase at the end of 2014, Markit said. Britain’s political parties are battling over claims to economic competency with less than five weeks to go before the general election.

“The U.K. economy moved up a gear in March,” Chris Williamson, chief economist at Markit, said in a statement. “Faster growth of new business and improved expectations of prospects for the year ahead also bode well for the upturn to retain strong momentum as we move through the spring.”

Jobs Report Disappoints, Participation Rate Falls to Lowest Since 1977

Posted by Forexsq 33 days ago (http://www.bloomberg.com)
img Households are feeling upbeat about employment prospects as more respondents than at any time since early 2008 said jobs were plentiful, a Conference Board report showed on Tuesday.

A separate report Friday from the Labor Department showed applications for unemployment benefits held below 300,000 for a 17th straight week. Jobless claims rose by 10,000 to 281,000 in the week ended June 27. The median forecast called for 270,000 applications.

The figures indicate corporate managers are keeping headcounts in line with stronger consumer demand while overseas markets remain feeble. At the same time, more moderate job gains may still be enough to reduce the unemployment rate, consistent with the Federal Reserve’s perceived timetable to raise borrowing costs by year-end.

“This is a softer report than people expected but it’s certainly not a game changer,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in Stamford, Connecticut, who projected a 225,000 gain.

Aussie jumps more than 1 percent as RBA keeps rates unchanged

Posted by Forexsq 120 days ago (http://www.reuters.com)
img The Australian dollar gained more than 1 percent against the U.S. dollar, on track for its biggest daily rise in more than two weeks, after the Reserve Bank of Australia surprised many investors by refraining from cutting interest rates.

The Aussie rose to $0.7711, its highest in a week, from around $0.76 before the decision and extending its recovery from a six-year trough of $0.7534 set on Thursday.

A fall in iron ore prices, Australia's single biggest export earner, and a currency that is still seen to be above fair value had left many convinced that the RBA would cut rates either this month or next.

The RBA policy board noted that while the Aussie had fallen against a strong greenback, the decline against a basket of currencies had been less and a lower exchange rate was needed to help the economy.

"Should the Aussie appreciate notably today or over the next few days we would have to come to the conclusion that the market has misunderstood the RBA's intention (in refra

Greek 'No' effect on Stocks and Forex market

Posted by Forexsq 29 days ago (http://www.reuters.com)
img Shares fell, the euro stumbled and yields on weaker euro zone economies' bonds rose after Greece overwhelmingly voted against conditions for a rescue package, but there was no rout and contagion was limited.

U.S. stock index futures ESc1 SPc1 indicated Wall Street would follow European and Asian share markets lower but there have been several worse days this year for markets vulnerable to events in Greece.

Analysts attributed the relatively muted reaction to expectations the European Central Bank would act to limit any damage. The ECB's governing council is holding a conference call on Monday to decide how long to keep Greek banks afloat.

"The market is, rightly or wrongly, taking a great deal of credence of the fact that the ECB has many more defense mechanisms in place than it did in 2011-12," said Andrew Milligan, head of global strategy at Standard Life Investments.

"Some of the measures we've seen already could be seen as a subtle signal by the ECB that it is ready to

Here Are the Suspicious Moves in the Australian Dollar That Set Off an Investigation

Posted by Forexsq 119 days ago (http://www.bloomberg.com)
img The Australian dollar is up today after the Reserve Bank of Australia announced interest rates would remain unchanged, surprising most traders who were expecting a cut. However, regulators noticed that the spike actually began before the announcement was officially released. Even more bizarre, it's the third month in a row that the aussie has made a sharp move just moments before a monetary policy decision was made public.

As you can see of this chart of the minute before and after the 2:30 p.m. local release (22:30 U.S. Eastern Time) on February 3, the Australian Dollar Spot fell about 0.6 percent in the final seconds before the announcement was made.

Securities regulators in Australia say they will investigate the situation to see why this keeps happening. However, the fact that the moves happened right before the announcement doesn't necessarily mean someone is getting the information early. Sean Keane, an Auckland-based analyst at Triple T Consulting, told Bloomberg News tha

Crude Oil Falls Most in a Week

Posted by Forexsq 22 days ago (http://www.bloomberg.com)
img The nuclear accord reached in Vienna on Tuesday could eventually reshape global oil markets. After almost two years of talks, the holder of the world’s fourth-biggest crude reserves will benefit from an easing of international sanctions on exports in return for curbs on its nuclear program, according to an official involved in the talks.

How Much More Oil Can Iran Produce?

Iranian Oil Minister Bijan Namdar Zanganeh says the country can increase exports by 500,000 barrels a day as soon as sanctions are lifted, and then an additional 500,000 a day in the following six months. Iran produced an average of 2.8 million barrels a day this year.

