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Saturday 31 October 2015

GOLD SLIGHTLY HIGHER AFTER U.S. HOUSING DATA

On Tuesday gold futures were little changed, after data indicated the number of housing starts issued in the U.S. rose more than expected in September, while building permits fell more than forecast, providing a blurred picture of the economy and adding to uncertainty over the timing of a U.S. rate hike.

Comex gold for December delivery added 0.03%, to trade at $1,173.10 a troy ounce during U.S. morning hours, while Comex silver for December delivery was up 0.06% to trade at $15.850.

Yesterday gold lost $10.30, or 0.87%, on bets the Federal Reserve could still raise U.S. rates this year.

The U.S. Commerce Department said that housing starts rose 6.5% to 1.206 million units last month from August’s total of 1.132 million units, while analysts had expected 1.140 million.

The number of building permits released dropped by 5.0% to 1.103 million units from August’s total of 1.170 million. Economists expected building permits to fall by 0.9% to 1.164 million units in July.

Market players have been trying to calculate when the Fed will increase interest rates for the first time in nearly a decade after recent economic reports offered a mixed picture of the U.S. economic growth.

The yellow metal surged to a four-month peak of $1,191.70 last week amid speculation the Fed will not raise rates until sometime next year, with weak economic reports on retail sales and manufacturing activity feeding that view.

However, positive inflation data and upbeat consumer sentiment released at the end of last week prompted investors to rethink whether Fed policymakers will wait until next year to hike rates.

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Friday 30 October 2015

GOLD CLIMBS AHEAD OF U.S. DATA

Gold futures were slightly higher on Tuesday as market players awaited reports on the U.S housing sector later in the day for further hints on the strength of the economy and the future path of interest rates.

Comex gold futures for December delivery added 90 cents, or 0.08%, to trade at $1,173.70 an ounce.

Comex silver for December delivery was up 0.44% to trade at $15,910 an ounce.

The U.S. Commerce Department is expected to issue a report at 8:30AM Eastern Time. Analysts expect housing starts to rise 1.2% in September to 1.140 million, while building permits are forecast to drop 0.9% to 1.160 million.

The possibility of a Fed rate increase has been a constant source of debate in the markets in recent months. The U.S. central bank has two more scheduled policy meetings before the end of the year, in late-October and mid-December.

Earlier in the day, the dollar had climbed 0.4% against a basket of currencies and rose against the euro as investors waited to see if the European Central Bank would offer more stimulus at a meeting this week.

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Thursday 29 October 2015

EURO HITS TEN-DAY LOW VS GREENBACK, ECB MEETING ON TAP

On Monday the single currency traded at its lowest level against the dollar in 10 days after official data showed that economic growth in China was stronger than economists’ expected in the third quarter.

The euro fell to $1.1305 in early trading, its weakest level since Oct. 9, according to FactSet. It recently bounced back to $1.1328 as investors in Europe and the U.S. are getting ready for a meeting of European Central Bank policy makers on Thursday.

EUR/GBP was last at 0.7315, down 0.48%.

Elsewhere in the currency trading, the dollar was slightly lower against the yen with USD/JPY last trading at 119.39, down 0.04%.

The dollar was also lower against the British pound with GBP/USD last seen at 1.5487, up 0.30%.

Most analysts believe the ECB will maintain its current asset purchasing program at Thursday’s meeting, but almost all of them expect ECB President Mario Draghi to hint at a coming expansion.

Draghi said at the central bank’s September meeting that officials are prepared to expand their program of €60 billion ($67.98) in monthly purchases of private and public debt if the inflation and global growth prospects get worse.

Chinese officials reported that the country’s economy grew by 6.9% in the third quarter, beating expectations by 10 basis points, but still below the government target of 7%.

Investors will now await data on housing starts - the number of new-residence construction projects begun last month. Analysts say it will be the most widely anticipated piece of U.S. data released this week.

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Wednesday 28 October 2015

CHINA SHOWS SLOWEST ECONOMIC GROWTH SINCE 2009, AUSSIE STEADY

The Australian dollar was slightly higher against the vulnerable U.S. peer on Monday, as data showed that Chinese growth showed the slowest pace in the third quarter since 2009.

AUD/USD hit 0.7290 during late Asian trade, the session high; the pair subsequently consolidated at 0.7268, up 0.03%.

The Aussie was lower against the euro, with EUR/AUD rising 0.06% to 1.5628.

The New Zealand dollar was last lower against the greenback with NZD/USD trading at 0.6804, down 0.10%.

EUR/NZD was last at 1.6709, up 0.31%.

Earlier Monday, official numbers showed that China’s economic growth slowed to 6.9% in the third quarter, down from 7% in the previous one. This is the country's slowest growth rate since 2009.

China is Australia's biggest export partner.

