Friday, 2 February 2018

What Is Moving US Banking Stocks?

The banking sector was fraught with pitfalls in 2017 as the combinations of lower volatility and perceived political risks hampered result at the biggest US financial institutions. Recent released fourth quarter results largely highlighted this phennomenon.

 Nonetheless thanks to greater forward-looking clarity owing to the passage of
Trump's tax bill and the expectation that the Federal the under-performance that saw the sector lag broader market indices like the s&p 500 and dow Jones industrial Average. Watch our video brought to you by plus500 to understand what to look out for when trading US banking stocks

within minute of the Federal Reserve announcing that it would put up interest rates by a quarter-piont in the middle of last month, the biggest bank by assets in America  said it would do the same of its main lending rate, then at 4.25 per cent. Millions of credit-card holders and small-business borrowers would pay another 25 basic points in interest, effective the next morning. But would regular savers get an automatic boost, too, through higher rates on deposits 
they would not. Rates for savers would be unchanged, a  JP morgan spokesperson confirmed.

The ability to earn more on assets, while capping the cost of liabilities to depositors, should keep the shareholders of us banks happy this year. Analysis and investors say that, even after two successive years of standout performance, the outlook for bank stocks remains bright. in 2016 the likes of JPMorgan, Bank of America and citigroup shrugged off years of sluggish post-crisis return, beating most benchmarks, boosted  by prospects of higher interest rates, lower taxes and lighter regulations under the new regime of president Donald Trump

In 2017 the big banks pulled clear again, as three rate rises from the Fed improved net interest margins, or the gap between the yield on banks’ assets and the rates they pay to borrow money. According to Jason Goldberg, analyst at Barclays, big banks’ average cost of deposits rose by 17 basis points over the two years to the end of the third quarter 2017, implying they passed on just 17 per cent of the 100bp increase in the federal funds rate over that period. During the Fed’s last rate-raising cycle, the average was about 60 per cent.

Plenty of fund managers are willing to bet on more share price gains to come, especially if banks can hold the line on their cost of funds, and if the main regulatory agencies — all but one of which will be led by appointees of President Trump by midyear — respond to orders from the White House to loosen Obama-era rules. Lower tax rates will help, too, with particularly big boosts for US-centric banks such as Wells Fargo and US Bancorp. 

And if capital markets revenues pick up after a relatively drab year, and loan growth begins to accelerate, so much the better. “There are plenty of singles and doubles,” says Mr Goldberg. That is why valuations could have some way to run. The KBW banks index is trading at about 1.5 times book value, the highest for more than a decade, up from a pre-Trump level of about 1 times.

 But the S&P 500 is up to 3.3 times book and the spread between the two indices is still near a record. “It’s been a nice run [for bank stocks], but we think the backdrop remains favourable,” says Tom Bergeron, senior fund manager at Frost Investment Advisors in San Antonio, Texas, which has $3.7bn in assets under management. He is maintaining an overweight position in the banks and in BofA — the most sensitive to interest rate increases — in particular. 

EUR/JPY’s Triangle Breakout

CAD/JPY’s Retracement Play:

It's all about the yen crosses on Today's canvas, as i bring to you hot fprex trade opportunities on CAD/JPY and EUR/JPY  check's em out, homies!

what makes the current levels more interesting is that it's right around the channel support that it broke in mid-January.

I mean, look at that area of interest working like a champ on the bulls and bears
stochastic is currently in overbought territory, so y'all can bet the bears are watching this one closely.

will we see a break-and-retest situation that would drag the pair the new 2018 lows? Or will the bulls jump in and continue the uptrend that CAD/JPY took a break from?

Breakout alert! EUR/JPY just broke above an ascending triangle that has ben solid since early December.

