Hotforex.com - Market Analysis and News.

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  1. #1011
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    Hotforex.com - Market Analysis and News.
    Date : 19th August 2020.

    EURUSD holds 1.1900 gains.



    EURUSD, H4

    Eurozone HICP inflation was confirmed at 0.4% y/y, in line with the preliminary release. The uptick in the headline rate came despite the dampening impact of Germany’s temporary cut to the VAT rate. Energy prices also remain much lower than a year ago and core inflation lifted to 1.2% y/y in June from 0.8% y/y in the previous month.

    Mixed signals then for the ECB, and while there may be nothing in the data to suggest a serious risk of deflation, the low headline rate will add to the arguments of those at the council who are pushing for a more symmetric inflation target that would require the ECB to let inflation run above target for a while following a period of below-target headline rates. In the current situation that would push the first rate hike even further into the future. A similar debate seems to be happening at the FOMC, which is currently also conducting a framework review.

    EURUSD has settled off yesterday’s 27-month peak at 1.1965, concurrently with the USDIndex (DXY) consolidating recent losses above Tuesday’s 17-month low at 92.15. The softer dollar hypothesis, which has been dominant in markets for several months, is currently being challenged. Most incoming US data are showing a strong rebound in economic activity, while the S&P 500 and Nasdaq equity indices have scaled to record highs. News that House Speaker Pelosi said that the Democrats are willing to trim their proposals has been taken as a positive, as it increases the odds that the Republicans and Democrats will break their stalemate and reach a deal on the next pandemic fiscal rescue package. July data showed an acceleration in homebuilding in the US to the most in almost four years. Coronavirus infections are now dropping sharply in the recently afflicted sun states, such as Arizona, Texas and Florida, indicating the downward phase of a classic Gompertz curve progression of respiratory illness as community immunity builds up.

    In focus is today’s publication of the minutes from the recent FOMC meeting, which comes amid market speculation that the Fed may adopt an average inflation target, specifically with the aim of pushing inflation above the 2% target. This has been a dollar negative, as it has driven real Treasury yields deep into negative terrain. Any confirmation of this would bolster the softer dollar hypothesis, and likely push EURUSD above 1.2000, while any lack of reference to this issue would have an inverse effect. The advent of the 750 bln Euro recovery fund, which has reduced perceived EU break-up risks, and the fact that Europe has come through the pandemic ahead of the US (having been impacted earlier), have also been underpinning factors of EURUSD.

    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

    Click HERE to access the full HotForex Economic calendar.

    Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

    Click HERE to READ more Market news.

    Stuart Cowell
    Head Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

  2. #1012
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    Date : 24th August 2020.

    Events to Look Out for This Week.




    Moving into a new week, the focus is now squarely on 2 days Jackson Hole Symposium. Uncertainty over the virus and recovery front, on the EU-UK trade negotiation front and center US-China tensions remain the major drivers of the market.
    Have a look at the most important events of the coming days in our usual weekly publication.

    Tuesday – 25 August 2020

    German IFO (EUR, GMT 08:00) – German IFO business confidence is expected to improve to 91.7 following the stronger than expected July reading, when the headline climbed to 90.5 from 86.3.

    Consumer Confidence (USD, GMT 14:00) – Consumer confidence is expected to rise to 94.0 from 92.6 in July, versus a 6-year low of 85.7 in April. This compares to an 18-year high of 137.9 in October of 2018 and a recession-low of 25.3 in February of 2009. The expectations index should rise to 93.6 in August from 91.5. All of the available confidence measures were oscillating near historic highs before being crushed by COVID-19, and even with recent drop-backs, it’s remarkable how firm the consumer measures have stayed relative to prior recessions.

