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China’s Manufacturing Declines Amid US Tapering

A guest post written by DAR Wong

Currency Market Observations - 3 February 2014

Fundamental Outlook

The US housing demand remains wobbly as growth slows down. FED announces tapering of another USD10 billion and triggers sell-off in global equity markets. China's manufacturing PMI declines and puts pressure on Asia asset bubbles as slowdown deepens. However, UK housing prices pick up in tandem with GDP gains.

The US new home sales dropped 7 percent to 414,000 annualized pace in December and below median forecast. Another separate report on orders for durable goods was unexpectedly down 4.3 percent. Consumer confidence improved in January at 80.7 compared to prior month revised 77.5.

The American pending home sales slumped 8.7 percent after a revised 0.3 percent drop in November. Weekly jobless claims climbed by 19,000 to 348,000 as of 25 January and created highest number since last December.

The US growth for Q4 rose...

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Gold and Oil Markets Report – 27 Jan 2014

A guest post written by DAR Wong and Chong HC

The U.S. Dollar Index plunged last week from 81.388 tops and closed at 80.458 on Friday. Short-term assets in U.S. markets like equities and currencies slid while Treasuries strengthened. Gold prices were lifted due to flight of fund movement into commodities. The International Monetary Fund (IMF) predicts global growth at 3.8 percent this year as led by the expansion in U.S. and U.K. economic recovery.

Crude Oil

WTI Crude prices have been recovering from 93.50 lows but resisted at 98.00 areas due to profit-taking. Technically, the market bulls are also barred at 98.00 levels by EMA200 line as strong resistance. This week, we foresee the market will thread from 95.00 – 98.00 regions as sideways consolidation. Beware of breaking above 98.00 resistances as market may try for 99.50 targets if the U.S. Dollar Index continues...

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Dow Plunges as US Treasuries Rise

A guest post written by DAR Wong

Currency Market Observations - 27 January 2014

Fundamental Outlook

The US Treasuries rise as yields drop, causing Dow Jones Industrial Average (DJIA) to plunge 318 points. International Monetary Fund (IMF) predicts the growth in US and UK will accelerate in 2014 and lead global recovery. The US existing home sales rise while Eurozone manufacturing improves. The UK sees an improvement in unemployment decline and budget deficit narrows.

The US existing home sales rose in December for the first time in past 5 months as purchase was up 1 percent to a 4.87 million annual pace. Jobless claims gained 1,000 to 326,000 in the period ended 18 January, held at near 6-week low levels.

The US Treasuries rose steadily last week while 10-year bond yield closed lower at 2.72 percent on Friday, at 8-week low. The declines in emerging-markets equities spurred demand for...

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Gold and Oil Markets Report – 20 Jan 2014

A guest post written by DAR Wong and Chong HC

The US Dollar has been rising throughout last week and settled at 81.18 levels for the weekend. The US economic inflation has begun to pave way for recovery as producer prices and consumer prices rose 0.4 percent and 0.3 percent respectively, both at highest over prior 3 months period. Gold prices closed firm on Friday amid short-covering and Crude prices stayed firm amid strong buying interest.

Crude Oil

WTI Crude prices drove higher towards last weekend after inventories continued to slide 7.7 million barrels in the week ended 11 January. Market advanced to 2-week high despite Dollar gained in rising value. This week, we reckon the trend will meet some resistance at 95.00 regions while support tends to emerge at 93.00 levels. Thus, sideways consolidation may occur in early week but the probability of climbing...

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Britain Gains Traction in Recovery

A guest post written by DAR Wong

Currency Market Observations - 20 January 2014

Fundamental Outlook

The US gains traction in retail sales and growth in inflation. China increases the holding of US Treasury assets on record high volume. The European policymakers are beginning to take measures in steering away from repetitive debt crisis while UK continues to show strength.

The US retail sales gained 0.2 percent in December after 0.4 percent advanced in prior month. Producer prices climbed 0.4 percent in the final month of last quarter for the first time. Core prices rose 0.3 percent and 3 times the median forecast.

Another separate report that measures inflation shows US consumer prices rose 0.3 percent in December, making the biggest jump in 6 months. Core prices were up 0.1 percent as expected in forecast. Jobless claims were reported at 326,000 for the week ended 11 January.

