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Bank of Japan Cuts Interest Rate to Negative

A guest post written by DAR Wong

Currency Market Observations - 01 February 2016

Fundamental Outlook

The U.Snew home sales rise to 8-year record high amid scepticism while orders for durable goods fall. Bank of Japan cuts interest rate to negative zone for first time in history. U.K. makes smallest growth since 2013.

The U.S. Conference Board of consumer confidence expanded 98.1 in January and better than forecast. New home sales rose to 8-year high at 544,000 annualized rates in January as housing prices tumbled. Analysts remain skeptical until they see the February data again as new cooling measures started in November might have backlogged many housing purchases.

American pending home sales grew 0.1 percent in January and better than minus 1.1 percent contraction in previous month. Core durable goods, excluding transport equipment, reduced to minus 1.2 percent after it was revised at par growth...

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Gold and Oil Markets Report – 01 February 2016

A guest post written by DAR Wong and Chong HC

Gold traded higher last week as Crude also recovered above USD30.00 per barrel. Ironically, USDX also recovered at near to 100.00 benchmarks at 8-weeks high. The new policy announced by Bank of Japan on negative interest 0.1 percent shocked the market and weakened the Yen by pulling up USDX on Friday. However, we foresee this is only temporary effect and Yen will soon regain strength in coming 1-2 weeks.

Crude Oil

WTI Crude pricesreversed above USD30.00 per barrel for the weekend. This week, we have identified the resistance to be strong at 35.00 and huge opportunity for the trend to fall back. Global supply glut is still bothering the market sentiment and the recovery could be short-lived. We do not recommend holding long positions for too many days in the current up trend.

Gold

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European Central Bank Stresses on New Stimuli if Needed

A guest post written by DAR Wong

Currency Market Observations - 26 January 2016

Fundamental Outlook

The U.S building permit is down while existing home sales make fictitious jump due to backlogged process of mortgage application. European Central Banks holds interest rates unchanged and express affirmation to introduce new stimuli if needed. U.K. sees small rise in inflation from consumer prices and factory gate cost.

The U.S. building permit was reported at 1.23 million in December versus revised 1.8 million in November. Consumer prices contracted 0.1 percent in December while core prices, excluding food and energy, expanded 0.1 percent. Both data are below expectation.

American jobless claims rose to highest since July last year at 293,000 in the week ended 18 January.Existing home sales jumped 14.7 percent in December after 11 percent decline in previous month. Analysts comment there is no real increment in housing market...

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Gold and Oil Markets Report – 26 January 2016

A guest post written by DAR Wong and Chong HC

Crude prices recovered from 12-year low after hitting 27.50 bottoms last week. Crude prices settled above USD30 per barrel and relieved global traders from fear of equity plunge. Gold prices continue to poise firm and make its way to 1100.00 benchmarks due to flight-in fund for safe haven. Dow Jones benchmarks caused panic in market during mid-last week after it hit 15,450 lows recorded in August but floated to 16,000 regions for weekend.

Crude Oil

WTI Crude prices floated above USD30.00 levels for weekend closing. Market tested 12-year low at 27.50 bottoms before crawling up. However, we do not expect rapid recovery yet as resistance is spotted at 33.00 levels. Therefore, we reckon range will be constricted from 27.00 – 33.00 regions in coming week. Breaking above 33.00 may reach 35.00 levels for...

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Crude Dips to 12-year Low before USD30/Barrel

A guest post written by DAR Wong

Currency Market Observations - 18 January 2016

Fundamental Outlook

The U.S. economy stays sluggish despite non-farm payroll grew in December. Crude oil slides to 12-year low beneath USD30 per barrel and drags stock prices down. Eurozone economy remains hawkish while Bank of England keeps status-quo on interest rate decision.

The U.S. unemployment claims rose to 284,000 in the week 9 January and higher than forecast. Core retail prices, excluding automobiles, plunged 0.1 percent in December after previous month was revised at 0.3 percent gains. Producer prices also slid 0.2 percent after rising 0.3 percent in November.

On Friday, U.S. Crude oil plunged to below USD30 per barrel for first time to 12-year low record. Weak demand in energies confirms the global recession and pull down stock prices. Dow Jones benchmarks declined 504 points throughout whole of last week.

