Hot Topic – UK pound and US dollar

Share This: Here’s what happened to the GBP: On Thursday, The Markit Purchasing Managers’ Index for the manufacturing sector came in at a higher than expected 53.3, while on Friday, the PMI for the construction industry additionally showed an increase to the previous month. Overall UK consumer confidence has actually additionally shown an increase. Following the release of Thursday’s manufacturing PMI the pound increased by 1.1% versus the US dollar, to 1.32737 and versus the euro, it increased by 0.7%. On a weekly basis, the GBP/USD increased by 1.3% & the EUR/GBP decreased by 1.7%. So although this week, the pound has actually proven resilient since the Brexit vote, it has actually dropped in value by more than 10% versus both currencies since the referendum. Across the Atlantic the US dollar has actually additionally been feeling the pinch: Last Friday’s NFP came in at a disappointing 155k versus an expectation of 188k While the unemployment rate remained unchanged at 4.9%, wage growth additionally disappointed along with a 0.1% rise versus an expectation of 0.2% The Dollar dropped as a result but recovered quickly. Overall the dollar index ended the week slightly lower at 95.88. Expectations for a rate hike decreased for both September & December, & numerous analysts are expecting the Fed to put any decision on hold until the presidential elections in Nov. Coming up this week we have: One of the crucial economic releases of the week – the EU interest rate decision on Thursday at 11:45 GMT. The ECB has actually left interest rates unchanged during their last meeting but said that it would certainly be ready to intervene along with additional stimulus measures in case that the UK’s decision to leave the EU would certainly begin to weigh on the Eurozone’s economy. The post Hot Topic – UK pound and US dollar appeared first on Forex.Info.

Bullet Report: Why OIL Jumped 5% Yesterday

Share This: Today’s financial calendar is thin but focus will be on the ISM non-manufacturing index for August. Yesterday we saw a sharp increase in the UK PMI service index which jumped from 47.6 to 52.9 back to pre-Brexit levels. Overnight, RBA left rates unchanged, which resulted to AUD/USD maintaining this week’s gains.    Currencies: EUR/USD is one of the weakest major currencies this week ahead of the ECB policy decision where expectations as to the announcement of additional stimulus is divided. Overall the USD trimmed some losses versus other major currencies in a quiet trading session, even though Friday’s bad NFP data, pressured initially the USD. The disappointing data lowered chanced for a near term rate hike, as FED officials indicated that the pace of interest rate increases will depend on data. Stocks: US stocks were closed on Monday for Labor day. Asian shares traded narrowly along with Australia down and Nikkei as well as Shanghai slightly higher at 0.19% and 0.02% respectively. Oil and Gold: Crude oil jumped yesterday after an announcement from Saudi Arabian and Russia said that they would certainly set up a working group to monitor the oil market and come up along with recommendations to promote stability. On Friday, crude settled 3% higher after Russian President Vladimir Putin said that an agreement between major oil exporters to freeze output would certainly be the right decision to support the market. Gold continued to build on its gains ever since touching $1308 Support Level on Friday. In thin holiday trading, gold prices were trading at $1330, up more than $20 since the release of NFP. The write-up Bullet Report: Why OIL Jumped 5% Yesterday appeared initial on Forex.Info.

