ONSHORE (CNY) and OFFSHORE (CNH) Chinese Currency and its role in the Global stage

China exchange rate regime is unique and a category on its own. The reason being is that China has two different currencies, CNY and CNH. The offshore renminbi (CNH), was developed in July 2010 so that China could gain a significant role in the global FX market and make it an important reserve currency like EUR and USD. CNY was not possible to achieve the goal mentioned above because it is a currency subject to a “managed float” band of 2% from midpoint that is allowed to fluctuate. In more general terms, it is a currency that suffers much intervention from the PBOC.

Furthermore, by having an offshore currency it may not affect its capital account balance at a time that China began to open up its economy and internationalize its currency. As a result, foreign entities and individuals were allowed by the introduction of CNH to hold that currency for any purpose such as foreign direct investments or speculation. It is important to mention China foreign exchange reserves were close to $1 tn in 2007 and climbed to $4 tn in 2014. This shows in numbers the important role that the Chinese currency has in global markets the recent few years.

A worrying statistic for the Bank of China is that these reserves have been steadily declining since 2014, accounting a little more than $3 tn at the moment.

Traders are interested to know what are the factors that affect the CNH. This report will try to address this issue.

One may wonder why everyone pays attention to the international reserves of China. The graph below will show the relationship between the spot CNH price and the reserves of China.

image-1-1

As we can see in the graph, when the reserves decrease the spot USDCNH increases as well, something which suggests that Yuan depreciates. It is suggested by many that the running down of reserves show the size of intervention by the Bank of China in the FX market in order to fulfill its goals. At the moment investors seem to have bearish bets on CNH and PBOC is selling reserves in order to slow down the renminbi’s slide.

One main goal of China to keep on expanding its GDP at a rate above 7%. The best way to achieve this is by increasing its exports around the world. As a result, a weakened CNH makes Chinese goods more attractive to overseas importers of goods. However, even though a weakened CNH may provides benefits to the economy, potentially uncontrollable depreciation of the currency may be really dangerous if we reference back in history such as East Asian financial crisis in 1997, and that is another reason for PBOC intervention.

Another factor responsible for changes in the value of CNH is the persistent strengthening of the dollar which is the main trading partner of Yuan. On July 2014, US Dollar Index stood at 79.8 and now trades at 101.9. The election of Donald Trump as US president supported this trend. USD is a competitor of CNH in the battle of reserve currency and a growing demand for USD steals from the demand of renminbi something which leads to capital outflows from China.

Deposit rates or the Hong Kong interbank borrowing rate is a way to manipulate CNH. The higher the Hibor, the costlier it is to short China’s currency. So when Hibor is high, demand for the currency strengthens and deter bets on renminbi depreciation. Many may wonder why the Hong Kong deposit rate affects the CNH. It should be noted that CNH main market is in Hong Kong and renminbi deposits were allowed there as well. Bank of China (Hong Kong) was designated as the sole offshore renminbi clearing bank since 2004.

CNH has been very volatile lately. The graph below shows the flatness of USDCNH before the storm of the 4th of January which led to a sharp appreciation of the currency and later whipsawed. The future is unpredictable but one thing may be sure: Volatility is here to stay!

image-1-2

References:

http://www.tradingeconomics.com/china/foreign-exchange-reserves

https://www.investing.com/currencies/usd-cnh-historical-data

http://www.reuters.com/article/china-economy-forex-reserves-idUSENNH150RW

 

The post ONSHORE (CNY) and OFFSHORE (CNH) Chinese Currency and its role in the Global stage appeared first on Forex.Info.

Friday 13-01-2017 Lookback

Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.

Event: Switzerland Unemployment Rate s.a. (MoM, Dec)

Date: Tuesday 10 January 2017 at 15:00 GMT

Markets affected: EUR/CHF

Trending hashtags: #swissy, #chf

Switzerland’s State Secretariat for Economic Affairs (SECO) released the Unemployment rate on Tuesday which came in at a higher than expected 3.5%. Expectations were for 3.3% like the previous month’s figure. This was the highest it’s been since April. However, once the rate was adjusted for seasonal factors it stood at 3.3% meaning that it hasn’t changed over the last quarter of 2016. The number of unemployed increased by 10,144 to 159,372 for the month of December and overall the year saw a small increase in unemployment of 4.6%

Event: US Crude Inventories

Date: Wednesday 11 January 2017 at 15:30 GMT

Markets affected: OIL/USD

Trending hashtags: #oil, #crude, #wti

Inventories of US crude stocks showed an increase by 4.1 million barrels according to the US Energy Information Administration (EIA). The report showed a huge increase to the expected 1.16 million barrels and oil prices dropped to weekly lows as a result. Oil prices continued to be volatile over the next 24 hours as they rebounded to daily highs of 52.65 thanks to a weaker US dollar.
The unexpected increase has been attributed to seasonal activities by companies bringing inventories onshore after being left in floating storage. The data released showed refineries working at 93.6% capacity, processing 17.1 million barrels of crude on a daily basis.

Event: UK NIESR GDP Quarterly Estimate (Dec)

Date: Wednesday 11 January 2016 at 15:00 GMT

Markets affected: EUR/GBP, GBP/USD

Trending hashtags: #sterling , #gdp

The NIESR estimate for UK GDP for the fourth quarter of 2016 came in at 0.5% and revised the previous reading of 0.4% to 0.5%. The result at 0.5% was slightly better than estimates of 0.46%.The GDP Estimate released by the National Institute of Economic and Social Research will be followed by the official announcement next month, but this has generally been considered very accurate. The estimate suggests the economy grew 2% for the year; a tad lower than the 2015 figure of 2.2%.


