Nikkei Surges post election

Tokyo’s benchmark stock index extended a record winning streak on Monday as Japanese Prime Minister Shinzo Abe’s victory in a snap election pushed the yen down and boosted exporters.

The Nikkei 225, which on Friday posted a 14th straight day of gains to match a record set in 1961, added 1.15 percent, or 246.51 points, to sit at 21,704.15 in early trade.

The broader Topix index was up 0.96 percent, or 16.70 points, at 1,747.34.

Abe — who came into power in late 2012 on a ticket to reignite the lumbering economy — is now on course to become the country’s longest-serving premier.

“It’s a relief for foreign investors who had bought Japanese stocks aggressively before the election on a bet that Abenomics will continue,” said Masayuki Kubota, chief strategist at Rakuten Securities, referring to Abe’s flagship growth policy.

The greenback strengthened to 113.91 yen against 113.51 yen in New York Friday.

A cheaper yen is a positive for Japanese exporters as it boosts their profitability, spurring demand for their shares.

“Abe policies should remain accommodative and point to a weaker yen over time,” said Stephen Innes, who heads Asia-Pacific trading at forex firm OANDA.

A cheaper yen boosted carmakers, with Nissan up 1.25 percent at 1,092.5 yen and Honda rising 0.99 percent to 3,462 yen.

Panasonic rose 1.67 percent to 1,664.5 yen and Canon climbed 0.42 percent to 4,047 yen.

Major bank Mitsubishi UFJ Financial rose 1.42 percent to 738.2 yen.

Via AFP

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And how was your weekend ??

And how was your weekend??

The markets opened right on  expectations, and so far in early APAC trade the headline risk from this weekends Catalonian perplexity is not posing a significant threat to risk or the Euro which  is only trading marginally lower with investors single-mindedly focused on the critical ECB meeting Oct 26

USDJPY has bounced higher on Abe’s resounding election victory. Traders remain bulled up on USDJPY as Abe policies should remain accommodative and point to a weaker Yen over time. And while the JPY is expected to weaken medium-term, uncertainty over the Fed chair nomination could weigh on crowded near-term positions. None the less,  Abe’s landslide victory should pave the way for an   extension of Japan’s stock market rally, which could underpin USDJPY sentiment

So far risk sentiment remains buoyant after a strong  US equity futures open on an extension of last weeks US tax reform euphoria.But its early days and with a deluge of headline risk expected this week, I surmise upside follow-through will remain tentative, but indeed, USDJPY bulls are smiling this morning.

The House Republican’s return from recess this week so we should expect the usual bipartisan banter to hit the wires as the  House will take up debate on the budget resolution. The discourse should provide the street with a decent heat map to gauge overall US political sentiment. Currently, the market is buying into Trump’s  comments that the GOP has enough seats to pass the administrations economic aspirations.

Let’s not overlook the Feds Chair game of thrones.Currently, the markets are giving the nod to either Powell or Taylor; however, a Yellen appointment should present some significant headwinds for the USD but good for US equities on the assumption of a very very gradual pace of policy normalisation. Not to mention continuity is always a good thing for equity markets.

The Euro

Very much cemented in current ranges but eyes will be on US treasuries as the EURO will take its cues from USD momentum early in the week. However, dealers will keep a close eye on the current EURUSD dip to gauge market lean going into the critical ECB meeting.

After the summer run up on the EURUSD, the ECB veered dovish with timely leaks designed to temper the markets bullish view. Given the ECB sensitivity to Euro strength, it may be wise to ascribe to the ECB source leaks that that monthly purchases will be extended for nine months at a pace of 25-40bn per month which should imply currency neutrality.

The Japanese Yen

Indeed, an excellent opener for the USDJPY bulls on Abe’s resounding victory.But from here the next significant extension will likely be triggered by House resolution headlines so all eyes will be on the headline heat map. The Nikkie futures look happy in early trade, so this alone could push the USDJPY above the phycological 114.00 for a test of the key 114.30-50 region.

The Australian Dollar

With no deviation from Friday’s view, the Australian Dollar is one of the G-10 currencies with most to lose from a stronger dollar and a more hawkish Fed. The US dollar appears to be on solid footings into the weekend., but next weeks focus will be the US bond curve. Any aggressive move higher in US yields, especially if President Trump gives Taylor the nod, will put the Aussie at exceptional risk.

