Friday, January 30, 2015

Weaker U.S. Growth Leaves EUR/USD With Little Room To Move

The GDP numbers out of the United States disappointed by missing the 2014 fourth quarter forecast. In the quarter the U.S. economy expanded at a rate of 2.6 percent, this is lower than the anticipated 3.0 percent. Taken out of context it looks like the U.S. economy is struggling and some the immediate reaction did not take into account the global financial markets. Growth forecasts have been cut around the world so it should not be a total surprise that after an impressive Q3 the U.S. would slow down. Corporate investment was low and with the price of oil at current levels will discourage Energy companies as some are already closing unprofitable wells and new projects are on pause.

The federal reserve can continue to be patient as it is safe to be bullish about the U.S. Economy relative to the rest of the world. Kansas Fed President James Bullard was comfortable with the current rate of growth of the U.S. economy and continues to advocate for higher rates sooner rather than later. He is a non-voting member and a known hawk that is not concerned with current inflation levels. He says a small rate rise soon could give the Fed more flexibility.

The market reaction to the U.S. GDP figures was subdued. Earlier German Retail Sales posted a weak gain of 0.2%, marking a 3-month low. The estimate stood at 0.4%. Eurozone inflation remains anemic, as the Eurozone CPI Estimate came in at 0.6%, its second straight decline. In Spain, CPI followed suit with a decline of 1.4%, although there was good news from GDP, which improved to 0.7% in Q4. The negative data pushed the EUR higher as confidence in the European Central Bank’s quantitative easing program suffered as deflation is advancing while the QE program has been announced, but not launched.

The EUR/USD depreciated as more comments around the U.S. fourth quarter numbers confirmed while lower than expected it still paints the American economies as one oasis amongst an uncertain macro picture.

MarketPulse Economic Calendar

On Tap for Next Week

Central banks continue to be the main drivers of volatility in the forex market. Surprise interventions defined the first month of 2015 and two central banks scheduled next week investors need to prepare ahead of the Reserve Bank of Australia Rate Statement on Monday and the Bank of England MPC Rate Statement on Thursday. There market is not anticipating changes to interest rates, but verbal intervention could play a part from both central banks and adding the Reserve Bank of New Zealand to the list as Governor Graeme Wheeler is scheduled to speak on Tuesday.

Global growth concerns will be in focus when HSBC releases its Final Manufacturing PMI estimate for China. Falling below the 50.0 mark last month and expected to continue below the expansion line traders will be watching this release and its impact on commodity prices.

The week will close with U.S. Non-farm Payroll Report on Friday. Given the state of the global economy and a weaker fourth quarter GDP figure the USD would be looking for continued improvement of the labor market. The Fed has stressed the importance of employment before it can give the go ahead to higher rates. Although the conversation has shifted to inflation given the strong state of U.S. jobs, the NFP could still spark a USD rally if the final figure beats expectations of above 231,000 added jobs. The U.S. has not had a below 200,000 NFP since April of 2014 which is another number to consider if the data comes in under expectations but still shows sustained growth.

WEEK AHEAD

* CNY HSBC Final Manufacturing PMI
* USD ISM Manufacturing
* AUD Reserve Bank of Australia Rate Decision
* GBP Bank of England Rate Decision
* USD Change in Non-farm Payrolls
* CAD Unemployment Rate

AUD/USD – Unchanged After Weak PPI

AUD/USD is showing little movement on Friday, as the pair trades in the mid-0.78 range in the European session. Taking a look at today’s releases, Australian PPI dipped lower to 0.1%. Australian Private Sector Credit matched the forecast with a 0.5% gain. In the US, today’s major events are Advance GDP and UoM Consumer Sentiment.

Australian inflation remains at low levels. The Producer Price Index edged down to 0.1%, short of the forecast of 0.3%. Earlier in the week, Australian CPI, the primary gauge of consumer inflation, dropped to just 0.2% in Q4, shy of the forecast of 0.3%. This was the index’s weakest gain in two years. However, there was much better news from Trimmed Mean CPI, which posted a strong gain of 0.7%, beating the estimate of 0.5%.

US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

The Federal Reserve reiterated in its policy statement on Wednesday that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a “solid pace” thanks to the robust labor market. The Fed is widely expected to raise rates sometime during the year, so the Fed rate watch is sure to continue as the markets look for clues as to when the Fed will make a move.

AUD/USD for Friday, January 30, 2015

AUD/USD January 30 at 12:10 GMT

AUD/USD 0.7769 H: 0.7797 L: 0.7731

AUD/USD Technical

S3

S2

S1

R1

R2

R3

0.7403

0.7582

0.7684

0.7799

0.7904

0.8081

AUD/USD has shown little movement on Friday. The pair continues to put pressure on resistance at 0.7799.

0.7799 is a weak resistance line. 0.7904 is stronger.

0.7684 is an immediate support level.

Current range: 0.7684 to 0.7799

Further levels in both directions:

Below: 0.7684, 0.7582, 0.7403 and 0.7265

Above: 0.7799, 0.7904, 0.8081, 0.8150 and 0.8214

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Friday. This is consistent with the movement of the pair, as the Aussie has posted very small losses. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

AUD/USD Fundamentals

00:30 Australian PPI. Estimate 0.3%. Actual 0.1%.

00:30 Australian Private Sector Credit. Estimate 0.5%. Actual 0.5%.

13:30 US Advance GDP. Estimate 3.0%.

13:30 US Advance GDP Price Index. Estimate 0.9%.

13:30 US Employment Cost Index. Estimate 0.6%.

14:45 US Chicago PMI. Estimate 57.7 points.

15:00 US Revised UoM Consumer Sentiment. Estimate 98.5 points.

15:00 US Revised UoM Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Gold Slips After Strong Jobless Claims

Gold prices have stabilized on Friday, after sharp losses a day earlier. In the European session, the metal is trading at a spot price of $1264.03. On the release front, today’s major events are Advance GDP and UoM Consumer Sentiment.

US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

The Federal Reserve reiterated in its policy statement on Wednesday that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a “solid pace” thanks to the robust labor market. This vote of confidence pushed gold prices to lower levels. The Fed is widely expected to raise rates sometime during the year, so the Fed rate watch is sure to continue as the markets look for clues as to when the Fed will make a move.

XAU/USD for Friday, January 30, 2015

XAU/USD January 30 at 11:45 GMT

XAU/USD 1264.03 H: 1266.18 L: 1257.33

XAU/USD Technical

S3

S2

S1

R1

R2

R3

1215

1240

1255

1275

1300

1322

XAU/USD has shown limited movement in the Asian and the European sessions.

1275 is a weak resistance line. 1300 is stronger.

1255 is an immediate support level.

Current range: 1255 to 1275

Further levels in both directions:

Below: 1255, 1240, 1215 and 1200

Above: 1275, 1300, 1322, 1345 and 1375

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Friday, continuing the direction seen a day earlier. This is consistent with the pair’s movement, as gold has posted slight gains. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

13:30 US Advance GDP. Estimate 3.0%.

13:30 US Advance GDP Price Index. Estimate 0.9%.

13:30 US Employment Cost Index. Estimate 0.6%.

14:45 US Chicago PMI. Estimate 57.7 points.

15:00 US Revised UoM Consumer Sentiment. Estimate 98.5 points.

15:00 US Revised UoM Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

AUD/USD – Unchanged After Weak PPI

AUD/USD is showing little movement on Friday, as the pair trades in the mid-0.78 range in the European session. Taking a look at today’s releases, Australian PPI dipped lower to 0.1%. Australian Private Sector Credit matched the forecast with a 0.5% gain. In the US, today’s major events are Advance GDP and UoM Consumer Sentiment.

Australian inflation remains at low levels. The Producer Price Index edged down to 0.1%, short of the forecast of 0.3%. Earlier in the week, Australian CPI, the primary gauge of consumer inflation, dropped to just 0.2% in Q4, shy of the forecast of 0.3%. This was the index’s weakest gain in two years. However, there was much better news from Trimmed Mean CPI, which posted a strong gain of 0.7%, beating the estimate of 0.5%.

US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

The Federal Reserve reiterated in its policy statement on Wednesday that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a “solid pace” thanks to the robust labor market. The Fed is widely expected to raise rates sometime during the year, so the Fed rate watch is sure to continue as the markets look for clues as to when the Fed will make a move.