The US industrial...

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Gold and Oil Markets Report – 13 Jan 2014

A guest post written by DAR Wong and Chong HC

The US non-farm payroll for December surprised the market on Friday by mere 74,000 gains vs. prior month 241,000 jobs created. Unemployment was down to 6.7 percent but economists reckoned more Americans have left the work forces. Bond yields were down on Friday late session as market investors speculated reversal in tapering stimulus. Gold climbed at firm sentiment while Crude prices also recovered due to falling USDX.

Crude Oil

WTI Crude prices have temporary bottomed out at 92.25 and prone to make technical recovery in coming week. By Fibonacci estimate, we predict the trend will reach up to 94.40 as our target. The USDX trend will play vital part in affecting crude prices in addition to the weekly inventory report after mid-week. Topside resistance after R1 – 94.40 will be R2 – 96.00 levels if...

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The US Payroll Contracts Unexpectedly

A guest post written by DAR Wong

Currency Market Observations - 13 January 2014

Fundamental Outlook

The US non-farm payroll grows at small pace while unemployment turns down unexpectedly. Janet Yellen will assume the role to become FED Chairperson after Ben Bernanke steps down at end of January. Eurozone economy slows down but Germany maintains AAA credit rating affirmed by Standard & Poor's ratings. Mortgage loans and housing markets in UK are recovering steadily with better expectation in 2014.

The US Institute for Supply Management's non-manufacturing index slid to 6-month low at 53 in December from prior month 53.9. Jobless claims for the week ended 4 January was reported at 330,000 and down from prior week and median forecast.

American payroll rose in December at the slowest pace in almost 3 years, with mere 74,000 gains in December. Ironically, unemployment rate was down to 6.7 percent and economists reckoned...

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The US Treasury Yields at Highest Since 2011

A guest post written by DAR Wong

Currency Market Observations - 6 January 2014

Fundamental Outlook

The US pending homes sales increase while consumer confidence also gains in optimism. The US treasury yields rise to highest record since 2011 ahead of unemployment in coming week. Stock prices in US and Europe remain in bullish sentiment as of New Year opening. UK economy is seen recovering with rising mortgage loans and manufacturing growth.

The US pending home sales increased 0.2 percent after declined 1.2 percent in October. The recent rise in US bond hampers growth in housing recovery as fear of interest rate is stepping into market. Another separate report on consumer confidence measured by Conference Board climbed to 78.1 in December from prior month 72.0.

The S&P/Case-Shiller index of property prices gained 13.6 percent from October 2012 after a 13.3 percent annual surge ended September. The Institute for Supply...

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Gold and Oil Markets Report – 6 Jan 2014

A guest post written by DAR Wong and Chong HC

The US economy is believed to be recovering as FED Chairman said the headwind for improvement is abating. Treasury yields rose to highest since 2011 as 10-year bond yield surpassed 3.0 percent on Friday. Dow Jones benchmark remains in strong sentiment as tapering will begin in January. Market players are waiting for unemployment data for coming Friday to check the persistence in market strength.

Crude Oil

WTI Crude fell heavily from 100.00 regions last week to 94.00 levels on Friday. A US government report showed that supplies of distillate fuel and gasoline climbed, hammering the prices down in biggest weekly decline for past 19 months. Technically, we foresee the market has a bargain hunting regions at 93.50 levels and will probably move into consolidation at 96.30 areas. However, long-view needs to be abandoned in case...

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Gold and Oil Markets Report – 30 Dec 2013

A guest post written by DAR Wong and Chong HC

The U.S. Dow Jones markets made new high on Friday after it ascended above 16,500 levels. The 10-year Treasury bond yield surged to 3 percent for the first time this year and triggered movement of funds from fixed-income assets to equities. Gold prices began to climb after jobless claims showed decline to 338,000 in the week ended 21 December. WTI Crude topped USD100 per barrel on Friday and remained strong after inventory supply fell further than previous week.

Crude Oil

WTI Crude prices were creeping up slowly throughout last week amid low volume. The Friday’s report on Crude inventories showed more supplies at 4.7 million barrels and more than double the expectation. The market hovered above USD100.00 benchmarks as demands increased. This week, we reckon the support will emerge at 98.50 regions while the bulls...

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