    Wednesday – 26 August 2020

    Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 4.0% in July with a 12% bounce in transportation orders, after a 7.6% headline orders climb in June that included a 20.2% transportation orders surge. The durable good orders rise ex-transportation is pegged at 1.1%. Defense orders should bounce by 19%, following a -16.8% June drop. Boeing orders fell to zero planes from 1 in June. The vehicle assembly rate rose to 11.9 mln from 8.4 mln units in June, versus a 3.7 mln trough from the last recession in January of 2009. Durable good shipments should rise 6.0%, and inventories should fall -0.3%.

    Thursday – 27 August 2020

    Jackson Hole Symposium – DAY 1.

    Gross Domestic Product (CHF, GMT 05:45) – In Switzerland GDP is expected to sink further to -8.0% q/q, after the 2.6% contraction seen in the first quarter.

    Gross Domestic Product (USD, GMT 12:30) –We expect a boost in the -32.9% Q2 GDP figure to -32.4%, with hikes for consumption, wholesale inventories, imports, exports, nonresidential construction and residential construction and retail inventories, but trimmings for both equipment spending and factory inventories. The Q2 GDP data capture the powerful impact of mandatory closures, which left Q2 contraction rates of 20%-40% for most measures of demand, and larger 50%-65% declines for foreign trade.

    Fed Chair Powell’s speech.

    Friday – 28 August 2020

    Jackson Hole Symposium – DAY 2.

    Gross Domestic Product (CAD, GMT 12:30) – In Q1 Canada revealed a -8.2% pandemic driven drop after the revised 0.6% gain in Q4, with Q1 coming in a bit better than expected but still marking a hefty pull-back in activity as lockdown measures shuttered much of the economy in the second half of March. Indeed, March GDP plunged -7.2% (m/m, sa) after the 0.1% gain in February (was flat). Expectation is for a -40% plunge in Q2 as the economy is devastated by the lockdowns, even as the easing of those measures so far in May suggests that the economy bottomed out in April. A 25% bounce in GDP is penciled in for Q3.

    Michigan Index (USD, GMT 14:00) – The Michigan Consumer Sentiment Index is expected to remain unchanged.

    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

    Click HERE to access the full HotForex Economic calendar.

    Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

    Click HERE to READ more Market news.

    Stuart Cowell
    Head Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

  3. #1013
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    Can you please send me this analysis on my mail? How can I set up the newsletter?

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    Date : 25th August 2020.

    The Europe Brief.



    The round of August confidence data has so far been mixed, as the services sector registers the fallout from lockdowns and the resurgence of new Covid-19 infections. Travel restrictions and new social distancing measures hit the services sector and consumer confidence especially in countries relying on tourism. Downside risks to the outlook continue to linger then, even as positive headlines on vaccines and treatment are offering a way out.

    German Q2 GDPwas revised slightly higher with today’s release – to a still firmly negative -9.7% q/q, from -10.1% q/q reported initially. The breakdown not surprisingly showed a pretty broad based contraction, with only government consumption helping to dampen the blow. Private consumption meanwhile contracted -10.9% q/q and exports slumped -20.3%, versus a -16.0% q/q decline in imports as borders were closed and supply chains disrupted.

    Beyond the temporary impact of lockdowns, the most worrying part of the report is the -19.6% q/q dip in equipment investment, which followed a -7.3% q/q decline in the previous quarter and could suggest that companies are not expecting a quick rebound.



    The manufacturing sector at least continues to rebound and after a rise in Germany’s preliminary composite PMI German Ifo business confidence today that jumped to 92.6 in August, from 90.5 in July. A better than expected number, that registered a broad based improvement, especially in the current conditions indicator. The breakdown for the diffusion index, which gives the balance of positive and negative answers, showed services sentiment lifting to 7.8 from 2.1, while manufacturing improved to a still negative -5.4, from -12.1 in the previous month. All in all a broad based improvement that should go some way to restore confidence in the recovery especially against the background of positive headlines on Covid-19 vaccines and treatment.