Event: ECB Monetary Policy Meeting Accounts

Date: Thursday 12 January 2017 at 12:30 GMT

Markets affected: EUR/USD

Trending hashtags: #ecb, #eur

The Governing Council of the European Central Bank reviewed financial, economic and monetary developments on Thursday.  They characterised the financial environment as volatile across asset classes and noted an upward direction to global inflation expectations. They also commented that global trade was expanding at a modest pace and that consumer inflation for OECD countries had increases over the previous months. Real GDP for the EU was growing 0.3% q-on-q, pointing to economic expansion, as did further declines in unemployment. Overall, there was emphasis that even with price stability, due to surrounding risks, the asset purchasing programme (APP) would continue in order to fulfil the Council’s price stability objective. Currently APP is at 60 billion euros per month in the aim to bring inflation closer to the, just under, 2% target.

Event: US Initial Jobless Claims

Date: Thursday 12 January 2017 at 13:30 GMT

Markets affected: EUR/USD,

Trending hashtags: #unemployment, #usd

Initial Jobless Claims for the US came in under the expected 255,000 to 247,000 for the last week. It was 10,000 above the previous reading  of 237,000 (revised from 235k) but still signalled a healthy employment sector for the nation as it was the 97th straight week in a row where claims came in under 300k – something not seen in over four decades. Analysts are however prudently noting the seasonality of the figure and commenting on the volatility involved in short-term outlooks.

Trade of the Week

Time in: Wednesday 11 January 2017 at 15:30 GMT
Market : OIL/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 11 January 2017 at 18:30 GMT

P&L: $3,440

If you had bought OIL/USD with a $500 margin at the price of $50.85 a barrel and closed the deal once after the EIA Inventory release on Wednesday at 18:30 GMT which saw oil drop 3.44%, you might have made $3,440. Note this example does not take into account spread.

http://www.tradingeconomics.com/switzerland/unemployment-rate

http://www.rttnews.com/2731563/swiss-jobless-rate-remains-stable-in-december.aspx http://investorsbuz.com/2017/01/10/swiss-unemployment-rate-steadied/

https://www.eia.gov/petroleum/supply/weekly/  https://www.dailyfx.com/forex/education/trading_tips/chart_of_the_day/2017/01/11/Crude-Oil-Prices-Rebound-on-a-Weakend-US-Dollar.html

http://thelakeandeswave.com/2017/01/11/crude-inventories-jump-4m-barrels.html

http://www.niesr.ac.uk/publications/january-2017-gdp-estimates#.WHeRGxt97IU

http://www.ecb.europa.eu/press/accounts/2017/html/mg170112.en.html

http://www.digitallook.com/news/international-economic/us-initial-jobless-claims-rise-less-than-expected–2442938.html

 

The post Friday 13-01-2017 Lookback appeared first on Forex.Info.

Friday 13-01-2017 Lookback

Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.

Event: Switzerland Unemployment Rate s.a. (MoM, Dec)

Date: Tuesday 10 January 2017 at 15:00 GMT

Markets affected: EUR/CHF

Trending hashtags: #swissy, #chf

Switzerland’s State Secretariat for Economic Affairs (SECO) released the Unemployment rate on Tuesday which came in at a higher than expected 3.5%. Expectations were for 3.3% like the previous month’s figure. This was the highest it’s been since April. However, once the rate was adjusted for seasonal factors it stood at 3.3% meaning that it hasn’t changed over the last quarter of 2016. The number of unemployed increased by 10,144 to 159,372 for the month of December and overall the year saw a small increase in unemployment of 4.6%

Event: US Crude Inventories

Date: Wednesday 11 January 2017 at 15:30 GMT

Markets affected: OIL/USD

Trending hashtags: #oil, #crude, #wti

Inventories of US crude stocks showed an increase by 4.1 million barrels according to the US Energy Information Administration (EIA). The report showed a huge increase to the expected 1.16 million barrels and oil prices dropped to weekly lows as a result. Oil prices continued to be volatile over the next 24 hours as they rebounded to daily highs of 52.65 thanks to a weaker US dollar.
The unexpected increase has been attributed to seasonal activities by companies bringing inventories onshore after being left in floating storage. The data released showed refineries working at 93.6% capacity, processing 17.1 million barrels of crude on a daily basis.

Event: UK NIESR GDP Quarterly Estimate (Dec)

Date: Wednesday 11 January 2016 at 15:00 GMT

Markets affected: EUR/GBP, GBP/USD

Trending hashtags: #sterling , #gdp

The NIESR estimate for UK GDP for the fourth quarter of 2016 came in at 0.5% and revised the previous reading of 0.4% to 0.5%. The result at 0.5% was slightly better than estimates of 0.46%.The GDP Estimate released by the National Institute of Economic and Social Research will be followed by the official announcement next month, but this has generally been considered very accurate. The estimate suggests the economy grew 2% for the year; a tad lower than the 2015 figure of 2.2%.


Event: ECB Monetary Policy Meeting Accounts

Date: Thursday 12 January 2017 at 12:30 GMT

Markets affected: EUR/USD

Trending hashtags: #ecb, #eur

The Governing Council of the European Central Bank reviewed financial, economic and monetary developments on Thursday.  They characterised the financial environment as volatile across asset classes and noted an upward direction to global inflation expectations. They also commented that global trade was expanding at a modest pace and that consumer inflation for OECD countries had increases over the previous months. Real GDP for the EU was growing 0.3% q-on-q, pointing to economic expansion, as did further declines in unemployment. Overall, there was emphasis that even with price stability, due to surrounding risks, the asset purchasing programme (APP) would continue in order to fulfil the Council’s price stability objective. Currently APP is at 60 billion euros per month in the aim to bring inflation closer to the, just under, 2% target.

