User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday November 14, 2008 - 22:11:48 GMT
Global Forex Trading - www.gftforex.com

Share This Story:
| | Email

Forex Research - A “Need for Urgency” May Not Be Enough to Organize a Global Recessionary Fight

A “Need for Urgency” May Not Be Enough to Organize a Global Recessionary Fight Last Updated 11/14/2008 4:54:32 PM EST (GMT +5)

TODAY’S BIGGEST PERCENTAGE MOVERS

NZD/JPY ( -144 pips or -2.58%)

AUD/JPY ( -160 pips or -2.43%)

NZD/USD ( -140 pips or -2.47%)

THE STORIES IN THE CURRENCY MARKET

  • USD: A “Need for Urgency” May Not Be Enough to Organize a Global Recessionary Fight
  • EUR: The Euro-Zone Has Officially Reached Recessionary Territory
  • GBP: How Long Will the UK be Able to Fight the Recessionary Assault?
  • CAD: Crude Oil Falls 6.6% This Week
  • AUD: Traders Hope RBA Minutes Shed Light on Future Cuts
  • NZD: The Kiwi Has Fallen 7.1% Against the Yen in Only Five Days
  • JPY: Will Japan Be the Next to Suffer a Technical Recession

EXPECTATIONS FOR UPCOMING FED MEETINGS


** PERCENTAGES MAY NOT ADD UP TO 100% BECAUSE OF THE PROBABILITY OF LARGER OR SMALLER MOVES BEYOND THOSE SHOWN ON THIS TABLE

A “NEED FOR URGENCY” MAY NOT BE ENOUGH TO ORGANIZE A GLOBAL RECESSIONARY FIGHT

An amazingly volatile Dow trading session has seen prices open down 200 points, rally 150 points, only to end the day down 3.80%. The whipsaws have only added to the uncertainty and fear expressed by many investors, pushing up the dollar and yen against its high-yielding counterparts. Traders have much to be disgusted with awful Retail Sales report and news that Freddie Mac, the insurance company the US government was forced to bail out only a few months ago, is asking for an additional $13.8B after reporting a record quarterly loss.

Weaker Consumer Spending Could Drive More Bankruptcies

Retail Sales plunged this month as purchases declined by 2.8%. On a historical basis the report is the biggest drop since the Commerce Department started keeping these figures in 1992. This is also the longest string of monthly retail sales declines since its inception. The report holds particular importance as it can serve as a bell-weather for growth and the health of the employment situation. Since our economy is so heavily dependent on consumer spending, the weak report proves that we are a long way from a potential turnaround. The specifics of the report show that among all purchases, automobile sales suffered the worse with a decline of 5.5%. However, weakness was broadly displaced as consumers demand less furniture, electronics, and clothing. We would be hard-pressed to find any uplifting indication presented in this release, but luckily restaurants and grocery stores did maintain some demand. It has been seen that consumers will shift their spending away from durable goods and into real nondurable essential purchases.

Retailers have suffered greatly over the past few months and we expect their troubles to deepen. So far, 14 national chains have filed for bankruptcy protection with Circuit City the latest victim. They were a 59-year old company that had been struggling even before the credit crisis. Their decision to file for bankruptcy protection will result in the closing of 155 stores and a cut of 20% of Circuit City’s 43,000 employees. With consumer spending almost completely dried up, many companies fear that this holiday shopping season will be particularly weak. The season, which traditionally brought struggling retailers from red to black within days, has been predicted to be a huge disappointment to struggling companies. The biggest problem we are facing is that many retailers are destined to follow a similar path. With consumers keeping the wallets sealed shut, companies such as Best Buy, Claire’s Stores, Borders, and Dillards (just to name a few) have been aggressively cutting earnings estimates as stock prices plummet. In the coming months, the US economy should be prepared for more layoffs and even weaker retail sales.

Will there be Fireworks at the G20 Meeting?

The two-day G20 economic summit is under way in Washington. The groups of representatives from twenty of the largest industrialized countries are discussing their plans to prevent an extended recession and policies to implement after the crisis has ended. Many have surmised that, because President Bush would soon leave the Presidency, this would be a lame session in which no important policy measures will be announced. This very well may be true, but the drama has already begun with various disagreements as to how and which policies should be implemented. The most striking contrast is what will be done once the crisis subsides. Many European officials are set on increased government oversight and regulation. UK Prime Minister Gordon Brown has devised a measure that would establish a panel of regulators responsible for “supervising” thirty of the world’s largest banks. Clearly, economic initiatives have been shifted to a global perspective. On the opposite side to arguments made by European and British officials, President Bush upholds the notion that too much government intervention is bad for markets. The president stated that, “our aim should not be more government, it should be smarter government”. However, it seems as though the world is getting ahead of itself. It is clear that we have many hard and trying months ahead. To prevent the current crisis from turning into a recession, Prime Minister Brown has taken a vocal stand in announcing that there is a “need for urgency”. He has told reporters that his plans will be focused on cutting taxes. It appears that the meeting is far from decreeing an organized global effort toward fighting the crisis. In the end, this will only draw out the length and magnitude of the impending global slowdown.