    The Eurozone August PMI (August 21) revealed a more mixed picture, however, in the preliminary release. Developments were uneven across countries with France more hit than Germany, although final readings will likely show that Spain and Italy suffered even more from the renewed restrictions for the services sector.

    With inflation still at very low levels, central bankers have enough room to manoeuvre. Eurozone HICP inflation may have lifted slightly in July, although with the headline confirmed at 0.4% y/y in the final reading, it remains far below the ECB’s definition of price stability. Part of this is of course due to special factors, with energy prices still far below the levels seen last year and July readings also impacted by the dampening impact of Germany’s temporary cut to the VAT rate. Indeed, core inflation lifted to 1.2% y/y in July from 0.8% y/y in June, although even that is lower than the ECB would like to see.

    ECB still debating inflation target

    While there may be nothing in the inflation data to suggest a serious risk of deflation, the low headline rate will add to the arguments of those at the council who are pushing for a more symmetric inflation target that would require the ECB to let inflation run above target for a while following a period of below target headline rates. In the current situation that would push the first rate hike even further into the future. A similar debate seems to be happening at the FOMC, which – like the ECB – is also conducting a framework review. There is some speculation that Fed-chairman Powell will give some hint on average inflation targeting at the Jackson Hole conference, which in the past has been the stage for coordinated signals from central banks.

    EUR continues to benefit from stimulus agreement

    EURUSD has lifted to the mid 1.1800s today, posting an intraday peak at 1.1843, which is 60 pips up on Monday’s New York closing level. The Euro has also rallied against the Yen, which is the day’s biggest loser, and most other currencies. While a bout of general dollar selling has helped to lift EURUSD, there have concurrently been a couple of cues to buy euros, including the better than expected Ifo reading and optimistic comments from German finance minister Scholz.



    Still the pair’s 5-month rally out of sub-1.0650 levels of mid March has been losing momentum in recent weeks, even it still produced new 27-month highs. Last week was the first down week the pair has seen out of the last nine weeks. A sustained correction is increasingly likely. The US is clearly through the worst of the pandemic, the economy is rebounding, Wall Street is on an record-breaking winning streak, and Treasury yields have perked up in recent sessions despite an expected dovish lean from Fed Chair Powell at his keynote address this Thursday.

    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

    Click HERE to access the full HotForex Economic calendar.

    Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

    Click HERE to READ more Market news.

    Stuart Cowell
    Head Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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    Date : 26th August 2020.

    Durables present a potential GDP surge in Q3.



    The 11.2% July durable goods orders surge sharply exceeded estimates, following gains of 7.7% (was 7.6%) in June and 15.1% in May, led by increases of 35.6% for transportation after a 19.7% (was 20.0%) June rise, and a 30.0% rise for defense after a -16.7% (was -16.8%) June decline. Excluding transportation, orders rose 2.4% in July, following a 4.0% (was 3.3%) June gain.

    The huge July orders gain marks a third straight monthly pop after two big pandemic drops in March and April.
    For the equipment sector specifics, nondefense capital goods orders excluding aircraft were up 1.9%, following June’s 4.3% (was 3.3%) increase. Nondefense capital goods shipments ex-aircraft increased 2.4%, following the 3.8% (was 3.3%) gain in June. Inventories declined -0.5% following a -0.1% (was unchanged) June dip. The inventory-shipment ratio fell to 1.73 from 1.87.

    Today‘s data may require an upward revision in our 30.5% Q3 GDP estimate. The June equipment data were revised upward while the June inventory data were revised modestly lower, leaving what appears to be net upward risk for our assumed upward Q2 GDP revision to -32.2% from -32.9%.

    Today‘s report largely assures that we’ll see a GDP surge in Q3 that reverses most of the GDP decline reported in Q2.

    Yields cheapened a bit on the durable goods beat, with a bear steepener still the play ahead of Fed Chair Powell’s Jackson Hole speech tomorrow. Concurrently, Equity futures are gyrating in a narrow range around unchanged levels. The 30-year bond was up 4 bps to 1.435%, but has notched back to 1.423%. The 10-year also was also about 3 bps cheaper at 0.719%. The just auctioned 2-year note is up 1 bp to 0.154%.