AUD/USD for Friday, January 30, 2015

AUD/USD January 30 at 12:10 GMT

AUD/USD 0.7769 H: 0.7797 L: 0.7731

AUD/USD Technical

S3

S2

S1

R1

R2

R3

0.7403

0.7582

0.7684

0.7799

0.7904

0.8081

AUD/USD has shown little movement on Friday. The pair continues to put pressure on resistance at 0.7799.

0.7799 is a weak resistance line. 0.7904 is stronger.

0.7684 is an immediate support level.

Current range: 0.7684 to 0.7799

Further levels in both directions:

Below: 0.7684, 0.7582, 0.7403 and 0.7265

Above: 0.7799, 0.7904, 0.8081, 0.8150 and 0.8214

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Friday. This is consistent with the movement of the pair, as the Aussie has posted very small losses. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

AUD/USD Fundamentals

00:30 Australian PPI. Estimate 0.3%. Actual 0.1%.

00:30 Australian Private Sector Credit. Estimate 0.5%. Actual 0.5%.

13:30 US Advance GDP. Estimate 3.0%.

13:30 US Advance GDP Price Index. Estimate 0.9%.

13:30 US Employment Cost Index. Estimate 0.6%.

14:45 US Chicago PMI. Estimate 57.7 points.

15:00 US Revised UoM Consumer Sentiment. Estimate 98.5 points.

15:00 US Revised UoM Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

EUR/USD – Flat as German Retail Sales, Euro CPI Disappoint

The euro is flat on Friday, as EUR/USD trades in the low-1.13 range in the European session. On the release front, Eurozone releases were a disappointment. German Retail Sales posted a gain of 0.2%, while Eurozone CPI Estimate posted a sharp decline of 0.6%. In the US, today’s major events are Advance GDP and UoM Consumer Sentiment.

German Retail Sales posted a weak gain of 0.2%,  marking a 3-month low. The estimate stood at 0.4%. Eurozone inflation remains anemic, as the CPI Estimate came in at -0.6%, its second straight decline. In Spain, CPI followed suit with a decline of -1.4%, although there was good news from GDP, which improved to 0.7% in Q4.

US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

The Federal Reserve reiterated in its policy statement on Wednesday that it would be ‘”patient'” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a ‘”solid pace'” thanks to the robust labor market. This vote of confidence helped the dollar post sharp gains against the euro. The Fed is widely expected to raise rates sometime during the year, so the ‘”Fed rate watch'”is sure to continue as the markets look for clues as to when the Fed will make a move.

EUR/USD for Friday, January 30, 2015

EUR/USD January 30 at 10:30 GMT

EUR/USD 1.1329 H: 1.1353 L: 1.1304

EUR/USD Technical

S1

S2

S1

R1

R2

R3

1.1066

1.1154

1.1231

1.1340

1.1426

1.1525

EUR/USD has shown little movement in the Asian session. This has continued in the European session, with the pair testing resistance at 1.1340.

1.1231 remains a strong support level.

On the upside, 1.1340 is under pressure. 1.1426 is stronger.

Current range: 1.1231 to 1.1340

Further levels in both directions:

Below: 1.1231, 1.1154, 1.1066 and 1.0906

Above: 1.1340, 1.1426, 1.1525, 1.1634 and 1.1754

OANDA’s Open Positions Ratio

EUR/USD ratio pointing to gains is short positions on Friday. This is not consistent with the lack of movement we’re seeing from the pair. The ratio has a majority of short positions, indicative of trader bias towards the euro moving lower.

EUR/USD Fundamentals

7:00 German Retail Sales. Estimate 0.4%. Actual 0.2%.

7:45 French Consumer Spending. Estimate 0.3%. Actual 1.5%.

8:00 Spanish Flash CPI. Estimate -1.5%. Actual -1.4%.

8:00 Spanish Flash GDP. Estimate 0.5%. Actual 0.7%.

9:00 Italian Monthly Unemployment Rate. Estimate 13.5%. Actual 12.9%.

10:00 Eurozone CPI Flash Estimate. Estimate -0.5%. Actual -0.6%.

10:00 Eurozone Core CPI Flash Estimate. Estimate 0.6%. Actual 0.5%.

10:00 Eurozone Unemployment Rate. Estimate 11.5%. Actual 11.4%.

13:30 US Advance GDP. Estimate 3.0%.

13:30 US Advance GDP Price Index. Estimate 0.9%.

13:30 US Employment Cost Index. Estimate 0.6%.

14:45 US Chicago PMI. Estimate 57.7 points.

15:00 US Revised UoM Consumer Sentiment. Estimate 98.5 points.

15:00 US Revised UoM Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

US GDP Growth Slows in Q4 But Consumer Spending Powers On

U.S. economic growth slowed sharply in the fourth quarter as weak business spending and a wider trade deficit offset the fastest pace of consumer spending since 2006.

Gross domestic product expanded at a 2.6 percent annual pace after the third quarter’s spectacular 5 percent rate, the Commerce Department said in its first fourth-quarter GDP snapshot on Friday.

The slowdown, which follows two back-to-back quarters of bullish growth, is likely to be short-lived given the enormous tailwind from lower gasoline prices. Most economists believe fundamentals in the United States are strong enough to cushion the blow on growth from weakening overseas economies.

“We look for strong domestic consumption to continue supporting growth momentum in the coming quarters even as investment suffers due to falling oil prices,” said Gennadiy Goldberg, an economist at TD Securities in New York.

Even with the moderation in the fourth quarter, growth remained above the 2.5 percent pace, which is considered to be the economy’s potential. Economists had expected GDP to expand at a 3 percent rate in the fourth quarter.

via Reuters

Oil Near Six Year Low as Supply

Crude oil fell to the lowest level in almost six years in New York as rising production swells U.S. stockpiles.
West Texas Intermediate dropped as much as 2 percent, widening its discount to Brent to the most in a month. U.S. crude supplies rose to the highest level in weekly data going back more than three decades, the Energy Information Administration said Wednesday.

Oil has collapsed about 40 percent since the Organization of Petroleum Exporting Countries decided to maintain its output target on Nov. 27, challenging non-OPEC producers to curb their supplies first to alleviate a global surplus. U.S. production rose to the highest since at least 1983 last week, signaling that non-OPEC output hasn’t yet faltered.

“U.S. stockpiles are still very high and the fundamentals are weak,” said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. “The market will continue to come under pressure. There is really not anything bullish out there.”

West Texas Intermediate for March delivery slipped 84 cents, or 1.9 percent, to $43.61 a barrel at 11:07 a.m. on the New York Mercantile Exchange. Prices fell as low as $43.58, the lowest since March 12, 2009. The volume of all futures traded was about 18 percent below the 100-day average for the time of day.

via Bloomberg

Gold Drops As Fed Optimistic About US Economy

Gold fell by the most in more than a month after the Federal Reserve upgraded its assessment of the U.S. economy and labor market.

The Federal Open Market Committee described the economic expansion as “solid,” after a meeting in Washington on Wednesday, an improvement over the “moderate” performance it saw in December. It substituted “strong” for “solid” in its evaluation of job gains. Higher rates curb gold’s appeal because the metal typically offers returns when prices rise.

“Positive sounds out of the Fed hurt,” Georgette Boele, an analyst at ABN Amro Bank NV, said by e-mail. “When precious metals get under pressure, it is often not a small move.”

Bullion for April delivery fell 1.2 percent to $1,272 an ounce at 9:11 a.m. on the Comex in New York. It fell as much as 1.8 percent earlier Thursday, the biggest drop since Dec. 22. Futures trading volume was 82 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.

via Bloomberg

December US Pending Home Sales Fall 3.7%

The number of consumers who started the process of buying a home decreased in December, reversing the modest gains in November, according to the latest data from the National Association of Realtors (NAR).

Thursday, the NAR said its pending home sales index fell 3.7% to 100.7 in December, following November’s revised reading of 104.6. However, the association said the index is 6.1% above the December 2013 reading.

Economists were optimistic heading into the report; according to consensus forecasts, economists expected the index to rise about 0.6%. Economists pay attention to pending home sales because it is seen as a barometer for the housing market. There is typically a one-to-two month lag between signing a contract and a completed sale.

Lawrence Yun, NAR chief economist, said that the reason behind the decline in the number of pending sales is because of a slight acceleration in prices as a result of fewer homes available on the market.
“Total inventory fell in December for the first time in 16 months, resulting in fewer choices for buyers and a modest uptick in price growth in markets throughout the country,” he said. “With interest rates at lows not seen since early 2013, the strength in existing-sales in upcoming months will largely depend on the willingness of current homeowners to realize their equity gains from the past couple years and trade up,” said Lawrence Yun, NAR chief economist.

