DIGEST Dec 2015 No2 : The German Unemployment Down Dramatically Strengthen Euro Rebound
Wednesday 2 December 2015
Gold Prices Back Up Powered Weakening US Dollar
- The gold price at the close of trading on Wednesday before dawn (2.12), closed up supported by the weakening US dollar prompted investors taking short positions ahead of Thursday's ECB meeting tomorrow and the release of US data on non-farm payrolls Friday the day after tomorrow.
- The US dollar slipped against the euro of 7.5 months, with traders judged that a large number of further monetary easing already levied against the single currency ahead of the ECB meeting on Thursday.
- LLG Spot gold prices rose 0.4 percent at 1,069.11 dollars per troy ounce, extending the distance from the lowest since February 2010 at the position last week at 1,052.46 dollars per troy ounce.
- While the price of US gold futures for February delivery rose 0.2 percent at 1,063.50 dollars per troy ounce.
- Gold posted the biggest monthly drop in 2.5 years in November affected sentiment US interest rate hike in December.
- On the physical market, there are signs of strong demand. US Mint's sales of American Eagle coins rebounded in November from a slump the previous month.
- The premium on the Shanghai Gold Exchange, which is an indicator of consumer purchasing power of the Chinese, are in a healthy position in the $ 5- $ 6 per ounce.
- Georgette Boele, FX and commodity strategy at ABN Amro, said in a note the bank expects investors to continue to liquidate positions. "We expect gold prices settled below $ 1,000 an ounce in the coming months," he said. "Silver prices could fall to $ 13.50 per ounce, while platinum and palladium prices could fall respectively under $ 800 per ounce and $ 500 per ounce."
- Silver prices meanwhile rose 0.4 percent to $ 14.14 per ounce, Whereas the price of platinum was up 0.8 percent at $ 837.78 per ounce and the price of palladium was down 0.7 percent at $ 541 per ounce. < / li>
- ZATco Analyst Research Center estimates that the price of gold would be potentially weakened by the imminent planned increase in US interest rates this December, which will further boost the US dollar. It is estimated that the price of gold will try to penetrate the support level of 1067-1065, and if the price rebounded will try to penetrate the resistance level of 1071-1073. </ Li>
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Crude Oil Prices Rise Amid Weakening Dollar and Yang Sluggish Market.
Crude oil prices at the close of trading on Wednesday before dawn (2.12) closed up after struggling to find direction reinforcement.
- The strengthening crude oil prices pushed down the US dollar weakness due to poor US ISM Manufacturing PMI. Results released last night noted the results of 48.6, down from the previous 50.1. Even further descent than economists' expectations at 50.4.
- A weaker dollar headed for its biggest daily loss in almost two weeks against a basket of currencies, making dollar-denominated commodities, including crude oil, more affordable for holders of the euro and other currencies.
- The rise in oil prices occurred in trade which has been sluggish ahead of the countries of the Organization of Petroleum Exporting in Vienna, Austria, on Friday, with fears of this group would choose still increase production to maintain market share against oil producer non-members of OPEC like the United States and Russia.
- The price of oil futures for WTI December contract closed up 20 cents, or 0.5 percent, to 41.85 dollars per barrel.
- The oil market itself estimates that OPEC will not cut production to stem the flood of supply as countries the world's largest oil producer meeting this week, despite the rally in US gasoline and a weak dollar limit losses.
- Gasoline futures, also known as RBOB, rose about 6 percent to a near three-week, reacting to the statement merchants declare it as a higher requirement for refining in order to meet the renewable fuel standard US.
- The Environmental Protection Agency (EPA) on Monday raised its previous target for the amount of biofuels blended into motor fuel for the three years to 2016.
- ZATco Analyst Research Center estimates that the oil price will still potentially natural pressure with sentiment excess world oil supplies. The price of oil will be moved through a range of 40.00 to 38.00 Support, if prices turn higher will try to penetrate the resistance range of 44.00 to 46.00. </ Li>
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Gold & Silver Experiencing Slight Increase
Gold rose slightly technical at the beginning of this week, after a recent strong selling pressure is pushing prices to their lowest in 5 ½ years. However, the bearish tendency remains solid, both short term and long term.