Goldman Sachs Group Inc. says adding 500,000 barrels a day will take about a year because Iran must first demonstrate its compliance with the terms of the nuclear accord and revive aging wells. Further expansion will need foreign investment, BNP Paribas SA says. The country also has 30 million barrels stored on tankers that it could ship more

Gold retreats from 7 week top as dollar bounces back

Posted by Forexsq 119 days ago (http://www.cnbc.com)
img

Gold edged lower on Tuesday as the dollar recovered and European shares rose, but uncertainty about the timing of a U.S. interest rate increase kept bullion not far from a seven-week high above $1,200 an ounce.

Bullion rose to its highest since Feb. 17 on Monday, supported by a weakening dollar after U.S. non-farm payrolls data fuelled expectations that the Federal Reserve could delay an anticipated rate increase this year.

U.S. jobs posted the slowest growth in more than a year in March.

Spot gold was down 0.6 percent at $1,210.80 an ounce, while U.S. gold for June delivery slipped 0.8 percent to $1,208.60 an ounce.

The dollar rose versus a basket of major currencies, aided by higher Treasury yields, while European shares also climbed, denting gold's appeal as an insurance against risk.

A stronger greenback makes dollar-denominated bullion more expensive for holders of other currencies, while returns on U.S. bonds are closely watched by the gold market, given that

Fed sees improving economy, jobs; September hike in view but not set

Posted by Forexsq 6 days ago (http://www.reuters.com)
img The U.S. economy and job market continue to strengthen, the Federal Reserve said on Wednesday, leaving the door open for a possible interest rate hike when central bank policymakers next meet in September.

Following a two-day policy meeting, Fed officials said they felt the economy had overcome a first-quarter slowdown and was "expanding moderately" despite a downturn in the energy sector and headwinds from overseas.

The central bank nodded in particular to "solid job gains" in recent months.

"On balance, a range of labor market indicators suggest that underutilization of labor resources has diminished since early this year," the Fed said in a policy statement that kept rates unchanged.

That language marks an upgrade in its view of labor conditions since its June meeting, when it said labor slack had "diminished somewhat."

The statement may strengthen expectations of a rate hike at the Fed's September meeting. The central bank has kept rates at a near-zero level since D

Why the Fed needs Europe's permission to hike rates

Posted by Forexsq 119 days ago (http://www.cnbc.com)
img The market is sending signals that the Federal Reserve may not make much headway raising interest rates during the next two years—even if central bankers are intent on doing so, Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, said on Tuesday.

The Fed will not be able to raise its federal funds rate above 1.5 percent by the end of 2017, Golub said. If it tries to do so, the dollar will start to rise, putting pressure on the economy and causing the central bank to retreat.

"I would love to see the Fed be able to move toward 2 percent, but with free money in Europe, it's very hard for them to get tighter," he told CNBC's "Squawk Box." "Are we asking the permission of the Europeans for our central bank policies? I'm not sure, but the market's saying [we are]."

The Fed faces the challenge of raising rates at a time when European central bankers are suppressing rates by purchasing large amounts of bonds. That monetary policy disparity is expected to send invest

Fed Says Labor Market Improves as It Moves Toward Rate Rise

Posted by Forexsq 6 days ago (http://www.bloomberg.com)
img Federal Reserve policy makers said the labor market and housing have improved, moving closer to ending an unprecedented period of near-zero interest rates without providing a clear signal on the timing of liftoff.

“The labor market continued to improve, with solid job gains and declining unemployment,” the Federal Open Market Committee said in a statement Wednesday in Washington. It said that “underutilization of labor resources has diminished,” dropping the modifier “somewhat” to describe the change.

Chair Janet Yellen is guiding the Fed toward its first rate increase in almost a decade as the nation approaches full employment. She has said the Fed is likely to tighten this year if the economy continues to improve as she expects, with market speculation focused on a move as soon as September.

“The housing sector has shown additional improvement,” the Fed said. “Business fixed investment and net exports stayed soft.” It dropped language saying energy prices appeared to have s

Oil prices to stay lower for longer, says Goldman Sachs

Posted by Forexsq 119 days ago (http://www.marketwatch.com)
img Thrilled about the recent bounce-back in oil prices? Well, it’s too early to get excited about the seven-week high reached on Monday, according to Goldman Sachs analysts, who predict we still have months of low oil prices ahead of us.

While noting that a decline in U.S. rig count has been faster than expected, that reduction is still not enough to change the course of the oil market, they said in a report dated Monday.

“It remains insufficient in our view to balance the U.S. market in 2016,” they said. “Prices need to stay low for longer to achieve a sufficient and sustainable slowdown in U.S. production growth.”

Goldman Sachs has forecast that crude oil will trade around $40 a barrel over the next three months, although it has noted there is “modest upside” to that prediction — that is, there’s a risk prices could be higher.

In early March, the investment bank argued its bearish outlook might be too pessimistic, but despite that concern, it hasn’t since made any change to
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