I’ve cracked the #Brexit conundrum!

Dear Britain,

Please don't worry about your decision to leave the EU.  I have a solution that should relieve both remainers and leavers equally. A moment comes, which comes but rarely, when we step from the old to the new….I’ve cracked the #Brexit conundrum!


Cameron needs to immediately apply for Britain to become a Union Territory of the Republic of India.

Whilst historically speaking it seems only right and proper to give India a chance to rule Britain for a few hundred years - it actually makes a lot of sense for the British too!

Worried about jobs? India’s economy is growing 4x faster than Europe’s and will overtake the entire EU’s sometime in the 2030s - becoming twice the size of the EU economy by 2050.

In economic terms alone every young Brit should wish to replace their garish red EU passport with a classy blue Indian one ASAP.

Worried about the future of the NHS? India already provides nearly as many Doctors to the NHS as the EU does - and that doesn’t even include those of Indian origin, born or educated, in Britain. 25,055 Indian v 30,082 EU.

Worried about diversity? With over 100 different languages spoken everyday and adherents of every religion - even Britain’s favourite materialist consumption - there truly is something for everyone here!

Worried about being understood? English is one of India's two official languages - which will be a huge relief for all those have struggled to communicate with their continental neighbours for all these years.

Worried about not being part of something bigger? India has more than twice the population of the EU. Half of which are under 35, so the bonus is no more worries about an ageing population!

Worried about where to go on holiday? The Himalayas are nearly three times the height of the Alps and thousands of miles longer - there are more sandy beaches along India’s coastline than all the Costas you can dream of - and India has tropical rainforests and even a desert too! Plenty of visa free inter-railing adventures as well on the world’s largest railway network.

Worried about not being ruled by an unlected bureaucracy in a far away land? We’ve got that covered as well! Nowhere on the planet has perfected the shuffling of paper and writing of rules better than New Delhi - what’s more India’s civil servants salaries are more than 10x lower than Brussels. Talk about getting more for less!

British MPs, the whole of Whitehall and even the Royal Family (subject to the return of the Kohinor) can all be pensioned off at the fast expanding and internationally renowned Best Exotic Marigold Hotel chain in Jaipur.

Which would free up the Houses of Parliament, Buckingham Palace and much of Central London to become a permanent Bollywood film set. With more viewers than Hollywood this is sure to help keep London’s tourist economy going - which within a decade or two will be mostly Indians in any case.

Embrace the 21st Century. Swap Brussels for Delhi. Say Goodbye to Little Europe and Namaste to Incredible India!

Yours in waiting,
A 3rd Generation Immigrant of British Origin,
New Delhi, India🙏

#Brexit - A Genuine Clusterfuck! What will happen?

137 billion pounds was wiped off the value of the UK stockmarket in the first nine minutes of trading. That's the equivalent of nine years EU membership fees.

The falling value of the pound will cause the cost of imports to rise, making things more expensive on the high street.

The poorer parts of Britain have used the referendum as a vote on globalisation: they've been shafted by continuous British governments since 1979, governments who have off-shored their jobs, used immigration to lower their wages and deregulated banks to provide cheap credit to fund their consumption.

None of this will change outside of the EU.

The problem always was, is and will be that domestic UK politicians do not represent the interests of the traditional working class, they represent international finance. And under Johnson and Gove they still will.

The UK is an international CAPITALIST economy, it needs inward investment to pay for its current account deficit (debt), which is massive. 50% of our inward investment came from the EU in 2015. Low wages - yes even with George Osborne's supposed 'living wage' - help to attract this investment. Immigration is a structural part of the UK economy and this is not going to change any time soon. Even Farage said he would use migrants from the Commonwealth (lol - that basically ended in 1956 @Suez), rather than the EU.

Immigration will not stop, but our economy will probably take a huge battering:

The UK economy is 79% services, services are harder to trade than manufactured goods because of the fact that people are integral to services, you can't just ship them overseas like a bag of spanners. The UK had a free 'passport' to trade services in the EU.

The City of London (services) generates 10% of the UK's total GDP. Roughly a quarter of the UK’s financial sector business involves the EU's Single Market, equivalent to 2 per cent of gross domestic product. And balanced on top is a wider array of professional services. (Financial Times).

Plus: developed countries buy more services than developing countries who are at a different stage in their economic development. The EU is made up of some of the richest developed countries on the planet. The entire structural configuration of our economy favours services sold to developed countries and we just risked putting the kibosh on that. Smart move.

There's more.

Free trade agreements take years to negotiate, and the UK will be screaming out for FTAs to ensure trade based on best possible terms, rather than the default WTO position - yes that's right, even on leaving the EU there are other international organisations we have to conform to, we call this the modern world - Under WTO there are 10% import tariffs on automotive manufacturing, one of the last bastions of manufacturing in the UK. Without an FTA all UK automotive exports will see a 10% tariff slapped on them. Let that sink in for a moment. A UK crying out for FTAs will give negotiating partners leverage, the UK does not have the upperhand here.

And as for an EU-UK FTA, the UK is 5% of global GDP (2015), the EU 26%, who do you think will have the upperhand in those negotiations? As for us importing more from the EU than we export, we need those goods, for our standard of living and for our domestic supply chains. The fact that we import so much is not automatically something that works in our favour! Trade is not a zero sum game.

And when all these British citizens fund out that they've been lied to over the next few years they're going to be absolutely furious. And who do you think they will vote for then? Angry men with easy answers and tiny little moustaches maybe? I'm pretty sure it won't be Corbyn with his mystical magical 1970s timemachine.

