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    • Forex & Bullion Outlook, Thailand 2016

      currency trading strategies Comments Off on Forex & Bullion Outlook, Thailand 2016

      Mario Singh Official Website

       
    • MNC World News Interview, Jakarta 2016

      currency trading strategies Comments Off on MNC World News Interview, Jakarta 2016

      Mario Singh Official Website

       
    • Hike or Hike Not Continues

      currency trading strategies Comments Off on Hike or Hike Not Continues

      Fed hawks remain cautious.  Where will the dollar be heading this week?

      A summary of last week’s FOMC meeting, Fed interest rate remains unchanged.  Fed Chair Janet Yellen indicated a rate hike in 2016 is still on the table, if US recovery remains on track.  It is obvious investors will focus on US data in the upcoming months to speculate on the possibilities of rate hike this year.  There are two more FOMC meetings in 2016.  The November meeting is just before their presidential election, chances of policy changes before such a major political event is low.  That leaves us with only December for any possible rate hike announcement.  If their non-farm payroll remains around 150,000 on average for the next few months, the bet for December rate hike is likely to increase and strengthen the dollar.

      For this week, we have the consumer confidence, core durable goods and final GDP.  Consumer confidence and core durable goods are expected to drop slightly, while the final GDP to remain steady.  If there are no surprises, the dollar could be trading in a range this week.

      As mentioned last week, it would be difficult for Bank of Japan not to disappoint investors again.  And true enough, they did.  They only made modest changes to their policy with no indication of any further rate cut.  Although they maintained their inflation target, judging from the current situation, it would be difficult for them to hit their target without more aggressive actions.  A less hawkish FOMC coupled with a disappointing BOJ, drove the USDJPY towards the 100 level.  The 100 level could be an attractive price for the mid and long term investors.

      Reserve Bank of New Zealand held their interest rate unchanged as well.  In the official statement, Governor Graeme Wheeler said, “Further policy easing will be required to ensure that future inflation settles near the middle of the target range.”  This sent a strong signal to the market to expect a rate cut again before end of the year.  Since RBNZ has made known their intention, it would be wise to exercise caution before buying the Kiwi and look for selling opportunities after rallies.

      There are no central bank policy announcements this week, but heads of central banks are scheduled to speak in various events.  We do not expect them to deviate too much from their policies; Short-term volatility in the currency market may still arise from these speeches.


      Our Picks

      USD/JPY – Slightly bullish.  Fed rate hike is still on the table.  It would hurt Japan if  BOJ allows USD/JPY to fall below 100.  Can consider placing a mid to long term Buy position around 100 with a stop loss below it.

      GBPJPY (Gold) – Slightly bearish.  A strong downtrend with the immediate support around 130.50.  If price breaks the support, it would be a potential breakout trade.

      AUD/NZD – Slightly bullish.  Price rallies on dovish RBNZ versus a neutral RBA.  We expect the trend to continue, possible to look to go Long when price retraces towards 1.0450.


      Top News This Week
      (GMT+8 time zone)

      US: Final GDP q/q.  Thursday 29th September, 8.30pm.
      We expect figures to come in at 1.2% (previous figure was 1.1%).

      UK: Current Account.  Friday 30th September, 4.30pm.
      We expect figures to come in at -25.8B (previous figure was -32.6B).

      Canada: GDP m/m.  Friday 30th September, 8.30pm.
      We expect figures to come in at 0.4% (previous figure was 0.6%).

       

      Mario Singh Official Website

       
    • Yen Gain Seen at Greater Risk From Fed Hawks Than BOJ Twists

      currency trading strategies Comments Off on Yen Gain Seen at Greater Risk From Fed Hawks Than BOJ Twists

      TOKYO, SEPTEMBER 20, (BLOOMBERG): As bond investors remain glued to their screens for the Bank of Japan’s policy review decision on Wednesday, Tokyo’s foreign-exchange traders may be looking to the Federal Reserve’s announcement hours later.

      The yen is set for three straight quarters of gains, the longest rally since 2011, in the wake of the BOJ’s decision to leave its bond-buying program unchanged in July and to adopt negative rates in January. Whether Governor Haruhiko Kuroda decides to widen the gap between long- and short-term yields, or cut rates, currency strategists say the biggest threat to the yen would be signs of hawkishness from Fed Chair Janet Yellen. Over the past two years, Japan’s currency has a greater tendency to move with changes in U.S. short-term yields than with those locally, data compiled by Bloomberg show.

      Source: BLOOMBERG

      Mario Singh Official Website

       
    • Hike or Hike Not

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      Will Fed stage a surprise or hold interest rate as expected?

      Bank of England held interest rate and monetary policy unchanged.  After they slashed interest rate to historical low and expanded their asset purchase program in the last meeting, the result has been encouraging so far.  The central bank is adopting a “wait and see” approach for the time being.  The impact of Brexit cannot be assessed unless Article 50 is invoked.  Brexit headlines hit the sterling last Friday saying Brexit talks could start early next year and UK is ready to accept the terms where their banks have to give up access to clients in Europe.  If the above comes true, the impact on UK economy would be significant.  From now until the actual Brexit talks, we believe data and headline news will continue to create short-term volatility in the sterling.