Will the Upcoming Week Manage to Swing Sentiment?

At this point, it seems that the US economy is in dire need of some decent report to renew consumer confidence and spending. Hopefully, we will get it next week. Monday we will receive the Empire Manufacturing Index, likely to show that manufacturing activity in New York State has come to a standstill. Tuesday we will receive the Producer Price Index along with Net TIC Flows, which measures and outflow of capital into US denominated securities. On Wednesday we will be met with the Consumer Price Index, Housing Starts, and FOMC Minutes. FOMC Minutes will hopefully give some insight into how aggressively the Fed plans to cut in the future. To end the week, we expect the Philly Fed Survey on Thursday.

THE EURO-ZONE HAS OFFICIALLY REACHED RECESSIONARY TERRITORY

It is official; the Euro-zone has reached the technical definition of a recession. EZ GDP fell by 0.2%, its second quarterly contraction. After Germany reported that its growth had slumped -0.5%, along with a similar contraction in Italy, it is undeniable that the countries are in the midst of the first recession since the euro was established. Such information is not a surprise to anyone, the area has fundamentally been ripped apart by the spreading of a global economic crisis, but it is significant in the fact that it is the first G7 member to declare the obvious. However, France did manage to hold on to positive territory and surprisingly reported that growth had actually accelerated to 0.1%. The developments in Europe are in an extreme contradiction with statements made by economists only a few months ago, predicting that there was only a 35% chance a recession would occur by the end of 2008. It is quite likely that on December 4th, the ECB will be forced to be more aggressive in cutting down their target interest rate. The 50bp cut of earlier this month appears to have been too little, too late. EZ CPI was unchanged this month, declining by 0.2% from last month. In the midst of all this, European equity indices manage to rally by more than 1.0%. More European news in the pipelines for next week includes the Trade Balance on Monday, German Producer Prices on Tuesday, and Manufacturing and Service PMI on Friday.

HOW LONG WILL THE UK BE ABLE TO FIGHT THE RECESSIONARY ASSAULT

The pound experiences a relatively subdued trading, but sells off by late afternoon. The selloff may have been initiated by fears that the displayed Euro-zone recession will spread into the rest of the European continent. It is clear that the UK might already be in a recession, but the technical definition does elicit some level of panic. In today’s Council of Foreign Relations Meeting in New York, Prime Minister Gordon Brown announced that a planned fiscal bail-out package will be intended to produce only temporary results. He seems adamant in relying mostly on interest rate cuts and increased spending to prevent a drawn-out recession. Trading today is moving on no important economic data. However, the FTSE 100 Index manages to stage a rally more than 1.50%, in accordance with strength in many European indices. Important newsworthy events for next week include Tuesday’s Consumer Price Index, Wednesday’s BoE Minutes and CBI Industrial Trends, and Thursday’s Retail Sales. Wednesday’s BoE Minutes will likely shed some light on the possibility and, perhaps more importantly, the magnitude of future rate cuts. We are also looking for some insight into the thought process behind the surprisingly 150bp but earlier this month; specifically, we would like to know if there were any dissenters and if they toyed with cutting by more or less than the announcement showed.

THE KIWI HAS FALLEN 7.1% AGAINST THE YEN IN ONLY FIVE DAYS

The commodity currencies have broadly fallen against the dollar and yen, in continuation of a weekly retreat. On a day with the Dow down triple digits right off the bat and the recession in Europe, you would expect to see such a significant drop in the high-yielding currencies. This week has seen a tremendous flight for safety. Five days alone has procured a loss of 4.8% in AUD/JPY and an amazing fall of 7.5% in NZD/JPY. Much of the losses, in addition to risk aversion, have been in response to the utter declines in oil prices. Demand has been decimated to the point where OPEC planned production cuts have not been able to influence market movements. Many analysts predict that such action would result in a lag effect that will postpone the true effects of a cut in production for months. There have been few important economic reports today. Those that were released showed an unexpected rise in Canadian New Vehicle Sales and Manufacturing Shipments. Again, the Canadians prove that their economy is stronger than many would think. New Zealand Non-Residential Bond Holdings are up, perhaps in an effort to diversify capital investments away from a struggling economy. Next week’s most important releases include AUD Retail Sales on Monday, RBA Minutes on Tuesday, CAD Leading Indicators on Wednesday, and CAD CPI on Friday. The RBA minutes, as with the BoE statements, may shed some light on the future of RBA rate cut possibilities.