UK data point to resilience against Brexit vote

Share This: The pound moved along with substantial increases through the week as the release of UK economic reports point to recovery following the Brexit vote. An economic report released by the market and consumer researcher GfK revealed that the UK consumer confidence increased in August to -7 compared to the previous month’s result of -12. According to the report, the main drivers of the increase in confidence were stronger-than-expected economic data, the decrease of prices, and reasonable levels of unemployment. The same survey additionally noted that consumers’ tendency to save decreased in August. Recent reports have actually additionally indicated that consumers remained unaffected following the UK’s vote to exit the European Union, despite the fact that there were some signs that they were less willing to spend big. An earlier survey by YouGov stated that consumer confidence in August had its sharpest monthly gain of the last three years, while a report by the Office for National Statistics (ONS) indicated that retail sales increased in July by 1.4% in relation to the previous month. Thursday’s release of the Markit Purchasing Managers’ Index (PMI) for the UK manufacturing sector showed an increase to 53.3 in August following July’s figure of 48.3. Forecasts prior to the report were only for 49 and the result above 50 is a sign of expansion of the sector. The PMI survey stated that the weaker level of the pound had a positive effect on exports but at the same time has actually pushed the manufacturing costs upwards. According to the PMI survey, August’s monthly increase was the largest ever recorded, while an earlier survey released two weeks ago showed that exports were increasing at the fastest rate since 2014. Markit Purchasing Managers’ Index (PMI) for the UK construction industry, released on Friday, showed an increase for the sector to 49.2 following July’s level of 45.9 but has actually not managed to reach the 50 level. July’s level was the lowest since 2009. According to the report, the UK referendum decision is the biggest factor that has actually a negative effect on the construction sector and there has actually been only a partial move towards stabilisation. The ONS last month released an economic report which said that construction output decreased by 0.7% during Q2 of the year, following a 0.3% decrease for Q1. This implied recession has actually been recorded for the initial time since 2012. Since the UK referendum, the pound’s value has actually decreased by more than 10% both versus the US dollar and the euro. Following the release of Thursday’s manufacturing PMI survey the pound increased by 1.1% versus the US dollar, to 1.32737. versus the euro, the pound increased on the same day by 0.7%. On a weekly basis, the GBP/USD had an increase by 1.3% and the EUR/GBP decreased by 1.7%. One of the crucial economic releases of the week will be the EU interest rate decision, expected to be released on Thursday 08 September at 11:45 GMT. The ECB has actually […]

Bullet Report: USD Stronger Despite Weak NFP

Share This: The USD had a rollercoaster ride on Friday after US NFP showed that only 151k jobs were added versus 180k forecasted. The USD initially went through losses on the news, yet managed to quickly recover and complete the week strong versus other major pairs. The Fed has actually been pretty aggressive in its talks regarding the state of growth in the US economy, indicating a potential rate hike as early as September, however the actual jobs figure might derail its plans. This week features Central Bank Rate decisions from Canada, Australia and Europe.   Currencies: The market reaction on Friday shows that traders still expect a rate hike this year despite the weaker than expected NFP on Friday. Actual forecasts are at 21% opportunity of September hike, down from prior day’s 24%. opportunity of December hike additionally dropped to 50.6%, down from prior day’s 53.6%. The EUR/USD lost 0.64% in the last week. The single currency is trading at $1.1160 as the rally from earlier in the week boosted the USD. The under-performing NFP only sapped some energy from the direction of the move, yet the USD managed to appreciate on a daily and weekly basis versus the EUR. Yen ended as the weakest major currency on expectation of BoJ easing in September. Stocks: Stocks additionally closed the week mildly higher along with DJIA ended at 18491.96 while S&P 500 closed at 2179.98, staying in recent range. Meanwhile in Asia, stocks were broadly higher on Monday, as the weaker than expected US jobs data eased worries over an imminent rate increase from the FED. Higher interest rates in the U.S. increase the chances of foreign capital pulling from emerging markets. Oil and Gold: OIL dropped 6% in the last 5 days. The price of oil was erratic in the last week of August as concerns along with overproduction, stronger USD and lower global growth forecasts combined versus the lukewarm efforts of the OPEC to bring down the price of oil. Despite a rebound in the USD after first weakness on the release of a weaker-than-expected U.S. employment report, gold ended the week along with a rally from important support ($1308), closing the session along with a 0.73% gain. For the week overall, gold was marginally higher. The post Bullet Report: USD Stronger Despite Weak NFP appeared initial on Forex.Info.