Event: US Initial Jobless Claims

Date: Thursday 12 January 2017 at 13:30 GMT

Markets affected: EUR/USD,

Trending hashtags: #unemployment, #usd

Initial Jobless Claims for the US came in under the expected 255,000 to 247,000 for the last week. It was 10,000 above the previous reading  of 237,000 (revised from 235k) but still signalled a healthy employment sector for the nation as it was the 97th straight week in a row where claims came in under 300k – something not seen in over four decades. Analysts are however prudently noting the seasonality of the figure and commenting on the volatility involved in short-term outlooks.

Trade of the Week

Time in: Wednesday 11 January 2017 at 15:30 GMT
Market : OIL/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 11 January 2017 at 18:30 GMT

P&L: $3,440

If you had bought OIL/USD with a $500 margin at the price of $50.85 a barrel and closed the deal once after the EIA Inventory release on Wednesday at 18:30 GMT which saw oil drop 3.44%, you might have made $3,440. Note this example does not take into account spread.

http://www.tradingeconomics.com/switzerland/unemployment-rate

http://www.rttnews.com/2731563/swiss-jobless-rate-remains-stable-in-december.aspx http://investorsbuz.com/2017/01/10/swiss-unemployment-rate-steadied/

https://www.eia.gov/petroleum/supply/weekly/  https://www.dailyfx.com/forex/education/trading_tips/chart_of_the_day/2017/01/11/Crude-Oil-Prices-Rebound-on-a-Weakend-US-Dollar.html

http://thelakeandeswave.com/2017/01/11/crude-inventories-jump-4m-barrels.html

http://www.niesr.ac.uk/publications/january-2017-gdp-estimates#.WHeRGxt97IU

http://www.ecb.europa.eu/press/accounts/2017/html/mg170112.en.html

http://www.digitallook.com/news/international-economic/us-initial-jobless-claims-rise-less-than-expected–2442938.html

 

The post Friday 13-01-2017 Lookback appeared first on Forex.Info.

Friday 13-01-2017 Lookback

Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.

Event: Switzerland Unemployment Rate s.a. (MoM, Dec)

Date: Tuesday 10 January 2017 at 15:00 GMT

Markets affected: EUR/CHF

Trending hashtags: #swissy, #chf

Switzerland’s State Secretariat for Economic Affairs (SECO) released the Unemployment rate on Tuesday which came in at a higher than expected 3.5%. Expectations were for 3.3% like the previous month’s figure. This was the highest it’s been since April. However, once the rate was adjusted for seasonal factors it stood at 3.3% meaning that it hasn’t changed over the last quarter of 2016. The number of unemployed increased by 10,144 to 159,372 for the month of December and overall the year saw a small increase in unemployment of 4.6%

Event: US Crude Inventories

Date: Wednesday 11 January 2017 at 15:30 GMT

Markets affected: OIL/USD

Trending hashtags: #oil, #crude, #wti

Inventories of US crude stocks showed an increase by 4.1 million barrels according to the US Energy Information Administration (EIA). The report showed a huge increase to the expected 1.16 million barrels and oil prices dropped to weekly lows as a result. Oil prices continued to be volatile over the next 24 hours as they rebounded to daily highs of 52.65 thanks to a weaker US dollar.
The unexpected increase has been attributed to seasonal activities by companies bringing inventories onshore after being left in floating storage. The data released showed refineries working at 93.6% capacity, processing 17.1 million barrels of crude on a daily basis.

Event: UK NIESR GDP Quarterly Estimate (Dec)

Date: Wednesday 11 January 2016 at 15:00 GMT

Markets affected: EUR/GBP, GBP/USD

Trending hashtags: #sterling , #gdp

The NIESR estimate for UK GDP for the fourth quarter of 2016 came in at 0.5% and revised the previous reading of 0.4% to 0.5%. The result at 0.5% was slightly better than estimates of 0.46%.The GDP Estimate released by the National Institute of Economic and Social Research will be followed by the official announcement next month, but this has generally been considered very accurate. The estimate suggests the economy grew 2% for the year; a tad lower than the 2015 figure of 2.2%.


Event: ECB Monetary Policy Meeting Accounts

Date: Thursday 12 January 2017 at 12:30 GMT

Markets affected: EUR/USD

Trending hashtags: #ecb, #eur

The Governing Council of the European Central Bank reviewed financial, economic and monetary developments on Thursday.  They characterised the financial environment as volatile across asset classes and noted an upward direction to global inflation expectations. They also commented that global trade was expanding at a modest pace and that consumer inflation for OECD countries had increases over the previous months. Real GDP for the EU was growing 0.3% q-on-q, pointing to economic expansion, as did further declines in unemployment. Overall, there was emphasis that even with price stability, due to surrounding risks, the asset purchasing programme (APP) would continue in order to fulfil the Council’s price stability objective. Currently APP is at 60 billion euros per month in the aim to bring inflation closer to the, just under, 2% target.

Event: US Initial Jobless Claims

Date: Thursday 12 January 2017 at 13:30 GMT

Markets affected: EUR/USD,

Trending hashtags: #unemployment, #usd

Initial Jobless Claims for the US came in under the expected 255,000 to 247,000 for the last week. It was 10,000 above the previous reading  of 237,000 (revised from 235k) but still signalled a healthy employment sector for the nation as it was the 97th straight week in a row where claims came in under 300k – something not seen in over four decades. Analysts are however prudently noting the seasonality of the figure and commenting on the volatility involved in short-term outlooks.