Gennadiy Goldberg, U.S. strategist at TD Securities, shook off the weaker than expected numbers?, saying that seasonal factors could have lead to the decline.

via Kitco

ECB’s Coeure Says QE Will Work Due to Size

The European Central Bank decided to embark in a large program of asset purchases because of deteriorating expectations on inflation over a number of years, ECB Executive Board Member Benoit Coeure said on Thursday.

Speaking at an event here, Mr Coeure said he is confident the recently launched, so-called quantitative easing by the ECB will succeed. “It will work because it’s big,” he said.

But the central bank official reiterated  the ECB cannot do everything to fix the euro-zone’s sluggish economy. Governments have to do their part with structural reforms, a message some members of central bank’s board have stressed.

Mr. Coeure added that the ECB’s decision on the purchases was vindicated by general comments noting that “the ECB had done what it had to do,” according to its mandate. The ECB has a mandate to keep the euro-zone inflation rate close to, but below 2%.

The bank recently decided to buy 60 billion euros ($68 billion) of government bonds and other assets each month to inject liquidity in the euro-zone system and rekindle economic growth.

via WSJ

FTSE Drops After Lower Oil, Greek and Fed Expectations

Energy shares weighed down a market already troubled by the Greek situation and the prospect of a US rate rise in the middle of this year.

The slump in the crude price is hitting the spending plans of major oil companies, with Royal Dutch Shell the latest to unveil cutbacks. The company’s B shares slid 110p to 21.38 after it unveiled a $15bn cut in investment over the next three years. Rival BP lost 8.1p to 424.85p and BG dropped 16.9p to 880.9p.

Soco International, the mid-cap producer focused on Vietnam and Africa, also announced a 60% cut in its investment budget this year, leaving its shares 15p lower at 265p.

Overall the FTSE 100 finished down 15.34 points at 6810.60.

Investors were nervous about the outlook for Greece’s finances if the new government fails to reach a compromise with its European creditors, while Wednesday’s statement from the US Federal Reserve was positive enough about the country’s economy to raise the prospect of an earlier than expected increase in borrowing costs. The US market was mixed, rising almost 50 points by the time London closed after better than expected weekly jobless claims but weak home sales figures.

via The Guardian

Denmark Central Bank Forced to Cut Rate to -0.5 Percent

The Danish central bank cut its key interest rate for the third time in two weeks to another historic low after intervening in the market to keep the crown within a tight range against the euro.

The central bank cut its certificate of deposit rate to -0.5 percent from -0.35 percent, making a reduction of 45 basis points since Monday last week.

While analysts said last week that its actions might not be enough to weaken the crown, few expected another cut so soon, especially as Denmark’s rate went below the eurozone equivalent of -0.20 percent, making it less attractive than the euro.

Analysts have said the central bank tends to use interest rate tools after spending 10 to 15 billion crowns in intervention.

“It has become expensive to have Danish crowns and the (upward) pressure is therefore expected to ease off, but whether the rate cuts are enough to turn off the ‘stream’ into the market is still uncertain,” Danske Bank chief economist Steen Bocian said in a note.

The central bank has intervened every month since September, aside from December, as the crown has strained at the upper limit of its trading band with the euro.

via CNBC

French FinMin Says No Change to Greek Bailout

He may be a socialist, but France’s economy minister showed no support on Thursday for Greece’s new left-wing government and its push to overhaul the terms of its bailout.

“We all know the situation about Greek debt. There is no question to change our state of mind, to change our views. They (Greece) have past commitments,” Emmanuel Macron, France’s economy minister since August 2014, told CNBC.

The battle lines between Greece and the rest of Europe were drawn up on Tuesday when Syriza called off the planned privatization of Greece’s Port of Piraeus. Then on Wednesday, the party, led by Alexis Tsipras, announced the reintroduction of the minimum wage, as well as the rehiring of sacked government workers and a halt to other privatization schemes.

Also on Syriza’s agenda is easing the repayment terms of the 240 billion euros ($295 billion) in loans the country has received since the height of its financial crisis in 2010—a hope that German politicians such as Finance Minister Wolfgang Schaeuble have been quick to dismiss this week. The bailout came with strict conditions on government spending and structural reforms. These measures have had a crippling effect on the Greek economy and renegotiating them has been a key part of Syriza’s election campaign.

via CNBC

EUR/USD – Flat as German Retail Sales, Euro CPI Disappoint

The euro is flat on Friday, as EUR/USD trades in the low-1.13 range in the European session. On the release front, Eurozone releases were a disappointment. German Retail Sales posted a gain of 0.2%, while Eurozone CPI Estimate posted a sharp decline of 0.6%. In the US, today’s major events are Advance GDP and UoM Consumer Sentiment.

German Retail Sales posted a weak gain of 0.2%, marking a 3-month low. The estimate stood at 0.4%. Eurozone inflation remains anemic, as the Eurozone CPI Estimate came in at -0.6%, its second straight decline. In Spain, CPI followed suit with a decline of -1.4%, although there was good news from GDP, which improved to 0.7% in Q4.

US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

The Federal Reserve reiterated in its policy statement on Wednesday that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a “solid pace” thanks to the robust labor market. This vote of confidence helped the dollar post sharp gains against the euro. The Fed is widely expected to raise rates sometime during the year, so the Fed rate watch is sure to continue as the markets look for clues as to when the Fed will make a move.

EUR/USD for Friday, January 30, 2015

EUR/USD January 30 at 10:30 GMT

EUR/USD 1.1329 H: 1.1353 L: 1.1304

EUR/USD Technical

S1

S2

S1

R1

R2

R3

1.1066

1.1154

1.1231

1.1340

1.1426

1.1525

EUR/USD has shown little movement in the Asian session. This has continued in the European session, with the pair testing resistance at 1.1340.

1.1231 remains a strong support level.

On the upside, 1.1340 is under pressure. 1.1426 is stronger.

Current range: 1.1231 to 1.1340

Further levels in both directions:

Below: 1.1231, 1.1154, 1.1066 and 1.0906

Above: 1.1340, 1.1426, 1.1525, 1.1634 and 1.1754

OANDA’s Open Positions Ratio

EUR/USD ratio pointing to gains is short positions on Friday. This is not consistent with the lack of movement we’re seeing from the pair. The ratio has a majority of short positions, indicative of trader bias towards the euro moving lower.

EUR/USD Fundamentals

7:00 German Retail Sales. Estimate 0.4%. Actual 0.2%.

7:45 French Consumer Spending. Estimate 0.3%. Actual 1.5%.

8:00 Spanish Flash CPI. Estimate -1.5%. Actual -1.4%.

8:00 Spanish Flash GDP. Estimate 0.5%. Actual 0.7%.

9:00 Italian Monthly Unemployment Rate. Estimate 13.5%. Actual 12.9%.

10:00 Eurozone CPI Flash Estimate. Estimate -0.5%. Actual -0.6%.

10:00 Eurozone Core CPI Flash Estimate. Estimate 0.6%. Actual 0.5%.

10:00 Eurozone Unemployment Rate. Estimate 11.5%. Actual 11.4%.

13:30 US Advance GDP. Estimate 3.0%.

13:30 US Advance GDP Price Index. Estimate 0.9%.

13:30 US Employment Cost Index. Estimate 0.6%.

14:45 US Chicago PMI. Estimate 57.7 points.

15:00 US Revised UoM Consumer Sentiment. Estimate 98.5 points.

15:00 US Revised UoM Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Gold Slips After Strong Jobless Claims

Gold prices have stabilized on Friday, after sharp losses a day earlier. In the European session, the metal is trading at a spot price of $1264.03. On the release front, today’s major events are Advance GDP and UoM Consumer Sentiment.

US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

The Federal Reserve reiterated in its policy statement on Wednesday that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a “solid pace” thanks to the robust labor market. This vote of confidence pushed gold prices to lower levels. The Fed is widely expected to raise rates sometime during the year, so the Fed rate watch is sure to continue as the markets look for clues as to when the Fed will make a move.

XAU/USD for Friday, January 30, 2015

XAU/USD January 30 at 11:45 GMT

XAU/USD 1264.03 H: 1266.18 L: 1257.33

XAU/USD Technical

S3

S2

S1

R1

R2

R3

1215

1240

1255

1275

1300

1322

XAU/USD has shown limited movement in the Asian and the European sessions.

