Market Review 02-11

Market Review 02-11

Forex News

GBP/USD Price Forecast – GBP/USD Trades Range Bound near Overnight High’s Ahead of US NFP Data

From: FXempire.com

The GBP/USD is trading range bound near the 1.3000 major handle after Thursday’s rally on refreshed Brexit hopes as the Cable heads into Friday’s action ahead of another bumper US NFP showing. The Sterling saw some much-needed lift yesterday after headlines broke that some progress may finally be being made on EU-UK Brexit negotiations; yesterday saw EU leaders in Brussels soothe financial markets with the announcement that European traders will maintain access to critical UK derivatives settling mechanisms in the event of a messy Brexit, but the headlines were good enough for Pound bulls to spark a brief rally. Pressure on the US Dollar in the broader forex market helped to send the Greenback lower across the board, and the GBP/USD is enjoying a reprieve from normal selling.

Sterling’s Positive Momentum Unaffected By Disappointing UK Manufacturing PMI

As of writing this article, GBP/USD pair is trading near flat at 1.3007 down by 0.05% on the day. A Times of London report said that the UK PM Theresa May has struck a deal to give UK financial services companies continued access to European markets after Brexit. The report added to overnight optimism triggered by the UK Brexit Secretary Dominic Raab’s letter to the House of Commons Brexit Committee, saying that he expected to finalize a deal with the European Union by Nov. 21, and prompted some aggressive short-covering move around the GBP/USD major. The positive momentum seemed rather unaffected by disappointing UK manufacturing PMI and dismissal of the news regarding a Brexit financial services deal by the UK/EU officials.

Meanwhile, bullish traders took cues from a more hawkish-than-expected BOE rate hike outlook, noting that more rate hikes might be needed as there could be overheating in the economy during the second half of 2019. On release front today, US markets will see release of NFP report, dropping at 12:30 GMT and markets will be coiling ahead of the key jobs report, but before that will be the UK’s Construction PMI for October (forecast 52.0, last 52.1), at 09:30 GMT. US Average Hourly Earnings are expected to increase to 3.1% for the year into October (last 2.8%), while NFP is expected to show 190 thousand new jobs compared to last month’s reading of 134 thousand. greenback. US Greenback is also expected to see some downside move over positive headlines relating to Sino-U.S. Trade talks ahead of US NFP data. Expected support and resistance for the pair are at 1.2980, 1.2935, 1.2900 and 1.3045, 1.3090, 1.3130 respectively.

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Trump’s Tweet Boosts Yuan; Dollar Falls

From: Investing.com

The Chinese yuan gained on Friday following reports that U.S. President Donald Trump said he had a productive conversation with Chinese President Xi Jinping on trade.

“Those discussions are moving along nicely,” Trump wrote on Twitter Thursday. “Also had good discussion on North Korea!” Trump and Xi are due to meet at the G-20 summit later this month.

Trump said the door is still open for U.S.-China trade talks, just days after reports said he was considering imposing tariffs on all remaining Chinese imports by early December if discussions between the two leaders do not go well.

The USD/CNY pair slipped 0.1%, while the U.S. dollar index that tracks the greenback against a basket of other currencies slid 0.8% to 96.16 by 12:18 AM ET (04:18 GMT).

The People’s Bank of China (PBOC) set the yuan reference rate at 6.9371 vs the previous day’s fix of 6.9670.

The dollar was under pressure this week as global equity markets rebounded.

Looking ahead, investors will likely focus on the closely-watched U.S. jobs report due later in the day.

“Long-term U.S. yields have established a firm foothold above 3%, providing a strong backdrop for the dollar,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. “And if the jobs report proves to be robust, we could see the dollar bounce back from recent losses and resume its rise.”

According to Reuters, U.S. payroll figures are expected to have risen to 190,000 in October from 134,000 in the previous month.

Elsewhere, the Aussie dollar slipped 0.1% against the dollar after data showed Australia’s seasonally-adjusted retail sales for September came in at 0.2%, missing the expected 0.3% and declining further from the previous month’s 0.3%.

The quarterly producer price index, on the other hand, clocked in at 0.8%, compared to the 0.2% forecast and the previous quarter’s 0.3%.