This is a genuine clusterfuck. Cameron has risked the union of the Kingdom - Northern Ireland voted remain 56%, Scotland 62% - and the wider EU in trying to appease to racists, the angry and the ignorant. This is not the behaviour of a statesman. It is the behaviour of an opportunist and a coward. His name will go down in history as the man who accidentally broke up Britain.

Hold on to your bowler hats, its about to get bumpy.

The day ahead 31 May 2016

Good morning,

Tokyo led Asian stocks higher on Monday, as the Nikkei heads towards a close above 17,000 points for the first time in a month, after the yen plummeted against the strengthening dollar. Data released earlier in the session showed Japanese industrial output unexpectedly rose 0.3% in April, suggesting production is holding up despite weak exports and the impact from a series of earthquakes that struck southern Japan during that month. Shares in Shanghai surged +2.43% , Hong Kong +1.25%, while the ASX slipped  -0.19%. Underpinning Asian sentiment, European shares hit one-month highs on Monday amid otherwise light trade with markets in London and New York closed for public holidays.

In FX space the Aussie gained against its peers as building approvals data for April came in much better than expected (+3% against -3% exp). The positive sentiment also saw the Kiwi rally, whilst sterling soared above the 1.47 only to quickly retreat back towards the 1.4650 handle against the US dollar. The Euro is also under pressure as we head towards the European open.

Gold rose for the first time in 10 days -- breaking its longest losing streak in more than a year and currently sitting at $1212. Although strongly underpinned amid the extended broad based US Dollar correction, it looks to build a recovery towards the 100 dma located around $1217.50. Oil pushed back towards the psychologically key $50 a barrel mark as moves were limited ahead of Thursday's meeting of the Organization of the Petroleum Exporting Countries. WTI sits at %49.58 and Brent at $49.73.

So to the day ahead and it looks to be a busy day as we enter the last sessions of the month. First up we have  German Retail sales (0700 BST) and Unemployment Report (0855 BST). Last week’s sentiment data suggests that Germany’s moderate growth trend will roll on, based on survey figures for consumers, the financial community and the business sector. There’s still concern about the near-term outlook, according to business polling, but overall, the mood points to more of the same: Economic expansion that’s less than stellar but strong enough to support the Eurozone's modest recovery. Forecasters are looking for a positive retail sales number of 1% whilst the jobless rate is set to remain unchanged at a low 6.2%. Close attention will be paid to the monthly update on changes in the number of newly unemployed workers for deeper context about the labour market trend.

Canadian GDP (1330 BST) The economy declined 0.1% in March, its first decline since November 2015 and the estimate for April is more of the same. According to Bank of Montreal, first quarter GDP is expected to rise nearly 3% annualized, thanks to solid growth at the turn of the year and a nice boost from net exports. Unfortunately, it said, the economy lost momentum as the quarter progressed, with March GDP expected to come in flat after a small contraction in the prior month adding Canada is going to get some sizeable volatility in the months ahead due to the Alberta wildfires and resulting drop in oil production.

US Consumer Confidence Indicator (1500 BST) Last week’s revised data for the University of Michigan’s Consumer Sentiment Index for May points to an improvement in the mood at the Q2 midpoint. The benchmark was revised down a bit from the preliminary reading for this month, but the index still posted a solid bounce higher against April – and relative to recent history as well. The CSI’s strength bodes well for today’s release of the Conference Board’s Consumer Confidence Indicator (CCI), a competing measure. The two indices track one another, although there can be substantial differences in the short term. Economists think that today’s first look at the May data for CCI will post a solid rise to 96.0 for May against 94.2 in the previous month. A firmer reading for the Conference Board’s index isn’t surprising in the wake of CSI’s latest jump. If the upbeat forecast holds, the case will strengthen for arguing that consumer optimism is rising in the second quarter.

Trade Smarter

Anish 

The day ahead 26 May 2016

Good morning,

Asia stocks were mixed on Thursday following a rally during the previous session, but energy firms were mostly up after oil surged past $50 a barrel for the first time this year. Investors seemed to brush off another strong lead from Wall Street and Europe, treading softly as the Group of Seven leaders' summit kicked off in Japan, where the sputtering global economy is likely to top the agenda. The Nikkei is up 0.5%, the ASX +0.3% with Shanghai and the Hang Seng down 0.97% and 0.41% respectively.

The yen surged on Thursday, taking some of the wind out of the sails of the recently buoyant dollar and prompting investors to cover positions against a backdrop of potential event risks, including a speech by Federal Reserve chief Janet Yellen. A sudden spike in the yen in relatively illiquid conditions triggered stop-loss orders and brought the Japanese currency as low as 109.42 against the US dollar from a session high of 110.235. Japanese Finance Minister Taro Aso said on Wednesday that he told his G7 counterparts at a finance leaders' meeting last week that Japan will raise the tax as planned. But he did not say whether that meant Japan has officially pledged to the international community that it will go ahead with the increase.

The Aussie dollar was also a mover overnight as Q1 capex came in well below expectations (-5.2% v -3.2% exp), the initial move lower on the headline (0.7162 vs US dollar) then saw the Aussie rally back through the 0.72 handle as the full details were digested. Elsewhere the US dollar has been on the back foot throughout the session as risk trades are again prominent.

Having bottomed out near $1218 region during Wednesdays trading, gold staged a solid comeback overnight on the back of profit-taking after the recent weakness. The bullion finally brought an end to its six-day losing streak rising to highs of $1234.35 before consolidating around the $1230 handle.

Brent crude passed $50 a barrel for the first time in 2016 on Thursday after data showed a fall in US crude inventories, adding to expectations of a tightening global market. Markets are now eyeing a June 2 meeting of the Organization of the Petroleum Exporting Countries in Vienna where it is hoped a deal on reducing production can be reached. WTI currently sits at $49.88 and Brent $50.10.

