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Stock Market News (US Open) – European markets on the rise; DAX at all-time high; Dow opens above 23,000

Posted on October 18, 2017 at 1:58 pm GMT

The picture in Europe was broadly positive as US traders were commencing their trading day with the pan-European Stoxx 600 being up by 0.4% and not far away from the four-month high of 392.42 that was recorded a couple days ago. All industry sectors comprising the Stoxx 600 were in the green with technology leading the gains. The UK’s FTSE 100 was higher by 0.5%, with the German DAX and French CAC 40 higher by 0.6%. The German index was [..]

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Investment themes – The dollar, the Fed and the recent election-induced volatility

Posted on November 2, 2016 at 3:03 pm GMT

The revelation that the FBI was reopening a probe into Secretary Clinton’s use of a private email server on Friday, October 28, was enough it seems for the markets to reassess the likely outcome of the November 8 US elections.  This has caused some volatility across a range of assets although it must also be said that the shake-up seems to remain contained for now. Interestingly one of the biggest victims has been the US dollar.  Dollar / yen for [..]

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US dollar index hits fresh 8-month peak; brings it within reach of a 13-year high

Posted on October 26, 2016 at 2:09 pm GMT

The US dollar index reached its highest since early February on Tuesday at 99.11.  From its August low of 94, the dollar index has therefore rallied more than 5%.  The US dollar is now tantalizingly close to the 100.51 high of December 2015.  If it manages to overcome this level, it would be a fresh 13-year high for the greenback.  Such a development would certainly be a major event for foreign exchange markets in 2016.  It would also mark a [..]

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Technical Analysis – US oil futures drop back from 50; still positive but will they break out?

Posted on October 10, 2016 at 7:53 am GMT

Oil has rallied hard since the end of September, leading price to top 50 for the first time in more than three months.  However, it did not have enough strength to break the 51.65 early June high.  Therefore oil stayed in the 40-51 dollar range that has been in place since around mid-April this year. According to the Ichimoku analysis, oil’s prospects are positive and it should test the 51.65 high soon.  Price is well above the cloud and the [..]

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A brief take on the US dollar and the UK pound following Brexit

Posted on September 20, 2016 at 1:25 pm GMT

Brexit was one of the year’s key events, which caused quite a lot of volatility initially.  Looking at the currency market, it is worth revisiting some of the key recent fundamental influences for two currencies in particular; the pound and the US dollar. Starting with the pound, it is interesting to note that the initial shock devaluation that Brexit inspired was followed by some sideways action.  Bank of England stimulus hurt the pound initially, but stronger-than-expected economic data created some [..]

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Bad US economic news may not hurt the dollar longer-term

Posted on September 7, 2016 at 1:51 pm GMT

The US dollar has experienced quite a flip-flop in the past few weeks, as a summer that was dominated by a relatively uneventful Brexit was drawing to a close. Relatively hawkish statements from Federal Reserve officials (particularly Chair Yellen) that seemed to open the door to a possible rate hike in September, have clashed with some particularly weak readings from the two most important business surveys of the world’s largest economy. In particular, the ISM’s manufacturing and non-manufacturing surveys posted [..]

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Week Ahead – UK post-Brexit data to be closely monitored; dollar to tune into Fed minutes

Posted on August 12, 2016 at 1:31 pm GMT

The British pound will likely experience some movement next week, as one of the first major batches of post-Brexit economic data will be released.  Elsewhere, the US inflation report, some Fed speakers and the Fed meeting minutes and Japanese GDP growth for the second quarter, will all be closely watched by market participants. The week will get off to a slow start, with the first important indicator coming out of Japan on Monday in the form of GDP for the [..]

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July employment report gives hope to dollar bulls following GDP, Fed disappointments

Posted on August 8, 2016 at 2:22 pm GMT

The US dollar was under intense pressure during the period July 27 – August 2.  During this period the dollar index suddenly lost about 2.5% of its value – a brutal move for the world’s reserve currency.  Following some encouraging news out of the US economy such as personal income and spending and the ISM non-manufacturing index the dollar started a recovery which received a big boost from a very strong US employment report. The employment report was better-than-expected in [..]

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Fed may rethink rate pause if stocks and data keep looking up

Posted on July 20, 2016 at 2:57 pm GMT

There has recently been some renewed optimism that the Federal Reserve could get up from the fence it has been sitting on since December of last year.  As can be seen from the chart of the 2-year Treasury yield, a gauge of short-term interest rate expectations for the next 2 years, expectations have recovered to near pre-Brexit levels. The 2-year yield has managed to claw back to 70 basis points after dropping to around 0.5% in the immediate aftermath of [..]

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European session – Jobs number beats estimates but boost to dollar proves short-lived

Posted on July 8, 2016 at 2:46 pm GMT

The release of much better-than-expected jobs figures for June out of the United States put to rest fears that May’s weak report was the beginning of a serious slowdown in the US labor market.  The net number of nonfarm jobs created reached 287 thousand during June against economists’ estimates of just 175 thousand.  However, the previous month’s figure was revised down to 11 thousand from the original 38 thousand announcement.  Unemployment climbed to 4.9% compared to the previous month’s 4.7%, [..]

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