1275 is a weak resistance line. 1300 is stronger.

1255 is an immediate support level.

Current range: 1255 to 1275

Further levels in both directions:

Below: 1255, 1240, 1215 and 1200

Above: 1275, 1300, 1322, 1345 and 1375

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in long positions on Friday, continuing the direction seen a day earlier. This is consistent with the pair’s movement, as gold has posted slight gains. The ratio has a majority of long positions, indicating trader bias towards gold moving to higher ground.

XAU/USD Fundamentals

13:30 US Advance GDP. Estimate 3.0%.

13:30 US Advance GDP Price Index. Estimate 0.9%.

13:30 US Employment Cost Index. Estimate 0.6%.

14:45 US Chicago PMI. Estimate 57.7 points.

15:00 US Revised UoM Consumer Sentiment. Estimate 98.5 points.

15:00 US Revised UoM Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

UK House Prices Rose by 0.3% in January

UK house prices rose by 0.3% in January as the slowdown in activity that began towards the end of 2014 continued to soften growth, the country’s biggest building society said.

After a rush of sales in the first part of 2014, mortgage approvals started to drop off in the autumn and ended the year down by around a fifth, and reports from surveyors suggest there are fewer would-be buyers looking for homes.

In the first snapshot of the market in 2015, Nationwide said the monthly rate of growth was slightly higher than December’s figure of 0.2%, but the annual rate of price inflation had fallen for a fifth month running, this time to 6.8% from 7.2%, its lowest level for 14 months. The society said the average price of a UK home now stands at 188,446 – 2.4% above its pre-crisis peak.

Separate figures from Land Registry showed that over the course of 2014, prices across England and Wales rose by 7% to an average of 177,766. It said December had seen a 0.6% uplift in prices, although this masked big variations around the regions. In London, monthly growth was three times that figure, while in the north-west of England prices were down by 1.6% month on month. Across the year, there was growth in all regions, although that in London and the south-east and east of England was more than double that elsewhere.

via The Guardian

Analysts Expect Russian Central Bank to Hold Rate

Russia’s central bank will hold its main lending rate at 17 percent when it meets on Friday, even though the economy is likely to contract by 4.2 percent this year, a Reuters poll predicted on Thursday.

The bank jacked the rate up in mid-December at an emergency meeting provoked by a run on the rouble, as sliding oil prices and Western sanctions linked to the Ukraine conflict sparked financial turmoil.

An escalation of fighting in eastern Ukraine is adding to the economic pressures, with the European Union warning this week that further sanctions against Russia are planned.

“The economy is heading toward a recession in 2015,” said ING economist Dmitry Polevoy. “Double-digit inflation is another evil that is not likely to ease its grip quickly.”

Out of 12 analysts polled by Reuters, 11 expected the central bank to hold its key rate this month, with one predicting a one-point cut.

via Reuters

US Jobless Claims Drop to 15 Year Low

The number of Americans filing new claims for unemployment benefits tumbled last week to its lowest level in nearly 15 years, adding to bullish signals on the labor market.

Initial claims for state unemployment benefits dropped 43,000 to a seasonally adjusted 265,000 for the week ended Jan. 24, the lowest since April 2000, the Labor Department said on Thursday. It was the biggest weekly decline since November 2012.

The drop, which far exceeded economists’ expectations for a fall to only 300,000, probably exaggerates the strength of the jobs market as the data included the Martin Luther King holiday, which means fewer claims were likely processed.

It unwound the prior weeks’ increases, which had pushed claims above the key 300,000 threshold. Economists had largely dismissed that rise as “noise,” noting difficulties adjusting the data for seasonal fluctuations at the start of the year.

U.S. stock index futures added slightly to gains on the data, while the dollar and prices for U.S. Treasury debt were little changed.

via Reuters

AUD/USD – Sharp Losses for Aussie on Weak Import Prices, Fed Statement

AUD/USD sustained sharp losses on Thursday, as the pair has shed over 100 points. The pair is trading just shy of the 0.78 line in the North American session. Taking a look at today’s releases, Australian Import Prices gained 0.9% but fell short of expectations. In the US, Unemployment Claims sparkled, dropping to 265 thousand. However, Pending Home Sales declined 3.7%.

US employment numbers have improved as the economy chugs along. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed gave a vote of confidence to the US economy, noting that the economy was expanding at a “solid pace”. This boosted the US dollar as the Australian currency posted sharp losses. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.

Australian Import Prices rebounded to 0.9%, but this was well short of the forecast of 1.5%. If Australian data continues to miss expectations, pressure will increase on the RBA to lower interest rates in order to boost economic growth. Such a move would likely see the Aussie post losses against the US dollar. We’ll get a look at PPI on Friday, with the markets expecting a slight gain of 0.3%.

Earlier in the week, Australian CPI, the primary gauge of consumer inflation, dropped to just 0.2% in Q4, shy of the forecast of 0.3%. This was the index’s weakest gain in two years. However, there was much better news from Trimmed Mean CPI, which posted a strong gain of 0.7%, beating the estimate of 0.5%.

AUD/USD for Thursday, January 29, 2015

AUD/USD January 29 at 15:35 GMT

AUD/USD 0.7799 H: 0.7907 L: 0.7766

AUD/USD Technical

S3

S2

S1

R1

R2

R3

0.7528

0.7684

0.7799

0.7904

0.8081

0.8150

AUD/USD edged lower in the Asian session. The pair posted sharp losses in European trade, easily breaking below support at 0.7904 and testing support at 0.7999. Early in the North American session, the pair is unchanged.

0.7799 is fluid and could break in the North American session. 0.7684 is stronger.

0.7904 has reverted to a resistance line as the pair has posted sharp losses.

Current range: 0.7799 to 0.7904

Further levels in both directions:

Below: 0.7799, 0.7684, 0.7528 and 0.7403

Above: 0.7904, 0.8081, 0.8150, 0.8214 and 0.8315

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Thursday. This is not consistent with the movement of the pair, as the Aussie has posted sharp losses. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD recovering and moving higher.

AUD/USD Fundamentals

 00:30 Australian Import Prices. Estimate 1.5%. Actual 0.9%

13:30 US Unemployment Claims. Estimate 301K. Actual 265K

15:00 US Pending Home Sales. Estimate +0.6%. Actual -3.7%

15:30 US Natural Gas Storage. Estimate -113B. Actual -94B

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

European Stocks Dropping After US Fed Bullish Remarks

European stocks slipped and the dollar strengthened on Thursday after the Federal Reserve took an upbeat view of the world’s largest economy and signaled it was on track to raise interest rates this year.

The stronger dollar helped push U.S. oil prices to six-year lows and weighed on the price of gold.

Greece, where an anti-austerity prime minister took over on Monday, also kept investors nervous, although Greek shares regained some ground after falling 9.2 percent on Wednesday.

The Fed, after a two-day policy meeting, said it would be “patient” and would take international developments into account in deciding when to raise borrowing costs. Some saw that as indicating any rate increase could be delayed.

U.S. shares, which closed lower on Wednesday after the Fed statement, with energy stocks weakening, were set to open modestly higher, according to stock index futures. SPc1 DJc1.

German government bond yields fell, as did U.S. Treasuries, on this dovish view. U.S. 30-year bond yields US30YT=RR reached a record low on Wednesday. Concern over Greece, whose new government opposes the terms of Greece’s international bailout, also boosted demand for low-risk debt.

via Reuters

Central Banks Stepping Up Interventions Around the World

The Monetary Authorty of Singapore surprised markets Tuesday night with a policy switch to pursue a slower pace of currency appreciation, its main policy tool.

Wednesday afternoon, New Zealand’s Reserve Bank kept policy unchanged, but significantly altered its language, saying it expects to see a “further significant depreciation” for the kiwi and that “the exchange rate remains unjustified in terms of current economic conditions.”
Hungary’s central bank struck a decidedly dovish note, hinting at easier policy ahead.

The moves follow surprise policy changes from Denmark, India Canada and Switzerland earlier this month. That includes the European Central Bank. Despite a great deal of anticipation, Mario Draghi managed to surprise and impress financial markets with the ECB’s trillion-euro bond purchase program.

“The trend of central bank surprises continues, adding volatility to markets and highlighting a more uncertain global policy stance but one that is partially centered on (foreign exchange) ahead,” Camilla Sutton, chief FX strategist at Scotiabank, wrote in a note this week. “An environment of increased volatility and uncertainty is typically U.S. dollar positive.”