So to the day ahead and first up we have UK Second Estimate GDP (0900 BST). The markets had their first look at GDP figures for Q1 with the release of Preliminary GDP in April, which showed a gain of 0.3%. This was short of the estimate of 0.5%. Little change is expected in the Second Estimate GDP release, with a forecast of 0.4% which is in line with the macroeconomic figures released lately.

US: Durable Goods Orders (1330 BST) Manufacturing appears to be recovering from its recent recession, but the preliminary numbers for May via survey data suggest otherwise. Markit’s purchasing managers’ index revealed that output fell this month for the first time more than six years. The hard data for April, however, is expected to deliver brighter news, albeit in terms of a one-month lag relative to the latest PMI update with headline orders for durable goods rising for a second month in a row, which hasn’t happened since last summer.

US: Initial Jobless Claims (1330 BST) New filings for unemployment benefits fell a hefty 16,000 to a seasonally adjusted 278,000 for the second week of May. The decline is the first weekly slide since mid-April. The question is whether the recent surge in claims will continue in today’s release. Although last week’s report offered an encouraging change of pace, it’s always risky to reason from one number with the volatile claims data. A second weekly decline, however, will offer a more reassuring message. The crowd will be looking at today’s claims data to help decide if the PMI warning is noise or an early sign of trouble for the labour market.

Good luck

Anish S. Lal – VP Sales

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

Risk Warning

Trading on margin (spread betting, CFDs and FX) carries a high level of risk and may not be suitable for all investors.  The high degree of leverage can work against you as well as for you.  Before deciding to trade your live account, you should carefully consider your investment objectives, level of experience and risk appetite.  You could lose more than your initial investment and should not trade with funds you cannot afford to lose.  You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

The Day Ahead 25/05/2016

Good morning,

Asian shares fell to near 10-week lows on Tuesday as a stubbornly strong yen dragged Tokyo into the red while falling oil prices deflated energy shares.  With few fresh catalysts to drive sentiment, investors eye the start of Thursdays G7 summit in Japan with the sputtering global economy a key topic on the agenda during the 2 day meeting, while worries over a possible US interest rate hike by the Federal Reserve as early as next month again took hold.  Adding to the US central bank's hawkish signals last week that a June US rate raise could be on the cards, a prominent Fed board member weighed in with comments that suggested markets could be behind the curve on the Fed's intentions. Since raising rates in December for the first time in nine years, the US central bank in March forecast essentially two rate rises for this year, but markets have had much lower expectations amid a batch of lack lustre US economic data. However, James Bullard, president of the St. Louis Fed and a voting member of the policy-setting Federal Open Market Committee, said in a speech on Monday in Beijing that US labour market and inflation data suggested the Fed's projection "may be more nearly correct".  The Nikkei trades down 0.73%, Shanghai  -0.77%, Hang Seng -0.55% and the ASX -0.1%.

In the FX space the Aussie dollar extended loses below the 0.7200 handle against the US dollar as RBA Governor Stevens reinforced his pledge to combat lower inflation levels by deploying appropriate monetary policy framework, and thereby justifying his May rate cut stance. The kiwi dollar also fell overnight as the bears took control as a classic risk-off sentiment gripped the markets with the US dollar paring some of its recent loses and the yen holding onto gains.

Gold extends its losing streak into a fifth-day this Tuesday as US dollar strength weighs on the yellow metal capping any effort to the upside. Having posted session highs of $1252.35 it quickly fell to lows of $1244 and has looked vulnerable since. Oil dipped for a second day as comments from Iranian officials vowing to keep production up did little to dispel worries about global oversupply. WTI and Brent trade $47.90 and $48.11 respectively.

So to the day ahead and this week’s first tier data release is German ZEW Economic Sentiment Indicator (1000 BST).  Economic activity accelerated in Europe’s biggest economy in May, according to yesterday’s survey data from Markit Economics. The firm’s composite purchasing managers’ index for Germany ticked up to 54.7 in this month’s flash estimate – a five-month high and the first improvement so for in 2016. Whilst the PMI data is encouraging a closer look still leaves room for caution. Today’s update in Germany’s financial sector will provide more context for assessing the May macro profile. The last two reports reveal a modest rebound in expectations, but the firmer outlook for the future was accompanied by an ongoing slide in the current reading of economic conditions.

UK Inflation Report Hearing (1000 BST)  With exactly one month left to go before the UK holds a referendum that will decide whether or not it stays in the European Union, the British pound has generally remained resilient in the face of substantial downside risk to the currency that would very likely result from a successful “Brexit” vote. Aside from the Brexit issue, last week saw mixed data out of the UK, including a lower-than-expected inflation reading in the form of the Consumer Price Index, and better-than-expected numbers for average earnings, unemployment claims, and retail sales. Expect plenty of trading opportunities from todays lengthy hearing.

US New Home Sales (1500 BST) The combination of job growth and low interest rates have dispensed a bullish edge for the housing market so far this year. Some indicators have been choppy at times, but sentiment in the home building industry remains upbeat. Last week’s numbers on existing home sales look promising too. Transactions edged higher in April for the third month in a row, sticking close to the highest level since the recession ended. Today’s update on newly built houses is expected to bring good news as well as the market looking for a gain that will push sales up to 523,000 for April (seasonally adjusted annual rate).

