freemexy's Blog

Adds 4.8 Million Jobs, Above Forecasts

Adds 4.8 Million Jobs, Above Forecasts, Before Virus Pickup The rebound in the U.S. labor market accelerated in June as the economy reopened more broadly, before a pickup in coronavirus cases that puts additional gains in jeopardy.To get more news about WikiFX, you can visit wikifx news official website.   The June jobs report reflects a snapshot of mid-month conditions after a flurry of rehiring -- particularly at restaurants and retailers -- but before reopenings screeched to a halt amid rising virus cases around the country. That could slow or stall the rate of improvement in the labor market, with implications for President Donald Trumps reelection chances, as well as for the extension of a U.S. stock-market rally following the best quarter since 1998.   U.S. stocks opened higher following the data. Treasuries and the dollar were lower.   A separate report from the Labor Department showed initial applications for unemployment insurance in regular state programs fell by less than expected, to 1.43 million, in the week ended June 27. Continuing claims -- or claims for ongoing unemployment benefits in state programs -- rose slightly to 19.3 million in the week ended June 20.   Economists had forecast payrolls to rise by 3.23 million -- the median in a range of 500,000 to 9 million -- and an unemployment rate of 12.5%.   “Were still coming off extremely high levels of unemployment, but every step counts,” said Jennifer Lee, senior economist at BMO Capital Markets.   What Bloombergs Economists Say   “The upward surprise in the June jobs report demonstrates that economic fundamentals remain strong enough to facilitate a relatively robust recovery once Covid-19 is under control. However, in the near term, the positive signal somewhat fades given the recent sharp acceleration in new virus cases and the looming income cliff stemming from the expiration of augmented unemployment benefits this month. The Labor Departments Bureau of Labor Statistics has largely fixed a problem that resulted in respondents being misclassified as employed when they should have been labeled as unemployed. Adjusted for the errors, the June unemployment rate would have been about 1 percentage point higher than reported -- or 12.3%, compared with an adjusted 16.4% in May. “The degree of misclassification declined considerably in June,” BLS said.   A resurgence in virus cases has complicated the picture, leading states across the country to reverse or halt reopening efforts in hopes to slow the spread. That‘s already led some rehired workers to get laid off once more. Paired with the coming expiration of the federal government’s extra $600 in weekly unemployment benefits, the economy could take another hit in the months ahead.   In addition, the weekly figures show the number of Americans claiming jobless benefits remains extremely elevated, posting the first increase in state programs in four weeks.

The Covid Surge Will Slam Southern States Economies

The Covid Surge Will Slam Southern States Economies Coronavirus is exploding in big southern states such as Texas, Florida, and Arizona. This entirely preventable disaster will have devastating consequences for these states economies.To get more news about WikiFX, you can visit wikifx news official website.   The outbreaks that slammed the Northeast and much of the Midwest in the spring are now mostly under control. But in much of the South and the West, the virus is now on the rampage. Hopes that the summer sun would suppress the disease have been dashed -- in fact, by driving people inside to mingle in air-conditioned spaces, the heat may be facilitating the spread. This was a human blunder. Leaders such as Texas governor Greg Abbott and Florida governor Ron DeSantis started reopening their states economies in early May, long before the threat of the virus had passed. And many voters scoffed at the threat of the virus; some even loudly disdained the practice of mask-wearing.   Fortunately, death rates are not yet as high as they were during the epidemics Northeastern wave -- possibly because society is doing a better job of isolating the old and vulnerable, possibly because treatments like dexamethasone are saving the lives of the critically ill. But even those who survive the virus often suffer severe long-term health problems.   In any case, the economies of states like Florida and Texas are going to take a big hit. Research shows that fear of coronavirus, rather than lockdown policies, is responsible for the vast majority of the economic impact of an outbreak. This will be true of the new wave as well. Already, restaurant reservations -- an early bellwether of virus avoidance behavior -- are falling in the new epicenters: Health care is another vulnerable Sun Belt industry. Hospitals and medical offices are some of the most obvious places to catch coronavirus, so people suffering non-life-threatening problems or needing routine care will tend to stay away. The sector generates about $150 billion a year in Texas and $132 billion in Florida, and has recently been the single biggest driver of job growth in Arizona.   These tentpole industries are important because they bring in outside dollars. Reduced tourism echoes through a states economy, as fewer tourist dollars mean less spending by locals. Less health care spending hurts cities, as fewer people drive in from surrounding towns to see the doctor. Reductions in tax revenue hurt education, infrastructure, transportation, and everything else state and local governments spend money on.   It‘s important to reiterate that these economic losses will not stem from lockdown policies. Even if Florida chooses to keep Disney World open, people will be scared to go there. Allowing routine medical procedures won’t make hospitals any less terrifying.   Instead, the losses are the direct result of a failure to control the virus itself. Texas, Florida, Arizona and California have lagged badly in terms of hiring contact tracers, so they cant use test-and-trace approaches to contain the pandemic. They also have avoided strict mask requirements in public places, despite masks being proven to reduce spread. And they opened restaurants, bars, and other high-risk crowded indoor spaces too soon. Thus, when the economic hit comes, they will largely have themselves to blame.

