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FED Chief Reassures Low Interest Rates

A guest post written by DAR Wong

Currency Market Observations - 21 April 2014

Fundamental Outlook

The US Federal Reserve chief reiterates on maintaining low interest rates to ensure recovery track. Japan faces tough road ahead as confidence declines amid tax rise. Market investors lose optimism after no stimulus was mentioned by Kuroda. UK reports on falling unemployment that indicates good recovery.

The US retail sales jumped 1.1 percent in March and above expectation, after advancing 0.7 percent in prior month. Inflation measured by consumer prices accelerated 0.2 percent in March versus prior month of 0.1 percent gain.

The US building permits grew at 990,000 annualized rates in March and almost in-line with median forecast. Weekly jobless claims increased 2,000 to 304,000 in the week ended April 12 from a revised 302,000 in prior period that was the lowest since September 2007.

Federal Reserve chief Janet Yellen spoke about policymakers...

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Gold and Oil Markets Report – 21 April 2014

A guest post written by DAR Wong and Chong HC

The WTI Crude prices surged due to civil war broke out in Ukraine. Crude inventories rose to 10 million barrels in the week ended 12 April by EIA report but posed no effect in pressing on Crude prices. Surprisingly, Gold prices behaved weak last week as flight of funds were believed to have driven into US equities and Dollar that sold off yellow metals. FED Yellen reassured of low interest rates to lead the road of economic recovery while policymakers will focus in bringing down the unemployment for stimulating growth.

Crude Oil

WTI Crude prices closed at 104.50 levels for a short week on last Thursday. The market is prone to create a double-top formation at 105.22 levels in coming week. Technically, we reckon that the trend will sit well on 103.00 supports and piercing...

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Gold and Oil Markets Report – 14 April 2014

A guest post written by DAR Wong and Chong HC

The US DJIA dropped 143 points on Friday after US producer prices rose 0.5 percent in March at best record for past 4 years. FED policymakers assured after FOMC meeting of low interest rates failed to impress market investors in supporting Dow Jones sentiments. Gold rebounded to 1320.00 regions after Dollar receded towards weekend. Crude inventories rose 4.0 million barrels on weekly report and put a lid at 104.00 levels for time being. This week, market investors will be observing to FED Yellen and BOJ governor Kuroda speak of their monetary policy that will influence the direction of Dollar and Yen.

Crude Oil

WTI Crude prices reached 104.44 highs last week amid Russia-Ukraine tension. The rising crude inventories helped to cap the energy prices but the sentiment for coming week will be under tight observations...

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Pound Surges as UK Economy Strengthens

A guest post written by DAR Wong

Currency Market Observations - 14 April 2014

Fundamental Outlook

The US stocks fall despite being assured of low interest rates by FED meeting. Stronger economic data rise worries among investors that stimulus withdrawal will expedite. China shows stronger inflation amid contraction in import/export trades. Bank of England leaves interest rates unchanged as recovery picks up as expected.

The US consumer borrowing rose more than forecast in February. Credit advanced USD16.5 billion and exceeded forecast while non-revolving credit gained in automobiles, schools etc. Another report on weekly jobless claims slid 32,000 to 300,000 in the week ended April 5, the least since May 2007 that signaled picking up in hiring.

American producer prices rose 0.5 percent in March after declined 0.1 percent in prior month. Core prices gained 0.6 percent and above median forecast. The better-than-expected figures put pressure on Dow Jones benchmarks...

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American Payroll Gives Better Outlook

A guest post written by DAR Wong

Currency Market Observations - 7 April 2014

Fundamental Outlook

The US trade deficits widens while jobless claims also rise. However, monthly US payroll shows gains in new jobs and triggers stimulus ease. Japan begins higher sales tax in April amid market expectation of slowdown in Q2. European Central Bank (ECB) remains interest rate unchanged even after Euro inflation recedes.

The US Institute for Supply Management's manufacturing index increased to 53.7 in March from prior month 53.2. On back to back, the non-manufacturing index from same institution rose to 53.1 from 51.6 in February. Another report on trade deficit widened in February by 7.7 percent to USD42.3 billion, the biggest since September, from the prior month's USD39.3 billion.

American weekly jobless claims rose 16,000 to 326,000 in the period ended March 29 vs. prior week 310,000. Before the weekend, non-farm payroll rose 192,000...

