All Aboard the Roller-Coaster that is Cable
Ladies & Gentlemen In the last 24 hours we have witnessed one of the most wildest days for Cable, with a near 200 pip swing – behaving more like a “spoiled kid” trading FX for the first time. We moved to 1.5390 when the AB InBEV / SAB Miller deal (now the world’s biggest brewery) was announced before a sharp move to 1.5210. UK employment data this morning has kept calmer the beast that could form this month in Sterling as it is held below 1.53… For now at least! The UK ILO Jobless rate was posted at 5.4%, actually the lowest since mid-2008… giving a further insight into an all important component for the UK employment sector, as people get their butts into work before Christmas. So what are the important intra-day levels to watch? Well the initial hurdle of 1.53 is clear and above that to really prove bullish power would be 1.5345, where the 200-Day SMA marks. However, a breakdown in Cable this week could fast see an exposure of 1.5107 – the low from October 1st and then a bearish eye towards the 1.50 levels once more (lows of May & also key psychological support). What is the Future for Cable? – Again the long-term dynamics of £/$ are likely to be determined by the continued debate around rate hikes and as we all know the global economy is slowing slightly and this slow-down could backlash on the UK as well as the USA. The near-term bias could still be on the down-side. Wishing you the best of Luck Anish 8FX
Crude Oil – A bargain hunt heading into 2016?
Dear Traders As we enter the final quarter in 2015, investors are watching the price of Crude Oil with an eagles eye. Oil prices have been on a roller-coaster ride over the past few weeks, coming from 6-year lows and with talks of $30 per barrel (being the new normal) a few months ago, we have seen a remarkable comeback as the $50 mark was crossed for the first time since July. It looks like more short-term players have seen this opportunity above $50 for greater profit-taking and more sizable positions seem to have taken the market back to $47 & if this price is not screaming for a “Pull-Back” before year-end.. I don’t know what is! However, more “conservative” fundamentalists focused on the over-supplied commodity are ignoring the price action and looking at more longer-term consolidations up to year-end & maybe till future rate-hikes – the recent drop in oil-rig counts did not help either! OPEC remain firm that demand should begin to increase in early 2016 and this should naturally reduce the worried over-supply figures, resulting in a more “balanced” market – which if true, should see investors price in a more bullish price action heading up to year-end. However, warnings persist from the International Energy Agency insisting over-supply is set to stay. Although this view did not stop the Chinese “Bargain Hunters” from buying up more of the market last month. With Russia now heavily involved in Syria and also stamping its foothold around the Middle-East’s perimeter, the geo-political dynamics of the Oil Markets have a new found tension from the prospect of a potential stand-off between the US & Russia, as Russia looks at prioritizing it’s hand in the Middle-Eastern Crude supply.Recent ISIS attacks on production facilities in Norther Iraq have also added to this dynamic and of course, oil nations and businesses are keeping this in mind when attempting to analyse their quarter-end plans. Overall, it is important to note that there is still an oversupply (surplus of around 1 million barrels per day). However, the “rebalance” force should help calm this supply over the next 12 months, where a turn upwards of $70-75 would really indicate a rebalanced market. Trade OIL with Atom8Atom8 are now proud to announce the launch of USOIL as a new CFD on their leading MT4 terminal. Spreads start from 1 pip and if you would like to test the core pricing, please email info@atom8.com
The most important NFP of 2015
Ladies and Gentlemen Today at 13.30 BST we get the latest employment report from the United States, it will assist government policy makers in their quest to decide on the timing of the first rate rise since 2006. The change in Non-Farm payrolls is expected to be 217k according to the Bloomberg Survey, the report is seen as the deciding factor for the September FOMC. Commentators believe the chances of ‘lift off’ have diminished in the light of the financial turmoil, however the employment survey was concluded before this period. The August number is heavily influenced by seasonal factors and difficult to predict. Over the last 10 years the difference between the consensus and the actually number has been biggest in both March and August, there was a 119k miss in March of this year let’s hope we are closer for August. It is important to remember the dual mandate of the Fed, meaning that both employment and inflation will have to be at levels where tightening monetary policy is appropriate. The unemployment rate which has already reached the top end of the Fed’s year end projection 5.2%, is a 7 year low. However, a falling oil price means away from the workforce there is a disinflationary environment and may enable the key decision to be delayed. At Atom8 we are cognisant that this is an important number and that it is worthwhile looking at all the data that is released at 13.30 including the July revisions. Good Luck
As the #BOE “Super Thursday” approaches.. What shall we expect to see?
Ladies and Gentlemen, If you look at the list of data being released tomorrow in the UK, you will see why the media are referring to it as ‘Super GBP Thursday’. 09:00 New Car Registrations 09:30 Industrial Production Manufacturing Production 12:00 Bank of England Inflation Report and Minutes to the meeting Bank of England Bank rate (0.5%) We get 3 data points from the BOE at midday, the minutes of its policy meeting, the quarterly inflation report forecast and the Interest rate decision, presently 0.5%. Normally, these reports are on separate days. What should we be looking out for? How the members of the MPC vote, the last 7 meetings have been 9-0. Are there any dissenters in the ranks? Martin Weale confirmed he was one of two members that nearly voted for rate rise at the last meeting and JP Morgan have forecast a 6-3 vote. Who are the other possible dissenters? Kristin Forbes said there will be a rate rise ‘in the not too distant future’. However I take note from the BOE chief economist Andrew Haldane ‘ For me the combination of a healing economy, very low price pressures and a wobbly world means there is no rush to move rates from where they are now’. It is important to remember that the BOE mandate is to deliver price stability and then support growth and employment. It will a very interesting day as the market presently expects a rate rise in May of next year, if the hawks win then 1.5680 is the level to watch whilst a leaning towards the doves would see 1.5470 tested. Good Luck
Is the Australian Economy losing its shine?
Is the Australian economy losing its shine? The flippant answer is look at their cricket team, not the dominant force they once were However the more considered answer is that the economic slide is partly due to circumstances beyond the government’s control. Commodity prices have fallen, the Australian economy has been based around mining and commodities so a period of adjustment is to be expected. Event Risk – RBA Announcement (4th August 05:30) What impact will lower interest rates have and is this tool the answer? Lower interest rates are fuelling ‘Asset Bubbles’. This is a global story but the Sydney Housing market is the extreme, up a staggering 18.4% (yoy) whilst economic growth has not reached over 3% So why reduce rates further? The currency is 35% lower over 4 years surely this should help exporters however the jobless rate is still stuck around 6% and business confidence surveys are not at the level the government would like. A cut is the short term fix but there is a longer term issue. The cash rate is at 2% and very few expect a cut to 1.75% (25 out of 28 economists polled by Bloomberg have rates on hold.) We get the quarterly monetary policy statement on Friday the last two times the Reserve Bank Board members meet before this statement they cut 25 basis points As the proverb goes being forewarned is forearmed.
FED : Risk Event or Non-Risk Event?
Today the two day Federal Reserve meetings start. Chairwoman Janet Yellen is not holding a press conference and updated economic projections will not be released. This meeting is dismissed as a ‘non-event’, however the statement will be released at 19:00 BST and should be digested quickly just in case it is an ‘event’. Look out for the following:- Rates on hold, the last rate hike was in 2006, a hint might be given by tweaking their description of the economy. The Fed has a dual mandate, both employment and stable prices. An upbeat assessment of the job market whilst energy prices have weakened could signal lift-off. The last five Fed Policy Statements have been approved by a 10-0 vote, will this unanimity last forever? Jeffrey Lacker, Richmond Fed President, is seen as the possible dissenter If this is a non-event we have to wait until September 17 for our next guidance Good Luck Anish S. Lal @anish8fx FX & Precious Metals, Atom8 Financial Services LLP 2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com Risk Warning Trading on margin (spread betting, CFDs and FX) carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade your live account, you should carefully consider your investment objectives, level of experience and risk appetite. You could lose more than your initial investment and should not trade with funds you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Timeline : Next 72 hours for Greece. Market gap for 3rd week in a row?
Link : http://anish8fx.blogspot.co.uk/2015/07/will-markets-gap-for-third-week-in-row.html
In it’s quest for 1.70 is GBP the new safe haven asset?
Positive Momentum ShiftIn the past two weeks we have witnessed an epic 750 pips + rally in Cable of the back of amazingly positive data from the UK, with both Retail Sales & GDP posting results above expectations. Cable touched 1.59 for the first time this year yesterday, as it shook off the “2015 story” of range-bound cobwebs of 1.45-1.52 marks. By breaking the important structure level of 1.58… we shift back to harmonics as the AB=CD pattern lines up pointing towards further demand. The A-Kill zone stars around 1.5850’s and if you are a trend trader this market looks like it is going to be bullish and current levels would be a buying at a bargain price. So… is GBP the new CHF? With absolutely 0 hope for Greece reaching a deal the risk looks to be all on the EUR, as the bulls look for shelter. And with EURUSD potentially breaking parity..Where will all these sellers flock? The GBP? Possibly so! With heavy risk on the SNB post the break and with CHF Economic data all over the place, investors are looking for a new safe haven. The GBP offers a large financial sector and capital markets strong enough to absorb the influx of flow. Historically, GBP has been used as a “quasi” safe haven in times of stress, for example during troubled times in the Middle East and the Economic recession of 2008-2009. However, the correlation between the EUR and GBP would be critical in determining the extent of damage caused from a prospective Grexit. The Pound Packing A Punch With the UK job market recovering, industrial activity heavily expanding and GDP at a healthy 2.7%… We are almost back to 2007 (pre-crisis) levels. – In fact, creating a huge contrast in the Euro zone. With EURGBP heading south… it could be argued that the GBP is even more of a sage haven. With the BOE looking to increase rates in either the 3rd or 4th quarter – the ECB in line is still committed to it’s QE program and I am just so darn excited about this move…. I genuinely think we will hit 1.70 soon and then 1.80 all before 2016… Trading with Atom8 For range-traders… Trend Followers… Scalpers… Carry guys/girls…. Atom8 offer superior conditions for FX trading… especially on GBPUSD and other GBP crosses.. with raw ECN spreads as tight as 0.3 on Cable.. no wonder we are growing so fast… (anyways)… Check us out at www.atom8.com and if you have any questions, you can always mail me. Peace & Love Anish
Is Gold Powering it’s way to $1,000 per oz?
The biggest quarterly fall in Gold Growing prospects of the FED raising rates have kept this shiny metal posted below the recently tested $1,200oz mark and expectations of higher borrowing rates in the future has also helped to hold the price of this precious metal down, as it now struggles to compete with yield-bearing assets when rates are on the rise. A Fear-Based Asset Firmer US data supported the biggest 2-day dollar move in recent times as the price of Gold fell to only find stability at around the 1170/80 levels. However, reports from Asia say there is still no stopping demand from price-sensitive customers. China’s new $16bn Gold Fund China’s initiative to boost Gold trade is firmly embedded into their Economic policies. The new entitiy may include an exchange traded fund for Gold and aims to raise about $16bn or £10bn in three separate tranches. This news could restore some Asian buying strength, struggling to offset the prospect of US rate rises. China still remains the largest Gold producer and consumer of Gold (according to the World’s Gold Council. However, the USA still holds the largest Gold Reserve. The Future of the Gold PriceIf you ever like to know what the Banks think – Commerzbank expects a significant Gold recovery and pin the move lower down to “uncertainty” over rate rises – they expect Gold to be trading back at around $1,250 by 2016…. And moving forward, Chinese officials expect their activity in Gold trading will result in an extra $2.5 trillion in the next 10 years. My View For the best part of the year I have remained bullish on metals, amidst the forthcoming FED rate raises…. and when shit hits the fan… it really does! I think we will still see a large reversal in the Metal as we continue to rest on a support of uncertainty. However, once clarity is restored…. I eye a move higher to the $1300 region. Your views/feedback would be greatly appreciated. Anish @ Atom8.com 🙂
What does a Conservative victory mean for the £GBP?
The Shooting Sterling Star Upon confirmation of a Conservative strong-hold on today’s election, Cable (or GBP vs USD) soared through a significant psychological barrier (1.545), as a sign of investor support for PM David Cameron and also a sigh of relief.Cable has trades with steady strength today nearing fresh monthly highs, as investors eye a referendum to be held on the UKs exit from the EU.Why did the polls get it so wrong? A few months back, large banks were calling for further lows in Cable past 1.30, as we were in for the most “uncertain” election of recent times and the prospect of another hung parliament was not likened among investors. The idea of a Labour victory did not sit right with most traders as they planned to slower the pace of fiscal tightening leading to a BOE tightening of the UKs Monetary Policies. However, in recent weeks the dust settled and Cable has been posting strong gains of around 4.3% in the past month as the markets now eye a Conservative backed EU referendum. “The most market-friendly outcome” Goldman Sachs The thing is… Markets like security and by continuing on from where we left of… we keep our “status quo”. The Conservative Economic Policy focuses around reducing the UKs huge budget deficit through cutting expenditure (Goodbye NHS)… rather than raising Taxes (Yes!). Also, there is a more probable chance of a UK exit from the EU following a commitment to hold a referendum in 2017. Albeit a negative for trade or UK assets, our nation has slowly began to accept the reality of our shores (relying on becoming more self-sufficient) and a cry for true independence is seen as more acceptable for the public. However, could this then spur another Scottish referendum, causing further outcry for an independent state to the North of the capital. My long-term view for GBPUSD On a monthly time frame we can see the impacts caused over the build up from last year into 2015 and also the knock-on effects of the (nearly 40%) fall in the Euro against the Winter/Spring bull of he USD. However, as Yellen becomes more dovish and US rate cuts loom daringly in June, this has given strong grounds for a spur in Cable – especially for today’s power move. I anticipate a move back to the 1.68-1.70 mark through to the end of 2015 and early 2016 as the Conservatives begin another 5 year term in power. Any thoughts/feedback would be greatly appreciated. Written by, Anish S. Lal, Atom8 FX