As the School of  Pipsology tells us, breakout like these can be as strong as the height of the base of the triangle. we 're talking 450 pips in this case, you
before you buy the Euro like there's no tomorrow, you should note that the pair has come a long way since it started popping up in January 29. This means the pair is due for a retracement.  

you could enter at current levels if you're confident that the euro will continue to fly over the next couple of days. but if you think that the overbought stochastic signal would attract some bears and force a break-and-retest scenario, then you might want to wait for either a pullback or more bullish momentum before placing your orders.

EUR/JPY has been consolidating this week like many other euro-crosses. The 1H chart shows that the consolidation has been in an ascending triangle where the resistance has been similar, and the support has been rising. over the Thursday European session, there was inflation data that came out as expected.

Employment for Q2 was also seen to have risen 0.3% in the EURO Area Risk appetite has been back in the markets especially as Markel and Sarkozy pledge to keep Greece in the USD and JPY might gain. For now, this fear is set aside, and the EUR/JPY is breaking above the ascending triangle seen in the 1H chart.

with this breakout, the projection using the width of the triangle at its widest, and projecting in the direction of the breakout, we have a  projection to 107.00. A slightly more conservative outlook sees resistance lower, at about 106.80 where the 200SMA resides. Also 106.90 is 50% retracement.

 The downside in the short-term is predicates on a weak pullback attempt that preferable fails to break back below 105.50 But ff the market is pushed below 105, the 100.00 level could be in sight in a more bearish continuation scenario. This requires also a break back below the current low at 103.88.

"the  spot could test 110.00 levels ahead of the NEP, however, the 50-MA is still sloping downwards, so a sustained move higher looks likely only on the back of strong US wage growth number. " the pair could test weekly 5-MA hurdle the other hand, a weaker-than-expexted print could yeild a drop to sub-109.00 levels. However, bear revival is seen only below 108.28"

2 Months of down fall in cryptocurrency and countinue?

why is bit coins price down:

Crypto investors are seeing red this week. Bitcoin plunged to two- month lows on Thursday. dipping below $9,000 for the first time since November. At the time of writing, Bitcoin had bounced back up to the $9,200 level, down from weekly highs just above $12,000. This week has seen coins across the board in the red- a sign that investor are jumping ship to flat currency this time instead of swapping into altcoins as we've seen in the recent past.  

At the time of writing, the total cryptocurrency market cap weighed in at $459 billion, down from January highs around $830 billion . it's a contraction to be sure, but not a low for the last 30 days 

is this the bitter end for Bitcoin? for cryptos? well, no, probably not. Get your head screwed on right and you'll see that many coins have seen unprecendented growth in the last six month to a year, even with Bitcoin's price halved from holiday highs closer to $20,000. On this day last year, Bitcoin's price halved from holiday highs closer to $20,000. on this day last year, Bitcoin was sitting pretty at $982. At the height of december's craze, most reasonable crypto-watchers could agree that the price was overheated and there was only one way for it to go in the short term. still, in the thick of the current correction, Bitcoin's longer-term growth is anyone's guess.

Cryptocurrency die-hards expecting the price to bounce back, even partially, will see these tanking number as the perfect entry point for getting in low and maximizing gains. Late speculators  who got in during the mass crypto hysteria of the hoilday season aren't likely to have such steady hands, a factor that's likely contributing to the slide. .

so what's causing the slide to begin with? As usual, no one thing can be blamed for Bitcoin's current downturn, but recent skittishness around a subpoena for Bitfinex and concern around Tether __ a kind of  cryptocurrency Recent news that Facebook would ban ads for IOCs probably didn't  help either And it seems like every day a new Ponzi Scheme gets busted throwing yet more doubt on the credibility of plenty of less than legit ICOs Ever beyond news cycle highs and lows, Bitcoin has seen a few mid-January dips before,though 2017's Bitcoin behavior has seen a few mid-January dips before, though 2017's Bitcoin behavior certainly broke from any seasonal pattern of the past.