Good luck

Anish S. Lal – VP Sales

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

Risk Warning

Trading on margin (spread betting, CFDs and FX) carries a high level of risk and may not be suitable for all investors.  The high degree of leverage can work against you as well as for you.  Before deciding to trade your live account, you should carefully consider your investment objectives, level of experience and risk appetite.  You could lose more than your initial investment and should not trade with funds you cannot afford to lose.  You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

The Day Ahead 23 May 2016

Good morning,

Asian shares rose on Monday following Friday’s solid session on Wall Street, while the dollar moved away from recent highs though remained supported as investors bet that the U.S. Federal Reserve was on track to raise rates sooner rather than later. However, the  Nikkei extended losses, slipping 0.6% on worrying economic data and reports that Japan's sales tax increase would proceed as planned. Data released before the open showed Japan's exports tumbled 10.% in April from a year earlier, in line with expectations but down for a seventh straight month, reflecting sluggish demand from China and emerging markets. Imports also fell sharply, which in turn boosted the country's trade surplus above expectations. On top of this  Japan’s Flash Manufacturing PMI showed activity contracted at the fastest pace in more than three years in May as new orders  slumped.  China’s Shanghai is up 0.5%, The Hang Seng 0.66%, whilst the ASX trades 0.19% lower.

In FX Space the US dollar fell against the safe haven yen after Tokyo's threat to intervene to tame its resurgent currency faced criticism at the G7 ministers' meeting. Japan last intervened in currency markets around November 2011, when it tried to stem the yen's rise against the greenback to keep an economic recovery on track after the quake-tsunami disaster earlier that year. In a statement which presented a clear rebuff to Tokyo, the G7 group "underscored the importance of all countries refraining from competitive devaluation". A stronger yen hurts Japanese exporters, a key driver of the world's third largest economy, by making their products relatively more expensive overseas. Elsewhere the start of the week brought a session of consolidation for currencies with pairs trading within tight ranges as the market awaits fresh inspiration.

Gold has halted a 3 day slide and trades higher at $1255 whilst Oil slipped on both sides of the Atlantic as investors locked in profits after a second week of gains. WTI currently sits at $48.15 and Brent $48.53.

So to the day ahead and the week kicks off with a host of PMI reading from the Eurozone. Manufacturing and Services PMIs (0900 BST) Sentiment data for manufacturing has been firming in recent months while the comparable numbers for services remains steady, albeit modestly below levels in 2015. Taken together, these results suggest that Europe will hold on to a growth bias in the second quarter. The trend may tick lower relative to the first quarter's relatively robust 0.5% rise in GDP (quarter over quarter rate). But for the moment, the economic outlook for Europe in the second quarter remains in the plus column. Yet there’s also hints that the trend is slowing so today’s flash data on PMIs for May will provide fresh guidance on Europe’s macro trend at the mid-point for the second quarter.

US Manufacturing PMI (1445 BST) Manufacturing activity in the US expanded in April, but just barely, according to two national sentiment benchmarks. In a rare case of unity, both the ISM Manufacturing Index and Markit’s PMI settled at 50.8 in April — just above the neutral 50 mark that separates growth from contraction. Two early clues for May, via last week’s releases from regional Fed banks, point to weakness for this month. The New York Fed’s Empire State index fell sharply for the May reading, sliding to negative 9 — a dramatic reversal after April’s positive 9 value. The Philly Fed’s regional benchmark for manufacturing in May was also in negative territory. The market consensus calls for a rise in the Manufacturing PMI to 51.0 for May vs. 50.8 in the previous month. Better, but a reminder that the manufacturing trend remains shaky at best.

Good luck

Anish S. Lal – VP Sales

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

Risk Warning

Trading on margin (spread betting, CFDs and FX) carries a high level of risk and may not be suitable for all investors.  The high degree of leverage can work against you as well as for you.  Before deciding to trade your live account, you should carefully consider your investment objectives, level of experience and risk appetite.  You could lose more than your initial investment and should not trade with funds you cannot afford to lose.  You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Overnight and The Day Ahead - Friday 13th May

Good Morning,

Yesterday was about the ‘Proud Pound’ Mark Carney, the Governor of the Bank of England, was unambiguous about the EU referendum; ‘Brexit’ would lead to a loss of jobs, a fall in the value of the pound and ultimately lead to a ‘technical recession’ - 6 months of falling growth. Has he overstepped the mark and become a political Governor, in his role he is supposed to be politically impartial. He believes he has the right to speak frankly about the economy and Brexit carries the risk of recession.

Stocks – The Nikkei is down 1%, nothing specific - the news that Nissan and Mitsubishi reached agreement lead to a surge of 16% in the Mitsubishi share price yesterday, today it is down 4%.

Oil is having a good week opening at 46.20, this is up 7% from the Monday open, we get the Baker Hughes Oil rig count later today

Gold opens at 1272, the range this week has been 1257 -1281.

We had Retail Sales data out of New Zealand overnight, coming in slightly weaker than expected at 0.8% QoQ and the currency dipped below 0.6800, 0.6793 the low.

Today in the US we get Retail Sales, Producer prices, the Michigan consumer sentiment and business inventories.

  

Why is Friday 13^th considered unlucky? One theory is that Thomas W Lawson’s popular novel ‘Friday, the Thirteenth’ published in 1907 contributed to disseminating the superstition.

In the novel, an unscrupulous broker takes advantage of the superstition to create a Wall Street panic on a Friday the 13^th.

Good Luck today and enjoy your week end.

Anish S. Lal – VP Sales

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

Risk Warning

Trading on margin (spread betting, CFDs and FX) carries a high level of risk and may not be suitable for all investors.  The high degree of leverage can work against you as well as for you.  Before deciding to trade your live account, you should carefully consider your investment objectives, level of experience and risk appetite.  You could lose more than your initial investment and should not trade with funds you cannot afford to lose.  You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Overnight and The Day Ahead 12.05.2016

Good Morning,

After yesterday’s gains is the Kiwi, today it is the poor performance of the Aussie dollar that catches the attention of the market.