Trade of the Week

Time in: Wednesday 11 January 2017 at 15:30 GMT
Market : OIL/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 11 January 2017 at 18:30 GMT

P&L: $3,440

If you had bought OIL/USD with a $500 margin at the price of $50.85 a barrel and closed the deal once after the EIA Inventory release on Wednesday at 18:30 GMT which saw oil drop 3.44%, you might have made $3,440. Note this example does not take into account spread.

http://www.tradingeconomics.com/switzerland/unemployment-rate

http://www.rttnews.com/2731563/swiss-jobless-rate-remains-stable-in-december.aspx http://investorsbuz.com/2017/01/10/swiss-unemployment-rate-steadied/

https://www.eia.gov/petroleum/supply/weekly/  https://www.dailyfx.com/forex/education/trading_tips/chart_of_the_day/2017/01/11/Crude-Oil-Prices-Rebound-on-a-Weakend-US-Dollar.html

http://thelakeandeswave.com/2017/01/11/crude-inventories-jump-4m-barrels.html

http://www.niesr.ac.uk/publications/january-2017-gdp-estimates#.WHeRGxt97IU

http://www.ecb.europa.eu/press/accounts/2017/html/mg170112.en.html

http://www.digitallook.com/news/international-economic/us-initial-jobless-claims-rise-less-than-expected–2442938.html

 

The post Friday 13-01-2017 Lookback appeared first on Forex.Info.

Friday 13-01-2017 Lookback

Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.

Event: Switzerland Unemployment Rate s.a. (MoM, Dec)

Date: Tuesday 10 January 2017 at 15:00 GMT

Markets affected: EUR/CHF

Trending hashtags: #swissy, #chf

Switzerland’s State Secretariat for Economic Affairs (SECO) released the Unemployment rate on Tuesday which came in at a higher than expected 3.5%. Expectations were for 3.3% like the previous month’s figure. This was the highest it’s been since April. However, once the rate was adjusted for seasonal factors it stood at 3.3% meaning that it hasn’t changed over the last quarter of 2016. The number of unemployed increased by 10,144 to 159,372 for the month of December and overall the year saw a small increase in unemployment of 4.6%

Event: US Crude Inventories

Date: Wednesday 11 January 2017 at 15:30 GMT

Markets affected: OIL/USD

Trending hashtags: #oil, #crude, #wti

Inventories of US crude stocks showed an increase by 4.1 million barrels according to the US Energy Information Administration (EIA). The report showed a huge increase to the expected 1.16 million barrels and oil prices dropped to weekly lows as a result. Oil prices continued to be volatile over the next 24 hours as they rebounded to daily highs of 52.65 thanks to a weaker US dollar.
The unexpected increase has been attributed to seasonal activities by companies bringing inventories onshore after being left in floating storage. The data released showed refineries working at 93.6% capacity, processing 17.1 million barrels of crude on a daily basis.

Event: UK NIESR GDP Quarterly Estimate (Dec)

Date: Wednesday 11 January 2016 at 15:00 GMT

Markets affected: EUR/GBP, GBP/USD

Trending hashtags: #sterling , #gdp

The NIESR estimate for UK GDP for the fourth quarter of 2016 came in at 0.5% and revised the previous reading of 0.4% to 0.5%. The result at 0.5% was slightly better than estimates of 0.46%.The GDP Estimate released by the National Institute of Economic and Social Research will be followed by the official announcement next month, but this has generally been considered very accurate. The estimate suggests the economy grew 2% for the year; a tad lower than the 2015 figure of 2.2%.


Event: ECB Monetary Policy Meeting Accounts

Date: Thursday 12 January 2017 at 12:30 GMT

Markets affected: EUR/USD

Trending hashtags: #ecb, #eur

The Governing Council of the European Central Bank reviewed financial, economic and monetary developments on Thursday.  They characterised the financial environment as volatile across asset classes and noted an upward direction to global inflation expectations. They also commented that global trade was expanding at a modest pace and that consumer inflation for OECD countries had increases over the previous months. Real GDP for the EU was growing 0.3% q-on-q, pointing to economic expansion, as did further declines in unemployment. Overall, there was emphasis that even with price stability, due to surrounding risks, the asset purchasing programme (APP) would continue in order to fulfil the Council’s price stability objective. Currently APP is at 60 billion euros per month in the aim to bring inflation closer to the, just under, 2% target.

Event: US Initial Jobless Claims

Date: Thursday 12 January 2017 at 13:30 GMT

Markets affected: EUR/USD,

Trending hashtags: #unemployment, #usd

Initial Jobless Claims for the US came in under the expected 255,000 to 247,000 for the last week. It was 10,000 above the previous reading  of 237,000 (revised from 235k) but still signalled a healthy employment sector for the nation as it was the 97th straight week in a row where claims came in under 300k – something not seen in over four decades. Analysts are however prudently noting the seasonality of the figure and commenting on the volatility involved in short-term outlooks.

