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Author: Adam Button

Weakness in emerging market currencies is hurting imports without boosting exports

The Financial Times, citing its own research, reports that falls is emerging market currencies aren't having a synchronous affect on global trade.

In theory, FX weakness will make imports more expensive but also stimulate exports. They found that this hasn't been the case.

"The FT compared changes in the value of 107 emerging market countries' currencies with their trade volumes in the following year.

The analysis found that having a weaker currency did not lead to any rise in export volumes. However, it did lead to a fall in import volumes of about 0.5 per cent for every 1 per cent a currency depreciated against the dollar," they report.

This isn't a huge surprise. The global supply chain isn't so flexible that trade can instantly adjust. In addition, purchasers and factory-builders are slow to move production unless they believe that FX changes will be long lasting.


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Author: Adam Button

Why Credit Agricole sees another 5 cent drop in cable

Credit Agricole looks for further declines Credit Agricole maintains a short GBP/USD position from 1.5450, with a stop at 1.5850, and a target 1.4850 (spot at 1.5350). The GBP has been under pressure as of late mainly due to falling central bank rate expectations. Increased China-related growth uncertainty and further weakening commodity price developments have been driving investors' UK inflation expectations lower.

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Author: Adam Button
4

WTI crude oil extends gains to $3. Here's why

WTI crude up more than 6% in third day of gains There are two popular theories as to why crude oil prices turned around today. Here's why they don't add up. 1) Falling US oil production

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Author: Adam Button
1

Higher oil could give Fed more confidence on inflation

Three-day, 27% jump in oil prices an important factor for Fed Fed funds implied odds of a hike in September have risen to 40% from 38% earlier today. The recovery in stocks is one factor behind the rising probability but oil might be the larger driver.

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Author: Greg Michalowski
9

GBPUSD makes it's way below 200 day MA

EURGBP helping  The GBPUSD has moved below the 200 day MA (has not closed below since July 9th) and approaches the lows from July at 1.5329 and the low from Friday at 1.5334. A move below both these lows should solicit more selling with the 1.52456 the next target.

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Author: Adam Button
5

Oil shoots higher on OPEC talk

Oil prices hit $47.59 OPEC said it was concerned about "today's continuing pressure on prices" in a publication today and said it was ready to talk to other producers about the market.

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Author: Greg Michalowski
5

USDCAD coming back down

Oil prices up.  Month end volatility impacting as well The USDCAD has fallen back down after rising in earlier North American trading.  The pair at the highs extended briefly above a trend line connecting the recent highs. That did not hold up. Oil prices are up today and so is market volatility in the last hour or so and that has helped lead to a move back lower. The price is currently trading back below the 100 hour MA with trend line support at the 

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Author: Adam Button
1

European stocks slide with UK on holiday

Closing changes for the main European bourses: - German DAX -0.4% - French CAC -0.5% - Spain IBEX -0.5% - Italy MIB -0.2% Much quieter trading than we've grown accustomed to but I think that has to do more with the UK holiday and month-end than a sudden relief.

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Author: Adam Button
1

Quick bund rout giving a lift to the euro

German 10-year yields jump 5 bps as month-end nears No one wants to be holding German bunds into month end. They're getting torn up and it's helped the euro rebound from below 1.1200.

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Author: Greg Michalowski
4

EURUSD: Bounces off support

Trend line holds on a test. The EURUSD fell to support trend line () and is bouncing. The trend line on the current bar came in at 1.11767. The low reached 1.1179. The price is back up above 1.1200.  

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Author: Greg Michalowski

GBPUSD extends. Makes new lows.

200 day MA approached The GBPUSD is extending the days narrow trading range (). The pair is approaching the key 200 day MA at the 1.5365 level. The price fell below this MA on Friday for the first time since July 10 but could not close below that level. A break and close below would be more negative for the pair. Testing.

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Author: Adam Button
4

Month-end fixing will underpin US dollar - Barclays

Barclays Capital's month-end rebalancing model generates USD buying signals across the board "We expect the passive rebalancing of hedges at month-end to lead to decent amounts of USD buying against all of the major currencies we include in our analysis," Barclays projects.

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Author: Adam Button

OPEC stands ready to talk to other producers about market - OPEC publication

OPEC publication highlights the difficulties in cutting production: - OPEC stands ready to talk to other producers about market but this has to be on a level playing field It highlights what OPEC has said all along -- that they understand there is over-production but they refuse to cut alone.

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Author: Greg Michalowski
1

For the USDJPY, trying to a new direction in the NY session 

Europe session tried higher The USDJPY tried to break higher in the European session, but failed. The price moved above the 100 and 200 bar MA on the 5 minute chart. It moved above the 200 hour MA (green step down line in the chart above), but those "breaks" all failed. The price for the USDJPY is now back below the 200 hour MA and both the 100 and 200 bar MAs (blue and green smoothed lines on the chart above)  It is not running away, but will it solicit move selling? Technically it should. What we know is risk can be defined against those technical levels above with the 200 hour MA at the 121.23 being a level for sellers to lean against, stay below, define and limit risk.  If the price can stay below, we should be able to wander down toward the lows for the day. That is the hope given the technical picture for the day.Looking at the daily chart below, the picture is showing some ambiguity. Specifically, the price has been able to hold resistance against a broken trend line at 121.68 (the high reached 121.62 today). ON the downside, the important 200 day MA and 50% retracement are at 120.73 and 120.68 respectively. The low today extended to only 120.87. Needless to say, if the bears are able to keep control (from the shorter term technical), a move below these longer term technical targets will be eyed.

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Author: Adam Button

Aug Chicago PMI 54.4 vs 54.5 expected

Details of the August Chicago PMI: - was 54.7 - 3-month rolling avg 52.8 - 3 components rose - Production and new orders eased off - Inventories rose to the highest since Nov 2014 This was leaked out a couple minutes early. Earlier rumors of a soft reading were unfounded and this bodes well for tomorrow's ISM report.

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Author: Adam Button

S&P 500 dips 12 points at the open

Stocks lower to begin the week The S&P 500 is down 12 points to 1977 shortly after the open. The index finished last week slightly higher despite a massive selloff on Monday.

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Author: Greg Michalowski
2

GBPUSD on holiday

UK on holiday.  GBPUSD also on holiday The UK has its summer bank holiday and the trading in the GBPUSD seems to be taking the day off as well. The pair is trading in a 42 pip trading range for the day. The average over the last 22 trading days is 115 pips. 

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Author: Adam Button

Chicago PMI may help clear up confusion on US manufacturing

Some US manufacturing surveys have been dismal, others have been solid Here is a roundup of the regional and national manufacturing PMIs so far: - Empire Fed -14.92 vs +3.86 prior Today's Chicago PMI is the final regional number ahead of tomorrow's ISM manufacturing report (exp at 52.5 vs 52.7 prior).

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