China...

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Gold and Oil Markets Report – 18 January 2016

A guest post written by DAR Wong and Chong HC

Gold traded in mild bullishness last week as same direction in U.S. Dollar index. WTI Crude oil declined as global supply glut continues to threaten demand. Crude prices closed below USD30 /barrel on Friday while hitting 12-year low record. Global stock prices are expected to be flamboyant in coming week as Crude attracts global attention. Dollar index will become main indicator to lead inverse trend to energies.

Crude Oil

WTI Crude prices broke below the low record in 2009 and stretched down to meet the bottoms of 2004 below USD30 levels. By analysis, we project a possibility to hit 26.00 lows before bargain-hunting emerges. This week, we are uncertain if the bears will descend to our aforementioned target then rebound, or recover first for another decline to be made later. Range for this...

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Global Stock Markets Down in Early January

A guest post written by DAR Wong

Currency Market Observations - 11 January 2016

Fundamental Outlook

The U.S. Institute for Supply Management reports manufacturing index in December fell to 48.2 and lower than forecast. Construction spending declined 0.4 percent after gained 0.3 percent gains in November.

A second report released by Institute for Supply Managementon services index grew 55.3 in December and stayed strong above expansion limit 50.0 levels. Trade deficits shrank to USD42.4 billion in November and improved from USD44.6 billion in prior month.

The U.S. unemployment claims dropped to 277,000 in the week ended 2 January, down from 287,000 in previous week probably due to year-end seasons.

The U.S. non-farm payroll in December rose to 292,000 in December unexpectedly and above the forecast. Unemployment rate stays at 5.0 percent. Another report on wholesale inventories dropped 0.3 percent and better the median forecast, signaling rising...

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Gold and Oil Markets Report – 11 January 2016

A guest post written by DAR Wong and Chong HC

Dollar Index (USDX) traded in sideways by making a pull-up last week before it closed lower. Precious metals climbed higher while Crude dipped at low edge. Global supply glut has been making the global economy gloomy as first week of the New Year caused a panic sell-off in global stocks. Investors are putting blame for China for possible hard landing in shrinking manufacturing and devaluing Yuan.

Crude Oil

WTI Crude prices have been lying low and dipped below 33.00 for weekend. The threat of global oil glut and slowdown in economic demand have put lid on oil prices. We foresee more dip will unfold in January before genuine short-covering arises in market. This week, we predict resistance will emerge at 35.00 levels while 30.00 benchmarks seem vulnerable to be tested. If market dips...

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American Home Market Slows in Recovery

A guest post written by DAR Wong

Currency Market Observations - 28 December 2015

Fundamental Outlook

The markets trades in quiet sentiment ahead of long holiday seasons. American homes sales expand in slower rate. Japan slows in consumer spending while unemployment rises. European market stays in low volatility due to Christmas seasons.

The U.S. existing home sales grew 4.76 million in November and slumped from revised 5.32 million in previous month, making worst growth in 9 months record. Final GDP for Q3 expanded 2.0 percent and better than expected.

American new home sales grew 490,000 in November and lagged below 500,000 benchmarks for third month. Core durable goods, excluding transport equipment, slid 0.1 percent after it grew 0.5 percent in October.

On separate report, the U.S. jobless claims for the week ended 19 December was down to 267,000, lowest in 4 weeks. Dow Jones benchmarks traded...

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Gold and Oil Markets Report – 28 December 2015

A guest post written by DAR Wong and Chong HC

The metals and energy markets traded in thin volatility last week as both made mild recovery before year-end. Dollar Index trades slightly lower while lending strength to lift the commodity prices. Pay attention to FCPO prices in Bursa market as palm prices might climb higher in coming weeks due to weakening Ringgit. The U.S. Crude inventory was cut by 5.9 million barrels last week and helped to recover the Crude demand.

Crude Oil

WTI Crude prices dipped below 35.00 levels last week and panicked market traders. It closed higher at 38.00 regions after Dollar Index slid. This week, we forecast the trend will be supported at 36.00 and may ascend slightly to 40.00 benchmarks. Expect range bound trading with low liquidity in market for this week!

Gold

Gold prices settled at 1074.00 regions before...

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