Trade of the Week

Time in: Wednesday 11 January 2017 at 15:30 GMT
Market : OIL/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 11 January 2017 at 18:30 GMT

P&L: $3,440

If you had bought OIL/USD with a $500 margin at the price of $50.85 a barrel and closed the deal once after the EIA Inventory release on Wednesday at 18:30 GMT which saw oil drop 3.44%, you might have made $3,440. Note this example does not take into account spread.

http://www.tradingeconomics.com/switzerland/unemployment-rate

http://www.rttnews.com/2731563/swiss-jobless-rate-remains-stable-in-december.aspx http://investorsbuz.com/2017/01/10/swiss-unemployment-rate-steadied/

https://www.eia.gov/petroleum/supply/weekly/  https://www.dailyfx.com/forex/education/trading_tips/chart_of_the_day/2017/01/11/Crude-Oil-Prices-Rebound-on-a-Weakend-US-Dollar.html

http://thelakeandeswave.com/2017/01/11/crude-inventories-jump-4m-barrels.html

http://www.niesr.ac.uk/publications/january-2017-gdp-estimates#.WHeRGxt97IU

http://www.ecb.europa.eu/press/accounts/2017/html/mg170112.en.html

http://www.digitallook.com/news/international-economic/us-initial-jobless-claims-rise-less-than-expected–2442938.html

 

The post Friday 13-01-2017 Lookback appeared first on Forex.Info.

Friday 13-01-2017 Lookback

Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.

Event: Switzerland Unemployment Rate s.a. (MoM, Dec)

Date: Tuesday 10 January 2017 at 15:00 GMT

Markets affected: EUR/CHF

Trending hashtags: #swissy, #chf

Switzerland’s State Secretariat for Economic Affairs (SECO) released the Unemployment rate on Tuesday which came in at a higher than expected 3.5%. Expectations were for 3.3% like the previous month’s figure. This was the highest it’s been since April. However, once the rate was adjusted for seasonal factors it stood at 3.3% meaning that it hasn’t changed over the last quarter of 2016. The number of unemployed increased by 10,144 to 159,372 for the month of December and overall the year saw a small increase in unemployment of 4.6%

Event: US Crude Inventories

Date: Wednesday 11 January 2017 at 15:30 GMT

Markets affected: OIL/USD

Trending hashtags: #oil, #crude, #wti

Inventories of US crude stocks showed an increase by 4.1 million barrels according to the US Energy Information Administration (EIA). The report showed a huge increase to the expected 1.16 million barrels and oil prices dropped to weekly lows as a result. Oil prices continued to be volatile over the next 24 hours as they rebounded to daily highs of 52.65 thanks to a weaker US dollar.
The unexpected increase has been attributed to seasonal activities by companies bringing inventories onshore after being left in floating storage. The data released showed refineries working at 93.6% capacity, processing 17.1 million barrels of crude on a daily basis.

Event: UK NIESR GDP Quarterly Estimate (Dec)

Date: Wednesday 11 January 2016 at 15:00 GMT

Markets affected: EUR/GBP, GBP/USD

Trending hashtags: #sterling , #gdp

The NIESR estimate for UK GDP for the fourth quarter of 2016 came in at 0.5% and revised the previous reading of 0.4% to 0.5%. The result at 0.5% was slightly better than estimates of 0.46%.The GDP Estimate released by the National Institute of Economic and Social Research will be followed by the official announcement next month, but this has generally been considered very accurate. The estimate suggests the economy grew 2% for the year; a tad lower than the 2015 figure of 2.2%.


Event: ECB Monetary Policy Meeting Accounts

Date: Thursday 12 January 2017 at 12:30 GMT

Markets affected: EUR/USD

Trending hashtags: #ecb, #eur

The Governing Council of the European Central Bank reviewed financial, economic and monetary developments on Thursday.  They characterised the financial environment as volatile across asset classes and noted an upward direction to global inflation expectations. They also commented that global trade was expanding at a modest pace and that consumer inflation for OECD countries had increases over the previous months. Real GDP for the EU was growing 0.3% q-on-q, pointing to economic expansion, as did further declines in unemployment. Overall, there was emphasis that even with price stability, due to surrounding risks, the asset purchasing programme (APP) would continue in order to fulfil the Council’s price stability objective. Currently APP is at 60 billion euros per month in the aim to bring inflation closer to the, just under, 2% target.

Event: US Initial Jobless Claims

Date: Thursday 12 January 2017 at 13:30 GMT

Markets affected: EUR/USD,

Trending hashtags: #unemployment, #usd

Initial Jobless Claims for the US came in under the expected 255,000 to 247,000 for the last week. It was 10,000 above the previous reading  of 237,000 (revised from 235k) but still signalled a healthy employment sector for the nation as it was the 97th straight week in a row where claims came in under 300k – something not seen in over four decades. Analysts are however prudently noting the seasonality of the figure and commenting on the volatility involved in short-term outlooks.

Trade of the Week

Time in: Wednesday 11 January 2017 at 15:30 GMT
Market : OIL/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 11 January 2017 at 18:30 GMT

P&L: $3,440

If you had bought OIL/USD with a $500 margin at the price of $50.85 a barrel and closed the deal once after the EIA Inventory release on Wednesday at 18:30 GMT which saw oil drop 3.44%, you might have made $3,440. Note this example does not take into account spread.

http://www.tradingeconomics.com/switzerland/unemployment-rate

http://www.rttnews.com/2731563/swiss-jobless-rate-remains-stable-in-december.aspx http://investorsbuz.com/2017/01/10/swiss-unemployment-rate-steadied/

https://www.eia.gov/petroleum/supply/weekly/  https://www.dailyfx.com/forex/education/trading_tips/chart_of_the_day/2017/01/11/Crude-Oil-Prices-Rebound-on-a-Weakend-US-Dollar.html

http://thelakeandeswave.com/2017/01/11/crude-inventories-jump-4m-barrels.html

http://www.niesr.ac.uk/publications/january-2017-gdp-estimates#.WHeRGxt97IU

http://www.ecb.europa.eu/press/accounts/2017/html/mg170112.en.html

http://www.digitallook.com/news/international-economic/us-initial-jobless-claims-rise-less-than-expected–2442938.html

 

The post Friday 13-01-2017 Lookback appeared first on Forex.Info.