    The US Dollar headed higher after the surge in durable orders, taking EURUSD to four-session lows of 1.1772 from near 1.1790 and USDJPY to 106.42 from 106.30.

    While there are still widespread expectations that the FOMC will be shifting to an average inflation strategy, some chips are being taken off the table after last week’s rally as the FOMC minutes weren’t clear on the timing of the adoption. And KC Fed’s George said “it’s too soon to try to speculate on what else might be needed other than to say the Fed is going to be very vigilant.”

    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

    Click HERE to access the full HotForex Economic calendar.

    Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

    Click HERE to READ more Market news.

    Andria Pichidi
    Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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    Date : 27th August 2020.

    The “big” day.



    With all eyes on Powell, FX markets traded within a narrow range overnight. GER30 and UK100 futures meanwhile are both up 0.1%, while US futures are slightly in the red after producing fresh record highs for the USA500 and USA100 yesterday, while most Asia stock markets have beaten a retreat.

    The USA100 is holding above the latest near term support at 11,930. The technical picture remains strongly positive for Wall Street in general not only on risk appetite gains but also on tech stocks rally after the reports from Bloomberg that Amazon’s founder and Chief Executive Jeff Bezos has become the first billionaire in modern history to cross the $200 billion mark as the shares of his company rose to a new high. His wealth is now almost double that of the second richest person in the world, Microsoft founder Bill Gates,

    Let’s turn back to the USA100 though, in which the “buying the deep” strategy has been seen so far in the near and medium term. Buying into near term weakness remains a viable strategy. Today will be an interesting session as depending upon the perceived level of dovishness of the speech, there could be a sizeable influx of volatility.



    Fed Chair Powell’s Jackson Hole speech later today (Thursday) is much anticipated. The markets are looking for more of an update on the FOMC’s Framework Policy Review. The Fed has been discussing a shift in its inflation strategy to targeting an average price target, versus the 2% mark, which would allow an overshoot of price pressures to make up for the underperformance over the last decade. As suggested by the FOMC minutes and by KC’s George earlier today, not everyone on the Committee ascribes to this shift. Obviously there was no decision at the July 28, 29 meeting, though one is expected to be made at the September 15, 16 meeting.

    Even though no one really expects the FOMC to even start to think about thinking about raising rates for a couple of years, any indication from Powell that there’s more opposition to a shift, or that an announcement won’t be made next month, won’t sit well with the markets.

    Meanwhile, there is a risk markets will be disappointed as he may not yet be in a position to deliver in terms of specifics on inflation targeting changes or other policy rubrics. The FOMC hasn’t completed its framework review, and there are known differences of opinion among Committee members. Any sense of disappointment would likely catalyze a rebound in the USD.

    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

    Click HERE to access the full HotForex Economic calendar.

    Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

    Click HERE to READ more Market news.

    Andria Pichidi
    Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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    Date : 31st August 2020.

    FX Update – August 31 – The USD trend persists.