UK Stocks to Watch for in September

Share This: The Brexit hysteria appears to have actually died down, which means traders can focus once again on the fundamentals. Perhaps surprisingly, London’s FTSE 100 Index has actually shot up nearly 14% since the post-Brexit selloff. UK stocks are currently trading at their highest level of the year, and look poised to continue that rally in September. Having said that, below are five UK stocks we’ll be closely following throughout September. BP Plc. 2016 has actually not been a kind year to BP Plc, the London-based oil and gas giant. The company recently posted its third consecutive quarter of losses,[1] as the oil-price collapse continued to wreak havoc on energy producers. But that’s what makes September so interesting. Oil futures, as traded on the easyMarkets CFDs commodities exchange, have actually surged over the past three weeks after OPEC ministers confirmed they will be holding informal talks along with Russia and other major producers in Algeria at the end of September.[2] As oil prices rally north of $50 a barrel, energy stocks should be closely monitored. Lloyds Bank Banking continues to be one of the more volatile segments of the stock market, and that’s precisely what makes Lloyds an interesting bet. The bank boasts strong fundamentals and has actually comfortably passed recent pressure examinations performed by the Bank of England (BOE).[3] Amid the latest drama concerning Italian banks and their exposure to bad loans, Lloyds offers dependability in an uncertain market. Unfortunately, it hasn’t been a good year for UK banks. Lloyd’s took a major hit after Brexit, but has actually gradually regained its footing over the summer. Rio Tinto Rio Tinto is a London-based mining company that likewise happens to be the 20th biggest component on the FTSE 100. The mining giant has actually operations around the world, and could be among the biggest to benefit from a plunging British pound. Despite what you read in the papers, mining resources are still in high demand in emerging markets like China and India. In places like China, demand may have actually peaked, but that doesn’t mean it has actually disappeared. British pounds are dirt cheap and could fall even further as the BOE considers additional stimulus measures to support the economy.[4] The Bank slashed interest rates in August to a brand-new all-time reasonable and expanded the size of its bond purchasing program.[5] Sterling continues to hover around 31-year lows versus the dollar, having shown fairly little upside since the June 23 referendum. The GBP/USD exchange rate, one of the most widely traded pairs on the easyMarkets forex platform, has actually declined around 11% since the June 23 Brexit vote. Diageo Diageo may not sound familiar, but several traders have actually enjoyed its products in the form of Guinness, Smirnoff, Johnnie Walker and Hennessy. Diageo is a British multinational alcoholic beverage company. It is the 11th largest company on the FTSE 100, and enjoys massive brand power internationally. The company’s earnings have actually run into a bit of a rough patch […]

Bullet Report: Markets Await NFP Friday at 1230GMT

Share This: Markets are awaiting one of the most highly anticipated NFP announcements of the year today at 1230GMT. The US economy is expected to have actually added 180k jobs last month, down from the 255k gain recorded in July however close to the 190k standard cited last week by Fed Chair Janet Yellen. The unemployment rate is expected to drop down to 4.8%. The August NFP data will certainly be a key number considered by the US Fed whether to increase interest rates during their forthcoming September policy meeting.  Currencies: The USD was relatively constant as investors await today’s NFP. USD/JPY traded at 103.355 after coming down from a one-month high of 104.00 overnight. EUR/USD traded at 1.1198 after moving 0.3% on Thursday. Stocks: Dow Jones Industrial Index was down 77.08 points (-0.42%) to 18,324.21. S&P 500 was down 10.05 points (-0.46%) to 2,161.00. FTSE 100 was down 35.54 points (-0.52%) to 6,745.97. DAX was down 58.38 points (-0.55%) to 10,534.31. Oil and Gold: Crude oil prices sank after Russian Energy Minister Alexander Novak said there is no need for an output cap at current levels. The remarks are a reversal for Novak, that said last month that his country would certainly be open to talks about a joint output freeze along with OPEC and non-OPEC producers. Gold prices moved higher after a worse than expected ISM Manufacturing survey weighed versus Fed rate hike bets, moving the US Dollar lower. The data showed factory-sector activity surprisingly contracted in August for the very first time in seven months. The information Bullet Report: Markets Await NFP Friday at 1230GMT appeared very first on Forex.Info.

