Forex Market Commentary
2016 and the turmoil of uncertainty continues.
This year we will be studying the major currency pairs within the context of the global economy set against a backdrop of indicator markets from fixed income, equities and commodities to the VIX CBOE Volatility Index. Last year 2015 we tried to understand the nature and movement of the USD within a macro-economic setting. This year we shall expand our analysis of the USD as the major currency to encompass other major currencies inclusive of the two major commodity currencies of resource producing countries like Australia and Canada. 2015 saw many global issues with the problem of Greece in Europe and a potential bubble within the Chinese economy which led to a plunge in global equities. The USD being about 60% of the global currency trade, experienced a large 'Flight to Safety' in 2015 which added to the already burgeoning strength of the USD due to a sturdy domestic economic performance. That being said and most of the concern issues being cast aside now, and with crude oil at rock bottom, it would be interesting to see how the USD shall behave in the face of a slowing global economy.
USD is likely not to experience the same kind of growth in 2016 against it's major counter-parties for several reasons. Global equities have already seen their worst as the first point and commodities are already cut-rate bottom as the second point of contention. Moreover, thirdly, I would like to add that the US forward yield curve is going to play a significant factor weighing on the value of USD for 2016. The US yield is starting to flatten with pressure on the 10 and 30 year as the front end and 2 year climb. Altogether in the last 5 years the 30 year has gradually declined from a yield of 4.75% to the current yield of 2.8% whilst the 2 year has remained within the 1.5 % region thus creating a narrowing convergence along the yield curve. The shape of the US yield curve is likely to have a holding impact on US dollar growth. Large speculators maybe looking towards the Euro Zone equities and its currency for growth potential as well as picking up the pieces from a ravaged China and Emerging Market. commodity currency could also hit back against the exuberant USD to temper the desire for the world's currency reserve as markets tend to stabilize for 2016.
Important data:
FX:
EUR/ USD 1.086965 0.000000 0.00%
USD/CHF 1.02305 0.00000 0.00%
USD/JPY 121.160 0.000 0.00%
CNY/ USD 0.15205 0.000 0.00%
GBP/USD 1.42445 0.00000 0.00%
AUD/ USD (commodity currency) 0.70853 0.00000 0.00%
USD/CAD (commodity currency) 1.39765 0.00000 0.00%
NZD/USD (commodity currency) 0.64789 0.00000 0.00%
Fixed Income Markets:
US Federal Reserve - +0.50%
US 30 Day Fed Fund 99.6575 -0.0025 -0.00%
US 2 year T-Notes 109.312500 +0.093750 +0.09%
US 10 year T-Notes 129.578125 +0.593750 +0.46%
ECB Base rate 0.050 %
Chinese interest rate PBC China 4.35 %
Japanese interest rate (BoJ) 0.10 %
Equities Markets:
Nikkei 22517,518.30 + 476.85 +2.80%
SSE Composite Index 2,737.60 + 81.94 +3.09%
Hang Seng 19,683.11 + 487.28 +2.54%
DAX 9,798.11 + 158.52 +1.64%
FTSE 100 6,083.79 + 152.01 +2.56%
DJIA 16,466.30 + 396.66 +2.47%
Commodities Futures Cash:
Crude Oil WTI 33.62 +0.43 +1.27%
Gold 1118.100 +2.850 +0.25%
Indicies:
USDX 99.527 +0.941 +1.21%
VIX 21.65 - 1.63 - 6.98%
Pieter Bergli - DeLoren Trust Holdings
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Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.
* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies
A non-profit commitment to provide education on the properties of currency markets. Forex market commentaries and media reports for free
Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission
Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.
* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies
