Market Insight Newsletter – Vol. 1, Issue 30 Futures, FX, CFDs, Equities
2012 December 24 by BBY NZ
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Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 December 20 by Graham Parlane
OPI will take a break and return mid January.
Regards
Graham
Hopeful for Gold and Silver
2012 December 18 by Graham Parlane
All
Recently Gold and Silver have been bucking the trend of a weaker USD, failing to rise despite the moves up in NZD, AUD, EUR and Copper etc.
I find this action rather strange given the background of the FED’s supportive action but you never know if, say for example, the IMF are selling Gold to send bailout money somewhere or if a large gold miner has to put on a hedge due to their treasury policy.
So with the above situation I have been stalking a reason to resume being long Gold and Silver. The action overnight hints that the precious metals may be worth a buy here with stop loss orders below the overnight lows.
1) Gold daily – recall the big picture. Gold has been in a brilliant uptrend since 2001 and in August broke higher out of a multi-year consolidation triangle
Gold Daily – click here to view chart
A closer look at Gold – support apparent now at the overnight low
A Closer Look – click here to view chart
2) Silver has a number of similar technical attributes including stopping at the important Fibonacci number, 61.8% decline of the last rise. Also Silver probed below, but closed above, the 4 month major trend line support.
Silver – click here to view chart
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Q3 NZ GDP
2012 December 18 by Graham Parlane
All
It is commonly accepted that the 3rd quarter in NZ was a growth flat patch. The 1st half was surprisingly strong and anecdotally the 4th quarter looks to be on the improve.
When we get the Q3 result this Thursday the data will be for the period 3-5 months ago (Jul, Aug, Sept.).
Despite the historical nature of the data the market often reacts to data misses. If Q3 underwhelms I’ll be the first to be buying any ensuing dip in NZD/USD and NZD/AUD.
There have been numerous times that I have seen weak GDP results send the kiwi to what ends up being the bottom of the market and I suspect that this time is shaping up as potentially one of them.
There is an exceptionally wide range of forecast for this upcoming release with a range of 0.0 to +0.7% with a focus on +0.4%. The RBNZ have +0.2% pencilled in but they make their call much earlier than the trading bank economists who have seen more of the component data bites.
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 December 18 by Graham Parlane
Good morning
Overnight
# The EuoStoxx600 remains stalled, ending barely changed for the 2nd day in a row, at -0.08%. Currently the S&P500 is up a moderate 0.38% underpinned of course by the FED’s extraordinary policy decision of last week.
# Profit taking set in for USD/JPY after a 3 week run higher into the expected landslide win of Mr Abe and his LDP party. As is so often seen, a ‘buy the rumour, sell the fact’ effect appears in play here. The profit taking set in only after the USD/JPY hit 20 month highs and the NZD/JPY 4 year highs.
# The FED’s Lacker said he expects that it will be another three years until the U.S. unemployment rate drops to (the now all important) 6.5 %.
# ECB’s Draghi said that the medium-term outlook for the euro zone economy remained “challenging”. Weak demand is expected to extend into 2013 and only a gradual recovery is forecast toward the end of that year while interest rates are expected to continue at record lows.
# House Speaker John Boehner reportedly told President Barack Obama that he may accept higher taxes on millionaires in exchange for reduced spending on Medicare and Social Security.
Ahead
# ANZ NZ Business Confidence
# RBA Monetary Policy Meeting Minutes
# China Foreign Direct Investment
# U.K Inflation
# U.S Current Account
# NAHB U.S. Housing Market Index
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Market Insight Newsletter – Vol. 1, Issue 29 Futures, FX, CFDs, Equities
2012 December 17 by BBY NZ
Please click here to view the latest copy of our newsletter.
If you would like to subscribe to the Market Insight newsletter, please click here.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 December 14 by Graham Parlane
Good morning
Overnight
# Global equity markets are lower this morning in what is probably a classic case of ‘buy the rumour, sell the fact’ post the FED and after a 7% run up since mid-November. Certainly the extraordinary steps taken by the Fed yesterday can only be viewed as highly supportive of share prices. The EuroStoxx600 fell 0.36% and the S&P500 is dropping to session lows as I type, currently down 0.77%. The FED move really is unprecedented with the key take away that the FED Funds rate will remain near zero until unemployment falls to at least 6.5 %.