    EURUSD, H1

    The Dollar posted fresh trend lows against some currencies before recovering in low volume, (London is closed today) end-of-month re-balancing trades. The framework regime shift at the Fed, announced by Chairman Powell last week, effectively reaffirmed the dollar softening trend, concomitantly with shorter dated inflation-adjusted Treasury yields posting fresh lows. The yields on the 5- and 7-year real constant maturity Treasury notes were indicated on Friday at new seven-year-plus lows, at -1.40% and -1.26% respectively (down by a respective 15 bp and 11 bp from week-before levels). The narrow trade-weighted USDIndex (DXY) logged a new 27-month low at 92.11, and is set to rack August up as a fourth consecutive month of descent and the worst August for five years. EURUSD printed a high at 1.1938, which drew back in on the 27-month high seen a couple of weeks back at 1.1967. This puts the pair on course to make this the thirteenth up week that’s been seen out of the last sixteen weeks. For now, the softer dollar theme looks likely to remain in play. But there are forces that may weaken this trend. One is that incoming US data has been showing ongoing economic recovery in the US. Another is that the ECB is also considering average inflation targeting with the aim of increasing inflation expectations, which would presumably weigh on the Euro. The Eurozone’s economic recovery may also flatten as a consequence of renewed restrictions for hospitality and travel operators. This was the prime cause for preliminary August services PMI surveys missing consensus expectations. Governments in most European countries (Sweden being the main exception) remain somewhat trigger happy in imposing localised restrictions in response to upward flurries in positive coronavirus tests — even though there hasn’t been any significant correspondence of actual public health events (serious illness and associated hospitalisations and deaths). The death rate from all respiratory illnesses outside Covid-19 has been greater than for Covid itself for some time now, and all-cause mortality rates continue to trend below long-term averages.



    Elsewhere, Cable posted a fresh eight-month peak at 1.3367 before retreating to 1.3332. AUDUSD lifted to a new trend peak at 0.7382, which is the loftiest level the pair has seen since December 2018. NZDUSD saw an eight-month high at 0.6740. USDCAD sank back below 1.3100 but remains shy of Friday’s seven-month low at 1.3045. Like other oil correlating currencies, the Canadian Dollar lost upside momentum as crude prices pared gains from the highs that were seen mid last week. Hurricane Laura wasn’t as disruptive to Gulf of Mexico crude production as feared. USDJPY is higher on the back of yen underperformance, rising to the lower 105.90’s, retracing some of the declines seen on Friday from levels near 107.00. AUDJPY, meanwhile, has lifted by over 0.7% but has remained short of last week’s 18-month peak. EURJPY, GBPJPY and other yen crosses have also lifted, but have also remained below recent highs.

    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

    Click HERE to access the full HotForex Economic calendar.

    Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

    Click HERE to READ more Market news.

    Stuart Cowell
    Head Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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    Date : 1st September 2020.

    Risks for UK Economy.



    The markets continue to take a sanguine view of the apparently stalled progress in the EU and UK trade talks. All things Brexit continue to go down to the wire, and expectations for any real progress are low until much nearer the deadline, which is widely accepted as being the EU leaders’ summit in October. The consensus view is that a deal will be struck. There are grounds to doubt there can be anything other than a narrow deal, given the intransigence on the EU’s level-playing-field rules and fishing rights.

    A bare-bones deal or a no-deal outcome are a risk.

    Prime Minister Boris Johnson’s cabinet is full of Brexit ideologues; of the view that Brexit is an opportunity to craft the UK on the Singaporean model, as an outwardly-oriented, low-tax and pro-trade hub. Signing up to the EU’s level-playing-field rules is not consistent with this view, and there is only so far that the EU is likely to bend. The government, which has over four years on the electoral clock and a large majority in parliament, is in a position to weather the short-term economic damage that leaving the EU’s single market without a comprehensive new trade deal would cause. Note that when UK leaves the single market, it will not just be leaving free trade with the EU but also the 40 free trade deals the EU has across the globe.

    Another risk is that the UK government’s pandemic-era furlough scheme will end in late October, which is likely to cause an upward jolt to the unemployment rate, with the aviation, high street retail and hospitality sectors to be hardest hit. The wage support scheme protected about 9.5 mln jobs at the height of the lockdown, though there remains up to 1.5 mln jobs at risk of being chopped in October, unless the government extends its support scheme (as Germany did with its plan last week).

    Furthermore, today’s UK economic data releases, showed that employment in the manufacturing sector dropped at one of the steepest rates since the Great Recession 11 years ago.

