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Today is 49 years since Bretton Woods. Why it matters more than ever

Deficits are a major challenge to the dollar-based system On August 15, 1971 -- exactly 49 years ago -- the gold-pegged Bretton Woods system collapsed. After nations began to demand redeeming dollars for gold, President Richard Nixon shocked the world with the following after secret meetings at Camp David:


Oil producers trapped by kingpin Saudi Arabia

A closer look at oil prices and OPEC, Saudi Arabia It goes without saying that oil prices largely depend on global output which is regulated through quotas imposed by OPEC on major oil exporters. Nevertheless, quotas and agreements of the cartel are not the only driving forces in the oil market that has become the political theatre with the key actors: the US, China, Russia, and OPEC. So, global investors are watching the breathtaking performance directed by Saudi Arabia. Production cuts keep global market balanced  It is common knowledge that the only way of fine-tuning oil prices is coordinated production cuts. In response to declining demand, the cartel agrees on output cuts. At the same time, oil exporters step up production rates when global demand is on the rise. However, not all oil exporting countries are committed to such agreements. Actually, the share of oil from the defiant countries in the total output accounts for 10-15% that saves the global oil market from a glut. Non-OPEC Russia and Norway still participate in the pact. Despite the seeming unity and common interests of OPEC and its allies, both the participants in the pact and the violators enter into agreements with an eye on their own goals. In practice, all of them seek to outpace rivals and earn at most. As a result of such ambitions, Russia and Nigeria breached their commitments in terms of output and exports in April and May. OPEC did not neglect such violations. In July, the cartel decided to scale back historic output cuts starting from August. At the same time, amid the cautious revival of the production, Nigeria, Russia, and other defiant countries are not permitted to ease quotas. Experts say that Russia and Nigeria ventured to boost output in the wrong time as global oil prices slumped in April - May to the weakest level over 13 years. Remarkably, crude prices briefly traded even below zero but it will be discussed a bit later.                                When it comes to pricing trends in the oil market, it is important to pinpoint the market leaders and the most comfortable export prices for them. For Russia, the lowest threshold which makes oil exports gainful is $25 - 30 a barrel. However, this is the price which generates modest revenue and enables an oil company to make up for production costs but does not allow investment in new oil projects. To encourage development of the oil sector and ensure steady revenue to the public purse, the price should be higher at $35 - 40 a barrel. The situation is even more complicated for the US. Its shale companies battled successfully with other oil suppliers 5-6 years ago. Nevertheless, US shale firms make profits at $40 - 45 a barrel that is certainly above the production cost. If the oil price falls below the drilling cost, US shale producers do not launch new drilling rigs leaving 50% of available rigs idle. The thing is that the US is not able to impact directly on the oil market when the global oil price slips below $40.                      Amid the uptrend of oil prices, Texas, the cluster of shale facilities, virtually floods the global market with oil, so the oversupply pushes oil prices below $40 and American shale companies again have to curb their output. In other words, despite the rapid technological advance that drives costs down, the US is certainly less influential than the kingpin of the oil market, Saudi Arabia. Oil traders joke that Riyadh can pump oil just thrusting sand anywhere in the vast desert with a finger. In fact, oilfields are very shallow in the Kingdom of the Two Holy Mosques. Saudi Aramco makes a profit invoicing its crude at $15 - 20 a barrel. Besides, the Kingdom has another amazing tool. Unlike other export-reliant economies, it can keep afloat when oil prices tumble below $10 and even at negative market quotes. How come? The truth is that the oil industry makes up over 50% of its GDP. In terms of foreign trade, oil exports account for 90% of its trade balance. Thus, Riyadh has amassed humongous reserve funds, so that it can woo its customers by low invoices for months and perhaps for years. The beauty is that the Saudi authorities do not have to launch large-scale social programs like those in the US or Russia.      For traders speculating in currency pairs, commodities, and bonds, it would be a good idea to be aware of those price corridors for major oil exporters. This information helps to foresee and recognize a trend for a currency, commodity, and equities in a particular country. Importantly, bond traders should grasp the point that cheap oil drags down not only stocks of oil drilling and servicing companies but other oil-related firms.              Quotes can turn negative Market oil quotes are seen as the most accurate barometer of global economic conditions. If the world's economy is booming, oil is trading in the uptrend. On the contrary, an economic crisis pushes oil prices down. In April 2020, the price of US oil turned negative for the first time in history. It means that shale producers were paying buyers to take the commodity out of their storage facilities. The question is why they did not just pile up their stocks or did not turn their drilling rigs to the sleeping mode. First, their storage capacity could run out in May. Indeed, nobody predicted that the coronavirus would cripple manufacturing activity worldwide that would slash global energy demand. Mass media posted photos of thousands of tankers jammed along the US shores because oil companies had to rent tankers to store exorbitant oil as inland storage facilities had been stuffed in full. Second, the principle of oil drilling is a nonstop production cycle. Once an oil rig was launched, it is impossible to cut a stream which flows under pressure. Technically, an oil flow could be made thinner by tightening a valve but it cannot be shut off completely. If hydrostatic pressure gets too strong, this will destroy the oil well. Back to trends in the oil market, prices respond to any change. The global economy was reopened in early May and oil prices recovered to the level of $40+ a barrel that is comfortable for almost all market participants.                       US - China jitters affect oil Apart from the coronavirus, the jitters between the US and China also play havoc with the global economy and the oil market. The two top economies have been engaged in the lingering trade war. No wonder, oil quotes are highly sensitive to oil production rates and energy demand of the two largest oil consumers. If Washington or Beijing slaps new tariffs on each other's imports, oil prices instantly go down. In contrast, a thaw in the relations is mirrored in growing oil prices. Those who trade oil-related assets are recommended to keep close tabs on two factors in six months ahead. Make sure you monitor developments in the US - China trade war as well as reckon the risks of the second pandemic wave worldwide this autumn - winter.             This article was submitted by InstaForex group. For bank trade ideas, check out eFX Plus