# In an interesting development, clearly at odds with the new FED policy, a sale of U.S 30 year bonds saw a yield of 2.917%, the highest at an auction of this maturity in seven months. Are the markets beginning to fret about the long term inflationary implications of the new, turbo charged, super easy policy?
# The European Economic Summit finally produced the goods, European finance ministers agreed on a framework for a common banking supervisor (which will lay the groundwork for banking union) and formally approved the latest Greek aid package, worth €49b.
# Ratings agency S&P revised the UK outlook to negative from stable (currently they enjoy a AAA rating), S&P expects government debt as percentage of GDP to rise in 2015 before declining, employment or growth shocks could pressure govt finances further. Surprisingly GBP/USD has shown limited downside, off about ½ a cent only so far.
# The CHF was notably strong after the Swiss National Bank maintained its EUR/CHF floor at 1.2000. Recently there had been a flurry of talk on the wires regarding a potential increase in the floor (implied CHF weakness) to combat the effects of a too strong CHF on the Swiss export sector.
# U.S. Retail Sales for November surprised positively. A combination of more online shopping around the Thanksgiving holiday, car buying and spending associated with cleaning up after super storm Sandy all conspired to lift sales +0.7% (ex food and energy) against expectations of +0.4.
# U.S. Jobless Claims dropped sharply to below trend, coming in at 343k against the 4 week moving average of 381.5k. Claims had jumped as high as 420k in the immediate wake of Sandy.
# In a reminder that the fiscal cliff isn’t going away, Oil fell for the first time in three days as House Speaker John Boehner said the White House isn’t serious about cutting spending. Prices dropped 1 % after budget-compromise talks stalled, with both White House and congressional officials saying no progress had been made. Regarding Oil, a theme we have been watching here is that the U.S. is forecast to be the world’s biggest petroleum producer somewhere around 2017/2020. I hope to source an appropriate article on that shortly.
Ahead
# Japan Tankan report
# HSBC Flash China Manufacturing PMI
# Eurozone Flash Manufacturing PMI’s
# Eurozone CPI
# U.S CPI
# U.S. Flash Manufacturing PMI
# U.S. Capacity Utilisation
# U.S Industrial Production.
Regards and good weekend to all
G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
The USD super cycle
2012 December 13 by Graham Parlane
All
The USD Index has fallen from 121 in 2001 to currently sit at 80 (has been as low as 71 at the height of the GFC 2008).
Essentially the FED’s policies since the GFC have been aimed at devaluing their way to prosperity. Remember when they had a ‘strong dollar policy’ that was quoted by officials at every chance ? That’s right, we haven’t heard that one for a very long time!
I have long maintained that this super cycle won’t end until the rest of the world cries out “Hey, you can’t devalue your way to prosperity at the expense of the rest of us”.
That will likely require an accord of some sort like we’ve seen in the past, see ‘Louvre Accord’ 1987 – halting the decline of the USD http://en.wikipedia.org/wiki/Louvre_Accord and the ‘Plaza Accord’ also 1987 – http://en.wikipedia.org/wiki/Plaza_Accord .
Already we have heard increasingly strained complaints from the likes of the outgoing RBNZ Gov. Bollard, the RBA and the BoE. This I’d suspect is only the beginning and the howls of anguish are only likely to get louder before this super cycle is finished. Unfortunately for our little export orientated economy that probably means coping with a much higher NZD/USD, and worryingly a higher NZD/AUD which recently has served as a bit of a circuit breaker for us.
Looking at the USD Index, the price action since the onset of the GFC simply looks like a consolidation and today’s FED announcement has every chance of propelling the USD down and out of the multi-year triangle consolidation.
NZD/USD at 0.9500 anyone ?
G.
Overnight Points of Interest
2012 December 13 by Graham Parlane
Good FOMC morning
Overnight
# The EuroStoxx600 eked out the smallest of gains rising 0.05% whilst the U.S. markets have, so far, shown a rather muted (positive) response to the Fed bringing out the big guns. The U.S. big board, the S&P500 is currently up 0.45%.
# The U.S. Federal Reserve, under the leadership of ‘Helicopter Ben’ (the man who fears deflation more than anything else) has held nothing back, re-igniting the long running easing program with yet more stimulus. In a ground breaking move, the FED has firmly linked monetary policy to U.S. employment conditions. The Fed has always had a dual mandate of price stability and full employment but today they broke new ground. Key features are that Operation Twist will be replaced with $US85b worth of monthly asset purchases (comprising $45b of longer-dated US government bonds and $40b of MBS), and the Fed will maintain its aggressive easing policy until the US unemployment rate falls below 6.5%.
