FX5: Dollar Remains King

Kamis, 21 Juli 2016

Wednesday, March 23: Five things that markets speak of

The recent rally actions starting to show some new signs of pressure. Investors should wait for some fresh catalysts to lead the market direction for the rest of this quiet trading week shortened holiday - Note the volumes on Wall Street transactions yesterday were relatively low

The safest haven USD continues to be good. supported relative to risky assets as investors and brokers are struggling with the impact of the atrocities Brussels yesterday.

The single currency of 19 member remains on the back foot (€ 1.1187), plus the pressure of optimistic comments on the US economy from various Fed members (president of the Chicago Fed Charles Evans).

1. Premier Li of China suggests the reform necessary to achieve the objectives

China's data communication continues to be the "dubious variable "with the fears of the capital market. For dealers, analysts and speculators, suspected the relative weakness of GDP, investment, currency, and capital outflows, even the employment data is supposed to be insufficient. Nevertheless, the appeal of the "top" still has the strongest influence.

During the night, the Prime Minister Li again hinted that the Chinese economy would be based on reform to achieve the target range of 6.5-7.0% GDP +, and no monetary stimulus. With this, the China Securities Regulator had reportedly compiled a list of firms in difficulty of potential radiation and begun negotiations with local authorities to push the exclusion of various exchanges.

Chinese yuan ended lower downright this morning, despite the People's Bank of China (PBoC) setting slightly stronger currency to the solution. The dollar closed at ¥ 6.4969 against the closing Tuesday ¥ 6.4926

According PBoC advisor -. Huang Yiping - Future yuan orientation depended on the economic performance and reiterated that monetary depreciation was not in line with China's goal.

2. Hungarian Central Bank (MNB) sideswipes markets

Hungary MNB promised to keep "lower interest rates "until monetary conditions become loose enough to ensure meeting the 3% target desired inflation for good.

In a surprise move yesterday, policymakers have cut -15pbs bank overnight rate to + 1.20%. Voting members continue to see the risks of "asking their inflation target for an extended period" on the back of weak costs such as crude oil prices (Brent $ 41.77).

responsible for the central bank indicated that they reach their inflation target much later than expected. The staff economists have aggressively reduced the inflation forecast for this year to 0.3% from 1.7% previously, while increasing growth forecast this year to 2.8% from + 2.5% (EUR / HUF € 312.0).

3. Emerging Markets - Turkey

Naturally, after the series of explosions yesterday in Belgium various emerging currencies have subject to new pressures and USD / TRY ($ 2.8714) is no exception. With other Tier II or EM central banks orchestrated a relaxing proactive surprise (Hungary MNB see above), all eyes will be on the market the central bank of Turkey, which meets Thursday to decide its own monetary policy .

The market consensus expects that rates will remain unchanged this time, but many analysts see downside risks to the overall direction of monetary policy - there is considerable political pressure of late reduce rates again.

4. Brussels attacks set to intensify fears Brexit

Falling pound this week (£ 1.4170) suggests that the attacks in Belgium is set to intensify concerns about output in the UK before Europe in the vote Brexit June 23

Sterling continued to fall this week, down -0.36% outright before the US Open that terrorist attacks yesterday on continental Europe offers another reason for the English vote from.

Technical bears are not exclusive GBP revisiting the lowest in the last month (16 February £ 1.3835) Short term

The latest poll Brexit ICM :. + 41% for staying in the EU vs. + 43% to exit (before Brussels: + 43% support while remaining 41% of leaving the EU support)

5 .. prices commodities soften, eye dealer stocks

the prospect of further tightening of interest rates by the Fed raises the USD across the board for a fourth consecutive day - the longest winning streak in four weeks.

A stronger dollar also pushed down the price lower commodity - oil (down -1% $ 41.65 Brent, WTI $ 41.19, gold fell -1.2 1.234% $).

Traders await EIA inventory data this morning for directional clarification. Earlier, API weekly oil inventory data showed crude supply jumped by 8.8 million barrels compared to + 1.5m before -. The fifth consecutive week of construction and the highest increase in three weeks

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