Monthly Archives: November 2016

Hot Topic – Monthly Outlook – Winter on the way but Markets hot up.

November was an exciting month for the markets with the unexpected win of Donald Trump to become the 45th president of the USA. Markets had been pricing in a Clinton win, so on 8 November as the numbers started to come in, there were some massive moves.

Asian stocks dove sharply, as did the UK’s footsie and EU equities. US stocks saw some of their biggest losses in years. The biggest loser on the day was the Mexican peso that saw a staggering and history-making 13.3% decline against the US dollar. But that is all in the past and markets rebalanced pretty quickly with the US dollar going from strength to strength.

While there were many big trades we could look at from November, we’re going to look at gold. It’s had a fairly lack-lustre year but with a  potential  uncertainty coming in the new world order, it may see a renaissance. Many certainly thought so on the night when they snapped it up sending it to an almost 5% high to $1,337.4 an ounce.

If you were trading the gold (XAU/USD) on election night here’s what you could have made.
If you had bought XAU/USD on 09 November at 01:00 GMT with an investment (or amount to risk) of $500 when the price was at $1,268.77 an ounce – and closed the deal at 05:00 GMT when the price peaked at $1,337.33, you might have made $5,403.66 assuming that you have been leveraged with 1:200. Note that this example does not take into account spread and the use of leverage means that you not only magnify the potential to profit but also to lose.

Missed out on that deal? Don’t worry, with the expectation of the Fed potentially raising interest rates in December there may be plenty of opportunities to take advantage of before the year is out.

Friday 2 Dec
US NFP, 13:30 GMT

Tuesday 6 Dec
Australia RBA Interest Rate Decision, 03:30 GMT
EU GDP (YoY), 10:00 GMT

Wednesday 7 Dec
UK GDP estimate, 15:00 GMT
Canada BOC Interest Rate Decision, 15:00 GMT

Thursday 8 Dec
EU ECB Interest Rate Decision, 12:45 GMT

Wednesday 14 Dec
US Retail Sales, 13:30 GMT
US Fed Interest Rate Decision, 19:00 GMT
US FOMC Press Conference, 19:30 GMT

Thursday 15 Dec
Australia Employment Data, 00:30 GMT
UK BOE Interest Rate Decision, 12:00 GMT

Thursday 22 Dec
US GDP, 13:30 GMT

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Bullet Report: OPEC meeting, NFP and Italy Spook the Markets

Today’s main event is the OPEC meeting in Vienna. Since months, OPEC has been expected to find a consensus in regards to cutting output in order to support oil prices. The meeting results, could spark volatility in commodities, but also the USD. In the US, we will have inflation data releases as we will have in the UK as well. Also from the UK, Consumer Confidence data will be released. The Bank of England is also releasing its financial Stability report. The market will also look to U.S. data for catalysts later in the day, including the November ADP employment report, November Chicago purchasing managers’ index (PMI) and October pending home sales.

Currencies: With a string of important data releases ahead, (NFP on Friday, Italian Referendum on Sunday, OPEC today) markets are cautious. Minister Matteo Renzi, who proposed the referendum, declared that he would resign if the result comes with a “no”. Polls suggest that the “No” camp is having a lead and a win for them would force out Renzi and create political uncertainties. Overall the Dollar lost some ground yesterday, however a reversal in the USD trend that we saw lately is still questionable. For the month of November, the Dollar rallied 7% versus the Yen and 3% against the EUR, its largest monthly rise since February 2009.

Oil and Gold: Oil prices dropped about 4% on signs that leading oil exporters were struggling to agree on a deal to cut production ahead of an OPEC meeting on Wednesday. The market will focus on statements from today’s meetings, however there is no pre-scheduled time for any comments to be released. Gold rose on safe haven demand. The trifecta of NFP, Italian Referendum and OPEC meeting has caused many investors to focus on relatively “safe” investments.