# Early analyst thoughts suggest super easy U.S. monetary policy may be maintained well into 2016 and beyond on the basis of what it may take to get the U.S. unemployment rate to the suggested goal. Indeed PIMCO boss Bill Gross has suggested it will take 4-5 years of 200k monthly US jobs gains to get the unemployment rate down to the Fed’s new 6.5% target.
# While the equity markets response has been muted to date the announcement lit a fuse under the risk currencies (broad USD weakness) with the NZD/USD rising to 0.8450. The kiwi has now put on almost 3 cents in quick order since the long term trend line break of only a week ago. The NZD/USD is now within spitting distance of the highs for the year being 0.8472 seen in February. With wildly different policy pronouncements seen from the RBNZ and FED in recent days it has to be suggested that this move may have decent legs.
# Interestingly, U.S treasury yields have actually moved a touch higher since the announcement. Whether it is simply a positioning adjustment, or something more sinister in the realms of the market fearing the future inflationary implications of what the super easy policy may bring down the track, remains to be seen.
# Eurozone industrial production fell 1.4%m/m in October v expectations of 0.00%.
# UK ILO unemployment rate came in on expectations at 7.8% in October. Employment +40k vs. +45k expected.
# German CPI falls 0.1%m/m to 1.9%y/y as expected.
Ahead
# NZ Manufacturing Index
# NZ Food Price Index
# Australian MI Inflation Expectations
# Eurozone Economic Summit (Ok’s Greece’s next bailout tranche?)
# U.S Retail Sales
# U.S. Unemployment Claims
# U.S Business inventories
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Overnight Points of Interest
2012 December 12 by Graham Parlane
Good morning
Overnight
# Global equity markets continue to grind higher (slow grind, minimal volatility – both signs of a bull market?) with the European ‘big board’, the EuroStoxx600 up a moderate 0.34% and similarly across the Atlantic, the S&P500 up 0.57%. The EuroStoxx600 pushed to new 1 year highs whilst the S&P500 sits a 4 week highs and just 3% off the high for the year. The U.S. bourses have now reclaimed the sharp 7% losses seen in the immediate wake of the U.S. elections. The Nasdaq surged 1.4% reflecting a sharp 3% rise in Apple Inc.
# Morale in Europe got a huge boost from a surprise jump in the ZEW survey of German investor sentiment, rising to the highest level since May. The sentiment index jumped to a buoyant 6.9 reading against expectations of a -12 print (wow!). The reading will no doubt fan hopes that Germany, Europe’s largest economy, will avoid recession this winter.
# Budget negotiations between President Barack Obama and Republican House Speaker John Boehner have progressed steadily and become more serious in recent days, The Wall Street Journal reported late Monday, citing people close to the process. Investors shrugged off a brief speech in which Mr Boehner said Republicans are still waiting for the White House to propose spending cuts. Stocks came off session highs but quickly rebounded after his remarks.
# The U.S. trade deficit increased in October because exports fell by a larger margin than imports, a sign that slower global growth could weigh on the U.S. economy. The Commerce Department said that the trade deficit grew 4.8 percent in October from September to $42.2 billion. Exports dropped 3.6 percent to $180.5 billion. Sales of commercial aircraft, autos and farm products all declined. Imports fell 2.1 percent to $222.8 billion, reflecting fewer shipments of cell phones, autos and machinery.
# NZ-Aus interest rate differentials continue to narrow in the wake of the respective central bank announcements last week and a VERY poor Aus business confidence reading yesterday. As a result the NZD/AUD tracked toward 0.8000 before settling just off its highs.
# Another milestone was set in Treasury debt sales Tuesday, with $32 billion of 3 year notes offered at a record low yield of 0.327%. The yield smashed the previous trough of 0.334% set at the September 2011 auction.
# Three consecutive years of smaller U.S. corn harvests are driving inventories of the world’s most-consumed grain to a 39-year low. Global stockpiles will drop 11 % to 117.61 million metric tons by Oct. 1, or 13.6 % of what will be used for food, ethanol and livestock feed, the lowest ratio since 1974, the U.S. Department of Agriculture said today in a report.
Ahead
# Westpac Australian Consumer Sentiment
# RBA Gov. Stevens speaks.
# OPEC Meetings
# FOMC Fed Funds Rate
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities