2008 THREAT IS BACK – STRETCH OUT ECONOMY.
The world financial system is as dangerously stretched today as it was at the peak of the last bubble but this time the authorities are caught in a “policy trap” with few defences left, a veteran central banker has warned.
Nine years of emergency money has had a string of perverse effects and lured emerging markets into debt dependency, without addressing the structural causes of the global disorder.
“All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten,” said Professor William White, the Swiss-based head of the OECD’s review board and ex-chief economist for the Bank for International Settlements. Read More @ https://www.stuff.co.nz/business/world/100831022/It-is-frankly-scary-World-financial-system-as-stretched-as-before-2008-crash
USD INDEX CHART
EURO STARES AT 1.26 TODAY
The euro is on the move, due to positive fundamental and technical reasons. And there is likely still more upside ahead — potentially a lot more. The European Central Bank meets Thursday, and although this gathering may be ho-hum, with no real changes in policy, the realities of a strong economy will put pressure on the bank’s president, Mario Draghi, to start mapping an exit strategy from ultra-accommodative measures before inflation becomes a problem.
In 2017, the shared currency had its best year against the dollar since 2003, rising from a low of about $1.04 in early January to finish at $1.20. Bearish parity forecasts were prevalent at the beginning of 2017, but fundamentally strong euro-zone economic data supported the euro throughout the year, which I predicted last January.
What made the euro rise in 2017 even more remarkable was that the Federal Reserve raised interest rates three times rates and U.S. equities as measured by the S&P 500 Index jumped 19.4 percent, while the ECB was going full-throttle on its quantitative easing program with negative deposit rates. Read More @ https://www.bloombergquint.com/view/2018/01/24/the-euro-s-surprises-may-just-be-getting-started
We have warned all about the EURO climb and here is yesterday chart re-cap. Be cautious today as the market consolidates for next move of the EURUSD.
RBNZ RATE FOCUS
The CPI measures the rate of price change of goods and services purchased by New Zealand households. From the December 2016 quarter to the December 2017 quarter, the CPI inflation rate was 1.6 percent. Housing and household utilities increased 3.0 percent, with construction up 5.3 percent, and rentals for housing up 2.3 percent. Food prices increased 2.3 percent, with grocery food prices up 2.5 percent, and restaurant meals and ready-to-eat food up 2.3 percent.
Lower than expected inflation at end of 2017 may signal further delay to interest rate increases –
Weaker than expected inflation at the end of 2017 will see the Reserve Bank delay interest rate hikes for at least six months, ANZ is tipping. Statistics New Zealand said on Thursday that the consumer price index (CPI) lifted by 0.1 per cent in the final three months of 2017, below the 0.4 per cent rise economists were expecting. A sharp rise in petrol at the end of 2017 boosted the transport component of inflation, while construction prices also rose. However food prices dropped, as did a range of retail goods, including new cars, clothing and appliances, Stats NZ said. Read More @ we maintain BUY with the Trend for NZDUSD – https://www.stuff.co.nz/business/100871256/lower-retail-prices-and-cheaper-cars-sees-inflation-fall-to-16-per-cent-in-2017
NEWS TODAY THAT MAY AFFECT YOUR TECHNICAL CHARTS.
- Disappoint NZD inflation brought the NZD pairs down – based on Technical is a good Buy – wait for Consolidation and maintain BUY.
- 3.00pm – German Consumer Climate & Business – should be all good for a Buy of EURUSD.
- 8.45pm – Big day for Mario – the winding down of the QE – the speech will be the same as BOJ with a twist of rate standstill. We believe Mario will talk about inflation more then anything else but will go ahead and cut down and also give timeline on the winding down. We maintain Hawkish for EURO.
- 9.30pm – Our favourite pair USDCAD – they will announce the Retail sales data which is expected to be all good for a SELL on USDCAD.
- 11.100pm – US will release the home sales and we are expecting the data to be weak. We maintain Buy for GOLD & SELL for USD.
Market USD sell-off will continue today till end of this week, the trend won’t stop till FEDs next meeting.
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