Friday 13-01-2017 Lookback

Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.

Event: Switzerland Unemployment Rate s.a. (MoM, Dec)

Date: Tuesday 10 January 2017 at 15:00 GMT

Markets affected: EUR/CHF

Trending hashtags: #swissy, #chf

Switzerland’s State Secretariat for Economic Affairs (SECO) released the Unemployment rate on Tuesday which came in at a higher than expected 3.5%. Expectations were for 3.3% like the previous month’s figure. This was the highest it’s been since April. However, once the rate was adjusted for seasonal factors it stood at 3.3% meaning that it hasn’t changed over the last quarter of 2016. The number of unemployed increased by 10,144 to 159,372 for the month of December and overall the year saw a small increase in unemployment of 4.6%

Event: US Crude Inventories

Date: Wednesday 11 January 2017 at 15:30 GMT

Markets affected: OIL/USD

Trending hashtags: #oil, #crude, #wti

Inventories of US crude stocks showed an increase by 4.1 million barrels according to the US Energy Information Administration (EIA). The report showed a huge increase to the expected 1.16 million barrels and oil prices dropped to weekly lows as a result. Oil prices continued to be volatile over the next 24 hours as they rebounded to daily highs of 52.65 thanks to a weaker US dollar.
The unexpected increase has been attributed to seasonal activities by companies bringing inventories onshore after being left in floating storage. The data released showed refineries working at 93.6% capacity, processing 17.1 million barrels of crude on a daily basis.

Event: UK NIESR GDP Quarterly Estimate (Dec)

Date: Wednesday 11 January 2016 at 15:00 GMT

Markets affected: EUR/GBP, GBP/USD

Trending hashtags: #sterling , #gdp

The NIESR estimate for UK GDP for the fourth quarter of 2016 came in at 0.5% and revised the previous reading of 0.4% to 0.5%. The result at 0.5% was slightly better than estimates of 0.46%.The GDP Estimate released by the National Institute of Economic and Social Research will be followed by the official announcement next month, but this has generally been considered very accurate. The estimate suggests the economy grew 2% for the year; a tad lower than the 2015 figure of 2.2%.


Event: ECB Monetary Policy Meeting Accounts

Date: Thursday 12 January 2017 at 12:30 GMT

Markets affected: EUR/USD

Trending hashtags: #ecb, #eur

The Governing Council of the European Central Bank reviewed financial, economic and monetary developments on Thursday.  They characterised the financial environment as volatile across asset classes and noted an upward direction to global inflation expectations. They also commented that global trade was expanding at a modest pace and that consumer inflation for OECD countries had increases over the previous months. Real GDP for the EU was growing 0.3% q-on-q, pointing to economic expansion, as did further declines in unemployment. Overall, there was emphasis that even with price stability, due to surrounding risks, the asset purchasing programme (APP) would continue in order to fulfil the Council’s price stability objective. Currently APP is at 60 billion euros per month in the aim to bring inflation closer to the, just under, 2% target.

Event: US Initial Jobless Claims

Date: Thursday 12 January 2017 at 13:30 GMT

Markets affected: EUR/USD,

Trending hashtags: #unemployment, #usd

Initial Jobless Claims for the US came in under the expected 255,000 to 247,000 for the last week. It was 10,000 above the previous reading  of 237,000 (revised from 235k) but still signalled a healthy employment sector for the nation as it was the 97th straight week in a row where claims came in under 300k – something not seen in over four decades. Analysts are however prudently noting the seasonality of the figure and commenting on the volatility involved in short-term outlooks.

Trade of the Week

Time in: Wednesday 11 January 2017 at 15:30 GMT
Market : OIL/USD
Investment: $500 with 200:1 leverage
Time out: Wednesday 11 January 2017 at 18:30 GMT

P&L: $3,440

If you had bought OIL/USD with a $500 margin at the price of $50.85 a barrel and closed the deal once after the EIA Inventory release on Wednesday at 18:30 GMT which saw oil drop 3.44%, you might have made $3,440. Note this example does not take into account spread.

http://www.tradingeconomics.com/switzerland/unemployment-rate

http://www.rttnews.com/2731563/swiss-jobless-rate-remains-stable-in-december.aspx http://investorsbuz.com/2017/01/10/swiss-unemployment-rate-steadied/

https://www.eia.gov/petroleum/supply/weekly/  https://www.dailyfx.com/forex/education/trading_tips/chart_of_the_day/2017/01/11/Crude-Oil-Prices-Rebound-on-a-Weakend-US-Dollar.html

http://thelakeandeswave.com/2017/01/11/crude-inventories-jump-4m-barrels.html

http://www.niesr.ac.uk/publications/january-2017-gdp-estimates#.WHeRGxt97IU

http://www.ecb.europa.eu/press/accounts/2017/html/mg170112.en.html

http://www.digitallook.com/news/international-economic/us-initial-jobless-claims-rise-less-than-expected–2442938.html

 

The post Friday 13-01-2017 Lookback appeared first on Forex.Info.

As Elections Loom, Which Countries May Be Next to Leave the European Union?

For Europhiles, the United Kingdom’s decision to leave the European Union (EU) was about more than just the UK. Brexit threatens the very legitimacy of the Single Market at a time when governments are under growing pressure to close off their borders.

