Welcome!

News Feed Item

FXPRIMUS Market Brief of the Week: Faster Euro Zone Growth Could Delay the Action from Mario Draghi

SINGAPORE, SINGAPORE -- (Marketwired) -- 02/18/14 -- In FXPRIMUS' Market Brief of The Week for 17 February, the brokerage firm's Senior Economist, Jimmy Zhu, looks at how the Euro Zone 4Q Gross Domestic Product is influencing the market.

Economic Insights

Euro Zone 4Q Gross Domestic Product (GDP) Result Sent the Single Currency Higher

Euro Zone 4Q GDP expanded 0.3% QoQ, beating earlier estimate of 0.2%. However, the numbers are similar to our last week's forecast, or a Euro Dollar rally has been expected. The key issue here is that two of the largest economy in the currency bloc, Germany and France had faster growth than predicted earlier; with the numbers of 0.4% and 0.3% respectively. Italy, which is the third-largest economy, posted an expansion for the first time in more than two years, which scored a 0.1% expansion on quarter on quarter basis.

Germany GDP QoQ (white), France GDP QoQ (yellow) & Italy GDP QoQ (red): http://media3.marketwire.com/docs/fxp218fig1.jpg.

Based on Euribor Market, there are decent percentages for next month's rate cut bets despite accelerated growth. All thanks to recent tepid inflation numbers. However, we still believe that the European Central Bank (ECB) could "hold on" in the coming policy meeting as overall conditions in currency bloc did not warrant further easing at this moment, unless inflation fell further by the end of the month. Inflation in the Euro Area slowed down to 0.7% last month, less than half of ECB's goal of just below 2%.

This week, Euro Zone Purchasing Managers' Index (PMI) and German ZEW survey for February will give clues on how the latest recovery pace is. Euro Zone composite PMI for February may have risen above 53% for the first time since June 2011, according to various recent indicators. The index has been above 50% thresholds since July. As for the expectations on German ZEW, we think the numbers is likely to remain flat compared to January's reading. Overall, there is little downside risk to Euro Dollar this week besides some technical consolidation, if any.

In Asia, Chinese lending numbers is surprisingly to the upside. But do not panic if you only look at aggregate figures, because new Yuan loans contributed substantially last month. China's total aggregated financing surged to a historically high level, reaching 2,580 trillion RMB. New Yuan loans surged to 1,320 trillion RMB from the 482.50 trillion RMB in December. If we do a simple calculation, social financing only increased 1.4% YoY in January to 2.6 trillion RMB. Trust loans tumbled to 49% and corporate bonds fell to 85%, overshadowing a 23% jump in new loans. Trust loans and bonds' share of social financing also dropped to 5.9% from 17.1% a year earlier. Government clampdown on shadow banking and tight liquidity may weigh on corporate funding this year. But the good news is that the shortage of liquidity in Chinese banking system does not look real. The 7-day repo rate has calmed down to the level of below 5%.

http://media3.marketwire.com/docs/fxp218fig2.jpg

Record new credit in China in the month of January may help economy in maintaining momentum amid government efforts to rein in risky lending. Aussie continues to climb higher. The bets are increasing that the next move for the Reserve Bank of Australia (RBA) is to raise the rate, instead of cutting it. In its housing market, eight straight months of rising housing costs in Sydney have pushed the prices to a record high. Australia's weaker exchange rate will help accelerate the country's return to trend economic growth and is likely to spur inflation for a period of time, as quoted in the text of a speech last week in Sydney.

This time, the Dollar's weakening is externally driven instead of being driven domestically. Until now, the Federal Reserve (Fed) wants to continue with its tapering program until the end of the year. In this case, stronger external growth such as the Euro Zone will lower the value of the Greenback.

Top news this week

German ZEW Economic Sentiment

I expect figures to come in at 61.5%

German Manufacturing Purchasing Managers' Index (PMI)

I expect figures to come in at 56.3%

Trade Recommendation

AUDUSD - Short at 0.8990

U.S. Dow Index has climbed almost 3% in last Friday's close since the Monday low, even after we see the tepid NFP report. It looks like that the market seems to believe that the slower jobs added was mainly due to bad weather in the U.S. Given the fact that the coming FOMC meeting will be in March and Yellen is unlikely to change the U.S. economic forecast lower this week before the Congress and the Senate, little fresh triggers could push the volatilities higher substantially.

Should confidence improve in the largest economy, the USD's downside could be limited. Among the major pair, AUDUSD is moving toward its resistance level around 0.90.

We would like to short this pair if its price rebounds to 0.8990.


Entry Price - 0.8990
Stop Loss - 0.9050
1st Target Price - 0.8940
2nd Target price - 0.8900

http://media3.marketwire.com/docs/fxp218fig3.jpg

ABOUT FXPRIMUS

FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security, ISO 9001:2008 certification in Quality Management and an industry-leading trader toolset that includes free access to powerful trader tools. FXPRIMUS truly is The Safest Place To Trade.

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
We are always online. We access our data, our finances, work, and various services on the Internet. But we live in a congested world of information in which the roads were built two decades ago. The quest for better, faster Internet routing has been around for a decade, but nobody solved this problem. We’ve seen band-aid approaches like CDNs that attack a niche's slice of static content part of the Internet, but that’s it. It does not address the dynamic services-based Internet of today. It does...
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...