Meanwhile, sentiment on the dollar remained fragile after the release of mixed economic reports from the U.S. on Friday.

The preliminary reading of the University of Michigan’s consumer sentiment gauge came in at 92.1 compared to expectations of 89 and up from 87.2 in September.

But another report signaled that U.S. industrial production dipped 0.2% in September, under pressure due to weakness in the oil and gas sector, as well as the strong dollar.

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Tuesday 27 October 2015

GOLD STILL DOWN AFTER U.S. DATA

Gold was lower Friday after positive data from the U.S.

The University of Michigan said its consumer sentiment index climbed to 92.1 this month from a reading of 87.2 in September. Economists had expected the index to rise to 89.0 in October.

The report came after data showed that industrial production dipped 0.2% last month, in line with forecasts. Industrial production declined 0.1% in August, whose figure was revised from a previously estimated 0.4% drop.

U.S. manufacturing production slipped 0.1% in September, compared to expectations for a 0.2% fall. Manufacturing production declined 0.4% in August, whose figure was revised from a previously estimated 0.5% slide.

Comex gold for December delivery was last at $1,182.70, down 0.40%. December Comex silver was trading at 16.095, down 0.43%.

Elsewhere, crude oil continued its decline Friday. Investors closed positions at the end of a volatile week that saw prices slide nearly 10 percent on renewed signs a global supply glut was here to stay.

The slump came after the International Energy Agency predicted the market would remain oversupplied through 2016. However, oil futures were supported by strong stock markets and positive U.S. data.

Brent crude's new front-month December contract was last down 23% at $49.62. November Brent expired at $48.71 on Thursday, down 44 cents on the day.

U.S. crude's front-month November contract traded 0.22% higher at $46.49 a barrel.

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Monday 26 October 2015

DOLLAR SLIGHTLY HIGHER VS PEERS AS U.S. INDUSTRIAL PRODUCTION MATCHES FORECASTS

On Friday the greenback was higher against the other major currencies after fresh economic reports.

Industrial production in the U.S. fell 0.2% in September and capacity utilization declined, according to data released by the Federal Reserve on Friday. The data came in line with expectations.

August's decline was revised higher to a drop of 0.1% from the prior estimate of a 0.4% fall. The only major market group to log a gain in September was consumer goods. Capacity utilization fell to 77.5% from an upwardly revised 77.8% in August, a bit above the 77.4% expected. The strong dollar, sluggish growth overseas, and low crude oil prices are all serving as headwinds for the U.S. factory sector.

The dollar was higher after the data, supported by the previous session's economic reports.

The U.S. Department of Labor said Thursday that the number of individuals filing for initial jobless benefits in the week ending October 10 decreased by 7,000 to 255,000 from the previous week’s total of 262,000. Economists had awaited jobless claims to rise by 8,000 to 270,000.

In a separate report, the U.S. Commerce Department said that consumer prices dipped 0.2% last month, matching expectations. Year-over-year, consumer prices were flat in September. Core consumer prices, which exclude food and energy costs, climbed by 0.2%, above expectations for a gain of 0.1%.

USD/JPY was last up 0.13% to 119.05.

Earlier in the day, Bank of Japan Governor Haruhiko Kuroda that the overall inflation trend is improving and that consumer spending is recovering from a lull earlier this year, dampening expectations that the central bank will increase stimulus measures.

Meanwhile, EUR/USD slipped 0.06% to 1.1380, while GBP/USD was up 0.07% to 1.5463.

In a final report, Eurostat said the euro area's consumer price gauge climbed 0.2%, matching forecasts expectations and higher from an initial estimate of 0.0%.

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Saturday 24 October 2015

CHINA'S THIRD-QUARTER GDP DATA: FIVE KEY THINGS TO MONITOR

China’s economic downturn is weakening commodity prices and hurting global economies and businesses alike. A fresh look at just how sharp the slowdown is will be presented on Monday when the country releases third-quarter GDP data. There are several important things to watch:

Hints at more stimulus

China's Premier Li Keqiang is targeting real gross domestic product growth in 2015 of “around 7%”, following actual growth of 7.3% in 2014.

Economic expansion in the first two quarters corresponded to the government target exactly, at least according to its own reports. But analysts expect the rate to decline to 6.7% in the third quarter, which would be the slowest since the trough of the financial crisis. The spokesman for China’s statistics bureau said in September that he believed growth as low as 6.5% would still be considered within the target range. Nevertheless, if it falls below 6.7%, calls for more aggressive stimulus will be more persistent.

GDP deflator

The GDP deflator converts nominal GDP to real GDP by stripping out inflation. Analysts have long suspected that China's statistics bureau manipulates it to forge the closely monitored and politically sensitive headline growth figure. Understating inflation aims to make real growth appear faster than it is. In the first quarter, the deflator was negative at -0.33, which meant the economy was in outright deflation but renewing doubts about its accuracy. It climbed back to positive territory at 0.09 in the second quarter. Another negative reading in the third quarter would again spur concerns about whether the deflator is being used to ease the appearance of volatility.