      We have a couple of central banks announcement this week.  Reserve Bank of Australia will release the meeting minutes of their last meeting.  Their last statement was pretty neutral.  We expect little surprise from the meeting minutes. Bank of Japan is still facing challenges in hitting their inflation target, despite continuous stimulus and negative rate policy.  Unless they take drastic actions, it would be difficult not to disappoint investors again.  Reserve Bank of New Zealand cut interest rate last round.  Diary prices have been rising recently and Kiwi has retraced back to around 0.73.  We do not expect a back-to-back rate cut, but RBNZ is likely to remain dovish in their statement.

      The main highlight of this week should be none other than the FOMC and Fed interest rate decision.  The US has been releasing inconsistent data, which fuelled speculations on the next rate hike.  Although the recent non-farm underperformed, the previous figure was revised upwards by 20k.  The employment data (comprising non-farm, unemployment rate, unemployment claims and average hourly earnings) in recent months can be considered decent for a rate hike.  Recent retails sales; manufacturing and non-manufacturing PMIs were disappointing, all fell short of expectations.  Core retail sales (excluding automobiles) dropped 0.1% instead of rising by 0.3%.  Manufacturing PMI came in at 49.4, representing a contraction, after 4 months of expansion.  Non-manufacturing PMI came in at 51.4 versus the consensus at 55.4.  However, last Friday’s inflation data CPI was encouraging.  Core CPI (excluding food and energy) rose 0.3%, better than expected.  As you can see, the data did not present a consistent picture.  With the major US presidential election in November, we do not expect Fed to change their monetary policy this week.  If Fed provides arguments to justify a rate hike by end of the year, the dollar bull could start to run.


      Our Picks

      GBP/JPY – Slightly bearish.  A disappointing BOJ monetary policy announcement could possibly force this pair to break the 61.8 Fibonacci level.

      XAU/USD (Gold) – Slightly bearish.  The level 1309 is holding well.  A hawkish FOMC could be the catalyst to break the support.  If Fed does not show any rate hike determination, 1309 could hold on well.

      NAS/USD (Nasdaq) – Slightly bearish.  Price is near key resistance 4835.  We expect the resistance to hold.  The upside risk is a dovish FOMC.


      Top News This Week
      (GMT+8 time zone)

      US: Federal Funds Rate.  Thursday 22nd September, 2am.
      We expect figures to come in at 0.5% (previous figure was 0.5%).

      New Zealand: Official Cash Rate.  Thursday 22nd September, 5am.
      We expect figures to come in at 2.0% (previous figure was 2.0%).

      Canada: Core CPI.  Friday 23rd September, 8.30pm.
      We expect figures to come in at 0.3% (previous figure was 0.0%).

       

      Mario Singh Official Website

       
    • Australia central bank holds rates at 1.5 pct

      currency trading strategies Comments Off on Australia central bank holds rates at 1.5 pct

      SYDNEY, SEPTEMBER 6, (CNBC) : Australia’s central bank kept its cash rate steady at 1.5 percent on Tuesday, a widely expected outcome given it was only a month since the last easing and the economic background had changed little since then.

      The Reserve Bank of Australia (RBA) made the announcement following its monthly policy meeting. A Reuters poll of 33 analysts had found all expected a steady outcome this week.

      Source: CNBC

      Mario Singh Official Website

       
    • NFP Fizzles, Dollar Bull Fights Back

      currency trading strategies Comments Off on NFP Fizzles, Dollar Bull Fights Back

      USD/JPY shot past 104 after a disappointing Non-farm payroll.  Find out why.

      Last week’s finale ended with a disappointment.  Non-farm payroll printed at 151K, missing the expectation of 180K by close to 30K.  Average hourly earning rose by 0.1%, which is lesser than the consensus of 0.2%.  Unemployment rate remained stagnant at 4.9%, but market expected a slight improvement to 4.8%.  Just by looking at these figures, anyone would have expected the dollar to weaken.  USD/JPY fell more than 50 pips in the first couple of minutes.  What made everyone scrambling for an answer was USD/JPY gained 150 pips gained in the next 2 hours.  So what could be the explanation?

      Although investors were looking at the NFP figure to adjust their rate hike expectation, but many had already priced out a September rate hike even before last Friday’s data.  The underperformed data had little impact on September rate hike expectation.  The next possibility would be in December.  There are 3 months of data ahead, so investors decided to give Fed the benefit of a doubt.  The figure for July was revised upwards from 255K to 275K, which makes it the second highest in 9 months.  This could be one possible reason that motivated the dollar bull to fight back.  We continue to hold our bias towards a probable rate hike in December rather than September.