    The final UK August manufacturing PMI was revised a tick lower, to 55.2 in the headline reading versus 55.3 in the preliminary figure. The details showed production in the sector to be rising at its quickest pace since May 2014, while new orders rose by the fastest since November 2017. Export orders rose for the first time in 10 months. However employment was on the downside, while backlogs of work fell at an increased rate, too, which points to space capacity. Business sentiment for the year has ahead remained near the 28-month peak, with hopes being pinned on expectations for a return to economic normalcy.

    The risk is that conditions will deteriorate as lockdown-caused work backlogs drop, and when the government wage support program expires in October as stated earlier, which will likely spark job losses (there is a chance that the scheme will be extended).

    The final August services PMI survey will be released on Thursday. The government’s ‘Eat Out to Help Out” scheme (with the government, courtesy of the bond market and eventually the taxpayer, meeting up to half the bill for consumers at restaurants and pubs from Monday to Wednesday during August) was partly behind the strength in activity in the service sector. The scheme, as of today, has now expired, which will likely lead to a weaker services PMI headline in the September survey. The service sector will be particularly exposed to a cut in the wage support scheme in October, with the aviation, high street retail and hospitality sectors most at risk.

    As markets for now are taking a sanguine view of the trade talks and as there is a slight recovery in both the domestic and global economy from the more extreme phase of lockdowns that were seen earlier in the year, the UK currency remains well supported.



    GBPUSD has risen above the 1.3470 level for the first time since April 2018. The pair has continued to be floated by broad US Dollar weakness. GBPJPY has also been lifted by Yen weakness, which saw the cross print 7-month highs yesterday. The Pound has fared less well against the Euro and other currencies. Among the mix of forces affecting the Pound is the coronavirus, which has ceased to be a public health event in terms of causing severe illness and associated hospitalizations and deaths. This being the case, regional UK governments remain somewhat trigger happy with regard to implementing localized lockdown measures in response to rises in new cases, and we can assume that this will only get worse going into the winter, the season of contagious respiratory illness.

    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

    Click HERE to access the full HotForex Economic calendar.

    Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

    Click HERE to READ more Market news.

    Andria Pichidi
    Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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    Date : 7th September 2020.

    Events to Look Out for This Week.




    The shortened week starts with the major markets closed for Labor Day, but overcompensates on Wednesday and Thursday with the BoC and ECB rate decisions and Press Conferences, and Inflation from the US.
    Have a look at the most important events of the coming days in our usual weekly publication.

    Monday – 07 September 2020

    Labor Day – US, Canada closed.

    Trade Balance (CNY, GMT N/A) – The Chinese trade balance is expected to turn out positive in March, standing at $18 bln, compared to the deficit of $7 billion in February.

    Gross Domestic Product (JPY, GMT 23:50) – Japan is expected to confirm a -8.1% contraction of its economy in the second quarter of the year.


    Tuesday – 08 September 2020

    Gross Domestic Product (EUR, GMT 09:00) – GDP is the economy’s most important figure. Q2’s GDP is expected to confirm a contraction to -13.1% q/q and -15% y/y.

    UK Inflation Report Hearings (GBP, GMT N/A)

    Wednesday – 09 September 2020

    Consumer Price Index (CNY, GMT 01:30) – The July Inflation was confirmed at 2.7% y/y, above the preliminary number and the 2.5% y/y in the previous month. Now the August number is expected to continue higher to 3.1 % y/y with a rise in the monthly reading at 1.0% y/y from 0.6% last month.

    Event of the week – BoC Interest Rate Decision (CAD, GMT 14:00) – The BoC’s announcement is expected to reveal no change in rates and a reiteration of a whatever-it-takes policy outlook that is shared by the core central banks. The latest jobs report showed that two-thirds of jobs have been recovered, consistent with bank’s view that there is still a long way to go before the economy and labour market return to pre-COVID levels of activity. Overall, a roughly as expected report that supports the recovery story but also highlights the long journey faced by the economy to return to pre-COVID levels of employment and production.