Despite some interest at 79.50 in AUD/JPY out of Tokyo, the AUD/USD is down 0.5% on the day and down 4% over the past month.

Last week the RBA cuts rates to 1.75% and they have another 40 bps of cuts priced into the 1-year curve with the next cut fully priced in for November.

Toyota and Bridgestone earnings were disappointing, Nissan announces a tie up with Mitsubishi, Nissan are looking to take a third stake in the company, both boards are meeting. All Asian stocks markets indices are in the red, the risk off environment remains.

 The BOJ Governor Haruhiko Kuroda has had comments published from an interview with German’s Boersen-Zeitung, the headline statement was “Technically we can go as low as the ECB”.  Other comments included it is “Desirable for FX to reflect economic analysis“ and the “Finance Minister is responsible for Japan’s FX Policy.”

The day ahead has ‘Super Thursday’ here in the U.K, finally some data to get our teeth into, actually it will be the speech by Governor Carney that will be of interest. Journalist will be quizzing his ‘Brexit / Bremain’ views. The Manufacturing sector continues to come under scrutiny output is still less than 20 years ago.

In other news Oil had a strong day yesterday up 3.5%, as output has declined to 8.8mio barrels a day the lowest level since September 2014, stockpiles fell 3.4mio barrels.

And finally Chelsea have ended their kit deal with Adidas six years early or have Adidas ended the deal early, who next? Under Armour, Nike, Puma and New balance are all believed to be interested. Google ban pay loans ads.

                                                                                                                (Cons)   (Prev)

09:00     EUR Industrial Production (MoM) (Mar)                                 0.0%      -0.8%

09:00     EUR Industrial Production (YoY) (Mar)                                     1.1%      0.8%

11:00     GBP BoE Asset Purchase Facility (May)                                   £375B    £375B

11:00     GBP BoE Interest Rate Decision (May 12)                               0.5%      0.5%

11:00     GBP Bank of England Quarterly Inflation Report

11:00     GBP BOE MPC Vote Unchanged                                                 9:9

11:00     GBP BOE MPC Vote Cut                                                                 0:0

11:00     GBP BOE MPC Vote Hike                                                               0:0

11:00     GBP Bank of England Minutes Report

11:45     GBP BOE's Governor Carney speech

12:30     USD Initial Jobless Claims (May 6)                                              270K      274K

12:30     USD Continuing Jobless Claims (Apr 29)                                  2.120M 2.121M

12:30     USD Import Price Index (YoY) (Apr)                                                          -6.2%

12:30     USD Export Price Index (MoM) (Apr)                                       0.1%      0.0%

12:30     USD Export Price Index (YoY) (Apr)                                                           -6.1%

12:30     USD Import Price Index (MoM) (Apr)                                       0.5%      0.2%

12:30     CAD New Housing Price Index (YoY) (Mar)                                             1.8%

12:30     CAD New Housing Price Index (MoM) (Mar)                         0.1%      0.2%

14:30     USD EIA Natural Gas Storage change (May 6)                                       68B

15:45     USD Federal Reserve Bank of Boston President Rosengren Speech

17:00     USD 30-Year Bond Auction                                                                           2.596%

17:30     USD Fed's George Speech

Have a great day

Anish S. Lal – VP Sales

FX & Precious Metals, Atom8 Financial Services LLP

2nd Floor, Centenary House, Palliser Road, London W14 9EQ, UK

T: +44(0)20 3405 3910 | M: +44 (0)7983701816 | anish.lal@atom8.com | www.atom8.com

Risk Warning

Trading on margin (spread betting, CFDs and FX) carries a high level of risk and may not be suitable for all investors.  The high degree of leverage can work against you as well as for you.  Before deciding to trade your live account, you should carefully consider your investment objectives, level of experience and risk appetite.  You could lose more than your initial investment and should not trade with funds you cannot afford to lose.  You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Gold & Platinum Shining In 2016!

Ladies and Gentlemen,

Gold has rallied almost 17% this year and most analysts are looking at the Metals markets heading higher, spear headed by the Yellow Metal.

So what has been the key driver of Gold this year? Well, Monetary Policy in US. If we look back at last year one of the reason Gold struggle to rally is because it was cautious about the rate hike.

This year, the drivers have changed. Looking at the Financial Market & Global Economy as a whole. After last months FED meeting we saw Gold getting a lift, upon the cautious dovish notes.  We also saw that China Gold imports were lower recently and heavy restocking, especially ahead of the New Year (Jan - heading into February).






 












So what is the cap then on the upside? Well, as Gold prices rally quickly the downside range can also be greater. Hence why if we saw a huge spike up to $1300 it could be bad for the market. However, if we see prices correcting at these levels (as well as the physical market adjusting) and the market coming into the right support - this could provide for a much more sustained move higher.

Another interesting market... Platinum. 

Platinum flirting with 1,000 per ounce, after a 5 year pressured market and that has not been enough to lift prices at all. The underlying stocks have also been quite high with supply growing also. However, 2016 looks like the year we will see XPTUSD start to base around the 1,000 per ounce mark and prices should be lifted from here.

There is also a strong fundamental reasoning for this sustained move higher. Firstly, South Africa (accounting for 80% of the World's Platinum) and their wage negotiations, which will be very significant. From this, we should see more producer discipline and cut backs in supply growth, this should lift in investor sentiment.   Most of the Rand volatility should also support this wage case.

Secondly, the Jewelry market - which was incredibly weak last year.. although the price elasticity has come back into play this year offering a greater floor for prices.