So far it appears the Typhoon Lan, which hit Tokyo this morning, is not dampening investor spirits.

The post And how was your weekend ?? appeared first on Forex news - Binary options.

And how was your weekend ??

And how was your weekend??

The markets opened right on  expectations, and so far in early APAC trade the headline risk from this weekends Catalonian perplexity is not posing a significant threat to risk or the Euro which  is only trading marginally lower with investors single-mindedly focused on the critical ECB meeting Oct 26

USDJPY has bounced higher on Abe’s resounding election victory. Traders remain bulled up on USDJPY as Abe policies should remain accommodative and point to a weaker Yen over time. And while the JPY is expected to weaken medium-term, uncertainty over the Fed chair nomination could weigh on crowded near-term positions. None the less,  Abe’s landslide victory should pave the way for an   extension of Japan’s stock market rally, which could underpin USDJPY sentiment

So far risk sentiment remains buoyant after a strong  US equity futures open on an extension of last weeks US tax reform euphoria.But its early days and with a deluge of headline risk expected this week, I surmise upside follow-through will remain tentative, but indeed, USDJPY bulls are smiling this morning.

The House Republican’s return from recess this week so we should expect the usual bipartisan banter to hit the wires as the  House will take up debate on the budget resolution. The discourse should provide the street with a decent heat map to gauge overall US political sentiment. Currently, the market is buying into Trump’s  comments that the GOP has enough seats to pass the administrations economic aspirations.

Let’s not overlook the Feds Chair game of thrones.Currently, the markets are giving the nod to either Powell or Taylor; however, a Yellen appointment should present some significant headwinds for the USD but good for US equities on the assumption of a very very gradual pace of policy normalisation. Not to mention continuity is always a good thing for equity markets.

The Euro

Very much cemented in current ranges but eyes will be on US treasuries as the EURO will take its cues from USD momentum early in the week. However, dealers will keep a close eye on the current EURUSD dip to gauge market lean going into the critical ECB meeting.

After the summer run up on the EURUSD, the ECB veered dovish with timely leaks designed to temper the markets bullish view. Given the ECB sensitivity to Euro strength, it may be wise to ascribe to the ECB source leaks that that monthly purchases will be extended for nine months at a pace of 25-40bn per month which should imply currency neutrality.

The Japanese Yen

Indeed, an excellent opener for the USDJPY bulls on Abe’s resounding victory.But from here the next significant extension will likely be triggered by House resolution headlines so all eyes will be on the headline heat map. The Nikkie futures look happy in early trade, so this alone could push the USDJPY above the phycological 114.00 for a test of the key 114.30-50 region.

The Australian Dollar

With no deviation from Friday’s view, the Australian Dollar is one of the G-10 currencies with most to lose from a stronger dollar and a more hawkish Fed. The US dollar appears to be on solid footings into the weekend., but next weeks focus will be the US bond curve. Any aggressive move higher in US yields, especially if President Trump gives Taylor the nod, will put the Aussie at exceptional risk.

So far it appears the Typhoon Lan, which hit Tokyo this morning, is not dampening investor spirits.

The post And how was your weekend ?? appeared first on Forex news - Binary options.

Friday’s Finish Line

Friday’s Finish Line

US equities put in another stellar session hitting the trifecta as all three major indexes ( DJIA, SPX and NASDAQ) synchronously closed at record highs. Likewise, the USD closed the week on a very optimistic note as positive investor sentiment was grounded in the Senate’s passage of the budget resolution, clearing a significant hurdle and moving the GOP closer to tax reform. Now it’s off to the Congress, but this time around, Trump is very confident The House will pass the resolution, eager to put tax reform behind them

The Fed Chair race remained in focus, but traders are finding it challenging getting off the merry go round after Trump made clear his three top choices are Powel, Taylor and Yellen on Friday. But never the one to miss an opportunity to stir the pot, when asked if Trump could have  Powell-Taylor as co-chairs, he said it could be an option. While Powell and Taylor remain the odds-on market favourites, we do know that the President prefers lower rates and a softer US dollar, perhaps forgetting Yellen could prove to be a huge mistake.

