something interesting

<  BACK TO Market Analysis

China’s liquidity

FOREX_chinas-liqudity-boost-tempered-by-trade-war-jousting2506_FXPIG
China increases liquidity

China’s central bank announced on Sunday a 50bps reduction of reserve ratio requirements for some banks effective July 5, according to its website update. This is the third reduction this year and suggests a liquidity boost of about 700b yuan (approximately $108b) for the local banking system. The central bank says it targets to support small and micro enterprises and to further promote its debt-to-equity swap program. The move had been widely expected, since Chinese authorities announced last Wednesday that it would “comprehensively use all kinds of monetary policy tools” to help the economy, especially given the risk of a protracted trade war.

Despite the announcement of the liquidity boost, Asian shares struggled to benefit with the cloud of escalating trade wars hanging over markets. Latest developments suggest US President Trump plans to bar many Chinese companies from investing in US technology firms and block additional technology exports to China. And it’s not just China, Trump threatened to impose a 20% tariff on Friday on all imports of EU-assembled cars, tweeting “build them here!” A senior European Commission official said on Saturday that the European Union will respond to any US move to raise tariffs on cars made in the bloc. Tit-for-tat exchanges appear not just confined to China.

Did OPEC do enough?

The 2018 OPEC meeting in Vienna concluded Saturday with a commitment to increase production, though the fines details were left noticeably vague. The general thrust is that overall production will revert to 2016 levels, before cuts were put in place to reduce a global inventory glut. That has now almost been eroded, though the increase in production level is not expected to start replenishing those stocks, merely to bring the demand/supply equation more into equilibrium. No official production targets were allocated to each producing nation, rather a more “fluid” approach to additional production was introduced, more likely because not all producers have the capacity to crank up the pumps so easily. Indeed, it is suggested that only Saudi Arabia, United Arab Emirates, Kuwait and Russia have access to immediate spare capacity.

Technical resistance caps for now

Comments and calculations suggest the actual increase could be between 600k to one million barrels per day. This may have been lower than some expectations and would explain the surge in oil prices late on Friday, with WTI closing more than 5% higher on the day. Today’s Asia session saw oil give back some of the gains amid profit-taking and re-analysis of the true impact of higher production. WTI (WTICOUSD) currently trading 0.83% lower at 68.772. The 61.8% Fibonacci retracement of the drop from May 22 to June 18 sits at 69.324

Sparse data calendar

It is a slow start to the week on the data deck. Today’s highlight could be the German IFO surveys for June. The expectations index has been sliding since November last year with the May reading at 98.5. Another weak number the EUR may find it a challenge to cling on to gains made after Friday’s PMI numbers. The US calendar features May’s Chicago Fed activity index and new home sales.

Source: marketpulse.com

China increases liquidity

China’s central bank announced on Sunday a 50bps reduction of reserve ratio requirements for some banks effective July 5, according to its website update. This is the third reduction this year and suggests a liquidity boost of about 700b yuan (approximately $108b) for the local banking system. The central bank says it targets to support small and micro enterprises and to further promote its debt-to-equity swap program. The move had been widely expected, since Chinese authorities announced last Wednesday that it would “comprehensively use all kinds of monetary policy tools” to help the economy, especially given the risk of a protracted trade war.

Despite the announcement of the liquidity boost, Asian shares struggled to benefit with the cloud of escalating trade wars hanging over markets. Latest developments suggest US President Trump plans to bar many Chinese companies from investing in US technology firms and block additional technology exports to China. And it’s not just China, Trump threatened to impose a 20% tariff on Friday on all imports of EU-assembled cars, tweeting “build them here!” A senior European Commission official said on Saturday that the European Union will respond to any US move to raise tariffs on cars made in the bloc. Tit-for-tat exchanges appear not just confined to China.

Did OPEC do enough?

The 2018 OPEC meeting in Vienna concluded Saturday with a commitment to increase production, though the fines details were left noticeably vague. The general thrust is that overall production will revert to 2016 levels, before cuts were put in place to reduce a global inventory glut. That has now almost been eroded, though the increase in production level is not expected to start replenishing those stocks, merely to bring the demand/supply equation more into equilibrium. No official production targets were allocated to each producing nation, rather a more “fluid” approach to additional production was introduced, more likely because not all producers have the capacity to crank up the pumps so easily. Indeed, it is suggested that only Saudi Arabia, United Arab Emirates, Kuwait and Russia have access to immediate spare capacity.

Technical resistance caps for now

Comments and calculations suggest the actual increase could be between 600k to one million barrels per day. This may have been lower than some expectations and would explain the surge in oil prices late on Friday, with WTI closing more than 5% higher on the day. Today’s Asia session saw oil give back some of the gains amid profit-taking and re-analysis of the true impact of higher production. WTI (WTICOUSD) currently trading 0.83% lower at 68.772. The 61.8% Fibonacci retracement of the drop from May 22 to June 18 sits at 69.324

Sparse data calendar

It is a slow start to the week on the data deck. Today’s highlight could be the German IFO surveys for June. The expectations index has been sliding since November last year with the May reading at 98.5. Another weak number the EUR may find it a challenge to cling on to gains made after Friday’s PMI numbers. The US calendar features May’s Chicago Fed activity index and new home sales.