      Sterling had a good run in the last one month, gaining close to 500 pips against the greenback.  Last week’s manufacturing and construction PMIs outperformed, gave the sterling a boost to go beyond 1.33.  The big surprise came from the manufacturing sector.  The latest PMI came in at 53.3 showing expansion, versus the consensus of a slight contraction in the manufacturing sector at 49.1.  Manufacturing expanded the most since November 2015; coincidently, the sterling had been weakening since then.  A weaker pound definitely favours exports and manufacturing.  The sterling should be driven by data until end of this year unless fresh news is available as to when UK Prime Minister will invoke Article 50.

      This week would be an exciting week again, with plenty of market volatility expected.  Three central bank interest rate announcements and statements are scheduled across three days.  Reserve Bank of Australia is quite unlikely to implement a back-to-back rate cut after slashing it to historical low last month.  With the Aussie hovering around 76 cents, they are likely to remain dovish.  Canada’s job data and inflation is a worry, however, the recent GDP surprised on the upside.  With oil price remaining above $ 40, we expect Bank of Canada to maintain their optimistic outlook.  The chances of policy changes by European Central Bank are slim.  Their forecast may be gloomy, as the inflation is still way below their target.


      Our Picks

      EUR/GBP – Slightly bearish.  EUR/GBP is in a downtrend.  ECB’s outlook may be unfavourable to the Euros.  Possible buy at peaks.

      XAG/USD (Silver) – Slightly bearish.  Silver broke the neckline of a double top formation.  Price retraced back to the neckline around 19.40.  Possible short after a bearish candlestick pattern is formed.

      200AUD (ASX200) – Slightly bearish.  Price broke 5460 support.  Possible reversal in trend.


      Top News This Week
      (GMT+8 time zone)

      Australia: Cash Rate.  Tuesday 6th September, 12.30pm.
      We expect figures to come in at 1.5% (previous figure was 1.5%).

      Canada: Overnight Rate.  Wednesday 7th September, 10pm.
      We expect figures to come in at 0.5% (previous figure was 0.5%).

      Europe: Minimum Bid Rate.  Thursday 8th September, 7.45pm.
      We expect figures to come in at 0.0% (previous figure was 0.0%).

       

      Mario Singh Official Website

       
    • Fed Hawks in Jackson Hole

      currency trading strategies Comments Off on Fed Hawks in Jackson Hole

      USD/JPY shot past 102 on Yellen’s and Fischer’s hawkish comments.

      “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.” said Fed Chair Yellen in her speech during Jackson Hole Symposium last Friday.  Vice Chair Fischer further supported her comments, saying a rate hike in September and 2 rate hikes this year are possible.  The dollar rallied to a 2-week high against most of the major currencies.  The comments have pushed the odds of a rate hike in December to more than 60%.  If the upcoming Non-farm Payroll adds around 190K or more jobs, it could well push the odds even higher, together with the dollar.

      The delay in Fed rate hike is posing a challenge to other central banks trying to boost their inflation or fight disinflation.  The most recent examples are RBA, RBNZ and BOJ.  All 3 central banks wanted to weaken their currencies by slashing interest rates to historical low or announcing more stimuli.  Their currencies remained relatively strong due to the weakness in US dollar.  Fed hawks came in the right time to support the dollar.  We maintain our bias of an unlikely rate hike in September, ahead of the US presidential election in November.  The likelihood of a rate hike would be in December.

      The other factor contributing to the low inflation is the relatively low oil prices.  WTI has risen recently on speculation of possible production freeze deal … again.  But, speculations can do just this much.  WTI now hovers between $ 47 and $ 48 per barrel, awaiting more concrete progress in the proposal.  If there is no progress in the next one month, prices may head south again.

      Without a doubt, the Non-farm Payroll will be the most watched data this week.  Besides that, UK Manufacturing PMI and Construction PMI could give further clues to the impact after Brexit referendum.  The previous figures of 48.2, 45.9 and 47.4 have shown contractions in all 3 sectors, manufacturing, construction and services respectively.  Judging from the other relatively positive UK data, we do expect the upcoming PMIs to show a lesser margin of contraction as compared to the previous figures.


      Our Picks

      EUR/JPY – Slightly bullish.  Price has broken the resistance around 113.90.  The bullish momentum may continue.  Possible to buy at dips.

      XAU/USD (Gold) – Slightly bearish.  Gold is dropping as dollar strengthens.  Price is near support of 1313.  Favourable Non-farm Payroll may be the catalyst for it to break the support.

      OIL/USD (WTI Oil) – Slightly bearish.  WTI is consolidating between $ 47 and $ 48.  Near term dollar strengthen may push it towards $ 46.80.


      Top News This Week
      (GMT+8 time zone)

       

      Australia: Retail Sales m/m.  Thursday 1st September, 9.30am.
      We expect figures to come in at 0.4% (previous figure was 0.1%).

      UK: Manufacturing PMI.  Thursday 1st September, 4.30pm.
      We expect figures to come in at 49.3 (previous figure was 48.2).

      US: Non-farm Payroll.  Friday 2nd September, 8.30pm.
      We expect figures to come in at 192K (previous figure was 255K).

       

      Mario Singh Official Website

       
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