Stocks:Asian equity markets are mixed this morning, China and Japan are down but other Asian markets are trading higher. The Dow Jones rose 23.7 points, or 0.12 percent, to 19,121.6, while the S&P gained 2.94 points, or 0.13 percent, to 2,204.66. U.S. stocks had their worst performance in nearly a month on Monday after hitting record highs last week.

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December Market Outlook: Ending the Year With A Bang

2016 has been a wild year in the global financial markets, but it isn’t over yet. The month of December is expected to deliver several juicy events that could rile the markets ahead of New Year celebrations. Below is a track sheet of the top market-moving events for the month of December.

December 2: US Nonfarm Payrolls

No month is complete without arguably the most closely followed data release.  The US Labor Department will release November nonfarm payrolls on the first Friday of the month. The report is expected to show the creation of 170,000 jobs in November, giving the Federal Reserve more than enough scope to possibly raise interest rates (more on that later).

December 6: Reserve Bank of Australia (RBA) Rate Decision

Monetary policy is in full swing in December. The RBA will issue its final interest rate decision of the year on December 6. After multiple rate cuts throughout the year, the RBA might end on a whimper, as policymakers continue to monitor the domestic economy.

December 7: Bank of Canada (BOC) Rate Decision

The BOC will also release its latest rate decision in the first week of December. BOC Governor Stephen Poloz raised eyebrows in October when he said the central bank was close to cutting interest rates again.[1] Calmer heads prevailed. Investors  may likely see a repeat of that performance on December 7.

December 8: China Trade (November), European Central Bank (ECB) Rate Decision

Investors may contend with high profile economic data and a major central bank statement on December 8. Following the release of Chinese trade figures, the market  might quickly shift its focus to the ECB rate decision. While no change in monetary policy is expected, the December announcement could unveil the future of the ECB’s bond-buying program.

December 9: China Inflation (November), UK Consumer Inflation Expectations

China will once again make headlines by releasing the latest consumer price index (CPI) and producer price index (PPI) for the month of November. In the United Kingdom, the Bank of England will release its latest report on consumer inflation expectations. This report will be closely followed by the markets after the BOE (BOE) said it expects inflation to overshoot its target by the most since 1997.[2]

December 12: China Industrial Production, Retail Sales, Urban Investment (November)

Beijing will release a big triad of reports on December 12, giving investors the latest insights into the country’s consumer, property and industrial sectors.

December 13: UK inflation (November)

All eyes will be on the UK consumer price index (CPI) report on December 13, as the first evidence of the BOE’s anticipated “inflation overshoot” could be on display.

December 14: US Federal Reserve Rate Decision; US Retail Sales, Industrial Production (November)

December 14 is expected to be a blockbuster, as investors are nearly 100% certain the Federal Reserve  might raise interest rates for the first time in a year. The Fed, which wraps up its two-day meeting on a Wednesday, will also release its revised summary of economic projections covering inflation, GDP and unemployment. This will include the Fed’s infamous “dot plot” summary of interest rate forecasts. Separately, a spate of US data will be released, including retail sales and industrial production.

December 15: Swiss National Bank (SNB) Rate Decision; Bank of England Rate Decision; US Inflation (November

Monetary policy might  make headlines well into the second full week of December when the Swiss National Bank (SNB) and BOE make their final rate decisions of the year. While no possible change in monetary policy is expected at either bank, the BOE is expected to spill its guts about the future of the post-Brexit economy.

In the United States, the Labor Department will also release a closely followed retail sales report.

December 19: Bank of Japan Rate Decision

Three months after uprooting its monetary policy program, the Bank of Japan will deliver its final rate decision of the year. No changes are expected at this time, as the embattled BOJ continues to search for evidence of inflation and economic growth.

December 22: US Personal Income and Outlays (November)

The Commerce Department will report on personal income and outlays in the days leading up to Christmas. This report will also include the latest data on core personal consumption expenditures (PCE), the Fed’s preferred measure of inflation.