Still, these growing pains are far from surprising.As cryptocurrencies nature
assuming they continue to do so ___regulatory "bad"  news will become more common. countries across the globe will continue to struggle to accommodate their citizens' sudden interest in digital currencies. In some countries, as is the case of india, that's shaping up to be a crackdown on illegitimate activity that might also affect legitimate transactions.

Unsurprisingly, headline like these inspire a sense of foreboding among cryptocurrency enthusiast wondering which country will be next to come down hard. Fear, perhaps justified fear for many speculators with plenty to lose, amplifies each new regulatory revelation.But for cryptocurrencyies to grow out of the current scam-laden chaotic era, a thorough house cleaning is healthy.

 Bitcoin and other cryptocurrencies have also looked less responsive to positive news in the latter half of january compared to their relative buoyancy during December's dizzying highs. Then, every little positive news blip seemed to push the prices higher.  

Bitcoin aside, some altcoins might just be adjusting from overheated, overhyped December highs, Ripple is a good example of this, hovering around $1 thursday, a price that's five times its November value and only looks bad after XRP flew a bit too close to the sun with  sudden early January highs above $3. Ethereum is also faring pretty well, all things considered, down from all-time highs above $1,400 but holding most of its newly built value after doubling in price from December prices  around $500.

it'll be interesting to see what happens as we move into next week's senate banking Committee hearing on Cryptocurrency. Titled "virtual currencies: The overnight Role of the U.S, securities and Exchange commission and the U.S. commodity Future Trading commission," the open hearing will air on February 6 at 10:00 Eastern time. it's possible that upcoming discussion in congress has traders nervous, but ultimately variables from all over the globe combine to affect the market every day.     

Thursday, 1 February 2018

China Factory Growth Remains Strong

China's manufacturing sector sustained growth at Multi-month highs in January's a private business survey showed on Thursday, as factories continue to raise output to meet new orders, suggesting resilience in the world's second- largest economy.

The Caixin/Markit manufacuturing Purchasing Manager's index (PMI)  was at 51.5 in January, unchanged from the previous month.

Analysts surveyed by December's reading was the highest in four months and above the 50-point mark that separates growth from contraction.

Growth in factory output quickened to a 13 month high in January, and employment fell at its slowest pace in nearly three years. 

The solid Caixin PMI readings could help reassure international investors that china's economy is still expanding at a healthy clip as it nututes new drivers of growth.

The China economy slowed slightly in the second half of last year from the first half amid  a government  crackdown on air pollution,a cooling property market and higher borrowing costs.

Analysts expect some softening in economic expansion early this year after a  forecast-beating 6.9 percent growth in 2017, the first annual acceleration in seven years.

An official survey released on wednesday on manufacturing activity in January pointed to a slight loss of momentum.

 The yuan rose nearly 7 percent against the dollar in 2017, and is up another 3.5 percent this year to its strongest level since August 2015- when the people's Bank of china (PBOC) stunned markets with a 2 percent devaluation.

still, china posted strong export growth last year, thanks not only to improving demand globally but efforts to diversify its markets beyond the United States. That push has seen policymakers put a greater emphasis on assessing the yuan's value against a basket of currencies of its trading partners.

"it's obvious that they are pegging (the yuan) directly to the basket, " said a source close to the central bank who declined to be identified due to the sensitivity of the matter.

On such a trade-weighted basis, the yuan has been remarkably steady, limiting the net impact on China's exports. China's CFETS RMB index was flat last year and has inched up only 1 percent so far this year.

but if other currencies in the basket were to fall relatively more against the dollar than the yuan, that could lift the trade-weighted value and cause some headaches   

"we want to absorb all factors that influence the yuan, not just the dollar as long as there are no big imbalances, we will not use the exchange rate to adjust trade," said a second source.

The source are involved in internal policy discussions but are not part of the final decision-making process. The PBOC did not respond to Reuters' request for comment.

All focus on FED

Brexit going to hurt the UK economy?