In 2017, the EU’s No. 1 and No. 3 economies will head to the polls for crucial elections that could dictate the future of the pan-European project. Both Germany and France are experiencing a surge in right-wing populism that is promising to stamp out immigration and challenge Brussels’ authority. If these two countries turn to Euroscepticism, the rest of Europe may follow.

The first round of France’s presidential election will take place on April 23, with a run-off vote scheduled two weeks later in the event no candidate secures an outright majority. Incumbent president Francois Hollande faces growing pressure from Francois Follin, the surprise winner of the right-leaning Republican primaries, who is said to represent the country’s Catholic middle class. Polls in December projected him as the winner in May following a run-off election against Marie Le Pen,[1] who is the biggest threat to the Europhiles.

Le Pen heads the National Front, who takes a hardline stance on immigration and pan-European integration. She has vowed to exit the Eurozone and hold a referendum on EU membership. A Le Pen election victory is France’s most likely path out of the Eurozone. Public opinion polls have the National Front leader finishing second to Follin.

Germany, the engine of Europe’s economy, heads to the polls in the fall. Like France, Germany is seeing a surge in populism, with the far-right AfD already making significant inroads in local elections. Chancellor Angela Merkel, who is seeking her fourth re-election, urged her countrymen and women to remain calm in the face of terrorism.

As we pursue our lives and our work, we tell the terrorists: They are murderers full of hatred, but it’s not they who determine how we live and want to live,” Merkel said in a speech on New Year’s Eve. “We are free, humane, open. Together, we are stronger. Our state is stronger.”[2]

Merkel’s appeal to stability might be too little, too late for a country increasingly frustrated with an influx of refugees. For many political analysts, Merkel’s handling of the refugee crisis may have sealed her fate in the upcoming election.

The AfD party is currently third in public opinion polling, but has seen its popularity surge since mid-2015. Merkel’s CDU/CSU holds the lead, with junior coalition partner the Social Democratic Party in a distant second.

Populist triumphs in either country may push the EU debate further in the direction of the skeptics. The outcome is Germany is especially pivotal, given the country’s economic influence over the region.

Following the resignation of Prime Minister Matteo Renzi over failed constitutional reforms in December, Italy may be another country heading for EU exit. Italy’s populist party, the Five Star Movement, is poised to make huge gains in the next election, which is currently scheduled for 2018. Five Star hasn’t been shy about its intention to exit the euro and reclaim Italy’s borders.

Since joining the euro in 1999, Italy has registered zero growth on average, leading many to believe the country has better fortunes outside the currency bloc.[3] Italy is also facing an escalating financial crisis, with the country’s banks sitting on one-third of the Eurozone’s bad debts.[4] In the case of Italy, it’ll be a combination of Euroscepticism and economics that influence any referendum vote on the question of euro membership.

While it’s uncertain how the dominos will fall, Euroscepticism is on the rise, and will continue to erode confidence in the Single Market. With the UK government pushing for a hard Brexit, the next 12 months will be a crucial period for European politics.

 

[1] DW.com. French election: The major players.

[2] Rainer Buergin (December 30, 2016). “Merkel Urges Calm Against Terror in Election-Year Stability Bid.” Bloomberg Politics.

[3] Lauren Said-Moorehouse (December 5, 2016). “Is Italy’s referendum result the first step toward leaving the EU?” CNN World.

[4] CNBC (November 29, 2016). “Italian banks hold nearly a third of euro zone’s bad loans: ECB.”

The post As Elections Loom, Which Countries May Be Next to Leave the European Union? appeared first on Forex.Info.

As Elections Loom, Which Countries May Be Next to Leave the European Union?

For Europhiles, the United Kingdom’s decision to leave the European Union (EU) was about more than just the UK. Brexit threatens the very legitimacy of the Single Market at a time when governments are under growing pressure to close off their borders.

In 2017, the EU’s No. 1 and No. 3 economies will head to the polls for crucial elections that could dictate the future of the pan-European project. Both Germany and France are experiencing a surge in right-wing populism that is promising to stamp out immigration and challenge Brussels’ authority. If these two countries turn to Euroscepticism, the rest of Europe may follow.

The first round of France’s presidential election will take place on April 23, with a run-off vote scheduled two weeks later in the event no candidate secures an outright majority. Incumbent president Francois Hollande faces growing pressure from Francois Follin, the surprise winner of the right-leaning Republican primaries, who is said to represent the country’s Catholic middle class. Polls in December projected him as the winner in May following a run-off election against Marie Le Pen,[1] who is the biggest threat to the Europhiles.

Le Pen heads the National Front, who takes a hardline stance on immigration and pan-European integration. She has vowed to exit the Eurozone and hold a referendum on EU membership. A Le Pen election victory is France’s most likely path out of the Eurozone. Public opinion polls have the National Front leader finishing second to Follin.

Germany, the engine of Europe’s economy, heads to the polls in the fall. Like France, Germany is seeing a surge in populism, with the far-right AfD already making significant inroads in local elections. Chancellor Angela Merkel, who is seeking her fourth re-election, urged her countrymen and women to remain calm in the face of terrorism.

As we pursue our lives and our work, we tell the terrorists: They are murderers full of hatred, but it’s not they who determine how we live and want to live,” Merkel said in a speech on New Year’s Eve. “We are free, humane, open. Together, we are stronger. Our state is stronger.”[2]

Merkel’s appeal to stability might be too little, too late for a country increasingly frustrated with an influx of refugees. For many political analysts, Merkel’s handling of the refugee crisis may have sealed her fate in the upcoming election.