December 26: Japan Inflation (November and December)

Japanese data might make headlines after Christmas, beginning on Boxing Day with the release of national and Tokyo CPI inflation figures.

December 27: Japan Industrial Production (November)

The health of Japan’s manufacturing sector may be on display in the days leading up to the New Year when the Ministry of Economy, Trade and Industry reports on industrial production.

[1] Gordon Isfeld (October 19, 2016). “Bank of Canada was close to cutting interest rate Wednesday, Stephen Poloz reveals.” Financial Post.

[2] Chris Giles (November 3, 2016). “BoE forecasts biggest inflation overshoot since 1997.” Financial Times.

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The Seven Deadly Sins of Financial Trading – Wrath

Greed. Envy. Gluttony. Sloth. Wrath. Lust. Pride… the seven deadly sins. According to ethics, these are the transgressions standing in the way of spiritual progress and purity. In reality though the seven deadly sins represent the dangers of both excess and defect which in modern times can be applied to virtually every aspect of life.

These cardinal vices often play out in the financial markets, leading traders to spiritual ruin or even bankruptcy. For this reason, it’s important to understand how these sins impact our trading behavior. It’s even more critical to identify the root causes of these transgressions so that we can replace them with virtues.

In this series, we take a look at the seven deadly sins of financial trading and how you can overcome them to improve your trading mindset.

Wrath is really just an old fashioned way to describe anger but not just anger .. downright thunder and lightning rage! While behavioural finance spends a lot of time talking about greed and fear, it spends considerably less time focusing on anger and it really is a key emotion in the financial markets.

The financial markets have been known to elicit feelings of extreme anger especially when trading real money in a highly volatile and unpredictable market. Even disciplined traders who follow a solid strategy and employ sound money management techniques lose more trades then they’d like to admit and in such a situation, losing your cool is extremely easy. That’s why it’s important to manage your anger before deciding to become a serious trader.

Everybody loses in the financial markets at some point. Even George Soros and Warren Buffett have lost their fair share of trades and if they can lose then so can the rest of us mere trading mortals. If you truly want to manage your emotions in the market, start by realizing that you can’t control everything and that losses are bound to occur. Obviously we would like to limit the instance of loss in the market. But limiting loss and eliminating it all together are two entirely different things.

There’s no such thing as a completely risk-free trade, but there are tools you can use to limit your loss and eliminate emotional responses all together. For example, easyMarkets recently launched its dealCancellation* feature, which allows traders to cancel losing positions within 60 minutes of placing them and have their funds returned in full. This powerful tool is available in the forex and commodity markets where for a small fee, traders can erase a bad trade up to an hour after opening as if it never happened.

Without tools like dealCancellation, traders must rely on risk management, stop-losses and sound technical and fundamental analysis when deciding on any position. By limiting your position size, you may also control the amount of money you are staking on a given position so even in the event of a loss, you wouldn’t be staking your entire account, but a very small portion of it.

Learn to read the warning signs of your trading wrath… tight shoulders, clenched fists, rapid breathing, short tempered responses with friends and family and if you find yourself getting angry consider taking a break. As a general rule, traders should take a breather after three consecutive losses but whatever your number you should learn to draw a line under your anger and walk away. After you’ve taken a short break, it’s time to get back on track but before you do, be sure to check in on your strategy especially if you found yourself losing big before.

Throughout this whole process, you should be refining your trading methodology, monitoring the market and learning as much as you can about the factors that influence your trades. By doing so, you are hedging against failure. In the event that you miss a position or place a bad trade, the impact shouldn’t cause you to lose your cool.

Instead of wrath, practice patience. A patient trader is a more astute trader.

TAKEAWAYS

  1. Learn to read your anger warning signs
  2. Walk away from your screen after three consecutive losses
  3. Use risk management tools such as dealCancellation

Are you a wrathful trader? Tweet us @easymarkets and let us know, alternatively contact our support team for assistance.

*terms apply

“dealCancellation© Option is an ORE patent pending under the patent “Easy Cancellation Option” application number 62334455.”