FX markets remain choppy with traders reacting to headlines, rumours and at times engaged in a flight of fancy, not allowing the facts to get in the way. But this is more or less typical of trading in politically charged markets where risk quantification is a guessing game at best. But no rest for the weary as politically, it will be a huge week not only for the dollar but the weekend noise from Catalonia, and the Japanese election could make for a rousing start on Monday if the unexpected comes to fruition.

Even if you view the Catalan conflict as inconsequential to the long-term EUR view, headline noise can produce an outsized currency move at the Monday open due to thin liquidity conditions so best be nimble best be quick. But in reality, the primary focus for EURO traders is the ECB meeting on the 26th

PM Shinzo Abe is mostly expected to return to power with a comfortable majority. Given this likely scenario and effervescent risk environment, we should see a move higher on USDJPY as the market prices in short to medium term weaker JPY. His victory all but assures more fiscal stimulus in Japan including a JPY2trn budgetary spending package to ensure the next tax increase slated for 2019 does not result in an economic slowdown like the 2014 tax hike. Also, the Nikkie will continue to play catch up as elections risk premiums unwind and that should provide further upside impetus to USDJPY. Granted there are no election surprises; we should expect any USDJPY dips to be hoovered up at the Monday open

In the race to the Friday Finish  line

The Canadian Dollar

The Candian dollar tumbled and fumbled its way to the finish line proving to be G-10’s worst performer on Friday as CPI, and retail sales both missed the mark. Also, The Bank of Canada Monetary Policy Report and policy statement are due October 25. Today’s USDCAD rally indicates traders are looking for a dovish statement and no rate increase. So this wave of negativity should continue next week

The Euro

The long-awaited ECB meeting is upon us. But with the council  all but telegraphing their intentions from the mysterious ” unknown sources ‘, a lot of vol has been sucked out of this weeks meeting risk.

With that in mind, I suspect the Euro, as it did on Friday, will take its cue early next week from USD momentum.

The Japanese Yen

The market is bulled up on USDJPY for a favourable Abe election outcome as its expected his policies will continue to weaken JPY.

The New Zealand Dollar

The market has issued a vote of non-confidence for the very muddied NZ political landscape and by extension the Kiwi dollar. While political risk usually has a way of evaporating quickly, but with the NZD getting drawn into the USD vortex, we should expect a more profound current trend extension on a stronger dollar narrative.

The Australian Dollar

The Australian Dollar is one of the G-10 currencies with most to lose from a stronger dollar and a more hawkish Fed. The US dollar appears to be on solid footings into the weekend., but next weeks focus will be the US bond curve. Any aggressive move higher in US yields, especially if President Trump gives Taylor the nod, will put the Aussie at exceptional risk

The post Friday’s Finish Line appeared first on Forex news - Binary options.

Friday’s Finish Line

Friday’s Finish Line

US equities put in another stellar session hitting the trifecta as all three major indexes ( DJIA, SPX and NASDAQ) synchronously closed at record highs. Likewise, the USD closed the week on a very optimistic note as positive investor sentiment was grounded in the Senate’s passage of the budget resolution, clearing a significant hurdle and moving the GOP closer to tax reform. Now it’s off to the Congress, but this time around, Trump is very confident The House will pass the resolution, eager to put tax reform behind them

The Fed Chair race remained in focus, but traders are finding it challenging getting off the merry go round after Trump made clear his three top choices are Powel, Taylor and Yellen on Friday. But never the one to miss an opportunity to stir the pot, when asked if Trump could have  Powell-Taylor as co-chairs, he said it could be an option. While Powell and Taylor remain the odds-on market favourites, we do know that the President prefers lower rates and a softer US dollar, perhaps forgetting Yellen could prove to be a huge mistake.

FX markets remain choppy with traders reacting to headlines, rumours and at times engaged in a flight of fancy, not allowing the facts to get in the way. But this is more or less typical of trading in politically charged markets where risk quantification is a guessing game at best. But no rest for the weary as politically, it will be a huge week not only for the dollar but the weekend noise from Catalonia, and the Japanese election could make for a rousing start on Monday if the unexpected comes to fruition.

