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.