The U.S. dollar has been the beneficiary of those moves and easy policies. In 2015 alone, the dollar has strengthened nearly 7 percent against the euro, more than 7 percent against the Canadian dollar and 6 percent against the New Zealand dollar.
Over the past 12 months, the moves are in the double digits, with the dollar strengthening more than 20 percent against Sweden’s and Norway’s currencies, more than 17 percent against the euro and 13 percent against the yen.

via CNBC

Bill Gross Forecasts 0.25 Rate Move by the Fed This Year

Gross released his monthly investment outlook on Thursday and predicted that neither stocks nor bonds would be threatened by the eventual Fed tightening. The investment guru—formerly of Pimco, and now at Janus Capital—said that a slight rate increase will arrive in 2015, despite previously indicating that he did not see a Fed move on the horizon.

Gross made news on Wednesday when he broke with previous predictions of prolonged zero-rate policy, telling CNBC’s “Street Signs” that he now predicted that the Fed will raise its rates by 0.25 percent in a symbolic move sometime this year.

Thursday’s note postulated that global capitalism had begun to break down in the absence of hope that an investor can find an “attractive return,” but that some Fed officials had begun to “recognize the system’s distortion if only because inflation is going down, not up, in the process.”

via CNBC

Syriza’s Actions Spark Rising Greek Bond Yields

After just three days in power, the new left-wing government in Greece has been ripping up the rule book on austerity and is plowing on with its radical policies — whether investors and political leaders like it or not

The yield on Greek 10-year bonds rose above 11 percent on Thursday, after the government said it was freezing a planned sale of some of its shares in Greece’s biggest refinery, Hellenic Petroleum, and any further sale of the Public Power Corporation of Greece.

“Enough with the fragmentation and the privatization,” new Energy Minister Panagiotis Lafazanis, who represents the far-left faction within Syriza, said Wednesday.

It comes after Theodoros Dritsa, the new alternate shipping minister, said on Tuesday he would “put an end to the sell-off” of the lucrative Port of Piraeus. One of the world’s biggest shipping groups, China’s Cosco, had been shortlisted as a potential buyer of the 67 percent government stake that was up for sale.

“I do not see why the new government raises this banner of resistance for a review, as they call it, of this investment,” former shipping minister Miltiades Varvitsiotis, who was key in sealing the Cosco deal, told CNBC in an email.

Under Prime Minister Alexis Tsipras, the Syriza-led government has wasted no time in taking on the previous government’s policies, halting the privatization deals that were a condition of Greece’s 240 billion euro ($270 billion) bailout program.

via CNBC

USD/CAD – Canadian Dollar Slide Continues, Pair Trading Above 1.26

The Canadian dollar continues to lose ground on Thursday. In the North American session, USD/CAD is trading above the 1.26 line and the pair has  jumped over 200 points since early Wednesday. On the release front, US numbers were a mix. Unemployment Claims sparkled, dropping to 265 thousand. However, Pending Home Sales declined 3.7%. There are no Canadian releases on Thursday. On Friday, we’ll get a look at the only Canadian event of the week, GDP. The markets are expecting a decline of 0.1%. A weak reading could send the reeling loonie even lower.

US employment numbers have improved as the economy chugs along. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed gave a vote of confidence to the US economy, noting that the economy was expanding at a “solid pace”. This boosted the US dollar as the Canadian dollar posted sharp losses on Wednesday. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.

USD/CAD for Thursday, January 29, 2015

USD/CAD January 29 at 16:15 GMT

USD/CAD 1.2641 H: 1.2649 L: 1.2511

USD/CAD Technical

S3

S2

S1

R1

R2

R3

1.2387

1.2469

1.2543

1.2680

1.2761

1.2950

USD/CAD showed little movement in the Asian and European sessions. The pair has posted sharp gains in North American trade, breaking past resistance at 1.2543.

1.2680 is an immediate resistance line. It could face pressure in the North American session. 1.2761 is next.

1.2543 has switched to support as the pair trades at higher levels. It is a strong line.

Current range: 1.2543 to 1.2680

Further levels in both directions:

Below: 1.2543, 1.2469, 1.2387, 1.2261 and 1.2190

Above: 1.2680, 1.2761, 1.2950 and 1.3063

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Thursday, continuing the movement we saw a day earlier. This is consistent with the strong gains by the pair, as long positions continue to be covered, resulting in a greater percentage of short positions. The ratio has a majority of short positions, indicative of trader bias towards the Canadian dollar moving to higher ground.

USD/CAD Fundamentals

13:30 US Unemployment Claims. Estimate 301K. Actual 265K

15:00 US Pending Home Sales. Estimate +0.6%. Actual -3.7%

15:30 US Natural Gas Storage. Estimate -113B. Actual -94B

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – Pound Slides on Excellent US Jobless Claims

The pound has taken a tumble on Thursday, losing about 100 points to the US dollar. In the North American session, GBP/USD is trading in the mid-1.50 range. In the UK, Nationwide HPI posted a gain of 0.3%, close to the estimate. CBI Realized Sales fell sharply to 39 points. US numbers were mixed, as Unemployment Claims sparkled, dropping to 265 thousand. However, Pending Home Sales declined 3.7%.

US employment numbers have improved as the economy chugs along. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed gave a vote of confidence to the US economy, noting that the economy was expanding at a “solid pace”. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.

On Tuesday, Preliminary British GDP for Q4 posted a gain of 0.5% in Q4. This was lower than the gain of 0.7% for Final GDP for Q3, as economic growth has slowed down. With British growth and inflation levels easing, there is less pressure on BOE Governor Carney to raise interest rates, and this divergence with the Federal Reserve could boost the dollar at the expense of the pound.

GBP/USD for Thursday, January 29, 2015

GBP/USD January 29 at 16:35 GMT

GBP/USD 1.5045 H: 1.5162 L: 1.5025

GBP/USD Technical

S3

S2

S1

R1

R2

R3

1.4781

1.4873

1.5008

1.5165

1.5282

1.5392

GBP/USD showed little movement in the Asian and European sessions. The pair has posted sharp losses in North American trade.

 1.5008 has weakened in support as the pair trades at lower levels. 1.4873 is stronger.

1.5165 is a strong resistance line.

Current range: 1.5008 to 1.5165

Further levels in both directions:

Below: 1.5008, 1.4873, 1.4781 and 1.4670

Above: 1.5165, 1.5282, 1.5392, 1.5505 and 1.5642

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Thursday. This is consistent with the pair’s movement, as GBP/USD has recorded sharp losses. The ratio is close to a split between long and short open positions, indicative of a lack of trader bias as to what direction the pound will take.

GBP/USD Fundamentals

7:00 British Nationwide HPI. Estimate 0.4%. Actual 0.3%

11:00 British CBI Realized Sales. Estimate 31 points. Actual 39 points

13:30 US Unemployment Claims. Estimate 301K. Actual 265K

15:00 US Pending Home Sales. Estimate +0.6%. Actual -3.7%

15:30 US Natural Gas Storage. Estimate -113B. Actual -94B

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

ECB’s Coeure Says QE Will Work Due to Size

The European Central Bank decided to embark in a large program of asset purchases because of deteriorating expectations on inflation over a number of years, ECB Executive Board Member Benoit Coeure said on Thursday.

Speaking at an event here, Mr Coeure said he is confident the recently launched, so-called quantitative easing by the ECB will succeed. “It will work because it’s big,” he said.

But the central bank official reiterated  the ECB cannot do everything to fix the euro-zone’s sluggish economy. Governments have to do their part with structural reforms, a message some members of central bank’s board have stressed.

Mr. Coeure added that the ECB’s decision on the purchases was vindicated by general comments noting that “the ECB had done what it had to do,” according to its mandate. The ECB has a mandate to keep the euro-zone inflation rate close to, but below 2%.

The bank recently decided to buy 60 billion euros ($68 billion) of government bonds and other assets each month to inject liquidity in the euro-zone system and rekindle economic growth.

via WSJ

FTSE Drops After Lower Oil, Greek and Fed Expectations

Energy shares weighed down a market already troubled by the Greek situation and the prospect of a US rate rise in the middle of this year.

The slump in the crude price is hitting the spending plans of major oil companies, with Royal Dutch Shell the latest to unveil cutbacks. The company’s B shares slid 110p to 21.38 after it unveiled a $15bn cut in investment over the next three years. Rival BP lost 8.1p to 424.85p and BG dropped 16.9p to 880.9p.