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Stock Market News

Apple Warns on Holiday Sales, Sending Value Below $1 Trillion

From: Reuters.com

Apple Inc on Thursday warned that sales for the crucial holiday quarter would likely miss Wall Street expectations, which Chief Executive Tim Cook blamed on weakness in emerging markets and foreign exchange costs.

The disappointing forecast by the world’s most valuable technology company helped send shares down as much as 7 percent, taking roughly $70 billion off Apple’s market value and forcing that value below $1 trillion. The forecast could also deepen concerns for technology companies that saw a sell-off after misses by Amazon.com Inc (NASDAQ:AMZN) and Google parent Alphabet (NASDAQ:GOOGL) Inc.

Apple said it expects between $89 billion and $93 billion in revenue for its fiscal first quarter ending in December, with a midpoint of $91 billion coming in below Wall Street expectations of $93 billion, according to IBES data from Refinitiv.

Cook in an interview with Reuters said that Apple is “seeing some macroeconomic weakness in some of the emerging markets.” He later told investors on a conference call that weak markets included Brazil, India, Russia and Turkey. Sales were flat in the fourth quarter in India, Cook said.

“Obviously, we would like to see that be a huge growth,” Cook said on the call.

Executives said they also would quit giving the number of iPhones, iPads and Mac computers, leading to a further drop in the share price, since iPhone unit sales was long the key indicator of quarterly success.

Withholding that number will make it impossible to calculate the average selling price of phones, another key measure.

Apple executives said unit sales are becoming less relevant as customers buy bundled products that include subscription services like Apple Music.

Apple said it would start giving cost-of-sales data for its services business, an important metric for subscription businesses. But investors reacted negatively.

“Companies typically stop reporting metrics when the metrics are about to turn. This is not a good look for Apple,” said analyst Walter Piecyk from BTIG Research.

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Investor Sentiment in Europe is Sinking Despite a Solid Earnings Season

From: CNBC.com

  • Europe’s benchmark Stoxx 600 index fell 6 percent for the month of October.
  • Revenue and earnings-per-share growth remained healthy in the region.
  • Despite a solid earnings season, investor sentiment has remained fragile.

 

European equities lost ground in October despite solid third-quarter results for most companies across the region.

Europe’s benchmark Stoxx 600 index fell 6 percent for the month, despite a strong 1.7 percent rally on the final session of trade.

This comes as revenue and earnings-per-share (an important metric used by traders to gauge a company’s value) growth remained healthy and most companies in Europe have maintained their full-year guidance to the market. However, investor sentiment has remained fragile.

“Slower Chinese demand for euro zone exports, escalation of trade tensions, and Italy have weighed on European growth and sentiment. There is scope for recovery, but something would need to change,” said Nandini Ramakrishnan, a global market strategist at J.P. Morgan Asset Management, said in emailed research to CNBC.

Cyclical sectors, which are affected by the ups and downs of the global economy, have sold off materially, while defensive stocks have generally outperformed.

As of October 30, 125 companies on the Stoxx 600 index reported earnings for the third quarter, according to I/B/E/S data from Refinitiv. Of these, 48 percent beat market expectations. In a typical quarter, 50 percent of companies beat estimates and 41 percent miss. The estimated earnings growth rate for European stocks for this period is 14.2 percent with six of the 10 sectors in the index poised to see an improvement in earnings, relative to one year earlier.

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Cryptocurrency News

Bitcoin Trades Slightly Higher; India Considers Imposition of Ban on Crypto

From: Investing.com

Bitcoin and other major cryptocurrency prices gained slightly on Friday. Reports that India is considering imposing a ban on virtual coin received some focus.

Bitcoin was trading at $6,418.40 on the Bitfinex exchange by 1:22 AM ET (05:22 GMT), up 0.5%, continuing what has been a relatively subdued period for the world’s largest digital currency.

Bitcoin has not traded outside the $6,200-to-$6,800 range since October 16. It ended October with a decline of 3.8%.

India’s central authorities are considering imposing a ban on virtual coins, a press release published by the central government’s Press Information Bureau (PIB) revealed this week.

Indian regulators would continue to encourage the use of blockchain technology, although they would seek to ban “private” virtual coins, according to the statement.

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