Forex trading and making money online

Some tips on approaching forex trading Is earning money online trough forex trading really possible? Well - it is - but it is not that easy. You cannot enter the financial market expecting to become a millionaire within a few days. But if you are willing to put some time in it, using a few simple techniques you could earn a fixed income over a long period of time. In the following sections, we gathered the best tips on how to approach to forex trading (and trading in general), in order to earn money online. Establish Safe and Strong Strategies Your strategy in forex trading is considered to be your strongest armor, and it can make the difference between successful and unsuccessful trading. There should be a well-thought-out trading strategy that considers the risks you can afford related to your investment. Your trading strategy should always include the stop-loss and take-profit orders to protect you when the market turns in an unfavorable direction. Mental Preparation After what being said about trading strategy, at the end of the day it comes secondary to the most important thing, which is doing your mental preparation first. It does not matter how strong your strategy is, it just becomes completely irrelevant without the right mindset. Trading is a very emotional practice - and you must always be aware of that. Perhaps the most important skill in trading is the ability to regulate your emotions. Not sticking to the strategy and acting on one's emotions is where most of the traders fail. Accept that both loss and profit are inevitable part of trading - this will help you to make profit on the long run. Never Stop Learning You can never get it done. Never stop learning new trading methods online, even after you think you are an expert in the field. In the past, Forex traders traveled long distances and paid big prices just to attend courses or seminars, but with the progress of technology and the internet, there is an endless amount of educational resources, some of them are free. Use of the abundance of resources available to you, including trading tools, market analysis and trading signals. Most Forex brokers provide you with these tools, usually for free. These tools are highly beneficial in helping you expand your knowledge. Like any other activity, you should always strive to learn more. In order to be more successful, you must always find new ways to educate yourself and keeping track of what is going on in the markets. Practice Makes Perfect Before your start trading, it is highly recommended to start with a demo account, so that you can practice first. Only after that you can start trading with a real account and apply your skills in the real market. Many traders make the mistake of switching to a real account too fast, without experimenting and testing strategies on a demo account. As a result, they often lose money, because they didn't take the time to test their strategy and finding possible flaws in it. This article was submitted by LegacyFX. For bank trade ideas, check out eFX Plus


