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Ahead Of January PayrollsTitle:
Euro Testing Key Support Levels
Sunrise Market Commentary
- Fixed Income Weak US payrolls push core bonds higher again
- On Friday, it was weaker US payrolls that helped core bonds eke out more gains, but non-core bonds held up quite well. Spreads even narrowed in the intra-EMU bond markets. We fear that this won't be the case today, as French and Greek election results inject uncertainty into markets.
- Currencies: Euro testing key support levels
- On Friday, trading in the major euro cross rate was rather calm, but the pressure remained to the downside. The US payrolls were unable to change this pattern. This morning, EUR/USD is testing the key 1.2974 support while EUR/GBP is trading south of the 0.8068 level. A sustained break below these levels would raise a red alert for the single currency.
The ...
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Weekly Economic and Financial Commentary : 04/05/2012
U.S. Review
Modest Growth on a Broadening Base
- The underlying tone of the recent economic reports remains consistent with modest economic growth. Consumer spending ended the first quarter on a solid note and spending is now on track to grow at a 2 percent pace in the second quarter.
- Reports from the regional manufacturing surveys showed some weakness but the National ISM report came in stronger than expected. The nonmanufacturing survey, however, came in below expectations.
- Nonfarm employment rose by 115,000 jobs in April and the unemployment rate fell 0.1 percent to 8.1 percent.
Modest Growth on a Broadening Base
This week's ISM report came in better than expected, rising 1.4 points to 54.8 in April, which greatly relieves fears built up from the weaker factory orders ...
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The Weekly Bottom Line : 04/05/2012
The Weekly Bottom Line
HIGHLIGHTS OF THE WEEK
United States
- U.S. job creation may have weakened in the last few months, but the grounds for sustaining stronger employment growth are more fertile now than have been since the economic recovery began. Europe's labor market, by contrast, is likely to deteriorate further before it gets better.
- Europe's (nonfinancial) corporate sector is highly leveraged. As balance sheet adjustments are made, Europe risks further decreases in investment, higher layoffs, and lower economic growth. These effects are compounded by deleveraging in the public sector.
- U.S. corporations, by contrast, are more profitable and liquid than they have ever been. At some point some of these funds will be unleashed towards new investment, creating a positive ...
Title:
When Will Volatility Pick Up
The Week Ahead
Highlights
When will volatility pick up
Digesting payrolls
Will there be more QE for the UK?
Data Watch
When will volatility pick up?
Volatility in US Treasuries is at its lowest level since 2007, so too is volatility in the FX options market for short-term EURUSD products and the Vix has fallen sharply since peaking in autumn 2011. Yet Europe's sovereign stresses remain as strong as ever, Spain and Italy are struggling to sell their sovereign debt to anyone bar their domestic banking sectors and election risks are enormous as Greece and France go to the polls on Sunday.
So why is volatility so low? The answer lies with central banks and fairly tight FX ranges. When central banks come in and pledge that interest rates will remain extremely low until 2014, ...
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Gold slides towards $1,630 per ounce ahead of U.S. jobs data
(Reuters) - Gold prices fell on Friday and were on track for their biggest weekly loss in seven, as traders took to the sidelines ahead of key payrolls data later in the day, and as the euro weakened ahead of elections in France and Greece this weekend.
The U.S. non-farm payrolls data at 8.30 a.m. EDT, a closely watched barometer of the wider economy, is expected to show the economy added 170,000 jobs in April.
If the data beats expectations, it will further erode the case for the Federal Reserve to unleash another round of quantitative easing to stimulate the economy.
That would likely hurt gold, as expectations for a fresh round of QE, which would undermine the dollar and keep real interest rates at rock-bottom levels, have been a major driver of higher gold prices this year.
Spot ...
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Dollar softer, but euro fails get a boost
(Reuters) - The dollar briefly fell to a two-month low against a basket of currencies on Monday, hurt by signs that the U.S. economic recovery was losing momentum, which keeps alive the chances of further monetary easing by the Federal Reserve.
Despite the dollar's problems, the euro failed to gain much traction, with investors looking to sell at higher levels as harsh austerity measures take a toll on economic activity across the region.
Spain slipped back into recession as gross domestic product shrank 0.3 percent in the January to March quarter, data showed on Monday. Traders were likely to be wary of the euro ahead of the second round of the French presidential vote as well as elections for a new Greek parliament next weekend.
The dollar .DXY touched 78.638 against a basket of ...
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Dukascopy Morning Forex Overview : 10/04/2012
Fundamental Analysis
EUR
"...markets have been overoptimistic after the extra liquidity provided by (the European Central Bank). We will see stocks moving lower"
- Christian Tegllund Blaabjerg, chief economist at FIH Erhvervsbank
Shares closed mixed on Thursday. The Stoxx Europe 600 Index gained 0.12 per cent to 259.07. Germany's DAX Index retreated 0.13 per cent and France's CAC 40 Index gained 0.19 per cent. The U.K.'s FTSE 100 Index rose 0.35 per cent to 5,723.67.
USD
"The economy does continue to grow, but slowly"
- John Carey, a fund manager at Pioneer Investments
U.S. stocks fell on Monday after a report showed the U.S. economy added less jobs than expected.
GBP
"Negative sentiment turned positive as Spanish bond yields retreated following an earlier spike"
- Angus Campbell, the ...
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Shares fall on tepid U.S. data, oil down on Iran talks
Asian shares fell and U.S. stock futures pointed lower on Monday in holiday-thinned trade after a sharp slowdown in U.S. jobs growth raised concerns about the strength of the world's largest economy.
Oil, which has climbed nearly $20 this year on worries that a standoff between Tehran and the West would escalate and disrupt oil exports from the Middle East, dropped more than a dollar after Tehran agreed to resume talks on its nuclear program.
Brent crude was down $1.19 a barrel to $122.24 by 1110 GMT after slipping below $122 earlier in the day. U.S. oil traded $1.46 a barrel lower at $101.85.
"The talks are good news. They are going to ease some stress from the oil market but not enough to bring oil below its current trading range," said Ken Hasegawa, a commodity derivatives manager at ...
Title:
QE or not QE?
The Week Ahead
Highlights
QE or not QE?
BOJ under pressure to ease
No more support from the ECB
Will the UK avoid a recession?
Market Moves: Key Levels
QE or not QE?
The release of the FOMC minutes earlier this week and speeches by Fed officials have resulted in markets reducing their expectations of additional easing. However, today's disappointing jobs figures (120K in headline NFP vs. cons. 205K) have brought the speculation of more stimulus back into focus. To illustrate the extent of the negative surprise in the NFP print, the lowest estimate was for the addition of 175K payrolls out of the 80 economists surveyed by Bloomberg. QE3 chatter is making its rounds again in the markets and the US dollar has tumbled against most of the majors as heightened speculation ...
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