Source: marketpulse.com

lastest Articles

Market Analysis
Dollar slips ahead of Fed testimony
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (16.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Canada: Housing sales figures to be little changed - TDS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD Technical Analysis: Cable quietly gaining ground currently supported at 1.3250 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
The stock market is about to set a bearish record
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
European stocks slip on China growth concerns, but Deutsche Bank leaps
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: Any Trader Can Take Risk - Pig Insider
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold clings to modest recovery gains, above $1240 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar gains fade on China-EU summit, U.S. data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Weekly Results (9-13.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
FOREX Week Ahead:Trade War and Trump European Trip Boost US Dollar
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (13.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
GBP/USD rebounds from near 2-week lows, back closer to 1.3200 handle
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
QE drove JPY from 2012 to 2016 - AmpGFX
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
NZD/USD scope to test 0.6675 – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
U.S. stock futures on pause with big bank earnings in focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote:Turnarounds seldom turn - Warren Buffett
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Euro falls as rate expectations, trade tensions boost dollar
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets 13.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold eyes $1250 as USD weakness fuels recovery
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (12.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Sterling edges up ahead of UK Brexit blueprint
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Trump reaffirms commitment to NATO after strained emergency meeting
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold clings to modest recovery gains ahead of US CPI
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: Most things will prove - Pig Insider
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR futures: further downside not ruled out
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE Credit Conditions Survey Report: Default rates on unsecured lending rose in Q2
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (11.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Asian stocks slump after U.S. announces $200 billion in new tariffs on China
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/CAD – Canadian dollar dips, BoC rate decision looms
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
China Govt to state media - keep calm, don't inflame trade row with US - Reuters
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: Person who never made mistake - Pig Insider
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Gold holds weaker near one-week lows, around $1250 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Dollar strengthens against yen, EM rallies as trade fears wane
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX tech targets EUR/USD sidelined around 1.1730 amidst risk-off trade
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (10.07.2018)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold rebounds sharply from 1-week lows; will it sustain?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Trump Today: President says ‘up to the people’ whether Theresa May should be replaced as he praises her rival
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
DAX gains ground as trade tensions ease
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets: 10.07.2018 EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: It was never my thinking - Jesse Livermore
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Dow set to catch its breath after racking up 320-point rally
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Technical Analysis: The recent recovery move already seems to have run out of steam
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (09.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/USD: bulls tire and daily cloud base, (1.1737), under threat
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold tries for best levels in 2 weeks after the dollar’s recent retreat
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD plummets to lows near 1.3240 as B.Johnson resigns
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD heading back towards 1.3300 amid UK political woes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
FOREX Trading Quote: The truth - Wisdom of the Pig
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Dollar sags after soft U.S. wages data, Brexit woes weigh on pound
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREXTech Targets 09.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Weekly Results(2-6.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Forex Week Ahead: Trade Uncertainty Hits Dollar’s Confidence
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (06.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
AUD/USD fades the NFP-led spike, returns to 0.7420 area
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY turns red near 110.50 as US Dollar slips on mixed employment data
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold lower but clings to weekly gain ahead of payrolls and wage snapshot
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Sterling braces for May's crunch Brexit meeting
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: Success Has To Do - Ed Seykota
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/USD sticks to gains near 1.1715 ahead of US NFP
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets 26.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (05.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Sterling lifted by BOE comments but Brexit meeting curbs gains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY retreats from session highs, returns to mid-110s on weaker USD
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold tries to edge higher as dollar slips
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD eases from over 1-week high, back below mid-1.3200s after Carney
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: Cut Your Losses - Livermore
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/USD consolidates gains near 1.1685 ahead of US ADP, Fed minutes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets 05.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (04.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
USD/CAD – Canadian dollar quiet, investors eye FOMC minutes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
China: Ready for trade war and currency battle – Nordea Markets
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD flirting with lows, below mid-1.1600s
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
China’s yuan rallies against the dollar
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: Bend your view - Pig Insider
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
EUR/USD takes a sharp U-turn, drops back to 1.1640
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets 04.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (03.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
DAX rebounds with strong gains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
PBoC Official: China will not use Yuan as tool in trade conflict
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
When is NZ GDT price index and how could it affect NZD/USD?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
SEK: Cautious over the near term path - TDS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: The First Rule - Warren Buffett
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Sterling slumps as Brexit crunch nears
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Yen bid on risk-off, Aussie unmoved by RBA, UK construction PMI in focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (02.07.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
PBoC: Deliberate weakening of CNY as part of the trade war? – Nordea Markets
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
CAC dips to 7-week low, French manufacturing PMI misses expectations
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
FOREX Tech Targets 02.07.2018: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
UK: Manufacturing PMI unchanged in June at 54.4 - TDS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Quips of Wisdom
Forex Trading Quote: Momentum - ED SEYKOTA
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
Dow futures fall more than 100 points as Trump, EU exchange trade jabs
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD/JPY looks to test 110.50 amid sell-off in European equities
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Market Events Ahead
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Weekly Results (25-29.06.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
FOREX Week Ahead: Dollar Strong Ahead of July 4 Holiday
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
PAMM News
Managed Forex Accounts Daily Results (29.06.2018)
https://en.gravatar.com/userimage/34011725/cac48086660b253b9c1e53a8b4a23604.png
Market Analysis
USD/JPY sticks to daily gains above mid-110s despite USD weakness
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoC Q2 Business Outlook Survey: Some expectation of moderation in pace of sales growth
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Cryptocurrency Daily Roundup - Jun. 29
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613