7 pharma stocks from EuropeFX you need to know for a Covid-19 vaccine

What are the stocks you need to know in the vaccine race 2020 has been defined by the outbreak of Covid-19, which according to many health experts has yet to even reach its peak. To date, a vaccine has not yet been created to combat the virus, though pharmaceutical companies worldwide are aggressively pursuing one. This has made investment in pharmaceutical stocks one of the most attractive options in 2020, given the huge potential upside of rolling out the first vaccine for Covid-19. EuropeFX is clearly cognizant of this demand, having recently expanded its own offering to include a basket of Pharma Stocks. The brokerage is now offering exposure into seven different pharmaceutical companies that are currently the frontrunners for a Covid-19 vaccine.   Why now could be an interesting time to invest in Pharma Stocks Hundreds of thousands have died worldwide and the demand for a vaccine has never been higher. This has created an unprecedented demand, which could catapult a pharmaceutical's valuation through the roof overnight. Traditionally, pharmaceutical companies face long roads to inventing vaccines. Long before these get to the market, a vaccine has to pass multiple stages of trials to ensure its safety. These are decreased however once the World Health Organization (WHO) has announced a pandemic, which is the case for Covid-19. As a result, several pharmaceutical companies have seen an extraordinary level of speculative interest from investors during the trial stages of a vaccine. Which companies could you invest in? EuropeFX now has on offer the seven pharmaceutical companies leading the race for a Covid-19 vaccine globally. This includes the following companies: Gilead Sciences Inc. (NASDAQ:GILD) A research-based biopharmaceutical company, Gilead Sciences, currently carries over twenty-five marketed treatments in the United States for HIV and Aids, Liver Diseases, Hematology and Oncology, Cardiovascular Disease and Inflammation and Respiratory Disease. Gilead is currently in Phase-3 trials for Remdesivir, a Covid-19 drug. Merck KGaA (NYSE:MRK) Founded in Darmstadt, Germany, Merck & Co is active in 66 countries and with around 57,000 employees, the Company generated sales of €16.2 billion in 2019. The Company is active in all areas of pharmaceutical production and food safety and is heavily involved in the performance material sector for a broad and diverse range of industries. Amgen Inc. (NASDAQ:AMGN) Founded in the United States in 1980, Amgen has grown to be one of the world's leading independent biotechnology companies. Amgen is currently focused on six therapeutic areas: cardiovascular disease, oncology, bone health, neuroscience, nephrology, and inflammation, the Company generated sales of $22.2 billion in 2019. Dynavax Technologies Inc. (NASDAQ:DVAX) Dynavax Technologies Corporation develops and commercializes novel vaccines. The Company's first commercial product, HEPLISAV-B [Hepatitis B Vaccine (Recombinant), Adjuvanted], a hepatitis B vaccine for adults, is approved in the United States. 2019 saw product revenue of $34.6 million. Biogen Inc. (NASDAQ:BIIB) Founded in Geneva, Switzerland, Biogen helped pioneer the biotechnology industry. A leader in the development of treatments for Multiple Sclerosis, Spinal Muscular Atrophy, and Alzheimer's Disease, Biogen's revenues in 2019 were over $14.3 billion, for a 4.5% increase in total revenues year over year. Biotest Aktiengesellschaft (XETRA:BIO3.DE) Founded in Germany, Biotest markets different products in three therapeutic areas: clinical immunology, hematology, and intensive care medicine. The Company is active globally, with locations in Europe, South America, and the Russian Federation. 2019 saw revenues of over €419 million, and the Company embarked on an ambitious expansion program with investments of over €300 million planned for their Dreieich location with the creation of over 300 new jobs in the region. Moderna, Inc (NASDAQ:MRNA) Moderna, Inc., a clinical stage biotechnology company, develops therapeutics and vaccines based on messenger RNA for the treatment of infectious diseases, immuno-oncology, rare diseases, and cardiovascular diseases. About EuropeFX EuropeFX is a global leader in Forex, CFDs, stocks, commodities, cryptocurrencies, and more. The company utilizes STP trade execution, offering live webinars and education sessions and an extensive lineup of tradable assets, markets, platforms and trading options. Risk Warning: CFDs are complex instruments and carry a high risk of losing money quickly due to leverage.  78.94% of retail investor accounts lose money when trading CFDs with this provider . The information contained in this market overview should in no way be construed as investment advice and/or as a proposal and/or request for trading activities and financial transactions.  The data contained in this market overview is not necessarily real-time or error-free.  The data and prices on the material are not necessarily provided by a market or exchange, but by market makers, so that prices may not be accurate and may differ from the actual price in a particular market, meaning that prices are indicative and not suitable for trading purposes.  There is no guarantee and/or prediction of future performance.  EuropeFX, its affiliates, agents, directors or employees do not guarantee the accuracy or validity of any information or data provided and shall not be liable for any loss arising from any investment based thereon.  Trading Forex/CFD's carries a high level of risk and may result in the loss of your entire investment.  Forex/CFD's are leveraged products and therefore trading Forex/CFD's may not be suitable for all investors.  It is recommended not to invest more money than you can afford to lose in order to avoid significant financial problems in case of losses.  Please make sure that you define the maximum risk for yourself. For bank trade ideas, check out eFX Plus


One mobile trading app from EuropeFX to rule them all: Introducing eFXGO!