Even if you view the Catalan conflict as inconsequential to the long-term EUR view, headline noise can produce an outsized currency move at the Monday open due to thin liquidity conditions so best be nimble best be quick. But in reality, the primary focus for EURO traders is the ECB meeting on the 26th

PM Shinzo Abe is mostly expected to return to power with a comfortable majority. Given this likely scenario and effervescent risk environment, we should see a move higher on USDJPY as the market prices in short to medium term weaker JPY. His victory all but assures more fiscal stimulus in Japan including a JPY2trn budgetary spending package to ensure the next tax increase slated for 2019 does not result in an economic slowdown like the 2014 tax hike. Also, the Nikkie will continue to play catch up as elections risk premiums unwind and that should provide further upside impetus to USDJPY. Granted there are no election surprises; we should expect any USDJPY dips to be hoovered up at the Monday open

In the race to the Friday Finish  line

The Canadian Dollar

The Candian dollar tumbled and fumbled its way to the finish line proving to be G-10’s worst performer on Friday as CPI, and retail sales both missed the mark. Also, The Bank of Canada Monetary Policy Report and policy statement are due October 25. Today’s USDCAD rally indicates traders are looking for a dovish statement and no rate increase. So this wave of negativity should continue next week

The Euro

The long-awaited ECB meeting is upon us. But with the council  all but telegraphing their intentions from the mysterious ” unknown sources ‘, a lot of vol has been sucked out of this weeks meeting risk.

With that in mind, I suspect the Euro, as it did on Friday, will take its cue early next week from USD momentum.

The Japanese Yen

The market is bulled up on USDJPY for a favourable Abe election outcome as its expected his policies will continue to weaken JPY.

The New Zealand Dollar

The market has issued a vote of non-confidence for the very muddied NZ political landscape and by extension the Kiwi dollar. While political risk usually has a way of evaporating quickly, but with the NZD getting drawn into the USD vortex, we should expect a more profound current trend extension on a stronger dollar narrative.

The Australian Dollar

The Australian Dollar is one of the G-10 currencies with most to lose from a stronger dollar and a more hawkish Fed. The US dollar appears to be on solid footings into the weekend., but next weeks focus will be the US bond curve. Any aggressive move higher in US yields, especially if President Trump gives Taylor the nod, will put the Aussie at exceptional risk

The post Friday’s Finish Line appeared first on Forex news - Binary options.

The NZD Slides Sharply into the Weekend

Selling of the New Zealand dollar accelerated, knocking another 1 per cent off the currency’s value as investors repositioned to the nation’s political shift.

“Both Labour and NZ First are looking to revamp the Central Bank by appointing outside director while moving away from the single decision-maker model,” said OANDA’s Stephen Innes, adding that “spooked” investors.

“The profundity of this political swing is no small matter as the coalition could bring about a dual mandate for the RBNZ incorporating a full employment target alongside the traditional inflation target and likely currency consequences,” Mr Innes said. “So far there has been little appetite to buy the dip while traders remain in ‘sellindipity’ mode expecting an extension of the current trend.”

The Kiwi was 1 percent lower at US69.59¢ in recent trade, falling below the US70¢ mark for the first time since late May. The currency has plunged 7.9 percent since its 2017 peak of US75.58¢ in late July.

Australian Financial Review

The post The NZD Slides Sharply into the Weekend appeared first on Forex news - Binary options.

Global Markets Rise

Treasury chief Steven Mnuchin said this week that markets could see a correction if US lawmakers fail to pass the president’s tax-cut measures, while People’s Bank of China governor Zhou Xiaochuan warned of “excessive optimism” and a possible plunge in prices.

But Trump’s promise to pass the legislation moved a step closer late Thursday when senators agreed a budget resolution that unlocks a procedure allowing Republicans to push through such measures without the need for Democrat help.

Trump hailed the vote as “an important step in advancing the administration’s pro-growth and pro-jobs legislative agenda”.

Expectations the tycoon’s tax cuts and big spending plans would boost the economy were one of the drivers of a months-long global markets rally that kicked off after his November election, though a series of White House crises and legislative setbacks pared those gains.

While the controversial proposals still have a long way to go before being passed, the news spurred Asian markets to life after a plodding start to the day, while the dollar strengthened against the yen, euro and pound.

“The budget still has to also pass the House, but near term, it should be supportive for the dollar,” Shinichiro Kadota, a senior foreign-exchange strategist at Barclays Securities Japan in Tokyo, told Bloomberg News.