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Gold and Oil Markets Report – 7 April 2014

A guest post written by DAR Wong and Chong HC

The US DJIA slumped 159 points on Friday after the non-farm payroll rose 192,000 and showed signs of recovery. Market expects the FED to ease stimulus as bond yield has been rising for past few days. The Gold rebounded after payroll data due to strengthening Dollar. Crude oil prices also traded higher as the buying sentiment has been carried forward from Wednesday due to contraction in crude inventory in weekly EIA report.

Crude Oil

WTI Crude prices rose after mid last week when the crude inventory was reported at minus 2.4 million barrels against positive gains. Stronger Dollar has little effect on Crude prices as the market is still ogling at Russia-Ukraine tension. This week, we reckon the market will continue to sit on bullish sentiment with buying interest emerging at 99.00 areas. The uptrend...

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Housing Slump May Drag US Recovery

A guest post written by DAR Wong

Currency Market Observations - 31 March 2014

Fundamental Outlook

The US housing slump still exists while growth climbs from improving job market. Japan shows inflation unchanged amid weakness in consumer spending. Economic confidence in Euro area rises and releases tension of new stimulus by policymakers. Britain reports contraction in current account.

The US new home sales fell in February to the lowest level in 5 months after it declined 3.3 percent to a 440,000 annualized pace from prior month 455,000. The Conference Board's sentiment index rose to 82.3 in March, the highest since January 2008, from 78.3 a month earlier and pulled up DJIA stocks.

Another report on American orders for durable goods gained 2.2 percent in February and core data gained 0.2 percent. Overall Gross Domestic Product in final quarter grew 2.6 percent annualized rate and higher than initial estimate 2.4...

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Gold and Oil Markets Report – 31 March 2014

A guest post written by DAR Wong and Chong HC

Gold prices declined deeper last week due to rapid liquidation. The reason might be due to rising Dollar and market reacted little to the sanctions of Russia by the G8 nations. The Crude inventories rose 6.6 million barrels in previous week but oil prices surged ahead of weekend from better U.S. consumer spending. The Gold-Crude ratio has widened while most traders expect the yellow metal will begin to short cover in coming week.

Crude Oil

WTI Crude prices surged after Wednesday above 100.00 benchmarks after the G8 and western countries voiced sanction against Russia. Media reported that Russia may attack over Ukraine through reinforcing military exercise caused market tension and triggered buying hedge in oil prices. This week, we foresee the market will sit on 100.00 supports and climb higher to 103.00 – 103.50 targets...

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FED Abandons Jobless Rate to Monitor Rate Policy

A guest post written by DAR Wong

Currency Market Observations - 24 March 2014

Fundamental Outlook

The US sees improvement in industrial production and consumer prices though housing resale market still stays at bottom. Federal Reserve (FED) policymakers will abandon the unemployment benchmark as threshold measure for raising rate. Japan deepens its trade deficit and floats Yen value against Dollar. UK also reports higher budget deficit as government has been increasing spending.

The US industrial production gained 0.6 percent in February after lost 0.2 percent in prior month. Consumer prices were up 0.1 percent, matching the advance in January. Another report on housing starts rose 910,000 in February and in-line with expectation, beating the harsh winter seasons and lifted stock prices.

American existing home sales fell 0.4 percent to 4.6 million annual rates in February, lowest since July 2012. Jobless claims increased by 5,000 to 320,000 in the week...

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Gold and Oil Markets Report – 24 Mar 2014

A guest post written by DAR Wong and Chong HC

Gold prices began to decline last week after Crimea voted to be part of Russia. Market faced profit-taking and reached down to 1320.00 regions though US pinpointed to Russia for annexing Crimea. Crude prices softened too amid increasing supply that drove the demand lower. Another reason for commodity falls over past few days was due o the recovery in US Dollar index moving up from 79.30 to 80.20 regions.

Crude Oil

WTI Crude prices pulled up from last week's low at 97.00 levels while it has been hovering around EMA200 average line. The market will continue to thread from 97.00 – 100.00 regions but picking to short from topside may be more sensible from technical appearance. We have spotted the resistance to lie at R1 – 100.00 and R2 – 101.50 in case the pull...

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