Doubts about data accuracy

After July’s GDP data release, the spokesman for China’s National Bureau of Statistics took the unusual step of publicly addressing skepticism about China’s official figures - especially the deflator issue. A column in the official People’s Daily newspaper then came. It offered a somewhat more detailed defence of the methodology the bureau uses. If the NBS again speaks to critics at its quarterly press conference, it will unveil how sensitive it is about overall skepticism, the Financial Times says.

Services

The Financial Times reports that Chinese services have become a new driver of growth against the backdrop of slowing manufacturing and construction. Services increased 12.1% in nominal terms in the second quarter, well above 7.1% nominal growth for the economy as a whole. Beijing is actively inspiring this transition. But services growth has been driven by one-off factors, particularly the stock market boom early this year in which securities brokerages raked in huge trading commissions. With the stock market turmoil in the third quarter, growth in financial services almost certainly shrank. Economists will be watching to see if other emerging service sectors such as healthcare, tourism and media can smooth the slowdown.

Fixed assets

Investment in fixed assets remains the backbone of the world's second largest economy, accounting for 44% of overall output in 2014. It also supports global demand for commodities like base metals. But with the property market still stuck in oversupply, investment in housing continues to be hampered. Beijing has tried to fill the gap this year by driving spending on infrastructure such as railways and water treatment. Infrastructure investment rose at a rate of 18.4% a year during the first eight months.

Data to be released Monday will show how aggressively the government is seeking stimulus through infrastructure.

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Friday 23 October 2015

WALL STREET OPENS HIGHER AS INVESTORS DIGEST ECONOMIC DATA

U.S. stocks opened higher Thursday as investors weighed earnings from big banks and economic data.

The S&P 500 rose 7 points, or 0.3%, to 2,001, while the Dow Jones Industrial Average advanced 18 points, or 0.1%, to 16,942. The Nasdaq Composite added 26 points, or 0.6%, to 4,809.

Earlier, data showed first-time claims for U.S. jobless benefits matched the lowest level since 1973. Separately, data showed the consumer price index fell by 0.2% in September.

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Thursday 22 October 2015

DOLLAR JUMPS AFTER UPBEAT U.S. DATA

U.S. consumer prices logged their biggest drop in eight months in September as the cost of gasoline fell, however, a steady ascent in the prices of other goods and services signaled inflation was starting to firm. The U.S. labor market also showed some good numbers.

Official data released Thursday showed that new applications for unemployment aid fell back to a 42-year low last week. The low level of layoffs and steadying underlying inflation could keep the door open to an interest rate hike from the Federal Reserve this year.

The Labor Department said its Consumer Price Index fell 0.2 percent last month after slipping 0.1 percent in August. In the 12 months through September, the CPI was unchanged for the first time in four months after rising 0.2 percent in August.

The so-called core CPI, which strips out food and energy costs, rose 0.2 percent after ticking up 0.1 percent in August. In the 12 months through September, the core CPI rose 1.9 percent, the largest gain since July 2014, after rising 1.8 percent in August.

The U.S. central bank monitors the personal consumption expenditures price gauge, excluding food and energy, which is running well below the core CPI.

Low inflation, which has persistently run below the Federal Reserve's 2 percent target, has been a major obstacle in the Fed's way to raising rates this year.

The greenback turned broadly higher against the other major currencies after the news was released, easing off a two-and-a-half month trough.

EUR/USD dipped 0.81% to 1.1381, pulling away from a 1-1/2 month peak of 1.1495 hit overnight.

The dollar moved higher against the pound and the Swiss franc, with GBP/USD down 0.23% at 1.5442 and with USD/CHF gaining 0.43% to 0.9536.

It was lower against the yen, however, with USD/JPY last seen at 118.60, down 0.20%.

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Wednesday 21 October 2015

CRUDE OIL FUTURES NEAR TWO-WEEK LOWS AHEAD OF INVENTORY REPORT

On Thursday U.S. oil futures edged lower amid concerns weekly supply data to be released later in the day will show U.S. crude inventories rose faster than expected last week.

Nymex oil shed 44 cents, or 0.93%, to trade at $46.21 a barrel during European morning hours.

Yesterday WTI prices dipped 2 cents, or 0.04%.

The U.S. Energy Information Administration is expected to publish its weekly report on oil supplies at 11:00AM Eastern time Thursday. The report comes out one day later than usual because of Monday's Columbus Day holiday in the U.S.

The data is expected to show that crude stockpiles rose by 2.9 million barrels last week, while gasoline stockpiles probably declined by 1.7 million barrels.