“Senate passage of budget was a step required for budget reconciliation to advance tax reform.”

And Stephen Innes, head of Asia-Pacific trading at OANDA, said: “It’s likely not too late to jump on this party bandwagon as global equity markets continue ratcheting higher… or the Trump trade bandwagon for that matter.”

Tokyo ended marginally higher as a weaker yen helped reverse early losses to see the Nikkei to its 14th straight gain, matching its best run since 1961.

Via AFP

The post Global Markets Rise appeared first on Forex news - Binary options.

A word of caution about today’s Dollar Bounce

Oct. 20, 2017 12:27 a.m. ET

Some analysts urged caution about Friday’s dollar gains.

Peter Chia Siong, a forex strategist at broker UOB Kay Hian in Singapore, said the dollar’s near-term direction “hinges not only on the tax reforms” but who Mr. Trump will tap to lead the Federal Reserve for the coming four years.

News reports that he is leaning toward Fed Gov. Jerome Powell weighed on the dollar Thursday as he is considered a dovish candidate. The White House has indicated Mr. Trump will make a decision before leaving for a trip to Asia next month.

“The stronger dollar doesn’t sit well with the U.S. administration’s goal to encourage exports,” said Stephen Innes, head of trading for Asia at Oanda. “They don’t want to tip the apple cart against the economy.”

The Wall Street Journal

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We Won’t Back Down

We Won’t Back Down 

The Dow managed to scrimp out a new record high as investors vote for higher earnings over superstition while nudged along by Fed speculation.

It’s been a testy 24  hours for investors as global market toppled on a cascade of risk aversion flashpoints and despite a potpourri of explanations floating around, PBoC Governor Zhou’s warning against “excessive optimism” seems the most likely trigger.

The Hang Seng led the global route falling more than 2 % at one point closing down -1.9 % However suspected intervention to prevent any awkwardness during the Party Congress saw Mainlands SHCOMP only down .34%

But Risk aversion accelerated as the Spain/Catalonia conflict came oh so close to crossing the Rubicon or should I say  Ebro. Spanish Newswires were ablaze with headlines that Article 155 is now extremely likely to be triggered. Predictably, that sent a wave of panic across all asset classes. Oil prices fell off the cliff, Euro wobbled,  USDJPY dropped like a stone, and US yields took a hit.

The veracity of the moves was a bit peculiar, but the expanse of the movement is a graphic reminder just how thin traders are positioning these days given the uncertainties surrounding US politics, the Fed Chair race, Spain, Brexit and China’s Congress.

As for today, we should expect another session of headline risk via the protraction of current market narratives.

Politico reports: “Federal Reserve Governor Jerome Powell is the leading candidate to become the chair of the US central bank after President Donald Trump concluded a series of meetings with five finalists Thursday, three administration officials said” .I think what we can glean  from this release is its either Powell or Taylor.

The headline saw the USDJPY drop to 112.41 ( -25 pips)in thinly traded markets, but if anything this move could foreshadow the market lean on a Powell nomination as he is perceived less hawkish than co front-runner Taylor.

The New Zealand Dollar

Investors were spooked by a potential shift in RBNZ policy. Both Labour and NZ First are looking to revamp the Central Bank by appointing outside director while moving away from the single decision-maker model. While the markets were shellshocked, but in a world of political upheaval, perhaps it best to expect the unexpected. However, the profundity of this political swing is no small matter as the coalition could bring about a dual mandate for the RBNZ incorporating a full employment target alongside the traditional inflation target an likely currency consequences. So far there has been little appetite to buy the dip while traders remain in ” sellindipity” mode expecting an extension of the current trend

The Japanese Yen

Appears to be a  short-term shake out with risk aversion ratcheting higher and likely accelerated by a sharp drop in oil prices. Short term traders were caught long on the USDJPY momentum trade heading into Sunday’s election. Longer term positioning came under little threat so far, and the market remains tentatively  bid on dips

The long dollar trade looked so much clearer yesterday, but with EU risk simmering and Fed musical chair headlines still looming large, its difficult to envision a push higher on USDJPY into  the weekend despite an expected strong showing from Abe on Sunday

The British Pound

The Pound got pounded after UK retail sales hit a four year low. And to rub salt in the wounds, the August figures were all revised lower too. It has been an intense week for Sterling traders who will be happy to hear the closing bell as politics continue to make things messy. Brexit remains the primary focus, but the political confusion makes for an awful market to trade.

