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Calendar event / 1 hour agopreviousforecastactualLow Job Ads, M/M%-0.1%+1%
Squawk / 1 hour agoLong USDJPY at 117.00
Article / 1 hour ago
Today's Trade: ASX wobbles over Wall Street tech troublesThe ASX has moved distinctly lower this morning with banks in the firing line after Wall Street falls on US tech sector weakness. The Australian market has followed Wall Street substantially lower in early trade amid a broad-based sell-off stoked by investor concerns around inflated stock valuations.Read the article
Calendar event / Yesterday at 23:50 GMT
JP Balance of PaymentspreviousforecastactualMed Current Account (JPY)1.144T1T960.7BMed Goods and Services (JPY)-209.9B17.4BMed Trade Balance (JPY)-271.5B188.7B
Calendar event / Yesterday at 23:50 GMT
JP Bank LendingpreviousforecastactualLow Bank Lending, Y/Y%+2.2%+2.4%
Editor’s Picks / Yesterday at 23:01 GMT
China's forex reserves decline to $3.23 trillionBloombergChina’s foreign exchange reserves shrank to the smallest since 2012, indicating that the central bank sold dollars as the yuan’s retreat to a five-year low exacerbated depreciation pressure. The world’s largest currency hoard decreased by $99.5 billion in January to $3.23 trillion, according to a People’s Bank of China statement released on Sunday. The contraction was less than a Bloomberg's estimate of a $120 billion drop. The stockpile slumped by more than half a trillion dollars in 2015, the first-ever annual decline. Policy makers fighting to hold up the weakening yuan amid slower economic growth, plunging stocks and increasing outflows have depleted reserves. The draw-down has continued since the central bank’s surprise devaluation of the currency in August, when the stockpile tumbled $94 billion. “While the remaining reserves represent a substantial war chest, the rapid pace of depletion in recent months is simply unsustainable,” said Rajiv Biswas at IHS Global Insight.Read article on Bloomberg
Squawk / Yesterday at 22:57 GMTLong USDCAD at 1.3891.
Squawk / Yesterday at 14:12 GMTWEEK 5 (01.02.2016 - 07.02.2016)
At last, EURUSD broke out from the range this week. As I stated in my previous squawks, market was preparing for a long time for this rally. But according to my setup, there is still some space up for the future moves. I calculate upper limits (for February) around 1.1850-1.1900.
Additionally USDJPY still stays above 1.116 and S&P500 has not started it's downtrend yet. These two factors(if happen) may speed up rise of EURUSD.
Also fundamentally there are a few issues which do not support bullish USD:
1. There is a lot of carry trade in US stocks. Position unwind would favor JPY & EUR.
2. Not many tools left for CBs. Besides, any new measures are believed to have small impact on real economy.
3. Possible reversal of US rate hike path. Wage rise in January is not enough for change in negative outlook.
4. Bubble on USD got to burst sooner or later. Risk of pushing the price to parity(EURUSD) or 1.130(USDJPY) is too high.
Calendar event / Yesterday at 1:40 GMT
CN Foreign Exchange ReservespreviousforecastactualLow FX Reserves (USD)3.33T3.231T
Squawk / Saturday at 9:00 GMTWeekly Trading Forecasts on Major Pairs (February 8 - 12, 2016)
Dominant bias: Bullish
This pair was engaged in a smooth bullish run last week, moving upwards 420 pips before the bearish retracement that was seen on Friday (February 5, 2016). The bearish retracement could be taken as a sale in the context of an uptrend, for the uptrend might continue this week. As long as price is above the support line at 1.0950, the bullish bias cannot be threatened. The resistance lines at 1.1250 and 1.1300 are the potential targets for bulls this week.
Dominant bias: Bearish
Owing to the perceived weakness in USD, USDCHF dropped 340 pips last week, ending the recent bullish outlook on the market. The support level at 0.9900 was tried, before the current upward bounce, which is, however, shallow.