After markets' closure on Wednesday, the American Petroleum Institute reported that U.S. crude inventories rose by enormous 9.3 million barrels in the week ended October 9.

Meanwhile, Brent oil for November delivery on the ICE Futures Exchange lost 7 cents, or 0.14%, to trade at $49.62 a barrel.

On Wednesday, Brent futures shed 7 cents, or 0.18%.

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Tuesday 20 October 2015

GOLD CLIMBS AHEAD OF U.S. CPI DATA

Gold held overnight gains on Thursday as investors awaited data on consumer prices in the U.S.

Comex gold for December delivery rose 0.26% to $1.182.70 a troy ounce.

December Comex silver was lower 0.04% to $16.110 a troy ounce.

December Comex copper edged up 0.22% to $2.421 a pound.

Investors await the release of the Consumer Price Index in the U.S. later in the global day for further signals on if Federal Reserve could raise short-term interest rates before the end of the year.

Economists expect the headline CPI to fall by 0.2% for the month, but await that the core reading will climb 0.1% from its level in August.

Overnight, gold futures jumped more than $10 an ounce on Wednesday hitting near-four month highs, as investors rushed to the safe haven asset amid a series of disappointing economic data around the globe.

Wednesday jump in gold coincided with a sell-off in the greenback, following the release of disappointing reports on retail sales and producer pricing last month.

On Wednesday morning, the U.S. Department of Commerce said retail sales nationwide climbed 0.1% in September, matching the low end of consensus estimates. Gasoline sales weighed significantly on the overall reading, plunging by 3.2% for the month. The core reading, minus auto and gas sales, remained flat on a monthly basis, but it remained by 3.8% over the last year.

Elsewhere, the U.S. Bureau of Labor Statistics said its Producer Price Index dipped by 0.5% in September, below low estimates of consensus forecasts for a 0.4% monthly loss. On a yearly basis, the data is just as grim. Over the last 12 months, producer prices have fallen by 1.1%, down from a fall of 0.8% in August.

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Sunday 18 October 2015

AUSSIE HIGHER AS UNEMPLOYMENT IN AUSTRALIA FALLS

The Australian dollar gained on Thursday as official data signaled a fall in unemployment, though jobs data was weaker than expected.

AUD/USD traded at 0.7341, up 0.56%, while USD/JPY was last at 118.73, down 0.09%.

The New Zealand dollar jumped against its U.S. counterpart with NZD/USD last seen at 0.6850, up 0.88%.

In Australia, job slots fell by 5,100 in September, compared to expectations for a gain of 5,000. But the overall unemployment rate dropped to 6.2%, compared to an expected 6.3%, as the participation rate slid to 64.9% from 65%.

Earlier, the latest MI inflation expectations climbed to 3.5% from 3.2%.

Overnight, the dollar remained broadly lower against the other major currencies on Wednesday, after the release of disappointing U.S. retail sales and producer price inflation data dampened optimism over the strength of the economy.

On Wednesday the U.S. Commerce Department said in a report that retail sales climbed by just 0.1% last month, below estimates of a gain of 0.2%.

Core retail sales, which exclude automobile sales, dipped by 0.3% in September, worse than forecasts for a fall of 0.1%.

Data also showed that producer price inflation in the U.S. fell for the first time in five months in September.

Producer prices declined by 0.5% last month, worse than forecasts for a drop of 0.2%, while core PPI dipped by 0.3%, disappointing forecasts for a gain of 0.1%

In the euro area, data on Thursday showed that industrial production fell 0.5% in August after an upwardly revised 0.8% increase in July.

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Saturday 17 October 2015

GOLD EXTENDS GAINS AFTER DOWNBEAT U.S. DATA

On Wednesday gold futures extended rally to hit a three-month high, after data showed retail sales in the U.S. rose less than expected in September, undermining optimism over the strength of the economy and dimming the case for higher interest rates.

December Comex gold hit an intraday peak of $1,176.00 a troy ounce, the highest level since June 30, before trading at $1,174.10 during U.S. morning hours, up 0.75%.

A day earlier, gold inched up 90 cents, or 0.08%.

December Comex silver was last up 1.21%, trading at $16.110 an ounce.

Earlier, the U.S. Commerce Department said retail sales climbed by 0.1% last month, below expectations for a rise of 0.2%. Retail sales for August were revised down to a flat reading from a previously reported increase of 0.2%.

Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.

Core retail sales, which exclude automobile sales, declined 0.3% in September, worse than forecasts for a fall of 0.1%. Core sales in August decreased 0.1%, whose figure was revised from a previously reported gain of 0.1%.

Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. Consumer spending amounts for as much as 70% of U.S. economic growth.

Separately, the Commerce Department said that producer prices dipped by a seasonally adjusted 0.5% last month, worse than the expectation for a drop of 0.2% and after holding flat in August.