EuropeFX brings you eFXGO! Life is increasingly on the go, placing a greater emphasis on mobile trading apps and technology. Indeed, users are demanding more from these apps than ever before, placing a greater premium on such technology. Many brokers have struggled to effectively satisfy these needs. However, EuropeFX has met the challenge head on, culminating in the launch of eFXGO!, an intuitive trading app for FX and contracts-for-difference (CFDs). Why you should be using eFXGO! Traders demand more from their brokers, and by extension the technology they have at their disposal. In an increasingly competitive field, users want to feel greater agency over their trading, along with access to the same tool suite available at traditional desktop trading desks. This is no easy feat, though eFXGO! has managed to check off all the right boxes. For starters, eFXGO! isn't simply a scaled-down desktop platform. Instead, the app operates as a sovereign advanced trading technology that is engineered for mobile devices only. The entire framework of eFXGO! is tailored specifically for mobile trading, which allows it to perform a range of specialized functions. The native Android and iOS app are fully compatible and streamlined to work with all existing EuropeFX systems, including MT4. Modern day traders rely on a basket of different assets. eFXGO! offers access to upwards of 100 tradable assets, including major, minor, and exotic FX pairs, commodities, and CFDs covering shares, indices, and spot metals. Users of MT4 and other existing platforms will feel right at home with eFXGO! The difference lies in the flexibility and fine-tuned feel the app provides while trading on mobile devices. Thanks to its dedicated mobile design, users are able to take advantage of improved trade flexibility and order execution. This extends to trades directly from chart viewing, saving users the trouble of sorting through multiple pages. Moreover, trade alerts help keep all users abreast of any developments and updates, placing them in greater control over their positions. eFXGO! is also built on offering precise entry and exit points on all your positions. One of the biggest strengths of eFXGO! is its ease of use for first-time users. The app has an extremely familiar feel and traders both advanced and novice can take advantage of an optimized and clean interface. Unlike many other platforms, eFXGO! is backed by in-app support that is available around the clock, five days a week. The app is also defined by its flexibility, syncing directly with the EuropeFX client area as well as its supported platform variants. This is instrumental in ensuring a smooth trading experience between multiple accounts so you can spend more time trading and less time figuring learning the interface. eFXGO! also has made security protocols an area of emphasis. This includes relying on encoded and encrypted data transmission to give you more piece of mind. Find out today what eFXGO! can do for you by downloading it today to your Android or iPhone!  About EuropeFX EuropeFX is a global leader in Forex, CFDs, stocks, commodities, cryptocurrencies, and more. The company utilizes STP trade execution, offering live webinars and education sessions and an extensive lineup of tradable assets, markets, platforms and trading options. Risk Warning: CFDs are complex instruments and carry a high risk of losing money quickly due to leverage. 78.94% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For bank trade ideas, check out eFX Plus


Qualcomm stock is making the biggest moves: Will the rally continue?

What to make of the latest moves in Qualcomm? Qualcomm triumphantly ended July with a massive 15% gain in 24 hours. QCOM.US broke free from the significant resistance at $95 on Thursday and peaked at $107, going past for the first time its previous highest point at $96 last January. It is now trading at $110 and is up by 24% this year to date. The massive spike last week came after Qualcomm announced that they finally closed a settlement agreement with telecom giant Huawei Technologies Co. The long-awaited patent-license settlement will push Qualcomm's expected profit and revenue in the present quarter.  Qualcomm anticipates an increase in unadjusted fiscal fourth-quarter earnings from $2.12 to $2.32 per share with an $8.1 billion revenue (from $7.3 billion). It is beyond analysts' estimates. QCOM.US breaks the resistance at $95 on Thursday, SimpleFX WebTrader On Monday, QCOM.US leaped another 3.8%, recording the current all-time high at $112 after Bernstein analyst Stacy Rasgon upgraded the stock from "market perform" to "market outperform." He said thatQualcomm is an attractive option for investors looking into 5G technology and that it may even sell chips to Huawei in the future. Ragon added that the chipmaker's management team is performing better and that the chipset margins could go higher than 20% because of the ramp in Apple smartphones. Qualcomm is a developer of wireless technology and a designer of smartphone chips. They have CDMA and OFDMA tech patents, which are the skeleton for 3G and 4G networks. The company aims to be the leader in 5G network technology. Analysts project that Qualcomm could record a 30% revenue growth in 2021, thanks to its licensing business with Apple and Huawei and the mass adoption of 5G coverage. Qualcomm is a strong competitor in the computer and tech stocks. According to Nancy Tengler, CIO at Laffer Tengler Investments, Qualcomm had the best chance to continue its rally to August among the top-performing stocks last month. In an interview with CNBC, she said that Qualcomm performed well in the last quarter with improved guidance, Huawei settlement contracts, and its 5G handsets. QCOM.US moves above the 50-, 100-, and 200-day SMAs, SimpleFX WebTrader Qualcomm's market cap is now at $125.18 billion. QCOM.US is hovering above the 50-, 100-, and 200-day simple moving average lines, which is a bullish signal for traders and investors. Interested in trading Qualcomm stocks? SimpleFX isthe most convenient way to trade popular stocks online. Trade forex, stocks, crypto, and precious metals on your laptop or smartphone anytime anywhere. No commissions. Guaranteed among the lowest fees. No minimum deposits. Open a SimpleFX trading account with only your email address. It's that easy!Start trading today. This article was submitted by SimpleFX. For bank trade ideas, check out eFX Plus


