The FOMC Countdown To Take-Off!

Ladies and Gentlemen,

Today the Federal Open Markets Committee begins a two day meeting in Washington, concluding with an announcement at 19:00 on 17^th September, followed by a press conference chaired by Janet Yellen. The stakes are high and the global financial markets wait with bated breath.

The members have a tough decision to make, should they raise rates for the first time since June 2006?

Larry Summer, the 71^st Secretary of the Treasury for President Clinton and Director of the National Economic Council for President Obama has stated in his blog that in the last 20 years the Fed has never tightened without guiding the futures market to at least a 70 percent chance of a tightening. Right now the Fed Funds futures market is assigning only a 28 percent chance of a September tightening.

There is a more centrist view, held by John Williams the San Francisco Fed President that low interest rates are sending out the wrong signal. They indicate that a crisis going on, when reality is very different. The labour markets have improved the economy is getting back on track and the correct signal is to raise rates. However the recent turbulence may make the members cautious.

What options are available? Do they raise rates and say they will not do so again until the inflation mandate is meet or do they continue to be data dependent and give further hints as to when lift off will happen.

We believe the press conference will give us a larger clue as to the normalisation process and prefer to be long volatility as the Fed seeks to explain how it’s mandate of maximum employment, stable prices and moderate long term interest rates will be achieved.

Best of luck

Anish S. Lal @anish8fx

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.

Will NZ Interest Rates be cut by 25 basis points tonight?

Ladies and Gentlemen,

At 10 pm tonight, as the End of Day Reports filter through, the RBNZ announce their interest rate decision.

All 17 economist surveyed by Bloomberg believe they will cut interest rates by 25 basis point, however in recent days the currency has rallied from 0.6250 to 0.6425, why?

It looks as if this particular story is more about will they cut 25 basis point and infer the cutting cycle is over or will bearish Central bank rhetoric continue, Governor Wheeler holds a press conference immediately after the announcement.

The recent Chinese meltdown is not good news for NZ, the June trade date in NZ was the worst in 6 years and the main reason was exports to China slumped 29%, with Dairy exports falling 24%.

The Dairy industry in NZ is not in a good way, employers hiring is at the lowest pace for 2 years, there is falling consumer confidence, weaker retail sales, softer manufacturing PMI and poor business confidence. Altogether this makes for a gloomy picture. Asset price inflation via the housing market is about the only positive, but not strong enough to avert a cut.

I personally believe a cut is on the card and that technically 0.6425, 0.6458 and 0.6550 act as good resistance levels

Good Luck

Anish S. Lal @anish8fx

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 most important NFP of 2015?

Ladies and Gentlemen

Today at 13.30 BST we get the latest employment report from the United States, it will assist government policy makers in their quest to decide on the timing of the first rate rise since 2006.

The change in Non-Farm payrolls is expected to be 217k according to the Bloomberg Survey, the report is seen as the deciding factor for the September FOMC. Commentators believe the chances of ‘lift off’ have diminished in the light of the financial turmoil, however the employment survey was concluded before this period.

The August number is heavily influenced by seasonal factors and difficult to predict. Over the last 10 years the difference between the consensus and the actually number has been biggest in both March and August, there was a 119k miss in March of this year let’s hope we are closer for August.

It is important to remember the dual mandate of the Fed, meaning that both employment and inflation will have to be at levels where tightening monetary policy is appropriate.

The unemployment rate which has already reached the top end of the Fed’s year end projection 5.2%, is a 7 year low. However, a falling oil price means away from the workforce there is a disinflationary environment and may enable the key decision to be delayed.

At Atom8 we are cognisant that this is an important number and that it is worthwhile looking at all the data that is released at 13.30 including the July revisions.

Good Luck

Anish S. Lal @anish8fx

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.

Event Risk - ECB rate announcement and press conference

Ladies and Gentlemen,

Tomorrow at 12:45 BST we get the ECB rate announcement no change is expected, so why is this an Event Risk?

At 13.30 the President of the ECB, Mario Draghi chairs a press conference on his 67^th Birthday, he will be his dovish self, highlighting external risk, so what is new?