As always. Trade Smarter

Anish8FX@Atom8.com

The UK Budget 16 March 2016 12:30 GMT

UK Budget... What to expect? 

Scheduled for 12:30 GMT, this will be Chancellor George Osborne’s eighth budget. Having set himself a target of achieving a surplus by 2019-20 , sluggish growth since November could mean more spending cuts and tax rises. His statement comes with two months to go before the UK votes on its EU membership. The government is campaigning to remain in the EU, and the chancellor will be keen to avoid antagonizing either side in the debate with his announcements.

WHAT WE ALREADY KNOW

A fresh round of government spending cuts

Osborne warned over the weekend that a slowdown in global growth would lead to further fiscal tightening, saying he would use the Budget to slash 50p in every £100 the government spends by the end of the decade, or around £4bn, from the Treasury’s balance sheet.

More than £300m in funding for Crossrail 2 and HS3.

Osborne will use the Budget to commit to more than £300m in new infrastructure spending, including £80m to fund the development of plans for Crossrail 2 and £60m to draw up plans to introduce high-speed rail in the north. In a major move for London transport, the chancellor will also say for the first time that Crossrail 2 is a “priority scheme” and commit to introduce a Crossrail 2 Bill by the end of the parliament.

A green light for driverless cars on Britain’s motorways

The chancellor is due to announce the first trials of driverless cars on British motorways and vow to spend £15m creating a “Connected Corridor” from London to Dover to help driverless cars communicate wirelessly with existing infrastructure.

WHAT MIGHT HAPPEN

Another hike in the insurance premium tax (IPT)

The AA warned over the weekend that the chancellor is considering raising the basic rate of insurance premium tax (IPT) from 9.5 per cent to 12.5 per cent. Just last November, Osborne increased the basic rate of IPT from 6 to 9.5 per cent – meaning that the stealth tax on more than 50m motor, home, medical and pet insurance premiums could be set to double in less than six months.

The first increase in fuel duty in five years

Osborne froze fuel duty in 2011, and given persistently low oil prices and the large amount an increase in the tax could net for the Treasury – an extra 2p of duty would bring in about £1bn – many believe the chancellor may announce a rise in the Budget. But the move would prove unpopular, with backbencher MPs from multiple parties opposing any increase.

An income tax break for middle and higher earners

Osborne is reportedly looking at increasing the amount people have to earn before they start paying the higher 40p tax rate to £43,000, from the current threshold of £42,385. The chancellor could also slash the top rate of tax from 45p to 40p, which would benefit people earning more than £150,000 a year.

Higher taxes on alcohol, tobacco and other vices

Brewers are betting on another 1p to be taken off beer duty, but Osborne is said to be looking at increasing taxes on alcohol, as well as imposing a minimum tax on cigarettes.

CALLS FROM THE TRADING FLOOR - BUY GOLD!

Ladies & Gentlemen

After a four-year slide, the price of Gold has nowhere to go but higher and many investors are starting to agree. The case for the "safe-haven" was further assured today, as China's manufacturing data showed a contraction.

For the majority of the Commodity markets, January was another bad month in a long bear-market cycle - apart from Gold. Gold rallied 5% in Jan, the best monthly gain in a year.  

Turmoil in Chinese markets (with the view of a potential Global Sell-Off), Oil price uncertainties and a slowing US growth has tickled Investors demand for the traditional safe-haven asset. Again, their remains a high chance the FED will hold off on further interest rate rises this year adds to the attraction for the yellow metal. 

There is really no sign of a re-surge in inflation and this has also been a large factor to Golds rise and this relationship goes back to the 1980's. However, what is interesting is that through the last 12 month Gold slide, we have had China, Russia and India continuing to purchase Gold (about 55% more in 2015) - but then why did not this affect the Price? It seems investors are more focused on Financial Assets & The state of the US Economy rather than Countries Gold holdings. 

James Cordier, CEO of a US based Options firm said "With stock markets looking to crash all over the worlds and the US economy growing slowly, nothing is pointing to rate hikes and that is why Gold will continue to rally" . 

However, as mentioned in posts prior - it is important to note that Gold does not pay a coupon like other competing assets, although the price elasticity (over the last 5 years) seems to have drawn Investors (especially Central Banks, like China, Russia and India) towards the Bullion. 

For the coming weeks, months / Central bankers like Kuroda and Draghi have key speeches scheduled (as well as NFP this week) which could further spur the rally in Gold as the consensus is for further tightening and talks of Negative interest rates and more uncertainty.  

As always, Trade Smarter

Anish @Anish8Fx 

Draghi's Sentiment Booster / The Day Ahead

With sentiment boosted following Draghi’s comments on more possible Eurozone monetary stimulus (the third time in a year), an overnight report from the Nikkei stated The Bank of Japan were also taking a serious look at expanding its monetary easing measures. "If falling consumer prices resulting from crude's plunge are making more people feel that prices are less likely to rise, then we should consider additional easing," said a senior BOJ official. 

Japan also decided to lift sanctions on Iran today following last Saturdays UN statements. A Japan-Iran investment agreement will be signed "soon" and "Japan would like to further develop its traditionally friendly ties with Iran." Oil prices at both sides of the Atlantic have rallied. 

Asian stock markets and traders liked what they heard with indices rebounding, tracking the positive close on Wall Street with Australian stocks following suit, boosted by resource and energy stocks. The Nikkei is the standout performer closing up 5.88%.

The FX market adopted a positive risk sentiment as the feel good factor kicked in, albeit in a rather sedate way.  