Source Sam Bourgi- Financial Markets Writer

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Bullet Report: Dollar Mixed in Cautious Trade

On the data front it will be a thin day, as there is no significant news to be released today. Most likely the market will focus on signals from the OPEC countries ahead of the meeting tomorrow as well as possible results for the Italian Referendum which will take place on Sunday, which will decide the future of Prime Minister Matteo Renzi. Investors’ concern is that the country’s banking sector would fail, with at least 8 banks at risk, if Renzi loses. The US releases Q3 GDP and Consumer Confidence Index. Price action yesterday was cautious, as the markets took a breather from the recent rally after Trump’s election. Fed’s Powell and Dudley are also scheduled to speak.

Currencies:  : Despite a break in its rally, the Dollar is still on track for its strongest 2-month gain since early 2015 on expectations that the FED is almost certain to raise rates next month. EURUSD briefly rebounded to 1.0686 yeste4rday only to trade under 1.06 again, and while the JPY fought back against the Dollar, the pair rebounded from 11.30 yesterday to 112.75 later in the session.  It remains 7% higher for the month. GBPUSD remains within a tight range 1.2385 – 1.2450. Overall, the CAD and JPY have been the strongest currencies since the start of the week while the GBP has been the weakest.

Oil and Gold: Oil dropped as low as 45.14 but managed to recover above 47 throughout the day on renewed optimism about an OPEC deal to cut supply. There have also been rumors that Iran and Russia are willing to cooperate on an output cut/freeze. Gold rebounded from 1185 support levels and has stabilized around 1190. Last week the price reached $1170, which was the 9.5 month lows for the yellow metal, which is priced in dollars and becomes more attractive to holders of other currencies when the dollar falls.

Stocks: The rally in the US equity market ran out of steam overnight. The S&P500 was down -0.53%, though still up more than 6% since early-November. That was the worst performance for Wall Street in nearly a month as some investors booked profits and pushed stocks lower. Dow Jones, S&P 500 and NASDAQ all closed mildly lower losing -0.28%, -0.53% and -0.56% respectively.

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Donald Trump’s Campaign Promises Under Scrutiny After Election Win

On November 8, Donald Trump shocked the world by seizing the presidential nomination from Democratic candidate Hillary Clinton. Two weeks after the historic victory, Trump appears to be backtracking on some of his elaborate campaign promises, which included locking up Hillary Clinton for her use of a private email server while serving as Secretary of State.

During a post-election interview on 60 Minutes, Trump was asked about his campaign promise to appoint a special prosecutor to investigate Clinton. The president-elect said he would think about it.

“I don’t want to hurt them. I don’t want to hurt them. They’re good people, and I’m going to give you a good and definitive answer the next time we do 60 Minutes together,” he said.[1]

That’s very different from the “lock her up” rhetoric that helped him win the Oval Office.

But that wasn’t the first promise the GOP candidate broke within a week of being elected. During the same 60 Minutes interview, he appeared no longer committed to fully repealing Obamacare. On the campaign trail, Trump was crystal clear about his plan to “completely repeal” the legislation “on day one” of his presidential administration.[2]

Trump has also conveniently left out any mention of tariffs on foreign goods or other protectionist policies that were at the heart of his presidential campaign. Additionally, his pledge to deport some 11 million immigrants quickly became a plan to deport only 2-3 million of them, according to House Speaker Paul Ryan.[3] What’s more, Trump’s plan to ban Muslims from entering the United States has completely disappeared from his website.

Depending on which side of the political divide you sit, Trump’s backtracking may be the most sensible revelation since he secured the presidential nomination. However, it also reveals the same underlying tendency that so many financial market experts feared in the GOP candidate – unpredictability. If Trump is already backtracking on his campaign goals, what’s stopping him from going down a completely different path after inauguration? Many in the political community are also wondering how much of Trump’s platform amounts to campaign rhetoric versus real policy objectives.

