ECB Watch: Inflation outlook and new president open the door for rate hikes

While the short-term outlook may appear a bit boring, the ECB’s decision making will turn extremely interesting longer out. The combination of gradually rising core inflation numbers and important nominations to the ECB Executive Board, including a new ECB President from November 2019, raises more question marks about the future monetary policy than seen for a while. In our new forecasts, we expect that the next generation of ECB decision makers is slightly more hawkish than the current generation and the reaction function changes slightly. Thus, we continue to expect that the first rate hike will take place in December 2019, and we will see three more rate hikes in 2020, until weaker global trends start weighing on developments in the Euro area – Read More @ https://e-markets.nordea.com/#!/article/45879/ecb-watch-inflation-outlook-and-new-president-open-the-door-for-rate-hikes

Strong U.S. sales could ease profit worries into 2019

&P 500 revenue growth, which hit 9.5 percent in the second quarter, its fastest pace since 2011, is estimated at 8.2 percent for 2018, according to Thomson Reuters data. While that growth is expected to slow to 5 percent next year, it is still at the high end of the historical average. The falloff is not as steep as that expected in earnings growth, which received a big boost this year from the Tax Cuts and Jobs Act that slashed the corporate income tax rate. That could ease some investors’ concerns about profit growth, which is hitting its peak for the cycle this year, while risks are increasing from costs related to tariffs, rising interest rates and a strengthening U.S. dollar. Read More @ https://www.reuters.com/article/us-usa-stocks-weekahead/strong-u-s-sales-could-ease-profit-worries-into-2019-idUSKCN1LN2FL?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29

In a Sign of the Economy’s Strength, Jobs and Wages Moved Higher in August

The American economy’s stamina was showcased Friday as the government reported that wages in August sprinted forward at their fastest pace since the recession ended and that the job creation streak extended to 95 months. But the Labor Department’s latest bulletin also hinted that President Trump’s tariffs could be starting to take a toll on manufacturing jobs. “What’s worth noting is that even though there still remains a lot of headline noise around politics and protectionism, underneath that, the U.S. economy — and that includes labor markets — is doing quite fine,” said Michael Gapen, chief United States economist at Barclays. Read More @ https://www.nytimes.com/2018/09/07/business/economy/jobs-report.html?partner=rss&emc=rss

Trump Threatens Tariffs on Another $267 Billion of Chinese Imports

President Donald Trump said he’s ready to impose tariffs on an additional $267 billion in Chinese goods on short notice, on top of a proposed $200 billion that his administration is putting the final touches on. The implementation of tariffs on $200 billion of products from China “will take place very soon depending on what happens,” Trump told reporters Friday on Air Force One. “I hate to do this, but behind that there is another $267 billion ready to go on short notice if I want.” U.S. stocks erased gains after Trump’s remarks, with the S&P 500 Index falling by 0.3 percent to the lowest in two weeks by 1:26 p.m. in New York. Read More @ https://www.bloomberg.com/news/articles/2018-09-07/trump-threatens-tariffs-another-267-billion-of-chinese-imports

It’s not wage rises that are a problem for the economy – it’s the lack of them

In recent weeks media outlets in the US have been fretting over what would ordinarily be considered good news – the roaring American economy, which has brought low unemployment and, in some places, a labour shortage. Owners and managers have complained about their problems in finding people to fill low-wage positions. “Nobody wants to do manual labour any more,” as one trade association grandee told the Baltimore Sun, and so the manual labour simply goes undone. Company bosses talk about the things they have done to fix the situation: the ads they’ve published; the guest-worker visas for which they’ve applied; how they are going into schools to encourage kids to learn construction skills or to drive trucks. The Wall Street Journal reports on the amazing perks that plumbing companies are now offering new hires: quiet rooms, jetski trips, pottery classes, free breakfast, free beer. Read More @ https://www.theguardian.com/commentisfree/2018/jul/12/wage-rises-problem-economy–vacant-jobs-unfilled-threatens-economy

WHAT IS THE USD SAYING?

Overall the USD didn’t really moved much after a good NFP, however all other pairs are for sure oversold on FRIDAY. We believe the USD will be back to $95 as we are expecting unhappy President with strong USD. Expect USD going sideways this week.

MONDAY NEWS THAT MOHT AFFECT YOUR TECHNICAL TRADES.

  1. 7.50am – Japan will release – Manufacturing sales, Bank Lending, Current Account and Final GDP – we expect in favor for JPY as Japan have recovered with massive stimulus.
  2. 9.30am – China will release their CPI & PPI – expect good volatility for CAD, AUD & NZD – we are expecting good data.
  3. 1.00pm – Japan will release their Economy watchers – Survey of about 2,000 workers which asks respondents to rate the relative level of current economic conditions – expected to be good.
  4. 4.30pm – EURO will release SENTIX Investor confidence – It’s a leading indicator of economic health – investors and analysts are highly informed by virtue of their job, and changes in their sentiment can be an early signal of future economic activity – expected to be good.
  5. 4.30pm – GBP big day and expect good volatility for all GBP pairs. we are buying GBP as we are expecting good data from UK.

The market will be quiet after the UK news – but expect volatility to be high this week. Be always mindful of your Money Management and never overtrade.

High Risk Investment Warning:

Please note that Forex and other leveraged trading involves significant risk of loss, It is not suitable for all traders and you should make sure you understand the risks involved, it is recommended that you seek an independent advice, if necessary.

 

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