This could be brought to a sharp halt as we have an eventful day to close another volatile week; with a raft of flash manufacturing and services PMIs from across the Eurozone. While retail sales and public sector borrowing data from the UK will also keep the GBP traders busy.  Apart from data, we have speeches from ECB President Mario Draghi and Board member Benoît Cœuré at the World Economic Forum in Davos, Switzerland. While BOE MPC Member Cunliffe is due to speak at the Bruegel Research Institute, in Brussels.

Looking towards the North American session, there are also plenty of risk events, with the CPI and retail sales data from Canada, while from the US, flash manufacturing PMI and existing home sales data will be reported. 

Good luck and have a great weekend.

Bank Of Canada / Risk

Ladies and Gentlemen,

 

As the Davos Economic Forum commences, with 40 Heads of State attending and a ticket cost of $27,000, away from listening to speeches and headline watching the main event will be in Canada.

At 15:00 GMT the Bank Of Canada make their rate announcement, followed by the quarterly Monetary Policy Report and Economic Forecast update at 16:15 delivered by Governor Poloz.

 

Why is this significant? The first full rate cut is priced for April 2016, however the Canadian $ is a currency strongly correlated to the price of Oil. Areas such as ‘Alberta Oil Sands’ have been heavily affected by the oil price hitting a 12 year low. The weaker price has heavily impact the economy, will the BOC take action?

 

Highlighting the strong correlation, this year the Canadian $ has been in freefall with 10 consecutive negative days, however yesterday when the Relative Strength Index (RSI) reached 87 we had a corrective move but has made fresh highs again today 1.4655, this area acts as a level of resistance.

 

Toronto Dominion Bank have gone for an ‘off consensus call’ for today’ event and expect the overnight rate to be cut by 25 basis points from 0.5% to 0.25%.

They state that ‘the currency weakness plays an important role in facilitating the rotation in the drivers of economic growth at the core of the BOC growth narrative’

 

Today Oil and Canada might grab the headlines, whilst the world leaders gather in the Swiss snowy peaks.

 

Good Luck

The SNB Crash... One Year On..

Good morning

 

Risk-sentiment turned negative once again this Friday, following a rebound during yesterday’s US session. Safe-havens are back in demand reducing the appetite for risk amid negative equities and falling oil prices. As a result, the dollar-yen pair continues to benefit from risk-averse conditions, now breaking lower near 117.70, after failing to sustain above 118 handle. EUR/USD also extended its post-ECB minutes recovery and now looks to test 1.09 handle as the demand for low-yielding currencies rise to fund the investments in higher-yielding/ risk assets.

 

Gold price dropped below 1080 today despite the Feds comments on slowing inflation that might affect rate rises. Oil benchmarks on both sides of Atlantic fell back in the red and resumed their dominant bear trend in Asia, reversing the bounce seen on Thursday.

 

A very light data session is first up so the focus today is likely to remain on a host of US macro data due to be released during the NY session (13:30 GMT). The US retail sales, PPI and consumer sentiment data will remain the main highlight, with the retail trade volumes expected to decline 0.1% m/m, deteriorating from still marginal growth of 0.2% in November. While the flash University of Michigan (UoM) confidence survey (15:00 GMT) might marginally improve to 93.0 points, from 92.6 in December.  

 

A quick reminder, the US observe Martin Luther King Day on Monday 18 January. FX markets remain open, although less liquid, with precious metals closing early (12:30 NYC).

 

Good luck and have a great weekend.

This Amazing Week So Far...

Good morning

The rout returned on the global stock markets, with the Asian equities mirroring the sharp declines seen on the Wall Street overnight. A classic risk-off sentiment prevailed in Asia this Thursday amid falling equities and oil prices, despite another neutral Chinese yuan fix today failing to calm markets. Safe-havens benefited the most, with the Japanese yen emerging the top performer, while the CHF, EUR and gold posted modest gains. The dollar-yen pair now attempts recovery around 117.50 levels, having found strong support near 117.30 region. While the upside in EUR/USD remains capped by 1.09 handle, and gold prices gains for the second day in a row and trades around $ 1093, unable to extend beyond 1095 levels. The Australian Dollar showed a tepid response against the US Dollar after December’s employment report crossed the wires. Australia lost 1k employees compared to the -10k forecast. This was the most amount of jobs lost over the course of one month since April 2015.

Multiple bomb and gun attacks in the Indonesian capital of Jakarta sent the rupiah and the Indonesian stock market lower.

A quiet start to the day data wise with the BOE’s ‘Super Thursday’ likely to grab a lot of attention. The BOE will publish its minutes and the asset purchase target, although no major surprises are expected from the British central bank. The policy makers are expected to vote 8-1 in favour of keeping rate unadjusted at record low of 0.50% as also the asset purchases program unchanged. While the ECB monetary policy account of the Dec 3 meeting will be also published. Moving on towards this afternoons session, Canada’s housing prices index will be on tap while from the US, unemployment claims and import prices index will be published. Initial jobless claims are expected to remain largely unchanged at 275,000 during the week ending January 9, following a figure of 277,000 booked previously. 

12:00 GMT  UK BOE Official Bank rate and minutes

13:30 GMT US Unemployment claims

Good luck

What To Expect At $20 Oil?

Ladies and Gentlemen

As we saw Oil dip below $30 per barrel yesterday, we have seen somewhat of an overnight reprieve in the Oil trading sessions of Asia and Europe. However,  it is very hard to find reasons to be optimistic in current conditions, especially with the over-supply and concerns about China growth. The pain low Oil prices has so far caused for Oil investors and Oil producing countries may just be a taste of things to come as we head to $20 per barrel. 