Trading ideas for the week ahead

What to expect in markets this week? In terms of markets, the epi-center of the world revolves around the US bond market, it's everything. On Friday we saw nominal bond yields up 3 to 4 basis points on US treasury 10s and 30s, yet inflation expectations fell a touch and the results were 'real' yields moved 4bp higher. Is this a taste of things to come? The moves in real yield were hardly pronounced but the effect was a 70bp rally in the USD, while the NAS100 fell 1.1% and commodities were weaker. It is all one trade and if we start to see yields higher, and that is a big if, but the prospect if elevated, then what we saw on Friday may be a taste of things to come. With this in mind, arguably the three most important instruments in markets over both the short- and medium-term are: US 'real' Treasury yield - the only game in town and the move deeper and deeper into negative territory has been the key tailwind for growth stocks (a la tech), gold/silver/crypto and the USD. Real yields reflect expectations from the Fed and have moved a long way as we gear up for a major change in policy in September to target average inflation. If this trade is to continue real yields hold the key. Any lift in real yield could see value outperform and compel USD shorts cover.Inflation is key, it is the one constraint that will change Fed policy, although that is a 2021 story, if not 2022. US 5 & 10-year breakevens look at average inflation expectations over a set duration. Breakeven rates have moved a long way since 19 March, but if real yields are going to head lower then we need to see inflation expectations moving higher while nominal bond yields stay anchored.US 5y5y forward breakevens (5-year inflation expectations starting in five years' time). Similar to breakevens, but they are a slower mover.  We know the Fed looks at forward inflation expectations, so should these march higher than it could have big implications for markets. White - NAS100, purple - US5yr real Treasury yield (inverted), orange - gold (Source: Bloomberg) Big picture drivers: US fiscal negotiations - while fiscal talks continue, Trump's move to sign four executive orders should be fairly well received by the markets, even if the measures reduce some of the urgency to strike a deal. At the margin, it increases the prospect the Dem's come closer to the Republicans fiscal proposal, and I still feel we get a deal of around $1.5t, either this week or next.US-China talks - both nations hit the negotiating table on Saturday, with the discussion falling on the Phase 1 deal and China's mandated $200b increase in imports over two years. With focus on Tiktok (and its likely suitor), and the US sanctioning Chinese tech firm, as well as HK Chief Executive Carrie Lam, it will be interesting to read the level of tension in the room. Also, consider that Huawei's temporary license to work with US firms expires on Thursday and the prospect it won't be rolled over is elevated.US politics - We should hear Joe Biden's pick for VP early this week. Unless we see a shock appointment for Elizabeth Warren, a probability the market places at 4%, then the news of placement of Kamala Harris or Susan Rice shouldn't move the dial too greatly. The saying goes, a good pick won't win you an election, but a bad pick will lose you one. If I were a betting man, I like Susan Rice as value, although Harris has been the front-runner for weeks for a reason.Covid19 trends - always a consideration for the week ahead, as it all is all-encompassing - sadly, and affects everything we do in life.US high-frequency data - with the US payrolls out of the way, it is clear US data continues to come in better than expected. From here, the market will be watching higher frequency data where they can get it - these include restaurant bookings, flight activity, initial jobless and continued claims, credit card spending and traffic congestion statistics.For those trading the AUS200, the focus will fall on FY corporate earnings, with nearly 30% of the index due to report this week. That includes FY numbers from CBA and an update from NAB. Weekly implied volatility matrix Monday China - July credit