There may be a silver lining in all this. Since the election, Donald Trump and Vice Presidential running mate Mike Pence have already spoked to 31 foreign heads of state, plus the Secretary of the United Nations. This revelation came after a story published in the New York Times said foreign leaders were “scrambling to figure out how and when to contact Mr. Trump.” The fact that contact has been made eased some concerns that the Trump administration will be an isolationist regime.

Among the list of world leaders included the Prime Ministers of Canada, Australia, Denmark, Japan and India. Trump also spoke with the Presidents of China and several Latin American countries. He also engaged in dialogue with the Saudi and Qatari royal families.[4]

Trump apparently broke with protocol in contacting his global counterparts. Rather than coordinate the phone calls with the State Department, the president-elect had already spoken with several leaders before other levels of government even knew about it.[5]

The financial markets have been surprisingly upbeat since Trump’s election, with the Dow Jones Industrial Average setting all-time highs and the US dollar reaching its highest level against a basket of currencies since 2003. Experts warn that investors may have been overly optimistic about the impact of Trump’s proposed policies on the economy. To be fair, Trump  might probably have the backing he needs to reform the tax code, deregulate the financial markets and boost infrastructure spending, all of which were key elements of his campaign platform.

[1] Jason Easley (November 13, 2016). “Republicans Realize They’ve Been Had As Trump Breaks Promise To Lock Up Hillary Clinton.” Politicus USA.

[2] Zulekha Nathoo (November 12, 2016). “Trump appears to backtrack on Obamacare in 60 Minutes Interview.” CBC News.

[3] Jason Easley (November 13, 2016). “Republicans Realize They’ve Been Had As Trump Breaks Promise To Lock Up Hillary Clinton.” Politicus USA.

[4] Matthew Nussbaum (November 16, 2016). ‘Trump says he and Pence have talked to 32 foreign leaders. Here they are.” Politico.

[5] Lauren Said-Moorhouse (November 19, 2016). “What’s different about Donald Trump’s phone calls with world leaders?” CNN Politics.

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Bullet Report: Dollar – Dollar Correction comes, watch out for the OIL – USD Correlation

There are no economic announcements scheduled for release in this new week that has begun with the Almighty Dollar losing value against all other currencies. After rallying for most part of the month. The USD index lost 0.70% against a basket of other currencies, adding to Friday’s small losses. Upcoming events that could stir up volatility are now the OPEC meeting and the Italian Referendum on December 4th.  The market will also focus on the all-important US Non-Farm Payrolls on Friday.

Currencies:  : Dollar index dips to as low as 100.64 so far, comparing to last week’s high at 102.05, but stays well above 100 handle. EURUSD recovered all the way to 1.0685 from 1.06 levels while the USDJPY dropped to 111.33, all the way from 113.85 which was Friday’s highest point. Adding to the risks for Dollar Bulls, is the fact that Hilary Clinton’s case for a vote recount is gathering steam. Should a recount happen, this would be extremely negative for the USD which has gained massively in value ever since Republican Donald Trump has been elected US President.

Oil and Gold: Oil prices have taken a beating since Friday ahead of the OPEC meeting today where a supply cut was to be discussed. Saudi Arabia though had said on Friday that it would not attend this meeting as the country believes that the oil market will balance itself in 2017 even if producers did not intervene. As lower OIL prices lead to lower inflation (which leads to lower interest rates thus a lower Dollar) we could see oil driving Dollar’s strength in the next weeks. Oil traded as low as $45.13 this morning, compared to $48 on Friday and $49.21 highs posted earlier last week. Gold also reversed its losses on the back of a weaker USD. The Yellow metal posted a new low of $1171 last week but managed to rebound to $1193 at time of writing.