The core producer price gauge pushed down by a seasonally adjusted 0.3% in September, below expectations for a rise of 0.1% and following an increase of 0.3% a month earlier.

The downbeat data fanned hopes that Fed officials could delay raising interest rates until the first half of 2016.

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Friday 16 October 2015

EURO HIGHER AS EUROZONE INDUSTRIAL PRODUCTION DATA MATCHES EXPECTATIONS

The euro was higher against the greenback on Wednesday as industrial production in the euro area fell last month, however, matching analysts' expectations, official data showed earlier.

EUR/USD was last up 0.56%, at 1.1444.

The euro dipped against the stronger pound with EUR/GBP last seen at 0.7422, down 0.54%. The pound was boosted after an upbeat unemployment report in the U.K.

Eurostat said in a report that the euro area industrial production fell to a seasonally adjusted -0.5%, from 0.8% in the preceding month whose figure was revised up from 0.6%.

Analysts had expected eurozone industrial production to fall -0.5% last month.

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Thursday 15 October 2015

GOLD EXTENDS GAINS TO HIT THREE-WEEK HIGHS; COPPER DOWN ON CHINA

On Wednesday gold futures rose for a fourth session in a row to hit a three-month high as a broadly weaker U.S. dollar coupled with ongoing expectations that the Federal Reserve will delay hiking interest rates until 2016 boosted the appeal of the precious metal. Meanwhile, copper declined impacted by downbeat China CPI.

Comex gold for December delivery hit an intraday peak of $1,174.50 a troy ounce, the highest level since June 30, before consolidating at $1,174.00 during European morning hours, up 0.74%.

Yesterday gold inched up 90 cents, or 0.08%.

Comex silver for December delivery was last up 0.68% to $16.015 an ounce.

Investors were looking ahead to U.S. economic reports on retail sales and producer price inflation later in the day for further clues as to the future path of interest rates.

Meanwhile, December Comex copper dipped 0.10%, to hit $2.385 a pound during morning hours.

Government data released earlier signaled that Chinese producer prices fell 5.9% in September, the 43rd straight monthly decline and matching the worst reading since October 2009.

Consumer prices climbed 1.6% last month, below expectations for 1.8% and down from 2.0% in August.

The weak inflation data added to expectations Beijing will have to launch further stimulus measures to boost growth.

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Wednesday 14 October 2015

LONDON STOCKS DIP AFTER CHINA NUMBERS; U.K. INFLATION DATA ON TAP

U.K. stocks dropped on Tuesday, with commodity-related shares pressured after Chinese export data highlighted concerns about a downturn in the world’s second-largest economy.

The FTSE 100 dropped 0.65% to 6,330.03. The fall was led by pullbacks in the basic materials and oil and gas sectors, which are sensitive to economic data from China, a major buyer of natural resources and related products.

Data released earlier showed that China's trade surplus widened to $60.3 billion last month from $60.2 billion in August, compared to estimates for a surplus of $46.8 billion.

Chinese exports slumped 3.7% from a year earlier, better than forecasts for a decline of 6.3%, while imports dropped 20.4%, far worse than expectations for a drop of 15.0%.

Among miners, shares of Glencore PLC  were down 4.7% and Anglo American PLC lost 3.2%.

Oil major Royal Dutch Shell PLC shares dipped 2.1%.

Meanwhile, SABMiller shares rose 9% after the beermaker’s board agreed to the key terms of a sweetened potential takeover offer by rivla Anheuser-Busch InBev NV. A deal would value SABMiller at £68 billion.

In the banking sector, shares of Barclays PLC were lower 1.4%. The lender is expected to name Jes Staley, a former J.P. Morgan Chase & Co. executive, as its next CEO.

In the currency market, GBP/USD was 0.34% lower at 1.5297 and EUR/GBP was at 0.7453, up 0.74%.

Market players will watch for U.K. inflation figures for September, due at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.

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Tuesday 13 October 2015

GOLD, COPPER DROP AFTER CHINA TRADE DATA

On Tuesday gold futures eased off yesterday's seven-week high, but losses were capped amid mounting confidence that the Federal Reserve will hold off on hiking interest rates until 2016. Copper were also lower after official numbers showed that China's trade surplus widened more than expected last month.

Gold for December delivery on the Comex shed 0.67%, to trade at $1,156.70 a troy ounce during European morning hours. Comex silver for December delivery was last at $15,740 an ounce, down 0.78%.

On Monday, gold surged to $1,168.60, the most since August 24, before ending at $1,164.50, up $8.60, or 0.74%.

Comex copper for December delivery dipped 0.48%, to hit $2.404 a pound during morning hours in London.

Data released earlier showed that China's trade surplus widened to $60.3 billion last month from $60.2 billion in August, compared to estimates for a surplus of $46.8 billion.