data (no set date, but due any day this week) - M2 money supply (consensus 11.1%), new yuan loans (consensus RMB1.2t), aggregate financing. The market is focused more on US-China relations than China's credit data at this stage. Tuesday Australia - July Nab business confidence (11:30aest) - there is no survey to derive consensus and unlikely a market mover, but certainly a survey the RBA is looking at quite closely. The implied low (with a 68.2% degree of confidence) in AUDUSD sits at 0.7070, which takes us to horizontal support (drawn from 10 June high) - one for buyers of dips. UK - July jobless claims (16:00aest), ILO unemployment rate (consensus 4.2%), employment change 3m/3m (-298,000 jobs) Germany - ZEW survey (expectations/current situation - 19:00aest) - consensus is for a decline in the 'expectations' survey to 55.6 (from 59.3), although these are still levels not seen for more than five years. The current situation should improve but at -69 is still deeply negative. Watching the 200-day MA on GER30, with the 12,200 swing a line in the sand. EURUSD looks supported into 1.1693/84, where a break below would see vols pick-up. US - NFIB small business optimism (20:00 aest) - consensus is for a small decline to 100.4 (from 100.6) Wednesday Australia - Westpac consumer confidence (10:30aest), where the risk of a shift lower is elevated due to COVID-19 restrictions in Victoria.Q2 wage price index (11:30aest) - the market expects to see wages increase 0.3% QoQ and 1.9% YoY NZ - RBNZ meeting (12:00 aest) -While the RBNZ will remain dovish, there will be no change to rates. There is scope for an increase in the banks QE program, given the rise in government bond issuance. Look out for signs the RBNZ could be heading in a similar path as the RBA by capping yields through adopting yield curve control. There is also a belief we see a positive revision to the bank's growth forecasts. AUDNZD is eyeing key resistance into 1.0866 and a close through here opens up a move to 1.1000 - consider the influence of relative AU-NZ financial conditions. UK - Industrial/manufacturing production (+9%MoM). We also get monthly GDP for June (consensus +8%) and theQ2 GDP aggregate print - consensus is for -20.5% QoQ, or -22.5% YoY US - July CPI/core CPI - consensus is for headline inflation to rise 0.3%MoM (+0.7%YoY) and core 0.2% MoM (1.1%YoY). Markets are more sensitive to inflation expectations, through breakeven rates or forward-inflation rates (5y5y forward breakevens) and the impact these have on 'real' rates - arguably the most important variable in any markets.  Thursday US - Fed member Rosengren discusses the US economy (00:00 aest). Fed member Daly speaks at 05:00aest. Not sure we'll learn much from either Fed member, with traders looking ahead to the July FOMC minutes (20 August) and Jackson Hole (27th August) Australia - July employment change - the market expects 30,000 net jobs to be created (economist range +150k to -120k), with the unemployment rate due to rise to 7.8%(from 7.4%) as the participation rate increases 40bp to 64.4%. Also watching hours worked. The marquee event in Oz and holds volatility risk given the sheer dispersions in forecasting. US - Initial jobless claims (22:30aest) are expected to decline modestly to 1.1m, with continuing claims also reduced to 15.8m (from 16.10m). Well worth watching given the better numbers seen last week - will these start trending lower? Friday Australia - RBA gov Lowe appears before the Parliament Economic Committee (09:30aest) China - July industrial production (12:00 aest - consensus 5.1%), retail sales (0.1%), fixed asset investment (-1.6%). The improvement continues, albeit at a slower pace. US - July retail sales (22:30aest) - consensus is for 1.9%, down from 7.5% in June. The control group element - the basket of goods that feeds into the Q3 GDP calculation is expected at 0.8%. US - Industrial Production (23:15aest) - consensus sits at 3%. University of Michigan survey (sub-surveys - sentiment, current conditions, expectations, 1 &5-10yr inflation expectations). This article was submitted by Chris Weston, Head of Research at Pepperstone. For bank trade ideas, check out eFX Plus