The Billion Dollar Wins You Never Knew Happened

Share This: Picking market tops and bottoms can be very risky, especially if this contrarian approach goes versus strong and prolonged trends. Here are some bets on not-so-popular assets in the past years that turned out to be huge winners. David Tepper (Appaloosa Management) David Tepper is already hailed as the champion of stock market bulls, managing $20 billion in assets and raking in gross returns of nearly 40% on his hedge fund for 2013. For that year, his firm Appaloosa Management took huge positions mostly on US equities, particularly airline stocks. Earlier that year, US Airways and the bankrupt American Airlines announced an $11 billion merger, which was expected to close in the third quarter. This merger was poised to create the largest air carrier in the country, amounting to nearly 7,000 daily flights to 56 countries. Prior to this, Tepper’s investment team was already crunching the numbers and was able to time its market entry correctly in both US Airways stock and American Airlines debt. When the merger was made public, Appaloosa Management was already one of the largest stakeholders in US Airways. The stock started off below $6.00 per share in 2012 then closed the year at $13.50 per share, jumping an additional 46.3% right until the merger was announced. As it turns out, Tepper’s fund had already started with a small position on this company way back in the first quarter of 2010, just after the stock bounced up from its recession lows around $2.00 per share. Appaloosa gradually grew its position on US Airways, from around 2.6 million shares in their initial investment up to 12 million shares in early 2012. At the same time, filings and court documents showed that Appaloosa held $27.2 million in claims versus American Airlines, some of which is tied to equipment and assets. As it turns out, this large debt holding enabled Tepper’s firm to have a say in merger decisions, which eventually turned out to Appaloosa’s advantage. Larry Robbins (Glenview Capital Management) Although unpopular with some citizens and investors, Obamacare gave quite the advantage for Glenview Capital Management’s Larry Robbins. Apart from his huge bets on US stocks in 2013, Robbins took positions on shares of companies operating in the US healthcare sector which he believed would certainly benefit from the Affordable Care Act, netting him 38% in gains for his fund that year. Based on recent filings, Robbins is sitting on $3.2 billion in realized and paper profits on these positions opened four years ago. Obamacare, which was passed in 2010, gave Robbins’ team an opportunity to come up with a strategy to invest in the healthcare industry, which spans not just hospitals but also insurers. In fact, Glenview Capital Management analysts were already looking into a potential shift in the healthcare industry as early as 2007 as more citizens gained coverage and hospital operators were mulling mergers with insurance companies. Robbins and Glenview partner Randy Simpson already started buying up shares of health insurers back then, […]

History of Financial Market Returns Under Democrats and Republicans

Share This: With the United States presidential election just months away, financial market participants are still deciding who to back. While not everyone is pleased with the choice of Hillary Clinton or Donald Trump, history clearly demonstrates that Democrats are better for stock markets than Republicans. While this is a far too simplistic way of deciding which party is better for the economy and finances, the difference in stock market returns between Democrats and Republicans is too big to ignore. Democrat vs. Republican: A Look at the Numbers Since 1900, the average annualized return for the Dow Jones Industrial Average under a Democratic president is 7%, more than double the Republican average of 3%. The Dow also has a much higher percentage change under Democrats than Republicans. The average change in the Dow under Democrats is 82.7% compared to just 44.8% for Republicans. The US stock market has surged under the lasts two Democratic presidents. Barrack Obama’s presidential tenure has seen average annualized returns of 14.5%. Bill Clinton, who served as president for two terms between 1993 and 2001, oversaw an average annualized return of 15.9% for the Dow Jones. The administration of George W. Bush saw the worst annualized returns for US stocks since Herbert Hoover’s reign in the 1930s. We should note that Mr. Hoover was also a Republican.[1] It’s important to mention that all presidents spend a great deal of their time dealing with decisions made by previous administrations. For example, George W. Bush was elected during the height of the dot-com peak that, along with the September 11, 2011 terrorist attacks, caused the stock market to lose $5 trillion in market value.[2] It can certainly be argued that the mess that Bush inherited was stoked by the Clinton administration, which facilitated a massive economic boom during the 1990s that eventually proved richer than the market can justify. In 2009 the Obama administration also inherited a financial catastrophe in the form of the subprime mortgage crisis, which precipitated the biggest recession since the Great Depression. The fallout of the housing bubble has been dubbed the Great Recession. If the Clinton administration is to be implicated in the dot-com bust, then Bush and Co could be equally blamed for the events that led up to the Great Recession. The recovery under Obama’s watch has been impressive – at least on paper. More than 14 million jobs have been created during his tenure, as the US economy made a long and gradual recovery aided by $4.5 trillion in Federal Reserve quantitative easing.[3] “Anyone claiming that America’s economy is in decline is peddling fiction,” Obama said in January in what many have called a direct swipe at Donald Trump. “We’re in the middle of the longest streak of private-sector job creation in history. More than 14 million new jobs; the strongest two years of job growth since the 1990s; an unemployment rate cut in half.”[4] Of course, Obama forgot to mention that workforce participation is a woeful 63%, and barely […]