- Likewise with silver. February Comex gold was last up $ 4.00 at $ 1,069.20 per ounce. Comex March silver was last up $ 0.089 at $ 14.175 per ounce.
- Purchasing Manager Index (PMI) of China's official fell to its lowest for three years from 49.8 in October to 49.6 in November.
- Previous estimated at 49.9. Readings below 50.0 indicate contraction. Data from the country with the second largest economy continued to show a decline in economic growth.
- This means bearish for the raw commodity sector, including precious metals, because China is the importer "raw commodity" most in the world.
- In the meantime, there are good economic data emerging from Europe.
- Eurozone manufacturing PMI was reported at 52.8 in November compared with 52.3 in October. Previously estimated at 52.8.
- The unemployment rate in the euro zone fell to a nearly four-year low on Tuesday reported at 10.7% in October and 10.8 in September.
- The unemployment rate in the euro zone is twice of a level like that in the US.
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Banking Stress Test Results British Pound Rally Strengthens European Session
- Sterling exchange rate movements continued to strengthen since the beginning of the previous trading resume trading faster and faster in the middle of the European session today (01/12) mixednya amid economic data released this afternoon. However, strengthening the pair received support in addition to footing of momentum weakening US dollar also strengthened by the results of the test strees banking in the UK.
- Test results announced by the central bank English (BOE) showed the country's seven major banks successfully passed the test sound bank position and support the country's economic growth so it is not necessary capital injections from the central bank.
- On the other hand Markit Economics announced UK domestic manufacturing performance in November experienced a decline from the previous month's data, dropped from 55.2 to 52.7. However, despite the decline is still in the expansion phase because the score PMI is above 50 index points.
- Pound exchange rate movements in the European session (10:00:35 GMT) strong moves against the US dollar, after a strong opening at 1.5056 in early trading (0000 GMT), the GBPUSD pair gained 38 pips or 0.3% and the value of the rolling is at 1, 5094.
- However, for the next trade, ZATco Research Center analyst estimates pair GBPUSD rose to 1.5137 in the over 20 Daily bolinger and if it does not penetrate that level, then the pair will go back down to the MA 3 and 5 H4 time frame.
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The German Unemployment Down Dramatically Strengthen Euro Rebound
- Euro exchange rate movements in early European trading session of December (1/12) managed to keep the pace of the rebound since the beginning of the Asian trading session which took a foothold of momentum weakening US dollar. The positive sentiment today supports the stronger euro rate by a barrage of economic data Euro area.
- From the data released this afternoon, the most powerful economic data pushed the pair EURUSD rate in the European session this afternoon is the German unemployment rate data and the Euro area which successfully reduced significantly from the previous period.
- The development of these data is shown in the indicator Unemployment Rate Germany in November decreased to -13K position from the previous month in -6K. Further indicators Eurozone Unemployment Rate in November decreased to 10.7% position from the previous month at 10.8%.
- Euro exchange rate movements in the European session (10:00:35 GMT) moved up against the US dollar, after a strong opening at 1.0565 in early trading (0000 GMT), the exchange rate Euro rose 28 pips or 0.2% and the value of the rolling is at 1.0593.
- For further trade until the close of trading American session ends tomorrow morning, analyst ZATco Research Center estimates that the EURUSD pair will further rise to 1.0609 range, but if the dollar rises, the pair will fall back to the position of 1.0535.
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Gold Preview: Statement Yellen, ECB meeting and the US NFP
Last week, gold has been under pressure from a stronger US dollar due to expectations that the ECB will announce its loose monetary policy further as the Fed began to tighten. The Fed is compelled to tighten when the government reported an increase in nonfarm payrolls in October amounted to 271,000 which overcomes what had been expected.
- As a result, traders will hunt report in November on Friday this week.