Gold rush: Why the precious metal is trading at all-time highs

A closer look at gold Investors in precious metals have probably noticed a trend emerging over the past few months that has seen gold soaring to record highs. What is the cause for this and more importantly will it continue? 2020 has been anything but ordinary for markets. With an abundance of gloom and bad news wrought by the outbreak of Covid-19, demand for gold has flourished, catapulting the yellow metal higher due to several trends. What to make of gold's rise Gold recently topped out at an all-time high earlier this week, crossing over $2,000 for the first time.The price was driven in large part by an erosion of the US dollar and seemed to easily overtake a previous high of $1931 set back in August, 2011. To better understand the recent strength behind goldhowever we must dig a little deeper. One does not have to look very far to uncover some warning signs of a recession. (caption of image: Gold prices) For example, the recent economic data in the United States saw the largest drop on record of GDP in a quarter. Beyond the US, the International Monetary Fund (IMF) is projecting a 5% annualized decline in the world economy. Consequently, central banks globally have opted to juice up financial markets by injecting billions to help stabilize economies throughout the developed world. In Europe and the United States this has resulted in new currency being printed. The repercussion of increase in money supply leads to lower interest rates, while also increasing the amount of currency in circulation. As such, these currencies tend to weaken due to inflation, which is what is happening with the USD and other majors. With normal safe haven currencies in question, this also creates another layer of demand with gold, as it is seen as the principle option for doom and gloom investing. With the virus not even close to abating, it is likely this trend will continue in the second half of 2020. The price of silver has also spiked in recent weeks, or 25% in July, netting an even larger increase than gold. Still, the price of the white metal is not even close to its all-time highs and is seen as undervalued. With gold markets supercharged at the moment, silver could be an obvious beneficiary as investors look to put money into precious metals. The ratio between gold and silver is also suggesting silver is very cheap at the moment, which could see further grounds for growth. Looking ahead, precious metals should be able to retain their luster with good news in short supply across the globe.  With many countries openly contemplating re-entering lockdowns in some capacity, any hope for a quick economic recovery seems wildly optimistic. In such a scenario, precious metals will continue to be in demand.  This article was submitted by CMS Prime.


Global equity market on the run

A look at what is driving markets at the moment Equity markets around the globe have posted significant performance after March 2020 lows caused by the global lockdown. In some cases, equity markets have recorded a performance of more than 50%. In the chart below, we see clearly that Equity markets have some sort of disconnection with real Economy as many areas in the World are still in quarantine, and the economic activity seems anemic. Specifically, the US stock market has the best performance from all the other Markets. VIX calms after the Storm Important to note here is that the VIX Index (Fear factor: Inverse relation with Equity indices: VIX goes up while Equity indices go down) posted a historic high of around 80 and right now is hoovering below 30. Equity Fundamental Review Stretch Valuation? or Future Cashflows...... From Fundamental point of view, the Equity market seems a bit messy as fundamental metrics can be tricky and misleading. From the one hand, we have the lockdown (lack of revenue generation) and from the other hand we have stimulus packages that various Governments have put in place.  Nevertheless, the earning season is up and running with many companies reporting their earnings reports, while most of them are easily beating the Analyst Estimate. Important to note here, is that the market valuation might seem a little stretched, however market participants are discounting 2021 and onwards. Also, the supporting monetary policies that a lot of Central Banks have implemented give a breath to the valuations. Equity Technical Review S&P 500 holds within bullish channel S&P 500 has been developing within an ascending channel over the last four months, keeping hopes for a brighter outlook in the short-term. Another bullish signal is that the 50-day SMA has posted a golden cross with the 200-day SMA, indicating that the positive pattern may continue in the medium-term. The technical indicators give a clear positive direction, as the Stochastic oscillator is hovering in the overbought territory and the RSI is upward sloping above 50-threshold level. If the index extends gains, resistance could be found at the five-months-high of 3397 psychological level, while if it faces selling pressures, immediate support would be given at 3123 level which is near the 50-SMA. Moreover, if the price manages to surpass below the moving average, the attention could be shifted to the 61.8% Fibonacci of 2933 level. FX Market Technical Review EURUSD keeps strong uptrend Looking at EURUSD in the daily chart, the pair had an impressive increase this week, jumping above the 1.1494 barrier and is testing now the 1.1591 high level, which was achieved in January 2019. A strong positive trend seems to be in place, and this is technically justified by the fact that the ADX indicator is increasingly above the 25-threshold level. Furthermore, the stochastic oscillator is lying in the overbought zone and the MACD keeps increasing momentum above its signal line. If the bulls stay in control and surpass the obstacle at 1.1591, the next resistance level to watch is the 1.1810 high, which was recorded on September 2018. On the flip side, if selling interest picks up, initial support could come from the fresh 1.1494 level, while moving lower, the door could open for the 1.1367 hurdle near the 20-SMA. In brief, both, the short- and medium-terms are currently looking bullish, though it should be mentioned that there is a possibility of a pullback in the short-term momentum if the stochastics create a bearish crossover. FX Market Technical Review AUDUSD posts a pullback after challenging a fresh 1-year high AUDUSD has jumped this week towards the one-year-high but found an important resistance at the 61.8% Fibonacci retracement level of 0.7132.A pullback from the positive outlook seems to be in place and this is reflected in the flattened Ichimoku lines. Moreover, both the MACD and the RSI momentum indicators are flattening in positive areas and suggest a short-term pausing of the uptrend. Also, the %K-line of the stochastic oscillator is posting a bearish cross with the %D-line in the overbought zone, supporting the view for a possible downside correction.  If prices continue to bounce higher, above the 61.8% Fibonacci, resistance will come at 0.7391 price level, while a reversal to the downside could find immediate support to the fresh 0.7036, near the Ichimoku lines. Should the price surpass these lines, the 50% Fibonacci could act as resistance for the bears at 0.6822, which is parallel to the Senkou Span A of the cloud. Summarizing, AUDUSD has been maintaining a neutral to bullish outlook since March 2020 and an advance above the 61.8% Fibonacci of 0.7132 would change the outlook to a strongly bullish one in the short-term. FX Market Technical Review USDJPY is suffering heavy losses USDJPY has turned sharply bearish today in the 4-hour chart, dropping to the one-month low, around 106.02 price level. The selling bias is confirmed by all technical indicators. The Stochastic oscillator is pointing south in the oversold area, with the %K-line recording a bearish cross, with the %D-line and the RSI sloping downwards near its 25-mark. Moreover, the Ichimoku analysis displays an overall bearish signal, since the red Tenkan-Sen is below the blue Kijun-Sen line, the current market price is moving below the Kumo (cloud) and the green Chickou Span is lying below the price chart. Should USDJPY make another move lower, traders could look for support initially at the 106.02 trough, while a drop below this would turn the focus at 104.45 level. Alternatively, if the price heads north, the nearest resistance is provided by the Kijun-Sen line near 106.78, while any new upward attempt, would likely meet the resistance at 107.52 level. A bounce above this region would open the way for the 107.79 barrier and shift the bearish bias to bullish. Summarizing, a break below 106.02 will reinforce the bearish outlook in the near-term, while the medium-term picture remains neutral. This article was submitted by Emporium Capital. For bank trade ideas, check out eFX Plus