Chinese exports slumped 3.7% from a year earlier, better than forecasts for a decline of 6.3%, while imports dropped 20.4%, far worse than expectations for a drop of 15.0%.

A slowdown in domestic demand signaled a recovery in the broader economy remains vulnerable and may need further government support.

Meanwhile, China’s copper arrivals in September rose nearly 24% from August to 460,000 metric tons, signaling that demand for the metal remains robust despite recent market turmoil.

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Monday 12 October 2015

SOMETHING TO READ - ENTRIES & EXITS: VISITS TO 16 TRADING ROOMS

Entries & Exits: Visits to 16 Trading Rooms
Come behind closed doors and see real trades made by real traders.

Dr. Alexander Elder leads you into 16 trading rooms where you meet traders who open up their diaries and show you their trades.

Some of them manage money, others trade for themselves; some trade for a living, others are on the semi-professional level. All are totally serious and honest in sharing their trades with those who would like to learn.

You will meet American and international traders who trade stocks, futures, and options using a variety of methods. All are normally very private, but now, thanks to their relationships with Dr. Elder, you can see exactly how these traders decide to enter and exit trades.

Each chapter illustrates an entry and an exit for two trades, with comments by Dr. Elder.

With this book as your guide, you can get closer to mastering the key themes of trading-psychology, tactics, risk control, record keeping, and the decision-making process.

The companion Study Guide is filled with striking insights and practical advice allowing you to test your knowledge and reinforce the principles outlined in Entries & Exits.

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Sunday 11 October 2015

OIL SET TO LOG BIGGEST RALLY SINCE 2009 ON 'DOVISH' FED

On Friday oil futures saw the biggest rally in six years after minutes from the U.S. central bank September meeting suggested the regulator was in no hurry to raise interest rates and an influential forecaster predicted a price rally.

World stocks also rallied Friday, on course for their biggest weekly rise in four years.

Overall relief that the Fed possibly won't hike until some time next year saw investors take on more risk across the board, with commodities in particular regaining ground to chalk up their biggest gains in six years.

Brent crude oil was on track for its biggest weekly rise since March 2009, while zinc soared 9 percent - its biggest daily gain for seven years - after troubled mining giant Glencore said it would cut production.

Meanwhile, Glencore shares themselves surged 13.10%, meaning they were up 41 percent on the week - their biggest weekly gain since being floated in mid-2011 - and doubling from the trough hit just two weeks ago.

The Fed minutes revealed the extent to which policymakers are concerned that a global economic slowdown might threaten the U.S. economic outlook. Though they said overseas turmoil had not "materially altered" economic prospects, they chose to stand pat on the current policy last month.

An unexpectedly weak U.S. jobs report for September last week had led many market participants to bet that the Fed will not deliver its first hike since 2006 until 2016, a feeling that was strengthened by the minutes.

Brent was last up 0.97% on the day at $53.57 a barrel, and U.S. crude was up 1.73% at $50.29 a barrel. Oil also got a boost overnight after forecaster PIRA Energy Group predicted crude prices would rise to $70 per barrel by the end of 2016.

ANZ raised its 2016 forecast for WTI crude by an average of 10 percent, saying it saw a quicker run-down in U.S. crude stocks as a valid reason for the upgrade. It raised its WTI estimate for the third quarter of 2016, for example, to $47 a barrel from $41.

Analysts at Swiss-based consultancy Petromatrix were more wary on further gains on the commodity, Reuters says.

Three-month zinc futures were up 10 percent on the London Metal Exchange at $1,844 a tonne after Glencore said it will cut production by 500,000 tonnes, equivalent to 4 percent of the world's output.

Zinc had fallen 30 percent since May to a five-year low, so the rebound could mark the bottom of the market and the commodities complex in general, some analysts said.

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Saturday 10 October 2015

GOLD HITS 6-WEEK HIGHS ON FED, 'OUTSIDE MARKETS' FACTORS

Gold prices have hit a six-week high in early U.S. trading Friday on dovish FOMC minutes.

The latest Fed minutes and bullish "outside markets" are supporting gold and silver today. Gold’s rally today is impressive, given the U.S. stock market has logged good gains this week, amid more of a "risk-on" trader and investor appetite.

December Comex gold was last at 1,154.60, up 0.88%.

December Comex silver was last up 0.44% at $15.835 an ounce.

The FOMC minutes did not move the markets in a big way, but reaffirmed the notions among many market watchers that world price deflation and sluggish global economic growth concerns will keep the Fed from raising interest rates, at least for the rest of this year.

Though they said overseas turmoil had not "materially altered" economic prospects, they chose to stand pat on the current policy last month.

The key "outside markets" see the U.S. dollar index lower and at a three-week low today, partly on the dovish FOMC minutes. The DXY was last down 0.45% at 94.888.