Since the last meeting the concern was Greece now it is China and in that time period €/$ has rallied from 1.0809 to 1.1714, over 900 points.

The important factor is the ECB are the first major Central Bank to take centre stage after a volatile summer, there will be concerns about growth, a deflationary environment and new external risks beyond their control.

The ECB is still in the easing cycle and I expect rallies to be sold and the 200 day moving average at 1.1291 to be the first major resistance level.

Good Luck

Anish S. Lal @anish8fx

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.

Event - The "Atomic" August NFP - What to expect?

Ladies and Gentlemen,

Today at 13.30 BST we have a plethora of data from the US, as we are all aware the Fed is “Data Dependent”.

13.30     Non-Farm Payrolls          

Average Hourly earnings

Unemployment Rate

Labor Force participant rate

The Non-Farm Payroll number will be where we look first. The market consensus is 225k. The barometer appears to be 200k with a weaker number suggesting that a rate rise in September will be off the table, whilst a strong number will make the voting members of the Federal Reserve do some soul searching.

Fed Funds has 19 basis points priced into the September Contract, 32 basis points priced in December Contract and a year from now it has 70 basis points,will this change?

The minutes of the last meeting teased the market with the word ‘some’, stating that the FED would like to see “some improvements” in data before raising rates

Dennis Lockhart, the Atlanta Fed President, a dove, said that it would take a significant deterioration in the data not to move in September.

We eagerly await the data dependent sequence…

Good Luck

Anish S. Lal @anish8fx

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

Bank of England's Super Thursday

Ladies and Gentlemen,

If you look at the list of data being released tomorrow in the UK, you will see why the media are referring to it as ‘Super GBP Thursday’.

09:00     New Car Registrations

09:30     Industrial Production

                Manufacturing Production

12:00     Bank of England Inflation Report and Minutes to the meeting

                Bank of England Bank rate (0.5%)

We get 3 data points from the BOE at midday, the minutes of its policy meeting, the quarterly inflation report forecast and the Interest rate decision, presently 0.5%.

Normally, these reports are on separate days.

 What should we be looking out for?

How the members of the MPC vote, the last 7 meetings have been 9-0. Are there any dissenters in the ranks?

Martin Weale confirmed he was one of two members that nearly voted for rate rise at the last meeting and JP Morgan have forecast a 6-3 vote.

Who are the other possible dissenters? Kristin Forbes said there will be a rate rise ‘in the not too distant future’.

However I take note from the BOE chief economist  Andrew Haldane ‘ For me the combination of a healing economy, very low price pressures and a wobbly world means there is no rush to move rates from where they are now’. It is important to remember that the BOE mandate is to deliver price stability and then support growth and employment.

It will a very interesting day as the market presently expects a rate rise in May of next year, if the hawks win then 1.5680 is the level to watch whilst a leaning towards the doves would see 1.5470 tested.

Good Luck

Anish S. Lal @anish8fx

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.

Is the Australian Economy losing its shine?

Is the Australian economy losing its shine? The flippant answer is look at their cricket team, not the dominant force they once were J

However the more considered answer is that the economic slide is partly due to circumstances beyond the government’s control.

Commodity prices have fallen, the Australian economy has been based around mining and commodities so a period of adjustment is to be expected.

Event Risk - RBA Announcement (4th August 05:30)

What impact will lower interest rates have and is this tool the answer?

Lower interest rates are fuelling ‘Asset Bubbles’.

This is a global story but the Sydney Housing market is the extreme, up a staggering 18.4% (yoy) whilst economic growth has not reached over 3%

So why reduce rates further?

The currency is 35% lower over 4 years surely this should help exporters however the jobless rate is still stuck around 6% and business confidence surveys are not at the level the government would like. A cut is the short term fix but there is a longer term issue.

The cash rate is at 2% and very few expect a cut to 1.75% (25 out of 28 economists polled by Bloomberg have rates on hold.)

We get the quarterly monetary policy statement on Friday the last two times the Reserve Bank Board members meet before this statement they cut 25 basis points

As the proverb goes being forewarned is forearmed.

Anish S. Lal @anish8fx

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