Stocks: Markets haven’t reflected the big move of the Dollar overnight. Japan’s Nikkei which had performed better than Wall Street thanks to the JPY’s drop, ended down -0.1%. European stocks today have opened marginally lower. US stocks all hit record highs last week, something that was last time done in 1999. Some investors though, are now questioning whether the stock markets and the USD have gotten carried away with over optimism as to Trump’s policy and speculate that a large portion of those gains could be reversed if there are signs of these policies being harder to materialize that initially expected.

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Monday Outlook – 28-11-2016

Welcome to the easyMarkets weekly outlook starting this Monday 28 November. We’ll be looking at the week’s key economic events on the financial calendar covering Monday to Thursday. Be sure to catch up with our Friday morning report that looks back at how the events played out and with a look at Friday’s events. This is a busy week for the US with a lot of key announcements due – from GDP, to consumer confidence, to manufacturing, to jobs data.

Event: ECB President Mario Draghi’s speech

Date: Monday 28 November 2016 at 14:00 GMT

Markets affected: EUR/USD

Trending hashtags: #ecb, #usd, #eur

President of the European Central Bank (ECB), Mario Draghi will be speaking before the EU Parliament’s Economic Committee in Brussels regarding economic progress since the UK’s Brexit vote back in June. Draghi has commented on extending the euro bond purchasing for next month due to a weak Eurozone. ECB provided no clarifications yet as to the future of its asset-purchasing programme.

Event: US GDP announcement

Date: Tuesday 29 November at 13:30 GMT

Markets affected: EUR/USD

Trending hashtags: #gdp, #usd, #usgdp

A slow year for the US economy seems to be turning around with third quarter GDP being revised upwards to 2.9% growth. This next release might  show another slight upwards revision to 3%. All this is laying positive ground-work for the Fed to keep true to expectations and increase interest rates next month.

Event: US CB Consumer Confidence

Date: Tuesday 29 November 2016 at 15:00 GMT

Markets affected: EUR/USD

Trending hashtags: #usd, #spi

Pre-election cautiousness saw consumer’s confidence slip last month to 98.6. Analysts expect with the uncertainty of the election out of the way, that confidence may rise to 101.3. The gift buying season is around the corner, so some are hoping to see a boost in the figure which will be good news for business.

Event: Canada GDP

Date: Wednesday 30 November 2016 at 13:30 GMT

Markets affected: CAD/USD

Trending hashtags: #cad, #gdp

2015-2016 has seen slow GDP growth for Canada increasing just 1.3%. The last three months were slowing even further – June’s was a low 0.6%, July slipped to 0.4% and August’s came in at a dismal 0.2%. The October figure due out is expected to follow suit and only increase 0.1%.

Event: US ISM Manufacturing PMI

Date: Thursday 1 December 2016 at 15:00 GMT

Markets affected: EUR/USD

Trending hashtags: #spi, #dow, #usd

The US ISM Manufacturing index has been showing steady growth month-on-month with October lifting to 51.9. Production came in strong at 54.6 but orders dropped to 52.1. Employment saw growth to 52.9 while exports continued their eight-month of affirmative data. For November, the ISM Manufacturing index is forecasted to increase again to 52.1.

Event: US Non-Farm Payroll and Unemployment Rate

Date: Friday 2 December 2016 at 13:30 GMT

Markets affected: EUR/USD

Trending hashtags: #usd, #eur, #nfp

Last month’s jobs data were a little disappointing with the Non-Farm employment change coming in under expectations at 161,000, and the unemployment rate remaining unchanged at 4.9%. Regardless of last month’s minor slips, analysts are still positive on a Fed interest rate hike in December. Expectations for November’s NFP are 165,000 with unemployment to also remain at 4.9%

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ForexLive Americas FX news wrap: Cracks in the OPEC deal

Forex news for North American trading on Nov 25, 2016:
Markets:
– Gold down 55-cents to $1184
– WTI crude down 4% to $46.06
– S&P 500 up 8.6 points to 2213
The US dollar softened early, in part due to soft trade balance numbers but it recovered som…The post ForexLive Americas FX news wrap: Cracks in the OPEC deal appeared first on Forex news – Binary options.
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