Trader Fact File Ray Dalio

Share This: Ray Dalio is the founder of one of the largest hedge funds, Bridgewater Associates. He was part of Time’s 100 Most Influential People of the World list in 2012 and was also listed by Bloomberg as one of the 50 Most Influential People in the same year. As of February 2016, he is said to have actually a net worth of $15.6 billion, ranking as the 30th richest person in the US and the 69th richest person in the world a couple of years back. Dalio’s public tax filing indicated that he was forming a philanthropic foundation, contributing more than $400 million to the fund and bringing its total assets to $842 million. He is also known for practicing Transcendental Meditation, which has actually led business leaders to achieve a super mind state of consciousness, for 40 years. Career Dalio graduated along with a degree in finance from Long Island University and earned an MBA from Harvard Business School. Upon graduation, he worked on the Brand-new York Stock Exchange, investing primarily in commodity futures. Soon after, he became a futures trader at Shearson Hayden Stone then founded Bridgewater Associates in Connecticut in 1975. Since then, the firm has actually made total gains of $35.8 billion, outranking George Soros’ Quantum Endowment Fund. In 2012, Bridgewater was listed as the largest hedge fund in the world along with over $160 billion in assets under management as of 2014. He was able to predict the 2008 financial crisis in his essay called “How the Economic Machine Works: A Template for Understanding What Is Happening Now” where he details the economic model he used. A few years later, Dalio released a publication called Principles in which he shares his investment philosophy and trading strategies. He shares more of his trade secrets and economic theories on YouTube. Bridgewater Associates had mixed results in 2015, along with its Pure Alpha fund up 4.7% net of fees and its Pure Alpha Major Markets fund up 10.6%. However, it’s All Weather fund along with $70 billion under management is down 7%, following another loss in the previous year. Facts Dalio and his wife joined Warren Buffet’s Giving Pledge in which they vow to donate more than half of their fortune to charitable causes. Dalio credits his investing triumph to his study of economic history, conducting in-depth analysis of periods of economic upheaval such as the Great Depression in the US and post-war Britain. He shared that he has actually simulated trading during those periods by reading daily news from those times and trading as though in real-time, writing down rules that would certainly guide his strategies along the way. Because of that, Bridgewater’s approach focuses on compiling data on credit and equity, allowing it to accurately predict the onset of the euro zone debt crisis in 2009. Interestingly enough, Dalio admits to being wrong roughly a third of the time but emphasizes that he has actually stayed successful due to proper management of risk during these […]

Bullet Report: Find Out Why GBP Is Poised For Big Moves Today

Share This: In the Asian session today, China manufacturing PMI data showed an increase of 50.4 versus an expectation of 49.9 which is the highest level since October 2014. It helped the AUD/USD trade higher at 0.7450 right after the data was released. Gold prices dipped to a fresh 2 month reasonable at 1304 after US ADP jobs report. Looking ahead, UK will certainly release Manufacturing PMI at GMT 08:30, US will certainly likewise release ISM Manufacturing PMI and Unemployment Claims. Currencies: The Sterling is clinging to earlier gains against the greenback on Thursday sending GBP/USD back to the 1.3140 area. Expect a big impact on the Cable along with UK’s Manufacturing PMI due later. Market consensus is expecting an improvement to 49.0 for the month of August, looking to revert July’s drop to 48.2 Stocks: Australia’s ASX 200 index closed down 17.43 points, or 0.32% at 5,415.60, along with the energy sector down 1.64% and the contents sector down 1.65%. In Japan, the Nikkei 225 edged up 39.44 points, or 0.23%, to 16,926.84. Oil and Gold: Crude oil prices declined dramatically after crude inventories data showed 2.3 million barrels increased which is much higher compared to the expectation of 1.1 million. U.S. crude futures rose 24 cents to $44.94 a barrel, after falling $1.65, or 3.6%, in the previous session. Gold prices stalled after losses to the $1303.62 area. A day-to-day close below this price opens the door for a test of the $1287.29 level. The information Bullet Report: Discover Out Why GBP Is Poised For Big Moves Today appeared very first on Forex.Info.