Why Africa is now the biggest new market for forex trading

Forex trading is on the rise in Africa In recent years there has been a significant rise in demand for forex trading in Africa, with the majority of the estimated 1.3 million traders in Africa residing in South Africa and Nigeria. Not only is the number of traders and investors across Africa increasing, but the number of foreign investors is also on the rise, strengthening Africa's currencies as well as the economy greatly. With the South African Rand being one of the top 20 most traded currencies in the world at the moment, Africa offers one of the largest markets for forex trading globally. Some of the world's largest forex brokers, such as FXTM and HotForex, have become regulated with the Financial Sector Conduct Authority (FSCA) of South Africa, one of the most respected financial authorities in the industry. With the increase in forex trading in Africa, the FSCA has responded responsibly and enforced a new licensing regime known as the Over the Counter Derivative Provider license (ODP). The ODP forces all brokers with a local presence to provide transaction data such as price, instrument type, leverage ratios as well as the name and residence of the investor, to the FSCA to ensure safe and legal trading practices. The FSCA allows these brokers to offer services not only in South Africa, but also to other African countries such as Nigeria, Ghana and Kenya. View a list of regulated forex brokers in Nigeria The European Securities and Markets Authority (ESMA) enforced new restriction laws on the maximum leverage ratios allowed for European traders, forcing traders to look to other markets. These new restrictions only allow leverage ratios of 30:1 for major currency pairs, 20:1 for non-major currency pairs and gold, and 2:1 for cryptocurrencies. Leverage ratios as low as these have a massive negative impact on potential profits. Added to this, the provision of bonuses, promotions and binary options was also banned. The FSCA allows brokers to offer unlimited leverage ratios, which can potentially maximise funds greatly, and has led to more residents being prompted to start trading the African markets. Although there are minor restrictions in some African countries to prevent fraudulent activities, there is no complete forex trading ban in Africa, which allows nearly anyone to profit from these ever-growing markets. Recent lockdown measures as a result of the COVID-19 pandemic and the resulting unemployment have prompted people to explore new opportunities to earn money. The forex market is easily accessible, holds endless opportunities to make money with little required capital and traded 24 hours, five days a week, allowing people to trade either full-time or part-time. Where forex trading was always expensive and originally done by large companies and high net-worth investors, it is now more affordable than ever, with some brokers charging no minimum deposits and minimal banking fees. Another incentive to enter the world of forex trading is the multitude of free tools to ensure success, such as trading courses, demo accounts and webinars that educate beginners on how to trade, use strategies and analyse markets. Trading is made easy with the internet becoming more accessible across the African continent. All one needs is a smart phone, pc, laptop or tablet, and a good internet connection, to trade from anywhere in Africa and the rest of the world. For bank trade ideas, check out eFX Plus

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