 A report prepared by the UK government showing  that the uk economy will be hit in any Brexit scenario leaked yesterday. Government minister tried to play down the important of the report, however media persisted on the issue.

The issue seems to be confirmed as U.K. banks may have limited access to  the EU single market after Brexit negotiator Barnier's recent statement. hence confirming EU's chief Brexit negotiator Barnier's facing a small rebellion with in the Tory party. These should not be good news about the GBP as political instability may increase and should the negative headlines continue, the GBP could be weaken.

 In contrast to yesterday Forecast for a bearish market, cable posted some to gains, testing the 1.4175 (R)  resistance line. we see the case for cable for the pair to enter a slightly bearish Yesterday's rise,we see the case for  the pair to enter a slightly bearish market as the greenback side of the pair may strengthen by today's fundamental and financial data.

Should the 1.4175 resistance level and test the 1.4325 resistance barrier. should the bears have the upper hand, we could see the pair breaking the 1.4040 support line and hover slightly below it.

No change is expected in the policy rate from the 30-31 January FOMC meeting Currently the market seems to have priced in the probability of the FOMC to remain on hold, at 95.0% as implied by the Feds Funds Futures (FFF). Thus market focus slowdown of the case for an upbeat assessment of the economy, despite the recent slowdown of the GDP growth rate. it could be the case, that a more hawkish tone will dominate the statement in order for the Fed to accommodate a possible rate hike in March.

At this point, pelase be advised that this will be Chiar Janet Yellen's last FOMC meeting. Also a number of the FOMC member will change as part of the Feds rotating system. it could be the case that  the FOMC will have a more hawkish tone from now on as a result of that switch.

The EUR/USD may in a sideways manner Yesterday, staying well within the range set by the 1.2355 support line and the 1.2495 resistance line.

The pair could continue to trade in a sideways manner over the short term, however there could be some selling pressures as the US dollar may strengthen with the EUR side of the pair could weaken as financial data, due out today could see it breaking the pair come under selling interest we could see it breaking the 1.2355 support level and aim for the 1.2230 support barrier.

should it come under buying interest, we could see it breaking the 1.2495 resistance level and aim for the 1.2600 resistance hurdle.

As for today’s other economic highlights:

During the European morning we get France's preliminary CPI rate for January, germany unemployment rate for January, Eurozone's preliminary inflation rate for December. 

We see the case for the negative effect of the inflation slowdown, of both France and the Eurozone to overshadow and positive impact of the German and Eurozone unemployment rates release.
later on we get Canada's GDP data for November and the US ADP National Employment indicators which could support the greenback to carry a positive sign for the first time in a long period. Last but not least as mentioned in the analysis before, we get the FOMC's intrest rate decision. As for speakers Riksbank Governer ingves speaks. 

Wednesday, 31 January 2018

GBP Depends on Brexit Deal:

GBP depend on Brexit Deal:

Sterling had been on a downward trend since the U.k.'s vote to leave the European Union in 2016 reduced concern over an abrupt break-up with the EU are sending the currency higher.

The pound traded at $1.40 against the dollar Tuesday morning,not only boosted by a weaker dollar, but also because tarders  are more confident  that the U.K. will strike a deal with the EU and thus avoid a so-called hard Brexit, where the U.K. and the EU would be trading under World Trade Organization (WTO) rules.

 "Prime minister Theresa May does not have the political capital or the unity within the government to implement a "hard Brexit" Stephen Gallo, head of European  forex strategy at BMO Capital Markets told CNBC via email.

 The pound has climbed to its highest level in almost two month against the dollar amid hopes that progress on Britain's divorce settlement with the European Union will smooth the way for the start of trade talks.

With fears receding that the UK would leave the EU in March 2019 without a trade deal,currency investors pushed sterling higher against both the dollar and the Euro on Wednesday.