- Sean Lusk, director of commercial hedging Trading Walsh said that the short-term focus is on the number of jobs that will be reported by the US government.
- Comex gold futures touched a five-year lows on Friday with the dollar index in March rose to 100 405, the strongest level since March. February gold ended the week with a loss of 2% to $ 1,056.20 per ounce. March silver loss of 0.1% to $ 14,048.
- A study of Capital Economics released on Friday said that the strength of the US dollar and the prospect of rising interest rates continue to weigh on gold prices in the last week.
- Kitco weekly survey showed an increase in the gold price back this week. From retail investors who took part in an online survey, 670 people took the vote, or 78% think bullish on precious metals. 139 other participants, or 16% saw prices will fall, while the sound collector 50, or 6% of the view neutral on prices this week. Of the 14 people who respond to the professional market, 8 or 57% said prices will rise. 4 or 29% bearish, while two participants or 14% argued neutral.
- Keep everything still depends on how much the number of strong US jobs will be struck gold on Friday this week, since the beginning of the tightening has been calculated into the price. George Gero, vice president and strategist at RBC Capital Markets Global Futures said that the price has considered tightening twice as Treasury 10-year yields have risen from 1.80% to 2:21%.
- With this background though, gold is likely to rise if it appears weak jobs report, especially if payrolls rose 100,000 in low areas.
- Prior to that, traders will continue to dissect Yellen's comments to see if he gives further instructions to estimate what will be decided in monetary policy when the Federal Open Market Committee met again in mid-December. Yellen in skedulkan to appear before the Economic Club of Washington on Wednesday and the Joint Economic Committee on Thursday.
- Also on the same Thursday, the ECB monetary policy meeting. Expectations have grown for the central bank to raise its assets purchase program, known as quantitative easing, especially after president Mario Draghi said last week, "We will do what we have to do" to raise inflation to acceptable levels.
- Ralph Preston principal of Heritage West Financial, said there is a dichotomy between the central bank. ECB expected to continue to be accommodative, while the Fed seems willing to get rid of some accommodative, with the total prop up the US dollar. Preston said the key focus in the gold market this week is to take instructions from the US dollar.
- Gold tends to move opposite to the US dollar. A stronger dollar weighed on commodities because it makes them more expensive in other countries-exchange, plus some less investors want to buy gold as an alternative when the greenback Full-exchange muscles.
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Japanese Manufacturing Business More Steady From South Korea
Starting the last months of the year, the release of the performance of manufacturing various countries announced to the public including manufakur performance of Asian economies such as Japan and South Korea and the Nikkei survey by Markit Economics for the majority of manufacturing companies in both countries. Both institutions have announced South Korean manufacturing conditions are still contracting and improved performance for Japan.
- PMI manufacturing index and the Nikkei according to Markit in November to Japan expanding into a score of 52.6, up from 52.4 in October. Position scores Japan in November is a position of the highest scores since March 2014, before the Japanese sales tax is raised.
Japan Manufacturing PMI
- The expansion of the manufacturing sector of the country's sunrise was driven by an increase in output and new orders. New orders for export has also increased since June, supported by strong foreign demand.
South Korea Manufacturing PMI
- PMI manufacturing index and the Nikkei according to Markit in November for the state of contraction in South Korea scores 49.1, which is similar to the position in October. Continuation of contraction is due to the drop in output and new orders. The new export orders also declined to 47.6, the lowest since June. In contrast, the sub-index for employment rose for the first time since March 2015.
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Unemployment Rate Declines, Strengthens Economic Growth Trust Germany
- German unemployment rate unexpectedly dropped to a record low as signs of strong domestic demand which is raising confidence in the outlook for economic growth in Europe's largest country.
- The unemployment rate fell to 6.3 percent in November, the lowest level since the reunification of Germany, from 6.4 percent a month earlier, according to the release of data from the Federal Labor Agency Nuremberg on Tuesday (01/12). Number of people out of work declined by a seasonally adjusted 13,000 to 2.77 million. Economists in a Bloomberg survey predict the rate will remain unchanged and the number of unemployed will decrease to 5,000.
