Weekend: US to extend reprieve for Huawei

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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Heads up: It will be a long weekend for some markets

Monday will be a holiday in the US, Canada, and Japan

Both the Canadian and Japanese markets will be closed entirely but some US markets will be open, notably the NYSE and NASDAQ. That means while certain financial institutions are closed, the stock market will still be running as per usual.

That said, we may observe lighter liquidity in trading as a result.
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Just a bit of a heads up before we head into the hustle and bustle involving US-China trade talks later on in the day.

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Japan media reports the G7 summit this weekend may end acrimoniously due to trade dispute

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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Forexlive Americas FX news wrap: US yields recover a bit into the weekend

Forex news for NY trading on August 16, 2019

Yes this week, had a day when the Dow and Nasdaq each fell over 3%. However, this week was really about yields. 

  • The 10 year yield moved from 1.745 last Friday to a low of 1.4732 before rebounding yesterday afternoon and today and are currently trading at 1.555%.  Nevertheless, that is a 10.9% decline for the week or nearly 20 basis points.  PS at the lows, the yield reached 1.4732% or -15.56% for the week.  

Forex news for NY trading on August 16, 2019

  • The 2-10 year spread went negative for the first time since 2007 (see chart below) 
The 2-10s spread traded negative for the first time since 2007

Those were the catalysts for the tumble in stocks for the week. 

The fundamental reason for the fall?  

Despite concession by the Trump administration that some of the China tariffs would be delayed until December (and some will not take place at all), the anxiety about what can and will be done as far as “a deal” remains sketchy at best.  It is the US’s Brexit dilemma. 

This week, China’s Xi said:

  • We will retaliate if tariffs go into effect in September
  • Let’s meet half way
  • Hong Kong is none of your business.

Pres. Trump said:

  • A deal will be on US terms
  • Xi should go talk to the protesters
  • The US will win

In addition, other central banks are ready to and willing to go low(er) even if the US is reluctant.   

The EU’s Rehn said that the it is better to be safe than sorry (the chance of a 20 bp cut went up for the ECB), and the Bank of Mexico went ahead and had a surprise cut. Last week, the RBNZ cut by 50 bps instead of 25 bps.  

The global trend is for lower rates and that has the market marking down rates in the US as well.  

The European 10 year yields are all making all time lows.  Germany’s low yield today was -0.727% before rebounding, and Spain got within 0.02% of reaching 0.0% (see lows in the chart below). 

European 10 year yields rebounded after nearly dragging the Spanish yields to negative

With the US 10 year at 1.56%, it seems like a steal, especially if the fundamental backdrop for the economies of the world are unknown and loaded with increased risks. 

US yields are mixed today

Now it is not alll doom and gloom.  The data in the US this week was good enough to have the Atlanta Fed GDPNow rise from 1.9% to 2.2% and the NY Fed to rise to 1.82% from 1.58% (vs a week ago). Those are better than the German and UK GDP most recent numbers which were negative.  

The key event in the new week will be Chair Powells testimony at the annual Jackson Hole Economic Symposium  on Friday.  With Pres. Trump getting on his case big time especially as stocks fell, and the market looking for 3 more cuts in 2019, the market will be looking for a dovish Fed chair (is there any choice?)  

In summary for the forex market this week (see the 5 day ranking of the strongest and the weakest), the GBP was the the strongest of the major currencies and the EUR was the weakest (helped by the Rehn comments). The USD was mostly higher with the largest gains vs the EUR at 0.98% and the largest decline vs the GBP (-0.94%).  The EURGBP was the largest moving pair with a 1.98% move (EURGBP fell -1.98%).  

That may just be covering in the GBP. Afterall the CBOT speculative positions still has the GBP shorts as the largest position. So a short squeeze is not out a surprise.  However, the Brexit clock is still ticking and Germany today was encouraging the EU27 to stick to their guns on the current deal.   PM Johnson will be going to Europe next week to meet France’s Macron and Germany’s Merkel who may just say “sod off mate” (or the equivalent) when he comes looking for a compromise.  That may weaken the GBP again.   

The 5 day ranking of the major currencies. Wishing all a good and safe weekend.

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Hong Kong braces for another weekend of protests

© Reuters. Anti-extradition bill demonstrators attend a protest at the arrival hall of Hong Kong Airport © Reuters. Anti-extradition bill demonstrators attend a protest at the arrival hall of Hong Kong Airport

By Clare Jim and Kevin Liu

HONG KONG (Reuters) – Hong Kong began another volatile weekend on Saturday, with anti-government protests taking place across the city, including one at the international airport for a second day.

Increasingly violent protests have plunged Hong Kong into its most serious political crisis for decades, posing a serious challenge to the central government in Beijing.

Protesters arrived back at Hong Kong’s airport, a day after a peaceful gathering there of about 1,000 activists. Neither protest disrupted flights.

Hundreds of activists occupied the arrivals hall on Saturday, some of them sitting on the floor drawing protest posters, while others politely greeted arriving passengers.

In the morning, in two separate protests, small groups of elderly Hong Kongers and families marched near the financial center’s business district. Both marches were peaceful.

About a thousand protesters also gathered later in the day in Tai Po, a town in the north of the territory.

Leung Wai Man, a housewife in her 60s, said she had been motivated to march in Tai Po because she was angry about what she saw as the violent response by police at some protests.

“We are very angry about the police arresting our teenagers,” she said. She said she was worried about escalating violence, but added that “the protesters were just trying to protect themselves against police violence.”

Hong Kong’s leader Carrie Lam said on Friday the economy was being undermined by the protests, which began in June.

China, meanwhile, demanded that the city’s flag carrier Cathay Pacific Airways (HK:) suspend staff involved in the demonstrations. One of its pilots was arrested last week.

Huarong International, the investment arm in Hong Kong of China Huarong Asset Management Co (HK:), has instructed staff not to fly Cathay Pacific if there are other options, according to an internal memo seen by Reuters and confirmed by a source at the company.

Lam’s warning about the economy and China’s targeting of a key Hong Kong business mark a toughening stance by authorities as they grapple with Hong Kong’s deepest crisis in decades.

Young people have been at the forefront of the protests, worried about the erosion of freedoms in Hong Kong by China but also concerned with issues such as wealth disparities in the city.

However, older people and parents have also been appearing at the protests.

“There are clashes in the recent protests and many parents are worried,” said Fion Yim, 35, representative of the organizing committee for what was billed as the family protest.

“The freedom to protect our children is very important. We hope to provide a safer place for parents and their kids to participate in rallies, and to voice their concerns.”

The protests began after Hong Kong’s government tried introducing an extradition bill that would have allowed defendants to be sent to mainland China for trial.

The bill has been suspended, but protesters have stepped up their demands and are now calling for greater democracy and Lam’s resignation.

The protests have been condemned by the central government in Beijing. China has also accused foreign powers of fueling the unrest.

Hong Kong was guaranteed freedoms not granted in mainland China, including an independent judiciary, under a “one country, two systems” formula, when Britain handed it back to China in 1997.

On Friday, the U.S. State department spokeswoman, Morgan Ortagus, said that Chinese media reports about a U.S. diplomat who met with Hong Kong pro-democracy leaders “have gone from irresponsible to dangerous” and must stop.

Ortagus earlier called China a “thuggish regime” for disclosing photographs and personal details of the diplomat.

More protests are planned for Sunday, including one in Sham Shui Po, a working class neighborhood that has been the scene of violent confrontations between activists and police.

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Forex – Dollar Mixed as Risk Appetite Ebbs Ahead of Weekend

© Reuters.  © Reuters.

Investing.com — The dollar was lower against the and early Friday in Europe but higher against risk proxies such as the dollar as traders shunned risk ahead of a weekend set to be marked by geopolitical tensions.

At 3:40 AM ET (0740 GMT), the , which measures the greenback against a basket of six major currencies, was effectively flat at 96.995, but that masked varying performances against the basket’s individual constituents.