The U.S. dollar bears have gained technical momentum this week. Crude oil prices are higher and hit a two-month high of $50.88 a barrel overnight, as the Russian military actions in Syria is escalating and making NATO nations very nervous.

Elsewhere, investors will eye fresh U.S. economic data to be released later in the day, which includes import and export price indexes and monthly wholesale trade data.

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Friday 9 October 2015

METATRADER 4 WEB PLATFORM ENHANCED

We are constantly upgrading the MetaTrader 4 Web Platform features. Since the beta version release one month ago, we have already implemented many changes and improvements to enhance the trading via a browser experience. Launch the web platform right now to try the new functionality:

One click trading
Opening demo accounts directly in the web terminal
The New Order button and the list of symbols available on the main panel
Selection of periods in the History tab
Active orders visible on the chart
Close By and Multiple Close By trade requests
Editable properties of graphical objects.
MetaTrader 4 Web Platform Enhanced
Besides, we have added audio alerts, sped up chart operation, optimized the application for HiDPI displays and fixed automatic re-connection.

The next stage of development for adding the basic set of technical indicators will start soon.

Stay tuned — we will keep you updated on our progress.

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Thursday 8 October 2015

GOLD NEAR TWO-WEEK HIGHS

Gold kept its gains on Wednesday approaching two-week highs with minutes from the U.S. central bank on tap.

Comex gold for December delivery was last at $1,152.00, up 0.49%.

December Comex silver was down 0.09% to $15.97, while copper rose 1.54% to 2.391.

Gold would benefit from any delay in raising U.S. interest rates as the precious metal would struggle to compete with yield-bearing assets. Higher rates would also boost the dollar, which would make dollar-denominated gold more expensive for holders of other currencies.

A day earlier, the International Monetary Fund slashed its global growth forecasts for a second time this year, warning that slower growth in China and the protracted rebalancing in the commodities market posed increased downside risks to growth.

No major economic reports are due today. Minutes from the last Fed meeting are slated to get released Thursday, along with weekly jobless claims.

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Tuesday 6 October 2015

HISTORY SUGGESTS, STOCK MARKET PERFORMANCE WILL BE POOR FOR ANOTHER 10 YEARS

Stock performance has been weak for the past 15 years. If history is any guide, the performance is likely to stay poor for at least another 10 years.

This will be so because stocks are still amazingly expensive relative to most of recorded history, says Henry Blodget of Business Insider.

In the past, when stocks have been this expensive — or close to this expensive — performance over the next decade has been crappy.

According to the long-term valuation analysis, we are still living the aftermath of the highest level of stock-market valuation in history — the peak of the tech bubble in 2000 — and that this will take at least another 5-10 years. That's the bottom line.

Bulls vs bears

Throughout the past 100 years, the market has gone through distinct "bull" and "bear" phases lasting 10-25 years each, on average:

A 29-year bull market from 1900-1929
A ~20-year bear market from 1930-1950
A  ~15-year bull market from 1951-1966
A ~15 year bear market from 1967-1982
An ~18 year bull market from 1982-2000
A ~? year bear market from 2000-?
Some analysts suggest the latest "bear" phase ended in 2009. They also think we're in the middle of a glorious "bull" phase again.

However, based on valuation — stock prices relative to the fundamentals of the underlying firms — we unfortunately appear to still be in the middle of the latest "bear" phase.


Stock prices usually surround the "fundamentals" of the underlying companies — i.e. earnings. Particularly, stocks have traded in a range of 5X cyclically adjusted earnings (at bear-market lows) to 44X earnings (at the peak of the biggest bull market in history — the one that ended in 2000). Meanwhile, the "average" P/E ratio over this period has been about 15X.

In the chart above you quickly notice a pattern:

Sustained bear-market periods have begun when the P/E is very high (~25X+).

Sustained bull-market periods, meanwhile, have begun when the P/E is very low (5X to 9X).

To put it another way, sustained bull markets emerge when investors are fed up with stocks — and so pessimistic about the future of stocks — that they'll pay only 5X to 9X earnings for them, says Blodget.

And sustained bear markets start when investors are so excited about stocks and the prospects for stocks that they'll happily pay 25X earnings or more for them.

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Sunday 4 October 2015

GOLD RALLIES AS U.S. JOBS REPORT DISAPPOINTS

Gold is seeing a rally in the wake of a big miss to the downside in today’s closely-watched U.S. jobs report. Heavy short covering in the futures market and perceived bargain buying in the cash market are featured.

Comex gold for December delivery was last up $19.90 at $1,133.30 an ounce.

December Comex silver was last up $0.3659 at $14.875 an ounce.

This morning’s September U.S. jobs report showed the key non-farm employment figure up just 142,000. Analysts expected the jobs figure to be up 200,000.