Soco International, the mid-cap producer focused on Vietnam and Africa, also announced a 60% cut in its investment budget this year, leaving its shares 15p lower at 265p.

Overall the FTSE 100 finished down 15.34 points at 6810.60.

Investors were nervous about the outlook for Greece’s finances if the new government fails to reach a compromise with its European creditors, while Wednesday’s statement from the US Federal Reserve was positive enough about the country’s economy to raise the prospect of an earlier than expected increase in borrowing costs. The US market was mixed, rising almost 50 points by the time London closed after better than expected weekly jobless claims but weak home sales figures.

via The Guardian

Denmark Central Bank Forced to Cut Rate to -0.5 Percent

The Danish central bank cut its key interest rate for the third time in two weeks to another historic low after intervening in the market to keep the crown within a tight range against the euro.

The central bank cut its certificate of deposit rate to -0.5 percent from -0.35 percent, making a reduction of 45 basis points since Monday last week.

While analysts said last week that its actions might not be enough to weaken the crown, few expected another cut so soon, especially as Denmark’s rate went below the eurozone equivalent of -0.20 percent, making it less attractive than the euro.

Analysts have said the central bank tends to use interest rate tools after spending 10 to 15 billion crowns in intervention.

“It has become expensive to have Danish crowns and the (upward) pressure is therefore expected to ease off, but whether the rate cuts are enough to turn off the ‘stream’ into the market is still uncertain,” Danske Bank chief economist Steen Bocian said in a note.

The central bank has intervened every month since September, aside from December, as the crown has strained at the upper limit of its trading band with the euro.

via CNBC

French FinMin Says No Change to Greek Bailout

He may be a socialist, but France’s economy minister showed no support on Thursday for Greece’s new left-wing government and its push to overhaul the terms of its bailout.

“We all know the situation about Greek debt. There is no question to change our state of mind, to change our views. They (Greece) have past commitments,” Emmanuel Macron, France’s economy minister since August 2014, told CNBC.

The battle lines between Greece and the rest of Europe were drawn up on Tuesday when Syriza called off the planned privatization of Greece’s Port of Piraeus. Then on Wednesday, the party, led by Alexis Tsipras, announced the reintroduction of the minimum wage, as well as the rehiring of sacked government workers and a halt to other privatization schemes.

Also on Syriza’s agenda is easing the repayment terms of the 240 billion euros ($295 billion) in loans the country has received since the height of its financial crisis in 2010—a hope that German politicians such as Finance Minister Wolfgang Schaeuble have been quick to dismiss this week. The bailout came with strict conditions on government spending and structural reforms. These measures have had a crippling effect on the Greek economy and renegotiating them has been a key part of Syriza’s election campaign.

via CNBC

December US Pending Home Sales Fall 3.7%

The number of consumers who started the process of buying a home decreased in December, reversing the modest gains in November, according to the latest data from the National Association of Realtors (NAR).

Thursday, the NAR said its pending home sales index fell 3.7% to 100.7 in December, following November’s revised reading of 104.6. However, the association said the index is 6.1% above the December 2013 reading.

Economists were optimistic heading into the report; according to consensus forecasts, economists expected the index to rise about 0.6%. Economists pay attention to pending home sales because it is seen as a barometer for the housing market. There is typically a one-to-two month lag between signing a contract and a completed sale.

Lawrence Yun, NAR chief economist, said that the reason behind the decline in the number of pending sales is because of a slight acceleration in prices as a result of fewer homes available on the market.
“Total inventory fell in December for the first time in 16 months, resulting in fewer choices for buyers and a modest uptick in price growth in markets throughout the country,” he said. “With interest rates at lows not seen since early 2013, the strength in existing-sales in upcoming months will largely depend on the willingness of current homeowners to realize their equity gains from the past couple years and trade up,” said Lawrence Yun, NAR chief economist.

Gennadiy Goldberg, U.S. strategist at TD Securities, shook off the weaker than expected numbers?, saying that seasonal factors could have lead to the decline.

via Kitco

USD/CAD – Canadian Dollar Slide Continues, Pair Trading Above 1.26

The Canadian dollar continues to lose ground on Thursday. In the North American session, USD/CAD is trading above the 1.26 line and the pair has  jumped over 200 points since early Wednesday. On the release front, US numbers were a mix. Unemployment Claims sparkled, dropping to 265 thousand. However, Pending Home Sales declined 3.7%. There are no Canadian releases on Thursday. On Friday, we’ll get a look at the only Canadian event of the week, GDP. The markets are expecting a decline of 0.1%. A weak reading could send the reeling loonie even lower.

US employment numbers have improved as the economy chugs along. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed gave a vote of confidence to the US economy, noting that the economy was expanding at a “solid pace”. This boosted the US dollar as the Canadian dollar posted sharp losses on Wednesday. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.

USD/CAD for Thursday, January 29, 2015

USD/CAD January 29 at 16:15 GMT

USD/CAD 1.2641 H: 1.2649 L: 1.2511

USD/CAD Technical

S3

S2

S1

R1

R2

R3

1.2387

1.2469

1.2543

1.2680

1.2761

1.2950

USD/CAD showed little movement in the Asian and European sessions. The pair has posted sharp gains in North American trade, breaking past resistance at 1.2543.

1.2680 is an immediate resistance line. It could face pressure in the North American session. 1.2761 is next.

1.2543 has switched to support as the pair trades at higher levels. It is a strong line.

Current range: 1.2543 to 1.2680

Further levels in both directions:

Below: 1.2543, 1.2469, 1.2387, 1.2261 and 1.2190

Above: 1.2680, 1.2761, 1.2950 and 1.3063

OANDA’s Open Positions Ratio

USD/CAD ratio is pointing to gains in short positions on Thursday, continuing the movement we saw a day earlier. This is consistent with the strong gains by the pair, as long positions continue to be covered, resulting in a greater percentage of short positions. The ratio has a majority of short positions, indicative of trader bias towards the Canadian dollar moving to higher ground.

USD/CAD Fundamentals

13:30 US Unemployment Claims. Estimate 301K. Actual 265K

15:00 US Pending Home Sales. Estimate +0.6%. Actual -3.7%

15:30 US Natural Gas Storage. Estimate -113B. Actual -94B

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – Pound Slides on Excellent US Jobless Claims

The pound has taken a tumble on Thursday, losing about 100 points to the US dollar. In the North American session, GBP/USD is trading in the mid-1.50 range. In the UK, Nationwide HPI posted a gain of 0.3%, close to the estimate. CBI Realized Sales fell sharply to 39 points. US numbers were mixed, as Unemployment Claims sparkled, dropping to 265 thousand. However, Pending Home Sales declined 3.7%.

US employment numbers have improved as the economy chugs along. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed gave a vote of confidence to the US economy, noting that the economy was expanding at a “solid pace”. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.

On Tuesday, Preliminary British GDP for Q4 posted a gain of 0.5% in Q4. This was lower than the gain of 0.7% for Final GDP for Q3, as economic growth has slowed down. With British growth and inflation levels easing, there is less pressure on BOE Governor Carney to raise interest rates, and this divergence with the Federal Reserve could boost the dollar at the expense of the pound.

GBP/USD for Thursday, January 29, 2015

GBP/USD January 29 at 16:35 GMT

GBP/USD 1.5045 H: 1.5162 L: 1.5025

GBP/USD Technical

S3

S2

S1

R1

R2

R3

1.4781

1.4873

1.5008

1.5165

1.5282

1.5392

GBP/USD showed little movement in the Asian and European sessions. The pair has posted sharp losses in North American trade.

 1.5008 has weakened in support as the pair trades at lower levels. 1.4873 is stronger.

1.5165 is a strong resistance line.

Current range: 1.5008 to 1.5165

Further levels in both directions:

Below: 1.5008, 1.4873, 1.4781 and 1.4670

Above: 1.5165, 1.5282, 1.5392, 1.5505 and 1.5642

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Thursday. This is consistent with the pair’s movement, as GBP/USD has recorded sharp losses. The ratio is close to a split between long and short open positions, indicative of a lack of trader bias as to what direction the pound will take.