An overnight rally on wall street was followed by further gains in European trading. The pounds was up 0.67% on the day against the dollar at $1.34,and 1.5% up on its low point on Tuesday, before news emerged of a potential breakthrough in the long-running discussions  about money between London and Brussels.

some City analysts warned, however, that the pound's rise would be capped by concerns that the talks could still be derailed in the weeks and months ahead by differences over the amount Britain intends to pay and by the concessions on trade that the EU would be prepare to make.

Jordan Hiscott, agreed, will suspect many hard Brexit advocates from the Conservative party will baulk at a later stage, rumoured to be 80bn-90bn
The rise in the value of the pound, if sustained, would lead to cheaper imports and lower inflation, but would make UK exports less competitive Despite

Sterling's jump over the past two days,it remained well below the highpoint for 2017 of $1.3659, which it hit in late September, and more than 11% below the $1.50 level at which is was trading and a transition before the JEU referendum in the June last year.

Stephen Gallo, European head of foreign exchange strategy at BMO Financial Group in London, said furher process on trade and a transition deal could push sterling to $1.40 over the next six to 12 months. 

Brexit Impact on the UK Economy

Brexit is Already Impacting the UK Economy:

what will Brexit mean for the British Economy?

Executives, forecasters and bankers have been trying to answer that question for at least two years. The U.K. government has done its own analysis,and a  leaked draft Tuesday makes for ugly reading

BuzzFeed reported that the government analysis suggest Brexit will reduced economic growth by between 2% and 8% over 15 years

"this  was initial work not approved by minister, which only consider off-the shelf scenarios. No analysis was made of the bespoke arrangement we seek as a matter of government policy," a spokesman for prime minister Theresa May told reporters.

but never mind the future, there already plenty of evidence that the June 2016 vote by Britain to leave the European Union_ by far its biggest export market__ is already causing damage. And that 's with at least a year of fraught negotiations on the uncertain relationship between the U.K. and EU still to come.

Inflation surges ahead

inflation has risen since the Brexit vote as the pound's sharp drop_ it has fallen 9.5% since 23 june 2016, despite a recent recovery__ makes important to the UK more expensive. Last month, the squeeze on living standards worsened due to the increased cost of importing fuel, clothes and food, Pushing inflation up to 2.9%, from 2.6%  in July. The Bank of  England now estimates the consumer price index will peak above 3% in October. Mark Carney, the Bank's governor,also used a speech in Washington to argue that a sharp reduction in migrant labor to Britain after the EU referendum has the potential to cause a spike in inflation. That 's pushing the setter at Thread needle street to consider raising interset rates as soon as November. 

UK’s trade performance worsens outside EU

there has been some evidence since the vote of a boost to exports from the weaker pound, raising hopes that a stronger trade performance can offset a downturn in consumer spending. But the latest official trade figures show efforts to expand trade in good beyond the EU's border took a knock in july overall the UK deficit for goods and services remained unchanged at 2.9bn between June and July, beating economist's expectations for it to widen to 3.025bn.

Growth in key services sector sputters

Key barometer of companies' sentiment about business activity were disappointing in August, barring the manufacturing sector, which stands to benefit from the drop in the value of the pound making goods more attractive overseas. The UK's biggest sector, service, missed expectations amid uncertainly over the Brexit talks, as the Markit/CIPS  purchasing managers' index (PMI) came in at 53.2 in August down from 53.8 in July, signalling the slowest pace of business expansion in 11 months. While construction also missed expectations, the August manufacturing PMI beat economists' forecasts. The PMI measure are tracked for early clues on official GDP figures. 

House price growth data mask London decline

The latest monthly snapshot from the Royal institution of Chartered Surveyors showed house price growth improved in August from a month ago, although disguised was a drop in central London prices at the sharpest pace since 2008. A net balance of 6% of surveyors saw house prices increase rather than decrease, up from 1% in July, which was the lowest reading in four years. Sales weakness was north. Meanwhile healthy sales growth was reported in Northern Ireland, the south-west and Scotland.