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

Posted by Forexsq 101 days ago (
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

Retail Sales Little Changed as Americans Reluctant to Splurge

Posted by Forexsq 107 days ago (
img Sales at U.S. retailers were little changed in April, starting the second quarter on a weak note as Americans remained reluctant to splurge.

The reading followed a revised 1.1 percent gain in March that was the biggest in a year and larger than previously estimated, Commerce Department figures showed Wednesday in Washington. The median forecast of 88 economists surveyed by Bloomberg called for a 0.2 percent gain in April.

Consumers have been using the windfall from cheap gasoline to boost savings as wages have been slow to pick up, which may temper the projected rebound in U.S. growth this quarter. At the same time, steady hiring and low borrowing costs will help underpin household spending, which accounts for about 70 percent of the economy.

“Consumers are still spending quite selectively,” Richard Moody, chief economist at Regions Financial Corp., said before the report. “It definitely gets the quarter off on the wrong foot as far as the rebound goes. Wages are stuck in a t

Oil glut worsens as OPEC market-share battle just beginning: IEA

Posted by Forexsq 107 days ago (
img A global oil glut is building as OPEC kingpin Saudi Arabia pumps near record highs in an attempt to win a market-share battle against stubbornly resistant U.S. shale production, the International Energy Agency (IEA) said on Wednesday.

The West's energy watchdog said in a monthly report that although higher-than-expected oil demand was helping to ease the glut, growth in global oil consumption was far from spectacular.

As a result, signs are emerging that the crude oil glut is shifting into refined products markets, which could make a recent rally in oil prices unsustainable.

"Despite tentatively bullish signals in the United States, and barring any unforeseen disruption elsewhere, the market's short-term fundamentals still look relatively loose," said the IEA, which coordinates energy policies of industrial nations.

Global oil production exceeds demand by around 2 million barrels per day, or over 2 percent, following spectacular growth in U.S. shale production and OPEC's d

Oil rallies on U.S. jobs data, bullish EIA monthly report

Posted by Forexsq 142 days ago (
img Oil futures rallied on Tuesday, erasing losses on strong jobs data and U.S. government forecasts for lower domestic crude production growth and higher global demand for oil.

U.S. job openings surged to a 14-year high in February the Labor Department said in its monthly Job Openings and Labor Turnover Survey (JOLTS), lifting oil prices.

"That JOLTS report was certainly quite strong and strong employment equals strong gasoline demand," said John Kilduff, partner at Again Capital LLC in New York.

Oil got more support from news that Minneapolis Fed President Narayana Kocherlakota made a case for waiting until the second half of 2016 to raise interest rates, and to then raise them gradually to just 2 percent by the end of 2017.

Crude futures got additional lift when an Energy Information Administration (EIA) monthly report raised forecasts for U.S. and global demand growth and lowered forecasts for crude oil production growth in the United States.

U.S. May crude CLc1 was up

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Fed should not raise rates until late 2016: Kocherlakota

Posted by Forexsq 142 days ago (
img Minneapolis Fed President Narayana Kocherlakota on Tuesday laid out a case for waiting until the second half of 2016 to start raising interest rates, and to then raise them gradually to just 2 percent by the end of 2017.

It was the first time the dovish policymaker detailed his preferred path for "late and slow" rate hikes. His remarks afterwards to reporters suggest he is increasingly worried that market expectations for nearer-term rate rises, fueled by comments from many of Kocherlakota's Fed colleagues, could knock the wind out of the economic recovery.

"That conversation (about raising rates) in and of itself is a tightening of policy," Kocherlakota said. "I do worry about the ongoing conversation about tightening monetary policy being a drag on economic performance both in terms of growth and in terms of employment outcomes."

Most Fed policymakers, including Fed Chair Janet Yellen, believe the Fed will need to start raising rates this year as the labor market improves a

Stocks higher with Dow briefly up 100 points; oil, dollar eyed

Posted by Forexsq 142 days ago (
img U.S. stocks traded higher on Tuesday as investors eyed weaker oil prices and renewed dollar strength ahead of the unofficial beginning of earnings season on Wednesday.

"It's a very light day today in terms of economic news," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The market's going nowhere. It's not breaking into new territory and it's not falling apart. I think investors should be cautious and defensive."

Stocks have remained in a range, with the S&P 500 roughly between 2,051 and 2,100.

"Yesterday had the characteristics of a shakeout, but we are not convinced that the pullback has fully matured yet," BTIG chief technical strategist Katie Stockton said in a note. "A breakout above intraday resistance near 2,080 by the S&P futures (2,089 for the SPX) would be an "all-clear" signal, in our view."

Equities extended gains in late morning trade with the Dow Jones industrial average briefly adding 100 points.

Healthcare led S&P 500 gains, wh

Bitcoin alternative in 'pyramid scheme' storm

Posted by Forexsq 142 days ago (
img The founders of a new digital currency, known as LEOCoin, have hit back at reports published over the weekend linking them with a suspected pyramid scheme back in 2012.

Last week, U.K.-based Learning Enterprises Organisation (LEO) unveiled a trading platform in Hong Kong for its cryptocurrency called LEOCoin, which the company is promoting as an alternative to more popular digital currencies like bitcoin.

At a London launch the previous week, LEO boasted that it had already promoted the product to its current client base, claiming it meant over 100,000 entrepreneurs were already actively using the cryptocurrency in anticipation of its official trading debut, with around 30,000 merchants already signed up.

It also claimed this made it the "second largest digital currency" in the world, second to bitcoin, but has been slammed by reports on industry websites in the last week. Joel Dalais, a virtual currency entrepreneur and the director of bitcoin exchange IBWT, said on cryptoco

Oil prices to stay lower for longer, says Goldman Sachs

Posted by Forexsq 142 days ago (
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

Why the Fed needs Europe's permission to hike rates

Posted by Forexsq 142 days ago (
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

Gold retreats from 7 week top as dollar bounces back

Posted by Forexsq 143 days ago (

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

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

Posted by Forexsq 143 days ago (
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

Aussie jumps more than 1 percent as RBA keeps rates unchanged

Posted by Forexsq 143 days ago (
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

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

Posted by Forexsq 143 days ago (
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.”

Dollar Drop Signals World’s Best Forecaster to Start Buying

Posted by Forexsq 143 days ago (
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

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