However, the big miss to the downside falls into the camp of those policy makers who want the central bank to postpone the increase until next year on a U.S. rate hike. That was also great news for the raw commodity market bulls, including the precious metals.

The U.S. dollar index sold off sharply, being last down 0.72% at 95.493, and U.S. Treasuries rallied on the U.S. jobs data. U.S. stock indexes declined on the news.

In overnight news, producer prices in the euro area were 0.8% lower in August from July and down 2.6%, year-on-year. The declines were more than economists expected and added to the growing concerns over price deflation in the European Union.

The European Central Bank is now under renewed pressure to implement further monetary policy easing measures, at a time when the U.S. is leaning to tighten its monetary policy.

The Euro currency was sharply higher, however, with EUR/USD last trading at 1.1300, up 0.96%.

Russian air strikes in Syria late this week are an added element to an already unstable Middle East region, boosting oil prices, however.

Other U.S. economic data due for release Friday includes the ISM New York business report, and manufacturers’ shipments and inventories.

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Saturday 3 October 2015

TESLA'S MUSK UNVEILS LONG-AWAITED MODEL X, STOCK RISES

Silicon Valley electric carmaker Tesla has unveiled its third model so far - a sports-utility vehicle distinguished by its double-hinged "falcon wing" rear doors, which unfurl themselves upwards to help parents put their children inside. The company's stock rose 2% after the event.

The Model X was launched nearly two years later than originally scheduled.

The firm's chief executive Elon Musk acknowledged that the "difficulty in engineering" some of the parts involved had been greater than he had initially estimated.

The car can fit seven people and can travel about 250 miles (400km) on a single charge. It reaches top speeds of 155 miles per hour, and goes from zero to 60 mph in 3.8 seconds (3.2 seconds in the “ludicrous” upgrade, which is $10,000 extra.)

Unlike gull wings of the past, the falcon-wing door has two hinges to better negotiate tighter spaces, Musk said. The doors also have sensors that can measure ceiling heights and gauge various obstacles helping navigate around them.

The price runs as high as $144,000 and is expected to cool demand, analysts say.

Tesla first showed a concept for the car in 2012, with an initial target launch of late 2013. The car has been constantly delayed while sales of the Model S sedan — the first all-electric car fully designed and constructed by the Silicon Valley auto maker — picked up. The company hopes to start production on its next car, the Model 3, in about two years, according to Musk, and price it lower for mass-market consumption.

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Friday 2 October 2015

NEW FINANCIAL CRISIS WILL EMERGE IF RATES GO UP - IMF

Higher global interest rates could drive a new credit crunch in emerging markets, as companies that have ridden the wave of cheap money to load up on debt will slide into crisis, the International Monetary Fund (IMF) has warned.

According to the IMF's twice-yearly Global Financial Stability Report, the debts of non-financial firms in emerging market economies quadrupled, from $4tn in 2004 to well over $18tn in 2014.

This borrowing carouse has taken business debt as a share of economic output from less than half, in 2004, to almost 75%.

Chinese businesses top the list, but companies in other countries, including Turkey, Chile and Brazil, have also ramped up their debts — and could prove fragile as interest rates rise.

With the US Federal Reserve expected to raise interest rates in the coming months, the international body cautions that emerging market heads should brace for an increase in corporate failures, as firms struggle to meet steeply higher borrowing costs.

That could spur jitters among the local banks who have bought much of this new debt, causing them in turn to rein in lending, in a “vicious cycle” reminiscent of the credit crisis of 2008-09.

Janet Yellen, the Fed’s Chairwoman, made clear that its recent decision to postpone a long-planned increase in rates was a result of the rout in emerging markets, in particular China. The IMF has urged the Fed to delay policy shift, because of the potential impact on other economies.

The fund was not alone to warn the U.S. central bank against the lift-off. Andy Haldane, the Bank of England’s chief economist, said recently that the world could confront the latest leg in a financial crisis “trilogy”, that started in US mortgage markets, flared up again in the eurozone, and has now reached emerging markets.

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Thursday 1 October 2015

VW'S AUDI DIVISION INVOLVED IN EMISSIONS SCANDAL, VW SHARES DROP FURTHER 6%

2.1 million Audi cars fitted with VW emissions cheat devices.
On Monday Volkswagen's luxury brand Audi said that 2.1 million of its cars have been affected by the emissions scandal that has shaken the German car manufacturer.

In a bid to get to grips with its worst crisis in its 78-year history, sources told Reuters on Monday that the carmaker has suspended the R&D chiefs of its Volkswagen brand, Audi and sport-car manufacturer Porsche.

Volkswagen shares, which dropped almost 30 percent last week, fell a further 6.7 percent on Monday.

The scandal continued to weigh on car makers, sending the DAX 30 index down 1.52%.

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