The Euro

Have we seen the worst of the Catalan fallout? Probably not as currency headwinds are likely to remain high to gusty. However, as we’ve seen so often when EU political risk looks to be nearing the point of no return, it has an uncanny way of working out favourably for the market. As cooler heads prevailed the market reaction overnight was widely considered way overdone and a modicum of risk appeal has filtered back into the EU markets.

The post We Won’t Back Down appeared first on Forex news - Binary options.

We Won’t Back Down

We Won’t Back Down 

The Dow managed to scrimp out a new record high as investors vote for higher earnings over superstition while nudged along by Fed speculation.

It’s been a testy 24  hours for investors as global market toppled on a cascade of risk aversion flashpoints and despite a potpourri of explanations floating around, PBoC Governor Zhou’s warning against “excessive optimism” seems the most likely trigger.

The Hang Seng led the global route falling more than 2 % at one point closing down -1.9 % However suspected intervention to prevent any awkwardness during the Party Congress saw Mainlands SHCOMP only down .34%

But Risk aversion accelerated as the Spain/Catalonia conflict came oh so close to crossing the Rubicon or should I say  Ebro. Spanish Newswires were ablaze with headlines that Article 155 is now extremely likely to be triggered. Predictably, that sent a wave of panic across all asset classes. Oil prices fell off the cliff, Euro wobbled,  USDJPY dropped like a stone, and US yields took a hit.

The veracity of the moves was a bit peculiar, but the expanse of the movement is a graphic reminder just how thin traders are positioning these days given the uncertainties surrounding US politics, the Fed Chair race, Spain, Brexit and China’s Congress.

As for today, we should expect another session of headline risk via the protraction of current market narratives.

Politico reports: “Federal Reserve Governor Jerome Powell is the leading candidate to become the chair of the US central bank after President Donald Trump concluded a series of meetings with five finalists Thursday, three administration officials said” .I think what we can glean  from this release is its either Powell or Taylor.

The headline saw the USDJPY drop to 112.41 ( -25 pips)in thinly traded markets, but if anything this move could foreshadow the market lean on a Powell nomination as he is perceived less hawkish than co front-runner Taylor.

The New Zealand Dollar

Investors were spooked by a potential shift in RBNZ policy. Both Labour and NZ First are looking to revamp the Central Bank by appointing outside director while moving away from the single decision-maker model. While the markets were shellshocked, but in a world of political upheaval, perhaps it best to expect the unexpected. However, the profundity of this political swing is no small matter as the coalition could bring about a dual mandate for the RBNZ incorporating a full employment target alongside the traditional inflation target an likely currency consequences. So far there has been little appetite to buy the dip while traders remain in ” sellindipity” mode expecting an extension of the current trend

The Japanese Yen

Appears to be a  short-term shake out with risk aversion ratcheting higher and likely accelerated by a sharp drop in oil prices. Short term traders were caught long on the USDJPY momentum trade heading into Sunday’s election. Longer term positioning came under little threat so far, and the market remains tentatively  bid on dips

The long dollar trade looked so much clearer yesterday, but with EU risk simmering and Fed musical chair headlines still looming large, its difficult to envision a push higher on USDJPY into  the weekend despite an expected strong showing from Abe on Sunday

The British Pound

The Pound got pounded after UK retail sales hit a four year low. And to rub salt in the wounds, the August figures were all revised lower too. It has been an intense week for Sterling traders who will be happy to hear the closing bell as politics continue to make things messy. Brexit remains the primary focus, but the political confusion makes for an awful market to trade.

The Euro

Have we seen the worst of the Catalan fallout? Probably not as currency headwinds are likely to remain high to gusty. However, as we’ve seen so often when EU political risk looks to be nearing the point of no return, it has an uncanny way of working out favourably for the market. As cooler heads prevailed the market reaction overnight was widely considered way overdone and a modicum of risk appeal has filtered back into the EU markets.

The post We Won’t Back Down appeared first on Forex news - Binary options.