We are now confronting $20 Oil and the likelihood is fairly great. Clearly Oil markets cannot maintain these prices (below $30) for very long and the question is for how much longer?  The Gulf Economies as well as other Oil producing countries are suffering immensely, such as Malaysia - who are losing $68 million for every $1 decline in the price of Oil. Oil producers too.. EconocoPhillips - losing $2 billion for ever $10 decline and yesterday Petrobras announcing it is lopping $30 billion of it's 5-year spending plan... Hours late, BP announces that they would slash 4,000 jobs. 

If there is some sort of optimistic note to leave you on and that was last year China (2nd largest consumer of Oil) imported a record amount of Crude, but that was simply taking advantage of low prices... and if/when prices go up they can start taking advantage of their huge stockpiles. 

$20 oil just acts to dig an even deeper hole from where you need to be before the markets look to open up again! 

Best of luck guys! 

Anish8FX @Atom8.com

Oil Crisis? Should We Now Buy Gold?

Ladies and Gentlemen

With a 17% fall in Oil since the start of 2016, the possibility of $20 oil becomes a real target for Investors, as we see major Hedge Funds exit the commodity.

Gold since August has been swung around in a tug of war, with Chinese equities on one side and a strong USD on the other. This pendulum has been relentless in the recent months, however with new lows in Oil prices, Gold continues to hold well in retaining it's safe haven status.

Gold has climbed 3.4% already in 2016 and investors risk aversion does not seem to be letting up. Geopolitical tensions persist in the Middle East and North Korea, as well as concerns about China's growth forecasts.  However, with a persistent strength in the USD forecasted for 2016, some analysts still call for sub $1,000 (per oz) Gold... as a "Competition for Gold" increases.

With Oil prices reeling from oversupply and Gold getting a small boost, Brent crude is now at the cheapest relative price in almost a generation.

Gold Vs Oil

But what is a "Safe-Haven"?   By Economic definition (as pointed out by James Steel, of HSBC) The Safe-haven inspired demand for Gold (and other precious metals) rests on the interconnection between  the state of the Gold Market and the Financial Markets of countries with long-term structural arguments for Gold accumulation (i.e. China and India) - and with this being said, HSBC forecast average Gold prices of $1,205 this year.

Mr Steel is looking more with a long-term view, as accumulations continue to rise. We always tend to think about Gold being a hedge on safety, however recently Gold has been more about uncertainty and a reflection of anxiety. Gold in a deflationary environment, may actually be likely to continue it's slide down.  2016 could well be the story of Central Bank delivery, especially as we are now risk-off as we strength in the Yen for example... but we hear nothing about the BOJ pushing back.

So Is Gold still a mark of uncertainty? Well the recent shocks coming from China did Send Gold immediately higher, which is reassuring to see.

I personally am long Gold, as I think it's safe-haven status will be the trend for 2016 but in the short-term we may remain bearish. I wish you all the best of luck with your Metals trading and as we all stay tuned to this theater of events in the World markets, I wish you safer trading.

Anish8Fx @ Atom8.com

The Day Ahead...

Good morning

The safe-havens were back in demand as the sentiment on the Asian markets remained soured, despite stabilizing China stock markets (currently holding small gains across the board). While lower oil prices and persistent Chinese economic slowdown worries continued to weigh on the commodities-currencies. The People's Bank of China continued to act on its intention to calm the yuan market today, squeezing offshore yuan shorts and keeping a steady fix, confounding those looking for further Yuan devaluation. Overnight Yuan HIBOR (Hong Kong Interbank Offered Rate - Offshore yuan borrowing rates) has jumped to a new record high of 66.82% from 13.4%.

The Japanese Yen has again benefited with USD/JPY despite a brief move towards 118.00 it has since reversed and is pushing towards 117.30 as I type. The Nikkei has been trading heavy as Japan return to work from their extended weekend, currently down -2.70% on the day.

Oil has been hit hard again as Asia sends Brent to a 12 year low and sees Hedge Funds starting to exit the commodity. Morgan Stanley warn that a strong US Dollar may send Brent down to as low as $20 a barrel.

The day ahead brings risk events for the British Pound. We have MoM Manufacturing and industrial production at 09:30 GMT followed by BOE’s Carney speaking this afternoon, although whether he can add any gems is to be seen. BoJ Governor Kuroda is also speaking at 10:30 GMT. But as ever this year the main focus will be all things China and the subsequent fallout.

Good luck.

First NFP of 2016.... "Risk On"!

Ladies and Gentlemen,

It has been a very busy start to the financial year, the stock markets have had a rough ride, the DAX is down 7% YTD and the S&P is below the pivotal 1990 level.

Risk off has been the theme in the FX market, until the correction overnight, has the sentiment turned ahead of the Non-Farm Payrolls?

The Non-Farm Payroll number will be announced at 13:30 GMT the consensus is for a 200k number following on from 211k in December, keep a keen eye out for the unemployment rate which is currently 5% and the average earnings increase, which is released at the same time. Reference to wage inflation and levels of employment where mentioned at the ‘Lift off’ press conference.

Why is this number so important? The market is trying to work out the pace of rate hikes in 2016, it is important to remember that the FED only has 8 meeting in a year. Will the hiking cycle be gradual or more aggressive? Fed Chair Yellen mentioned at her press conference that ‘future policy actions will obviously depend on how the economy evolves’ stressing that unemployment and inflation figures are factors that guide the Fed in arriving at rate hike decisions.

The Federal Reserve official publish their forecasts for the central bank’s key interest rate on a chart known as the ‘dot plot’. The dots has 4 hikes whereas Fed funds only has 3 who will be correct?

This year has already been touted as the year of ‘Doom Gloom and lack of Boom’, and i am looking forward to more positive 2016.

Good Luck