The AfD party is currently third in public opinion polling, but has seen its popularity surge since mid-2015. Merkel’s CDU/CSU holds the lead, with junior coalition partner the Social Democratic Party in a distant second.

Populist triumphs in either country may push the EU debate further in the direction of the skeptics. The outcome is Germany is especially pivotal, given the country’s economic influence over the region.

Following the resignation of Prime Minister Matteo Renzi over failed constitutional reforms in December, Italy may be another country heading for EU exit. Italy’s populist party, the Five Star Movement, is poised to make huge gains in the next election, which is currently scheduled for 2018. Five Star hasn’t been shy about its intention to exit the euro and reclaim Italy’s borders.

Since joining the euro in 1999, Italy has registered zero growth on average, leading many to believe the country has better fortunes outside the currency bloc.[3] Italy is also facing an escalating financial crisis, with the country’s banks sitting on one-third of the Eurozone’s bad debts.[4] In the case of Italy, it’ll be a combination of Euroscepticism and economics that influence any referendum vote on the question of euro membership.

While it’s uncertain how the dominos will fall, Euroscepticism is on the rise, and will continue to erode confidence in the Single Market. With the UK government pushing for a hard Brexit, the next 12 months will be a crucial period for European politics.

 

[1] DW.com. French election: The major players.

[2] Rainer Buergin (December 30, 2016). “Merkel Urges Calm Against Terror in Election-Year Stability Bid.” Bloomberg Politics.

[3] Lauren Said-Moorehouse (December 5, 2016). “Is Italy’s referendum result the first step toward leaving the EU?” CNN World.

[4] CNBC (November 29, 2016). “Italian banks hold nearly a third of euro zone’s bad loans: ECB.”

The post As Elections Loom, Which Countries May Be Next to Leave the European Union? appeared first on Forex.Info.

As Elections Loom, Which Countries May Be Next to Leave the European Union?

For Europhiles, the United Kingdom’s decision to leave the European Union (EU) was about more than just the UK. Brexit threatens the very legitimacy of the Single Market at a time when governments are under growing pressure to close off their borders.

In 2017, the EU’s No. 1 and No. 3 economies will head to the polls for crucial elections that could dictate the future of the pan-European project. Both Germany and France are experiencing a surge in right-wing populism that is promising to stamp out immigration and challenge Brussels’ authority. If these two countries turn to Euroscepticism, the rest of Europe may follow.

The first round of France’s presidential election will take place on April 23, with a run-off vote scheduled two weeks later in the event no candidate secures an outright majority. Incumbent president Francois Hollande faces growing pressure from Francois Follin, the surprise winner of the right-leaning Republican primaries, who is said to represent the country’s Catholic middle class. Polls in December projected him as the winner in May following a run-off election against Marie Le Pen,[1] who is the biggest threat to the Europhiles.

Le Pen heads the National Front, who takes a hardline stance on immigration and pan-European integration. She has vowed to exit the Eurozone and hold a referendum on EU membership. A Le Pen election victory is France’s most likely path out of the Eurozone. Public opinion polls have the National Front leader finishing second to Follin.

Germany, the engine of Europe’s economy, heads to the polls in the fall. Like France, Germany is seeing a surge in populism, with the far-right AfD already making significant inroads in local elections. Chancellor Angela Merkel, who is seeking her fourth re-election, urged her countrymen and women to remain calm in the face of terrorism.

As we pursue our lives and our work, we tell the terrorists: They are murderers full of hatred, but it’s not they who determine how we live and want to live,” Merkel said in a speech on New Year’s Eve. “We are free, humane, open. Together, we are stronger. Our state is stronger.”[2]

Merkel’s appeal to stability might be too little, too late for a country increasingly frustrated with an influx of refugees. For many political analysts, Merkel’s handling of the refugee crisis may have sealed her fate in the upcoming election.

The AfD party is currently third in public opinion polling, but has seen its popularity surge since mid-2015. Merkel’s CDU/CSU holds the lead, with junior coalition partner the Social Democratic Party in a distant second.

Populist triumphs in either country may push the EU debate further in the direction of the skeptics. The outcome is Germany is especially pivotal, given the country’s economic influence over the region.

Following the resignation of Prime Minister Matteo Renzi over failed constitutional reforms in December, Italy may be another country heading for EU exit. Italy’s populist party, the Five Star Movement, is poised to make huge gains in the next election, which is currently scheduled for 2018. Five Star hasn’t been shy about its intention to exit the euro and reclaim Italy’s borders.

Since joining the euro in 1999, Italy has registered zero growth on average, leading many to believe the country has better fortunes outside the currency bloc.[3] Italy is also facing an escalating financial crisis, with the country’s banks sitting on one-third of the Eurozone’s bad debts.[4] In the case of Italy, it’ll be a combination of Euroscepticism and economics that influence any referendum vote on the question of euro membership.

While it’s uncertain how the dominos will fall, Euroscepticism is on the rise, and will continue to erode confidence in the Single Market. With the UK government pushing for a hard Brexit, the next 12 months will be a crucial period for European politics.

 

[1] DW.com. French election: The major players.

[2] Rainer Buergin (December 30, 2016). “Merkel Urges Calm Against Terror in Election-Year Stability Bid.” Bloomberg Politics.

[3] Lauren Said-Moorehouse (December 5, 2016). “Is Italy’s referendum result the first step toward leaving the EU?” CNN World.

[4] CNBC (November 29, 2016). “Italian banks hold nearly a third of euro zone’s bad loans: ECB.”

The post As Elections Loom, Which Countries May Be Next to Leave the European Union? appeared first on Forex.Info.