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The FxPro Analyst Team

Advance Figures Weigh On U.S. Q2 GDP Forecast

The Atlanta Federal Reserve reduced their second quarter GDP growth forecast to 1.8% from 2.3%, according to the data on wholesale and retail inventories in June released on Thursday by the U.S. Census Bureau. This was the first time that quarterly data from last month was provided ahead of the reveal of GDP, previously being released after a month. The figures are indicators for today’s GDP number. The retail inventories showed a moderate increase. Another figure released yesterday was the ...

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Bank of Japan surprises markets by a modest monetary stimulus

Today the Bank of Japan surprisingly announced a modest monetary stimulus in an 8-1 vote, keeping rates steady at minus 0.1% and the purchase amount of Japanese government bonds was also left unchanged at an annual rate of 80 trillion yen ($778.5 billion). Alternatively, the BoJ would enlarge the annual ETF purchases to 6 trillion yen ($56.7 billion), from 3.3 trillion yen previously. It also doubled the size of a 4-year lending program for local companies to $24 billion in order to underpin ...

The FxPro Analyst Team

Bank of Japan Under Pressure As Abe Announced $265 billion Stimulus Package

The Bank of Japan will its announce monetary policy statement along with interest rate decision on Friday 29th July. Market expectations are that BoJ will likely implement stimulus measures, even a rate cut further lower than the current negative rate of 0.1 %. Ahead of the BoJ’s statement, on Wednesday 27th July Kyodo News reported that Japanese Prime Minister Shinzo Abe announced an economic stimulus package sized over 28 trillion yen ($265 billion). The timing for the statement to be ...

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Groundhog Year?

The Fed statement gave the briefest of lifts to the dollar, but this proved to be short-lived. The statement had the near-term risks to the outlook as being diminished and one member voting for higher rates (George). There has been some talk of a rate hike as early as September, but the market is not yet pricing that in, with only around a 25% probability of a hike in the September meeting. Still, we will have to watch the data and rhetoric carefully in the run up. The Fed has been caught out ...

The FxPro Analyst Team

Fed Rate Decision This Evening

Fed will announce the interest rate decision along with the FOMC statement this evening at 7pm UK time. Markets expectations are that Fed will likely keep rates unchanged at 0.5% as the overall economic outlook is not solid enough for a rate hike. The outperformance of the U.S. labour market, retail sales and ISM indices in Q2 brighten the economic outlook. While the aftermath of Brexit and the unreached inflation target of 2% are likely to make the Fed keep interest rates on hold. The U.S. ...

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The yen rollercoaster

Today will be about waiting for the Federal Reserve decision this evening. Of course, there is no tangible chance of a change in rates, so the focus will be on the shifts in the statement and on their assessment on the outlook for policy. The last meeting saw the uncertainty surrounding the UK’s Brexit vote holding the Fed back. That’s now passed, even if the result was not as expected, so the focus is back on the domestic economy and whilst the latest data showed headline employment ...

The FxPro Analyst Team

Oil Prices Hit 3-month Low As Fundamental Weakens

West Texas Intermediate (WTI) spot hit 3-month low of $43.14 on Monday owing to market concerns on the U.S. oil oversupply, sluggish global demand and a strengthening dollar. Firstly, energy service firm Baker Hughes reported that the number of the active oil rigs in the U.S. has increased for the fourth consecutive week from 357 to 371. In the past two years, the decline in the U.S. drilling activity had provided support for oil prices. Nevertheless, the trend seems to reverse at present. ...

FxProUpdates

Winding down

The single currency has fallen out of the limelight, largely because there have been more dominant themes driving most of the other majors currencies in recent weeks. It’s also notable that it’s been moving away from having interest rate as the primary driver. The one month rolling correlation between EURUSD and the 2Y interest rate spread between the US and Eurozone has moved into negative territory for the first time since early 2015. Normally the positive correlation corresponds to the euro ...

The FxPro Analyst Team

Sterling Plunges As Services and Manufacturing PMIs Indicate Contraction Post Referendum

The Services PMI (month-over-month) released falling significantly from 52.3 in June to 47.4 in July, which is the lowest level since the April 2009 post-financial crisis. The indicator was surveyed from a variety of service sectors, a reading below 50 indicates economic contraction. The sharp fall was a result from the impact of the referendum outcome to leave the EU. Despite the Manufacturing PMI figure being 49.1, more than the expected figure of 47.8, it still fell from the previous figure ...