31 / 08 / 2017 | Notizie sul mercato

What to Look out for Today – Gasoline’s Up, Trumps Tax Reform and USD Strengthens

Gasoline has seen its highest price in the last 2 years – as refineries in Texas, including the US’s largest, shutdown due to Hurricane Harvey. The fossil fuel jumped up to $2 a gallon after almost a quarter of US refinery output – more than 4 million barrels a day - completely ceased. This caused oil prices to transversely go down, due to lowered US demand. Analysts around the world are expecting this effect to hold for a few months, some even expect a longer-lasting effect. The total speculated economic damage from Hurricane Harvey is said to reach $160 billion.

After the Trump administration’s failure to reverse or restructure the colloquially known Obama-care, markets are very apprehensive whether the new presidency’s tax reform will be able to make it through the Senate. This is also compounded by the fact that the policy seeks to lower corporate taxes from 35 to 15, as lawmakers speculate that 25 percent would be challenging. According to the Trump administration this should boost and grow the job market, helping in turn the middle class – which sounds eerily similar to trickle-down economics, which inefficacy has been proven in past years and could even potentially be damaging to the economy at large.

Safe havens seem to continue dropping as the USD stabilized, gaining 0.016% against the JPY trading 110.4825. USD also a very meager gain against CHF (in the area of 0.002%) and is currently trading 0.9638.
Today’s economic calendars has significant data releases including Germany’s Unemployment Change which came in under expectations at -5K instead of -6K but still a substantial drop from the previous -9K. The German unemployment rate stayed stable at 5.7%. The EU’s CPI (YoY) for August is also scheduled at 09.00 (GMT) – which is speculated to increase from the previous 1.3% to 1.4%. The US Core Personal Consumption Expenditure – Price Index (YoY) for July is slated to be released at 12.30 (GMT), which is forecasted to fall slightly to 1.4% from the previous 1.5% the month to month report for July for the same index is expected to remain unchanged.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
 
 
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31 / 08 / 2017 | Notizie sul mercato

Fundamental Analysis 2017.08.31 – US Data Pushes USD up

Yesterday the dollar gained against its currency counter-parts, a trend supported by macroeconomic data. ADP Employment Change surpassed expectations by far, 237K compared to the previous figure of 201K. GDP also experienced a significant increase in the region of 2.7% in Q2 up from the previous 2.6%.

EUR/USD dropped by 0.85% trading at 1.1868. Most investors will be on the look-out for the EU CPI scheduled to be released at 11:00 (GMT+2), and US Initial Jobless Claims publication slated to be released at 14:30 (GMT+2).

GBP/USD pair held strong even in lieu of positive US data. After a slight dip to 1.2877 the pair returned to the previous day’s highs of 1.2922.

USD/JPY traded at 110.50 after growing 0.27%. It received a further boost by Japan’s Industrial Production which came in under forecasts. Its MoM was –0.8% last month and YoY also dropped, to 4.7% from the 5.5% in June.

AUD/USD  went down by 0.68% reaching 0.7897.

Metals are continuing their downward vector. Gold dropped 0.50% 1302.80. Silver lost 0.40% and is trading 17.32.

The change in EIA Crude Oil Stocks pulled the price of crude down, the report showed a decline of 5.4 million barrels a week as production ramped up to 9.53 million barrels/day. This information though reflected the pre-Harvey situation of Oil stocks. The incapacitated oil refineries actually had the opposite effect – causing oil stocks to increase due to diminished demand of crude. This caused Brent to lose 1.71%reaching 50.62. WTI also dropped, to 46.17 after losing 0.80%.

US stock is trading in the green. The Dow is in the area of 21912.0 after going up 0.19%. NQ also went up by 1.36% to 5944.1. S&P gained 0.50% to reach 2457.9. The FTSE reached 7384.4 after growing 0.27%. The CAC also went up by 0.48% trading at 5082.1. The DAX climbed to 12073.3 after growing by 0.68%.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
 
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31 / 08 / 2017 | Analisi tecnica

Technical Analysis 2017.08.31 – USD/JPY USD/CHF Just a Little More Risk?

USD/JPY
It seems as though USD/JPY is in correction.

B’s higher level wave c is forming . Wave (ii) of c, seems to be pointing towards a local correction, having reached its end. If this speculation is validated the currency pair has the potential to fall to 107.50sooner than later. 110.95 is deemed as critical.


 
 

 
USD/CHF
Current trend
US gained against CHF yesterday, August 30, showing that the bullish trend has inertia. US macroeconomic statistics bolster the growth of the dollar, while Swiss data was murky at best.

US GDP for the second quarter went up by 3.0% YoY compared to the last 2.6%. Private sector jobs did better than the previous month, reaching 237K from 201K according to the ADP report.

Today (Aug. 31st ) traders will be looking for data on personal income and expenditure for July at 12:30. Jobless claims and housing sales will also be points of interest.

Support and resistance
In the D1 chart, the Bollinger Bands show a relatively flat dynamic. We can see the range of the currency pair . MACD histogram is over the signal line a positive indicator for the pair. Stochastic is also holding an its upward vector, but it is likely overbought at this point – due to its rapid growth.

USD/CHF Resistance levels: 0.9643, 0.9666, 0.9695, 0.9724, 0.9770.
USD/CHF Support levels: 0.9600, 0.9575, 0.9548, 0.9496.


 

 
This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
 
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30 / 08 / 2017 | Notizie sul mercato

What to Look out for Today – USD Recovers as N. Korea Threat Subsides

The USD and Asian stock saw a marked increase as the threat of N. Korean missile strikes softened in investors minds – Wall Street also experienced a stronger session closing. The dollar recovered slightly after a drop in its price to a two and half year low.

European stocks also seemed to recover slightly with the FTSE 100 opening at 7.337.43 and currently seeing a 0.35% gain trading at 7,36330. The Dax also saw and increase in the region of 0.51% trading at 12,026.45 after closing at 11.945.88 the previous session.

Although yesterday safe-havens seemed to be the plat du jour - today the strengthening dollar shows investors adding a bit more risk to their positions. Secondary contributors to the USD price was Trump’s nominal reaction to the Pyongyang threats, significantly positive consumer confidence index (reaching its highest in the past five months), labor market and house prices data.

This trend might continue if the US second quarter gross domestic product release is also positive along with the Core Personal Consumption Expenditures – both scheduled to be published at 12.30 pm GMT.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
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30 / 08 / 2017 | Notizie sul mercato

Fundamental Analysis 2017.08.30 – US Dollar Recovers after Missile Crisis

Yesterday’s trading day saw US dollar gain against other G10 currencies.
This was largely due to the lack of macroeconomic data other than the Consumer Confidence Index (which was the highest it’s been in last 5 months) to pull the USD down and as markets sighed in relief over the N. Korean missile crisis.

ADP Employment Change publication is slated to be released at 14:15 (GMT+2) – forecasted at 185K up from the previous 178K and the Second Quarter Gross Domestic Product is scheduled to be released at 15:30 (GMT+2) which is also forecasted to increase from 2.6% to 2.7%. If expectations meet the actual figures then the USD will definitely be positively affected.

EUR/USD tested the max level of 1.2069 the pair went into correction 1.2970, which also seems to be its consolidation probably as they wait for today’s data releases – EU Consumer Confidence (at 11.00 +2 GMT) and German Inflation Rate (at 14.00 GMT +2). GBP/USD fell from a high of 1.2978 to 1.2927 as the USD went into correction. Mortgage Approvals and UK Consumer Credit is scheduled at 10:30 GMT+2.

USD/JPY saw a significant increase on Tuesday. It rose 0.61% reaching 109.90.

AUD/USD went up by 0.55% trading in the area of 0.7955, Australia’s Construction Work Done surpassing expectations largely contributed to this dynamic. In its second quarter, an increase of 9.3% was experienced in July up from the meager 0.9% of June.

Metal have been slipping since the USD went into correction. Gold lost 0.27%, after its multi-day climb 1311.52. Silver lost 0.63% and fell to 17.40.

Oil also fell slightly. Brent slipped to 51.36. WTI is in the region of 46.50 after losing 0.98%.

US stock is finally in the green. The Dow is currently at 21886.0 after opening 0.57% over yesterday’s closing price. NQ increased 0.98% to 5872.5. S&P also went up but by 0.66% and is currently trading at 2449.5.

European Stock was mixed. The FTSE opened at 7367.3. The CAC reached 5065.4 after a gain in the region of 0.28%. The  DAX lost 0.60% slipping to 12018.7.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
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30 / 08 / 2017 | Analisi tecnica

Technical Analysis 2017.08.30 - WTI Crude Oil

Current trend
We have seen Oil prices dropping the last three trading sessions. Yesterday WTI experienced a slip of 0.98% falling 46.50. As a result of multiple refineries in Texas completely ceasing production (due to Hurricane Harvey) a decline in demand and of course a drop in the price of crude was observed.  This affect was so profound that Stateside production went down by 15% or 2.5 mln barrels causing a relatively unexpected rise of oil reserves around the country.

The US Department of Energy report on oil reserve changes will be highly anticipated data today – if the pace of reserve depletion slows or there is growth – then WTI might experience pressure again.
Support and resistance
At this point technical indicators are showing that the downward trend has significant inertia. Bollinger Bands have a downwards vector. The MACD is showing growth within the negative zone showing that sellers' are holding their influence on the commodity.

WTI Support levels: 46.00, 45.00, 44.00.
WTI Resistance levels: 47.08, 47.90, 48.85.
https://media.clawshorns.com/uploads/files/f08f1863a9a73652a5bd0fca35dd4183.jpg
 
This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
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29 / 08 / 2017 | Notizie sul mercato

What to Look out for Today – USD Experiences Record Drop

The USD has not had a good quarter – political scandal, diplomatic fallouts, questionable Presidential statements, mixed economic data, a conservative Fed monetary policy and multiple Trump administration resignations and dismissals (almost reaching twenty since the beginning of Trump’s inauguration) – have all contributed to the currency’s continued volatility.

Markets have been dancing the risk-on/risk-off tango with the dollar for months – but today with the announcement of a new N. Korean missile launch, which actually flew over a US ally (both strategic, economic and industrial) Japan – the USD slipped to a four-month low.

Across it JPY, CHF (as a safe-havens) and EUR (as a much more stable major currency) grew – the Yen experiencing a small loss of 0.143% at the moment (trading at 0.0092) but overall grew 1.52% since the beginning of the month. CHF gained 0.231% trading at 1.0522 with monthly gains in the neighborhood of 1.55%. EUR seems to be growing at the moment gaining 0.236% (trading at 1.992) and has gained a observable 1.19% since the beginning of the month.

Although Hurricane Harvey was down-graded from a hurricane to a tropical storm – the extremely inclement weather is causing a loss of more than half a million barrels a day in production. And analysts around the world are speculating that a drop in production of this scale will inevitably have long-term effects on the market at large.

While all of these substantial events are happening, markets are holding their breath (and looking to Twitter) for any Trump statements that might further increase frictions between the US and N. Korea – pushing the dollar down further.  

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
 
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29 / 08 / 2017 | Notizie sul mercato

Fundamental Analysis 2017.08.29 – Markets React to N. Korean Missile Launch with Risk-off USD

A renewed N. Korean threat – a missile was launched over Japan causing a risk-off market response. As expected safe havens such as CHF, JPY and metals benefited from the reaction, as more risky currencies – like the Australian dollar– lost. Asian stock markets, also as expected, slipped during early this morning, as bond yields also dropped.

EUR/USD trend hasn’t changed as the USD weakens the EUR seems to strengthen.

The trend is unlikely to change unless something comes to affect the EU – as the US was affected. This could be in the form of diplomatic frictions, political instability (most likely pertaining to Brexit) or negative fundamental/technical data.