    Thursday – 10 September 2020

    Event of the week – ECB Interest Rate Decision & Press Conference (EUR, GMT 11:45 & 12:30) – Even before the negative inflation print, there had been calls for the ECB to move to a more “symmetric inflation target” as part of the ongoing strategic policy review. With the Fed already indicating a shift to an average inflation target and the August HICP rate falling back to -0.2% y/y, the pressure to strengthen the ECB’s commitment to the “low for longer” message has only increased, especially after the rise in the EUR, which clearly has some council members rattled. Against that background the ECB’s policy meeting will be of intense interest for markets and while markets don’t expect a change in overall policy settings, Lagarde is likely to send a dovish signal and hence strengthen the commitment to the “low for longer” stance.

    Jobless Claims (USD, GMT 12:30)– US initial jobless claims dropped -130,000 to 881,000 in the week ended August 29 following the -93,000 drop to 1,011,000 in the August 22 week.

    BoC’s Governor Macklem speech (CAD, GMT 16:30)


    Friday – 11 September 2020

    Eurogroup Meeting.

    Harmonized Index of Consumer Prices (EUR, GMT 06:00) – The German HICP final inflation for August is anticipated to remain unchanged at -0.1% y/y.

    Consumer Price Index (USD, GMT 12:30) – The August CPI is seen with 0.2% m/m gains for both the CPI headline and core, following 0.6% gains for both in July. The headline will be boosted by an estimated 1.9% August increase for CPI gasoline prices. As-expected August figures would result in a headline y/y increase of 1.2%, up from 1.0% in July. Core prices should set a 1.5% y/y rise, below the 1.6% y/y pace last month. As with PPI, the headline inflation figures continue to be lifted by oil prices. The Fed will have plenty of elbow room for an easing monetary policy over the coming quarters.

    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

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    Andria Pichidi
    Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

  10. #1020
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    in ro ham eslah kon:
    Date : 8th September 2020.

    FX Update – 8 September – Sterling STILL centre stage.



    GBPUSD, H1

    The head of the UK government’s legal department has quit, according to sources cited by the FT,¹ (paywall) who report that Sir Jonathan Jones is “very unhappy” about the government’s decision to overwrite parts of the Northern Ireland protocol that was enshrined in the Withdrawal Agreement. This is a significant development, as it shows the government’s intent on leaving the single market at year-end without a deal, if necessary, rather than being a mere negotiating tactic. The unilateral move to overwrite parts of the Withdrawal Agreement, specifically aimed at enhancing the UK’s state aid autonomy, crosses a fundamental EU red line.



    Sterling has hit fresh lows against its peers, racking up a near 1% loss versus the Dollar and being the biggest loser out of its peer group. Cable dropped to new lows at 1.3020, while EURGBP gained 0.86%, printing a two-week high at 0.9048. The Pound is also down against the other European currencies, the yen and dollar bloc currencies. The latest news is that UK Prime Minister Boris Johnson will give a speech later today where he will defend his government’s decision introduce legislation that will unilaterally unpick parts of the EU Withdrawal Agreement. The Internal Market Bill, which will be published this week, is specifically designed to enhance the UK’s state aid autonomy — rather than constrain it, which puts the UK on a crash course with Brussels and its regime for limited state aid. EU Commission President von der Leyen tweeted yesterday that the Withdrawal Agreement is “an obligation under international law and prerequisite for any future partnership.” The risk of the UK exiting the EU without a trade deal are now much greater, and the Pound is likely to run much lower yet. Leaving the frictionless trade of the single market without a mitigating trade deal means UK trade shifting to much less favourable WTO terms (think tax and regulatory friction). The UK won’t just be leaving the common market, but also the 40 trade agreements the EU has with global economies.



    Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

    Please note that times displayed based on local time zone and are from time of writing this report.

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    Click HERE to READ more Market news.

    Stuart Cowell
    Head Market Analyst
    HotForex

    Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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