GBP/USD Fundamentals

7:00 British Nationwide HPI. Estimate 0.4%. Actual 0.3%

11:00 British CBI Realized Sales. Estimate 31 points. Actual 39 points

13:30 US Unemployment Claims. Estimate 301K. Actual 265K

15:00 US Pending Home Sales. Estimate +0.6%. Actual -3.7%

15:30 US Natural Gas Storage. Estimate -113B. Actual -94B

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Oil Near Six Year Low as Supply

Crude oil fell to the lowest level in almost six years in New York as rising production swells U.S. stockpiles.
West Texas Intermediate dropped as much as 2 percent, widening its discount to Brent to the most in a month. U.S. crude supplies rose to the highest level in weekly data going back more than three decades, the Energy Information Administration said Wednesday.

Oil has collapsed about 40 percent since the Organization of Petroleum Exporting Countries decided to maintain its output target on Nov. 27, challenging non-OPEC producers to curb their supplies first to alleviate a global surplus. U.S. production rose to the highest since at least 1983 last week, signaling that non-OPEC output hasn’t yet faltered.

“U.S. stockpiles are still very high and the fundamentals are weak,” said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. “The market will continue to come under pressure. There is really not anything bullish out there.”

West Texas Intermediate for March delivery slipped 84 cents, or 1.9 percent, to $43.61 a barrel at 11:07 a.m. on the New York Mercantile Exchange. Prices fell as low as $43.58, the lowest since March 12, 2009. The volume of all futures traded was about 18 percent below the 100-day average for the time of day.

via Bloomberg

Gold Drops As Fed Optimistic About US Economy

Gold fell by the most in more than a month after the Federal Reserve upgraded its assessment of the U.S. economy and labor market.

The Federal Open Market Committee described the economic expansion as “solid,” after a meeting in Washington on Wednesday, an improvement over the “moderate” performance it saw in December. It substituted “strong” for “solid” in its evaluation of job gains. Higher rates curb gold’s appeal because the metal typically offers returns when prices rise.

“Positive sounds out of the Fed hurt,” Georgette Boele, an analyst at ABN Amro Bank NV, said by e-mail. “When precious metals get under pressure, it is often not a small move.”

Bullion for April delivery fell 1.2 percent to $1,272 an ounce at 9:11 a.m. on the Comex in New York. It fell as much as 1.8 percent earlier Thursday, the biggest drop since Dec. 22. Futures trading volume was 82 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.

via Bloomberg

European Stocks Dropping After US Fed Bullish Remarks

European stocks slipped and the dollar strengthened on Thursday after the Federal Reserve took an upbeat view of the world’s largest economy and signaled it was on track to raise interest rates this year.

The stronger dollar helped push U.S. oil prices to six-year lows and weighed on the price of gold.

Greece, where an anti-austerity prime minister took over on Monday, also kept investors nervous, although Greek shares regained some ground after falling 9.2 percent on Wednesday.

The Fed, after a two-day policy meeting, said it would be “patient” and would take international developments into account in deciding when to raise borrowing costs. Some saw that as indicating any rate increase could be delayed.

U.S. shares, which closed lower on Wednesday after the Fed statement, with energy stocks weakening, were set to open modestly higher, according to stock index futures. SPc1 DJc1.

German government bond yields fell, as did U.S. Treasuries, on this dovish view. U.S. 30-year bond yields US30YT=RR reached a record low on Wednesday. Concern over Greece, whose new government opposes the terms of Greece’s international bailout, also boosted demand for low-risk debt.

via Reuters

Central Banks Stepping Up Interventions Around the World

The Monetary Authorty of Singapore surprised markets Tuesday night with a policy switch to pursue a slower pace of currency appreciation, its main policy tool.

Wednesday afternoon, New Zealand’s Reserve Bank kept policy unchanged, but significantly altered its language, saying it expects to see a “further significant depreciation” for the kiwi and that “the exchange rate remains unjustified in terms of current economic conditions.”
Hungary’s central bank struck a decidedly dovish note, hinting at easier policy ahead.

The moves follow surprise policy changes from Denmark, India Canada and Switzerland earlier this month. That includes the European Central Bank. Despite a great deal of anticipation, Mario Draghi managed to surprise and impress financial markets with the ECB’s trillion-euro bond purchase program.

“The trend of central bank surprises continues, adding volatility to markets and highlighting a more uncertain global policy stance but one that is partially centered on (foreign exchange) ahead,” Camilla Sutton, chief FX strategist at Scotiabank, wrote in a note this week. “An environment of increased volatility and uncertainty is typically U.S. dollar positive.”

The U.S. dollar has been the beneficiary of those moves and easy policies. In 2015 alone, the dollar has strengthened nearly 7 percent against the euro, more than 7 percent against the Canadian dollar and 6 percent against the New Zealand dollar.
Over the past 12 months, the moves are in the double digits, with the dollar strengthening more than 20 percent against Sweden’s and Norway’s currencies, more than 17 percent against the euro and 13 percent against the yen.

via CNBC

Thursday, January 29, 2015

Bill Gross Forecasts 0.25 Rate Move by the Fed This Year

Gross released his monthly investment outlook on Thursday and predicted that neither stocks nor bonds would be threatened by the eventual Fed tightening. The investment guru—formerly of Pimco, and now at Janus Capital—said that a slight rate increase will arrive in 2015, despite previously indicating that he did not see a Fed move on the horizon.

Gross made news on Wednesday when he broke with previous predictions of prolonged zero-rate policy, telling CNBC’s “Street Signs” that he now predicted that the Fed will raise its rates by 0.25 percent in a symbolic move sometime this year.

Thursday’s note postulated that global capitalism had begun to break down in the absence of hope that an investor can find an “attractive return,” but that some Fed officials had begun to “recognize the system’s distortion if only because inflation is going down, not up, in the process.”

via CNBC

Syriza’s Actions Spark Rising Greek Bond Yields

After just three days in power, the new left-wing government in Greece has been ripping up the rule book on austerity and is plowing on with its radical policies — whether investors and political leaders like it or not

The yield on Greek 10-year bonds rose above 11 percent on Thursday, after the government said it was freezing a planned sale of some of its shares in Greece’s biggest refinery, Hellenic Petroleum, and any further sale of the Public Power Corporation of Greece.

“Enough with the fragmentation and the privatization,” new Energy Minister Panagiotis Lafazanis, who represents the far-left faction within Syriza, said Wednesday.

It comes after Theodoros Dritsa, the new alternate shipping minister, said on Tuesday he would “put an end to the sell-off” of the lucrative Port of Piraeus. One of the world’s biggest shipping groups, China’s Cosco, had been shortlisted as a potential buyer of the 67 percent government stake that was up for sale.

“I do not see why the new government raises this banner of resistance for a review, as they call it, of this investment,” former shipping minister Miltiades Varvitsiotis, who was key in sealing the Cosco deal, told CNBC in an email.

Under Prime Minister Alexis Tsipras, the Syriza-led government has wasted no time in taking on the previous government’s policies, halting the privatization deals that were a condition of Greece’s 240 billion euro ($270 billion) bailout program.

via CNBC

Analysts Expect Russian Central Bank to Hold Rate

Russia’s central bank will hold its main lending rate at 17 percent when it meets on Friday, even though the economy is likely to contract by 4.2 percent this year, a Reuters poll predicted on Thursday.

The bank jacked the rate up in mid-December at an emergency meeting provoked by a run on the rouble, as sliding oil prices and Western sanctions linked to the Ukraine conflict sparked financial turmoil.

An escalation of fighting in eastern Ukraine is adding to the economic pressures, with the European Union warning this week that further sanctions against Russia are planned.

“The economy is heading toward a recession in 2015,” said ING economist Dmitry Polevoy. “Double-digit inflation is another evil that is not likely to ease its grip quickly.”

Out of 12 analysts polled by Reuters, 11 expected the central bank to hold its key rate this month, with one predicting a one-point cut.

via Reuters

US Jobless Claims Drop to 15 Year Low

The number of Americans filing new claims for unemployment benefits tumbled last week to its lowest level in nearly 15 years, adding to bullish signals on the labor market.

Initial claims for state unemployment benefits dropped 43,000 to a seasonally adjusted 265,000 for the week ended Jan. 24, the lowest since April 2000, the Labor Department said on Thursday. It was the biggest weekly decline since November 2012.

The drop, which far exceeded economists’ expectations for a fall to only 300,000, probably exaggerates the strength of the jobs market as the data included the Martin Luther King holiday, which means fewer claims were likely processed.

