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Japan PM Suga confirms Tokyo state of emergency to end on 20 June
Japan PM Suga confirms Tokyo state of emergency to end on 20 June

Japan PM Suga confirms Tokyo state of emergency to end on 20 June

147598   June 17, 2021 16:17   Forexlive Latest News   Market News  

Japanese prime minister, Yoshihide Suga, announces

The state of emergency will also be ended for other prefectures as well so we’ll see how that will impact the virus situation going into the Olympics next month.
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ICYMI – US Treasury Sec Yellen says US may decouple from China to some extent

ICYMI – US Treasury Sec Yellen says US may decouple from China to some extent

147595   June 17, 2021 16:12   Forexlive Latest News   Market News  

U.S. Treasury Secretary Janet Yellen spoke around about the time of the FOMC, so her comments may have slipped under the radar. 

Updating here now ICYMI. Yellen was speaking to the US Congress’  Senate Finance Committee

  • said she expects the United States to decouple in some areas from China
  • to protect US national security

But …

  • “I would worry somewhat about complete technological decoupling

Added that many US allies would be reluctant to sharply reduce their business activities in China.

Info via Reuters.  

U.S. Treasury Secretary Janet Yellen

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No follow through in Treasury yields surge so far today

No follow through in Treasury yields surge so far today

147591   June 17, 2021 16:09   Forexlive Latest News   Market News  

10-year yields are down 2 bps to 1.555% currently

USGG10YR

The dollar may still be working with the technicals and gaining some modest ground in European morning trade but not a lot of that ‘hawkishness’ per se is being reflected in the bond market at the moment.

10-year yields are retracing slightly after yesterday’s surge, falling short of testing 1.60%.

In fact, yields are keeping lower on the day though we may have to wait on US traders to come in to be sure of things.

The Fed certainly did deliver a bit of a hawkish surprise yesterday – in terms of projections – but as long as they keep rate guidance the way it is, there is still reason for yields to be handicapped; as they have been since late March.

Keep an eye on things here as this could also prove to be a headwind for the dollar.

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Switzerland May trade balance CHF 4.95 billion vs CHF 3.84 billion prior
Switzerland May trade balance CHF 4.95 billion vs CHF 3.84 billion prior

Switzerland May trade balance CHF 4.95 billion vs CHF 3.84 billion prior

147549   June 17, 2021 14:02   Forexlive Latest News   Market News  


HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.


ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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Trade ideas thread – European session 17 June 2021
Trade ideas thread – European session 17 June 2021

Trade ideas thread – European session 17 June 2021

147546   June 17, 2021 13:56   Forexlive Latest News   Market News  

Daily thread to exchange ideas and to share your thoughts

Is this a start of a major turning point for the Fed and the dollar? Perhaps.

If anything, the market has never been a good judge of that but the Fed surprise yesterday certainly could be one that we look back at as a pivotal shift in the narrative that tapering is coming sooner rather than later.

There is some argument that the response is one that should be short-lived, given that the main guidance on rates has not changed whatsoever.

Adding to that is the fact that these so-called projections are still long ways to go and a lot can change up until then – especially on the inflation front.

That said, policymakers are making it clear that they are growing more hawkish by the day as long as there aren’t any major hiccups along the way.

That is something to be optimistic about and for the dollar, that may at least provide some comfort – even if in the short-term – until something changes.

However, the rest of the world isn’t just resting on their laurels. The BOC and RBNZ are also shifting towards a hawkish stance, with the BOE also not too far behind. The Fed may be big in terms of importance but they are not leading the charge here.

I’m still reserving judgment for the dollar for the most part as I would argue that bets on the loonie and pound are still more favourable – at least for now, especially against the franc and yen in the long-term.

I don’t quite think this is what sets off the dollar trade that we experienced back in 2012 where it was just sell everything and buy the greenback.

But we will likely eventually get there and it seems that day is one that is moving closer with every passing day.

What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.

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Germany reports 1,330 new coronavirus cases, 105 deaths in latest update today

Germany reports 1,330 new coronavirus cases, 105 deaths in latest update today

147519   June 17, 2021 12:21   Forexlive Latest News   Market News  

The 7-day incidence rate falls further to 11.6

Germany

The signs continue to point to an improving virus situation in Germany ahead of the summer, with total active cases easing further to ~34,100.

That will likely spur looser restrictions ahead of the busy travel period next month through to September with perhaps a relook at the Oktoberfest decision on the cards.

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China’s NDRC says has preliminary success curbing price surges in commodity prices
China’s NDRC says has preliminary success curbing price surges in commodity prices

China’s NDRC says has preliminary success curbing price surges in commodity prices

147505   June 17, 2021 11:45   Forexlive Latest News   Market News  

The National Development and Reform Commission of the People’s Republic of China (NDRC) is the ‘state planner’.

  • says has preliminary success curbing price surges in commodity prices
  • it will work with other departments to release state reserves of copper, aluminium and zinc at an appropriate time to boost market supply, lower firms’ cost pressures and guide prices to a return to normal ranges
  • will step up supervision on spot and futures markets and safeguard normal market order

AUD can tend to soften a little on news of China actions to curb commodity prices. 

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Australia’s ‘stunning’ jobs report, wage pressure ‘will only grow’
Australia’s ‘stunning’ jobs report, wage pressure ‘will only grow’

Australia’s ‘stunning’ jobs report, wage pressure ‘will only grow’

147501   June 17, 2021 11:33   Forexlive Latest News   Market News  

A snippet via Westpac on the jobs report.

ICYMI:

WPAC’s note is detailed, I pulled out mainly their comments on the potential for wage growth ahead:
  • stunning outcome
  • a very robust update
  • suggesting firms are finding the workers they need at the price they are willing to pay
  • While firms have been reluctant to pay higher wages to get the workers they need, they do appear to be adapting to conditions and with the fall in underemployment, the pressure will only grow as the supply of labour is struggling to match demand

The point about wage growth (which, up to now has been very slow) is that the RBA wants it at around 3 to 3.5% to help drive inflation towards the Bank’s target. 

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Japan economy minister Nishimura confirms plan is to lift emergency state in Tokyo, elsewhere
Japan economy minister Nishimura confirms plan is to lift emergency state in Tokyo, elsewhere

Japan economy minister Nishimura confirms plan is to lift emergency state in Tokyo, elsewhere

147499   June 17, 2021 11:02   Forexlive Latest News   Market News  


HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.


ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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ForexLive Asia FX news wrap: Blow-out Australian and New Zealand data

ForexLive Asia FX news wrap: Blow-out Australian and New Zealand data

147497   June 17, 2021 10:56   Forexlive Latest News   Market News  

Forex news for Asia trading on
Thursday
17
June 2021

Major
FX digested the FOMC outcome here in Asia in a relatively sedate
manner. AUD and NZD were different, though.

New
Zealand kicked off the data agenda with a huge beat for
Q1 GDP. This was followed up by at least one set of bank analysts
(ANZ in NZ) bringing forward their expectation for the first Reserve
Bank of New Zealand rate hike, to February 2022 from August 2022).
NZD/USD rose 60 or so points from its post-FOMC low to test 0.7100.

Later
we had a huge beat on the Australian jobs report for May;
unemployment dropped from 5.5% in April to 5.1%, jobs added grew by
more than 100K and the participation rate rose. One bank analysts
(JPM) said it was “a
near-flawless labour report”. The
Australian dollar popped above 0.7640 briefly.

Both
NZD/USD and AUD/USD have subsequently given back some of their gains,
both are still higher on the session.

Gold
was a mover also,
losing further ground on
expectations
post-FOMC of a nearer-term Fed dialling back of monetary
support
(various analysts see tapering most likely beginning early 2022 and
some have rate hike expectations now in 2023). 

On the central bank front we had Brazil hike its key rate, as expected. We also had speeches/Q&A from Governors of the Bank of Canada (Macklem) and Reserve Bank of Australia (Lowe). Neither of these two Govs had too much FX impact. 

Bitcoin traded in a small range (for it).

NZD/USD:

NZD/USD chart gdp q1 rally

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China May new home prices +0.6% m/m
China May new home prices +0.6% m/m

China May new home prices +0.6% m/m

147486   June 17, 2021 10:05   Forexlive Latest News   Market News  

Chine new home price data was out at the same time as the Australian jobs report, catching up on this now.

Average new home prices in 70 major cities grew 0.6% in May (Reuters calculation)

  • prior also +0.6%

+4.9% y/y

  • prior was +4.8% 

Says Reuters:

  • Chinese property prices have risen strongly this year despite increasing government attempts to reduce speculation in the market and prevent asset bubbles. Cooling measures have included imposing stricter rules for home buyers, curbing loans to developers and guiding banks to increase mortgage rates.

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AUD/USD up, but has come back a little, on the blow-out Australian jobs report

AUD/USD up, but has come back a little, on the blow-out Australian jobs report

147483   June 17, 2021 09:51   Forexlive Latest News   Market News  

A huge beat for the Australian labour market report:

I mentioned in that post the RBA want wage growth as well as employment growth to help lift inflation towards its target. The RBA target for the jobless rate is 4.5%, they expect that would prompt wage growth of 3 to 3.5% which in turn would lift inflation. 

The 4.5% jobless rate may come sooner than the Bank forecasts, but will that be low enough to prompt wage increases? The RBA, and Governor lowe have both noted non-wage benefits are being used to entice employees to jobs. Perhaps its time for hedonic quality adjustment to wages as well as inflation!

Anyway, AUD/USD response:

aud usd chart may 2021 employment report

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