GBP (the loser of the year) actually managed to gain across its counterpart USD. This could even be considered a paradox considering yesterday’s less than positive Brexit negotiations. Both Germany and France are advocating coming to an agreement over the UK’s obligations towards the one-currency union, before any trade agreements are even discussed and Michel Barnier, Chief Brexit negotiator for the EU, stated that the UK should approach Brexit with much more urgency. Of course an unsubstantiated.

Markets reaction to Hurricane Harvey seems like a mixed bag. The most significant effect is putting multiple oil refineries out of commission. As a result gasoline went up substantially in US. The inverse of that dynamic is a lowered demand for crude, causing the gap between the prices of WTI and Brent to widen. This gap is of course closely correlated to the adverse weather conditions and could easily turn around once skies clear.  




Today’s market
On the other side of the Atlantic, on-going negotiations between the UK and EU – should affect GBP with less influence on the EU. The first leg of the talks yesterday – didn’t go as well as the UK negotiators would have liked and any further news will also likely be negative which obviously will negatively impact GBP.

When Wall Street finally wakes, traders will be on the lookout for Canada’s industrial product prices but they won’t be expecting positive results, the speculation is that it will be significantly lower than the previous report period. This is on-top of the previous month’s 1.0% drop – bringing the focus on the 1.2% YoY, inflation – and fueling speculation whether it can keep up with the BoC’s target of 1% - 3%. This type of sentiment is unlikely to be beneficial to CAD.







This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
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29 / 08 / 2017 | Analisi tecnica

Technical Analysis 2017.08.29 – N. Korea Launch Shakes Japan and Markets

Current trend
Gold experienced its highest price since November 2016, when markets opened this morning – largely due to N. Korea launching a missile over Japan.

Although markets hoped for monetary policy news - Fed’s head Janet Yellen disappointed again with her Jackson Hole summit speech. Her statement contained no references to balance sheet reduction or monetary policy.  This reinforced the USD risk-off sentiment markets were already dealing with. ECB President Mario Draghi’s speech motivated traders’ rush to havens as he pointed out that a conservative monetary policy is the best course of action at the moment. Further elaborating on the topic Draghi said that a mild monetary policy that most regulators have adapted recently are showing positive results, resulting in actual growth in the Eurozone.

Support and resistance
We can see Bollinger Band growth in the daily chart. The price range seems to be expanding.
MACD histogram is also growing, with the signal line above it. Correction may be immanent.
Stochastic is currently in the overbought region, confirming or at least reinforcing the speculation of a probable correctional movement.

XAU/USD Support levels: 1307.75, 1300.44, 1295.85, 1291.71, 1287.05 (the level of August 25).
XAU/USD Resistance levels: 1317.77, 1324.07.



This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
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28 / 08 / 2017 | Notizie sul mercato

What to Look Out for Today – Harvey hits US Oil Refineries

Since OPEC decided to cut oil production, the US has tried to ramp up its own production to counteract, unfortunately the weather had a different plan. Hurricane Harvey has been cutting a destructive swath through the Gulf region of the United States, an area with a large concentration of oil refineries. These facilities where forced to shut down due to the adverse weather conditions – interrupting production.

Markets readily responded to this effect causing Gasoline to sky-rocket to a two year high and Brent crude futures did the same after the news of Libyan pipeline blockades. U.S. crude on the other hand slipped slightly under the assumption that demand would be lower due to the incapacitated refineries along the Gulf Coast.   
Some analysts are even speculating long-term effects on refinery output in Texas.

Although Harvey seems to dominate the latest news – something else that traders were anticipated; the Jackson Hole Summit also weakened the USD unfortunately – which dropped. The oxymoron was that this wasn’t a result of news – but because of a lack of it. Fed chair Janet Yellen remained tight-lipped in regard to anything relating to interest rates or monetary policy.

BoJ Governor Harukhiko Kuroda conversely went on record during Jackson Hole saying that Japan’s Central Bank is likely to keep a lenient monetary policy as the economy’s growth is unlikely to be sustainable or have longevity.

Tensions continued between the U.S. and N. Korea when Pyongan launched three missiles over the same weekend, without an immense reaction by the US other than the Secretary of State Tillerson saying they will continue their attempt to diplomatically diffuse the situation.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.
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