It unwound the prior weeks’ increases, which had pushed claims above the key 300,000 threshold. Economists had largely dismissed that rise as “noise,” noting difficulties adjusting the data for seasonal fluctuations at the start of the year.

U.S. stock index futures added slightly to gains on the data, while the dollar and prices for U.S. Treasury debt were little changed.

via Reuters

AUD/USD – Sharp Losses for Aussie on Weak Import Prices, Fed Statement

AUD/USD sustained sharp losses on Thursday, as the pair has shed over 100 points. The pair is trading just shy of the 0.78 line in the North American session. Taking a look at today’s releases, Australian Import Prices gained 0.9% but fell short of expectations. In the US, Unemployment Claims sparkled, dropping to 265 thousand. However, Pending Home Sales declined 3.7%.

US employment numbers have improved as the economy chugs along. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.

On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed gave a vote of confidence to the US economy, noting that the economy was expanding at a “solid pace”. This boosted the US dollar as the Australian currency posted sharp losses. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.

Australian Import Prices rebounded to 0.9%, but this was well short of the forecast of 1.5%. If Australian data continues to miss expectations, pressure increases on the RBA to lower interest rates in order to boost economic growth. Such a move would likely see the Aussie post losses against the US dollar. We’ll get a look at PPI on Friday, with the markets expecting a slight gain of 0.3%.

Earlier in the week, CPI, the primary gauge of consumer inflation, dropped to just 0.2% in Q4, shy of the forecast of 0.3%. This was the index’s weakest gain in two years. However, there was much better news from Trimmed Mean CPI, which posted a strong gain of 0.7%, beating the estimate of 0.5%.

AUD/USD for Thursday, January 29, 2015

AUD/USD January 29 at 15:35 GMT

AUD/USD 0.7799 H: 0.7907 L: 0.7766

AUD/USD Technical

S3

S2

S1

R1

R2

R3

0.7528

0.7684

0.7799

0.7904

0.8081

0.8150

AUD/USD edged lower in the Asian session. The pair posted sharp losses in European trade, easily breaking below support at 0.7904 and testing support at 0.7999. Early in the North American session, the pair is unchanged.

0.7799 is fluid and could break in the North American session. 0.7684 is stronger.

0.7904 has reverted to a resistance line as the pair has posted sharp losses.

Current range: 0.7799 to 0.7904

Further levels in both directions:

Below: 0.7799, 0.7684, 0.7528 and 0.7403

Above: 0.7904, 0.8081, 0.8150, 0.8214 and 0.8315

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Thursday. This is not consistent with the movement of the pair, as the Aussie has posted sharp losses. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD recovering and moving higher.

AUD/USD Fundamentals

 00:30 Australian Import Prices. Estimate 1.5%. Actual 0.9%

13:30 US Unemployment Claims. Estimate 301K. Actual 265K

15:00 US Pending Home Sales. Estimate +0.6%. Actual -3.7%

15:30 US Natural Gas Storage. Estimate -113B. Actual -113B

*Key releases are highlighted in bold

*All release times are GMT

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Asian Shares Finished Lower After Bullish Fed

Asian shares headed mostly lower, following Wall Street’s lead, after the US Federal Reserve indicated it was still on track to raise interest rates this year.

The Dow Jones fell 1.1% to a six-week low, while the S&P 500 lost 1.4%.

In Japan, the benchmark Nikkei 225 closed down 1.1% at 17,606.22 – its biggest one-day drop for two weeks.

That came despite data showing retail sales rose for the sixth consecutive month in December.

However, the 0.2% year-on-year growth fell short of gains expected by economists.

Shares of Nintendo slumped 8.7% after the video game maker halved its operating profit target for the fiscal year through March to 20bn yen ($169m; 112m) from 40bn yen.

via BBC

Germany has 56 Billion EUR Exposure to Greece

Greece and its international lenders have embarked on a battle over the country’s staggering debt.
The new Greek government, led by left-wing party Syriza, wants the debt reduced and its terms renegotiated; its creditors are reluctant to forgive any debt, but may be prepared to talk about extending the deadlines for repayment.

Analysts say some sort of restructuring might be necessary. Greek government debt stands at 323 billion euros ($366 billion), over 175% of the country’s GDP.

About 246 billion euros was lent by other countries in the eurozone, the European Central Bank and the International Monetary Fund — otherwise known as the Troika — to prevent Greece collapsing and crashing out of the euro.

Syriza won the election after portraying the Troika as the enemy because of the tough austerity program it imposed on Greece in exchange for its money.

A far bigger chunk, 142 billion euros, came from the eurozone’s bailout fund. Any relief on those loans would have to be agreed by all members. All eurozone countries chipped into the fund but by far the largest contribution — 27% — came from Germany, and it will exert huge influence in negotiations with Greece.

The German government has so far rejected talk of a haircut, which would mean losses for its taxpayers. Germany’s exposure to the bailouts totals 56 billion euros — equivalent to roughly 700 euros per citizen.

via CNN

BOE Carney Advises Europe to End Austerity

Governments in the euro zone should loosen tough budgetary measures in order to promote growth and help restore normality in the region, according to the governor of the Bank of England (BoE).

Speaking in Dublin on Wednesday evening, Mark Carney called for looser fiscal policy in the euro zone, and for its members to pool their resources.

“(Fiscal policy) is tighter than in the U.K., even though Europe still lacks other effective risk sharing mechanisms and is relatively inflexible. A more constructive fiscal policy would help recycle surplus private savings and mitigate the tail risk of stagnation,” he said, according to a transcript of the speech.

“It would also bridge the drag from structural reforms on nominal spending and would be consistent with the longer-term direction of travel towards greater integration….it would be bold, and it would be favored by fortune.”

His comments come as Greece’s new government go head-to-head with officials in Berlin, who have long promoted a tough stance on austerity in return for financial support. The anti-austerity Syriza party is now expected to attempt to renegotiate the terms of its bailout, amid fears this could lead to Greece exit from the single-currency bloc.

via CNBC

New Greek PM First Actions Signal Defiance to Germany

In his first act as prime minister on Monday, Alexis Tsipras visited the war memorial in Kaisariani where 200 Greek resistance fighters were slaughtered by the Nazis in 1944.

The move did not go unnoticed in Berlin. Nor did Tsipras’s decision hours later to receive the Russian ambassador before meeting any other foreign official.

Then came the announcement that radical academic Yanis Varoufakis, who once likened German austerity policies to “fiscal waterboarding”, would be taking over as Greek finance minister. A short while later, Tsipras delivered another blow, criticizing an EU statement that warned Moscow of new sanctions.

The assumption in German Chancellor Angela Merkel’s entourage before Sunday’s Greek election was that Tsipras, the charismatic leader of the far-left Syriza party, would eke out a narrow victory, struggle to form a coalition, and if he managed to do so, shift quickly from confrontation to compromise mode.

Instead, after cruising to victory and clinching a fast-track coalition deal with the right-wing Independent Greeks party, he has signaled in his first days in office that he has no intention of backing down, unsettling officials in Berlin, some of whom admit to shock at the 40-year-old’s fiery start.

“No doubt about it, we were surprised by the size of the Syriza victory and the speed with which Tsipras clinched a coalition,” said one senior German official, who requested anonymity because of the sensitivity of the issue.

Another said Tsipras’s choice of coalition partner and finance minister were “not good signs”, while a third admitted to being “stunned” by the Greek leader’s first days in office.

via CNBC

UK House Prices Rose by 0.3% in January

UK house prices rose by 0.3% in January as the slowdown in activity that began towards the end of 2014 continued to soften growth, the country’s biggest building society said.

After a rush of sales in the first part of 2014, mortgage approvals started to drop off in the autumn and ended the year down by around a fifth, and reports from surveyors suggest there are fewer would-be buyers looking for homes.

In the first snapshot of the market in 2015, Nationwide said the monthly rate of growth was slightly higher than December’s figure of 0.2%, but the annual rate of price inflation had fallen for a fifth month running, this time to 6.8% from 7.2%, its lowest level for 14 months. The society said the average price of a UK home now stands at 188,446 – 2.4% above its pre-crisis peak.

Separate figures from Land Registry showed that over the course of 2014, prices across England and Wales rose by 7% to an average of 177,766. It said December had seen a 0.6% uplift in prices, although this masked big variations around the regions. In London, monthly growth was three times that figure, while in the north-west of England prices were down by 1.6% month on month. Across the year, there was growth in all regions, although that in London and the south-east and east of England was more than double that elsewhere.

via The Guardian