Against the yen, the dollar was down 0.2% at 108.20 and closing in on a new 14-month low, while the euro also edged higher against the buck to $ 1.1281.

The weakened further in the Asian session, a drop later validated by a disappointing data for industrial production and fixed asset investment in May. At only 5.0%, industrial production grew at its slowest rate since 2002.

China also announced its latest countermeasures in its widening dispute with the U.S., raising import tariffs on certain steel pipes from the U.S. and EU by a factor of 10.

In the U.S., a letter signed by hundreds of companies including Walmart (NYSE:) and Target (NYSE:) urged President Donald Trump not to go ahead with his plan to impose tariffs on another $ 325 billion of Chinese imports, saying they would hit American businesses, farmers and families.

The administration had late on Thursday said it would waive tariffs on bifacial solar panels from Asia, a token de-escalation of tensions given that such panels only account for 3% of the U.S. market, according to Deutsche Bank (DE:) strategist UIrich Stephan.

The dollar may see some movement later in the day after a big dump of U.S. data, which includes May at 8:30 AM ET, May at 9:15 AM ET and the University of Michigan index at 10 AM ET.

The British remains under pressure after the first round of the Conservative Party leadership contest left Boris Johnson as the clear favorite. The pound was 0.1% lower against both the dollar and , ahead of a speech later by Bank of England Governor Mark Carney.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Bitcoin’s First $1,000 Weekend Since 2017 Marks Nine-Month High

© Reuters.  Bitcoin's First $  1,000 Weekend Since 2017 Marks Nine-Month High © Reuters. Bitcoin’s First $ 1,000 Weekend Since 2017 Marks Nine-Month High

(Bloomberg) — surged more than $ 1,000 this weekend to the highest level since August, as cryptocurrencies extended their rebound from a slump last month amid the New York attorney general’s investigation of a key part of the market.

Bitcoin rose as much as 6.9% to $ 7,445, before trading at $ 7,323.86 as of 2:15 p.m. Hong Kong time on Sunday, according to Bitstamp. That compares with $ 6,290.24 at Friday’s close. All five members of the Bloomberg Galaxy Crypto Index are up more than 8% this weekend, based on pricing from Bitstamp and Bitfinex.

The price of Bitcoin, the biggest cryptocurrency, has more than doubled since its Dec. 14 trough and is now rising for a sixth-straight day on Bitstamp. The decade-old token surged as intensifying trade tensions hammered global stocks in the past week to set fresh milestones for Bitcoin’s wild ride after it crashed last year from 2017’s peak above $ 19,000.

Virtual currencies slumped late last month as New York Attorney General Letitia James alleged an $ 850 million coverup by the companies behind virtual currency Tether and Bitfinex — one of the world’s largest crypto exchanges. The Bloomberg Galaxy Crypto gauge tumbled 11% in the week to April 26 for its biggest one-week slide this year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Weekend comments from Trump economic adviser Kudlow on US China trade talks

Larry Kudlow on US TV over the weekend with remarks on the state of negotiations on trade talks with China 

Nothing much of substance:

  • US and China are “closer and closer” to a trade deal
  • “guarded optimism, maybe more than guarded optimism” 
  • “We’ve made great progress on the IP theft. We’ve made good progress on the forced transfer of technology” 

Yeah, sure you have. 

Markets have been paying more attention to comments from Chinese officials on trade, as we saw on Friday, as US credibility declines.

Larry Kudlow on US TV over the weekend with remarks on the state of negotiations on trade talks with China 

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Mueller report concluded. Congress may learn contents this weekend

Report submitted to the Attorney General

US Attorney General William Barr informed Congressional leaders that he’s received the conclusions of Mueller’s Russia investigation today. It’s not clear if it’s the full report or a “confidential report explaining the prosecution and declination decisions” he has reached.

In any case, Barr told congress he may be able to reveal to them the report’s conclusions as soon as this weekend.

Here is the letter from Barr:

Report submitted to the Attorney General

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Weekend: Trump asked China to 'immediately' remove all tariffs on US agricultural products

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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