- German Bundesbank expressed the momentum of the German economy is still "strong enough" to the labor market solid support domestic demand even as exports falter amid slower global growth. The European Central Bank is widely expected to expand stimulus for the euro area on Thursday, which could trigger a recovery in the region.
- "The outlook for the German labor market remains strong," the statement said Andreas Rees, economist at UniCredit SpA in Frankfurt, said before the report. "The economy is strong, should create employment continued and the employment rate should continue to rise"
- The number of people who do not have jobs fell by about 6,000 in western Germany and about 8,000 in the eastern part of the country, the report showed.
- German economic growth in the third quarter boosted by private consumption and government, with public spending increased 1.3 percent, the fastest rate since early 2009.
- Higher government spending may partly be a result of the arrival of as many as 1.5 million refugees in the country this year. A survey by the Ifo institute based in Munich showed that German companies are planning to speed up recruitment.
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China Manufacturing Contraction Worst Performance In 3 Years
First day of December 2015, the Chinese government's official agency released the country's manufacturing sector performance data for the period November. In this release noted that activity in the manufacturing sector of China who experienced the deepest contraction last month was the lowest contraction in the past three years.
- Official surveys conducted by government agencies indicate that concerns over an economic slowdown in the world's second largest country is becoming increasingly strong despite various interventions either from the government or its central bank (PBoC) has been aggressively given.
- Tiogkok manufacturing performance version of the government in August was recorded on a score of 49.6, down from a successful record of 49.8 in the previous month. PMI score below 50 indicates that the performance of the Chinese manufacturing sector is currently experiencing difficult times or contraction. Because of this contraction caused by sluggish domestic demand and exports to a number of factories in China, this also resulted in a number of industrial enterprises in China to cut the number of employees.
China NBS Manufacturing PMI
- In this release noted that the sub-index for a number of new orders both for domestic and export demand category together recorded a decline. Number of new export orders also fell to a score of 49.8 from 50.3 recorded in October.
- So far the PBoC has cut interest rates and also cut the reserve requirement (GWM) of banks to support the economy Tingkok. Until early November, PBoC has cut interest rates six times starting from November 2014.
- However, although the Chinese manufacturing performance is not as expected, the results of surveys of private institutions Caixin and Markit Economics showed improvement contraction. The report comes after government data (NBS), Caixin Manufacturing PMI index rose to 48.6 in November 2015, from 48.3 in October and better than market expectations.
- In November, new orders decreased at the same pace as in the previous month. Meanwhile, new export orders grew at the fastest rate in 13 months. According to Caixin data repair due to the recovery of the country's fiscal condition of the economy terbesa second.
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RBA decision Year End Change Interest Rates Not Right
- Ending the monthly meeting of the board of Australia's central bank policy this year on Tuesday (1/12) decided to maintain the policy interest rate at its lowest position for seven consecutive months. RBA reason not to change its benchmark interest rate because the central bank assesses the country's economic prospects improve.
- Council policy of the Reserve Bank of Australia (RBA) today kept its benchmark rate at position 2 percent as expected by economists earlier. The central bank has cut interest rates by 25 basis points in February and May.
Australia Interest Rate
- RBA also considered that the inflation outlook could provide room for further easing of monetary policy, but it also saw the Australian dollar exchange rate to adjust to a significant reduction in the price of key commodities.
- Policy-makers also considered that the survey showed a gradual improvement in business over the last year and is supported by somewhat stronger growth in employment and stable unemployment rate. Additionally RBA estimates will be consistent with the target for one to two years, but slightly lower than previously expected.
- So that the economic conditions like this makes monetary policy needs to be accommodative, but the RBA will continue to consider the prospect of the next after this month's interest rate unchanged. Low interest rates act to support credit growth and consumer spending.
- The final decision for the RBA this year is the right decision to support continued economic growth. And after this announcement the Australian dollar exchange rate against the US dollar managed to soar.
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