WILL JAPAN BE THE NEXT TO SUFFER FROM A TECHNICAL RECESSION?

As the Dow drops on uncertainty, so does USD/JPY. The move lower can be attributed to a number of factors, including terrible US Retail Sales and a newly revived risk adverse attitude. The low-yielding currency has seen some significant gains this week as USD/JPY retreats 1.25%. Unlike the fate of US exchanges, many international stock markets have posted significant gains, with the Nikkei 225 up more than 2.5%. Much of the international buying has been initiated on the fact that many stocks are trading at extremely low valuations. There has not been any market moving Japanese data today. Next week will have some important implications for the further strength of the yen. The most important event risk is present in late-Sunday’s Gross Domestic Product release. Although the number is predicted to be unchanged on a Q/Q basis, an unexpected drop will result in the second G7 nation to declare a technical recession. Last month’s growth figure showed the Japanese economy slowed markedly to -0.7%. In addition to an already crucial week, there will be the Tertiary Index which follows GDP, Leading Index on Tuesday, Merchandise Trade Balance on Wednesday, and the BoJ monetary policy meeting on Thursday. Apparently the week will begin and end on a bang. Even though BoJ officials would be very hesitant to drop rates further, a weak GDP may prompt some unexpected behavior.

EUR/USD: Currency in Play for Monday

The currency in play for the upcoming Monday will be EUR/USD. We are expecting Euro zone to release Trade Balance at 5:00 AM EST or 10:00 AM GMT. In addition, United States will be releasing Empire Manufacturing at 8:30 AM EST or 13:30 GMT.

With a major rebound on Thursday and relatively quiet day on Friday the price action remains in the trading range of Bollinger Bands. In addition, a clear triangle formation remained intact with established short term support and resistance in place. For the time giving, short term resistance remains at the 20 Simple Moving Average and the top of triangle formation which is at 1.2800. While, strong resistance is forming at the level of 1.3070 which is the 1st Standard Deviation of the Bollinger Bands and the 38.2% Fibonacci retracement of the 2000 to 2008 rally. For the downtrend to resume, we would need to see the EUR/USD fall back below 1.2550. With no clear direction in the markets, we will be looking at the economic data coming from both Euro zone and United States on Monday.

 

About The Author

Lien has extensive knowledge within the interbank market, particularly in trading spot FX and options. She has written for numerous publications, is frequently quoted on financial media outlets, and is the author of several books, including Millionaire Traders. Read more >>

DISCLAIMER: This forum and the information provided here should not be relied upon as a substitute for extensive independent research before making your investment decisions. Global Forex Trading is merely providing this column for your general information. This forum and its information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision based upon this forum or any information contained within. In addition, any projections or views of the market provided by the author may not prove to be accurate. Global Forex Trading and Kathy Lien will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained in this column. Global Forex Trading and Kathy Lien do not render investment, legal, accounting, tax or other professional advice. If such advice is sought, or other expert assistance is required, the services of a competent professional should be sought

 

 

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 18 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Wed 18 Oct
12:30 US- Housing Starts & Permits
14:30 US- EIA Crude
Thu 19 Oct
01:30 AU- Employment
08:30 GB- Retail Sales
12:30 US- Weekly Jobless
Fri 20 Oct
12:30 CA- Retail Sales & CPI
14:00 US- Existing Homes Sales

Forex Trading Outlook


Trading Opportunities


  • POTENTIAL PRICE RISK: HIGH Tue-- 08:30 GMT GB- CPI top tier confirmation of Inflation.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT DE- ZEW Survey second most important German monthly Survey.

  • POTENTIAL PRICE RISK: Medium Tue-- 09:00 GMT EZ- final HICP revision to flash report. Revisions are usually minor.

  • POTENTIAL PRICE RISK: Medium Tue-- 13:15 GMT US- Industrial Production. Top output indicator.



  • POTENTIAL PRICE RISK: Medium Wed-- 12:30 GMT US- Housing Starts and Permits revision to flash report. Useful housing leading indicator.

  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top WTI inventory measure.



  • POTENTIAL PRICE RISK: Medium Thu-- 01:30 GMT AU- Employment. Top economic indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 02:00 GMT CN- GDP. Top economic indicator.


  • POTENTIAL PRICE RISK: HIGH Thu-- 08:30 GMT GB- Retail Sales. Top consumption indicator.


  • POTENTIAL PRICE RISK: Medium Thu-- 12:30 GMT US- Weekly Jobless. Employment Indicator.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105