Asian Stocks to Open Higher After U.S. Gains

Asian Stocks to Open Higher After U.S. Gains: Markets Wrap Asian stocks looked set to follow Wall Street higher after a better-than-expected U.S. jobs report overshadowed ongoing concerns that new coronavirus hotspots could derail the economic recovery.To get more news about WikiFX, you can visit wikifx news official website.   Investors cheered data showing payrolls rose by 4.8 million in June after an upwardly revised 2.7 million gain in the prior month. Still, Florida reported that infections and hospitalizations jumped the most ever, and Houston had a surge in intensive-care patients.   “There‘s still a general positive sentiment about how quickly we’re seeing the recovery,” said Chris Gaffney, president of world markets at TIAA Bank. “But we do think youre going to see the recovery level off, especially if we continue to see higher case numbers on the virus.”   The U.S. labor market made greater progress than expected last month digging out of a deep hole, yet optimism over the rebound was tempered by stubbornly high layoffs and a resurgent coronavirus outbreak across the country. President Donald Trump still said the report shows the economy is “roaring back.”   Elsewhere, oil closed at its highest level in almost four months before the U.S. holiday weekend. European stocks rallied.   Ray Dalio, the billionaire founder of Bridgewater Associates, discusses his views on the global economy amid the coronavirus pandemic and why he‘s worried about the U.S.’s ability to compete with China.

EUR/USD Another False Breakout! What Now?

EUR/USD Another False Breakout! What Now? EUR/USD is traded at 1.1238 level and continues to be under pressure on the Daily chart after another false breakout above the near-term dynamic resistance. The pair has posted humble gains today, it could drop further if the USDX will resume its short term rebound.To get more news about WikiFX, you can visit wikifx news official website.   The price has erased yesterdays gains and has invalidated the breakout above a major dynamic resistance as the US Non-Farm Payrolls and the Unemployment Rate have come in better than expected. The NFP was reported at 4800K, beating the 3037K estimate, while the Unemployment Rate has decreased to 11.1% in June, even if the specialists have expected a 12.4% rate.   Unfortunately, the Average Hourly Earnings indicator has decreased by 1.2%, versus -0.8% expectations, the Unemployment Claims indicator was reported at 1427K in the previous week, higher versus the 1350K forecast, the Trade Balance has dropped from -49.8B to -54.6B, while the Factory Orders economic indicator has increased only by 8.0%, less compared to the 8.6% estimate. EUR/USD has failed once again to close above the upper median line (UML) signaling that the bears are still in the game. The false breakout with great separation has signaled that the sellers could take full control again soon.   Still, only a valid breakdown below the 1.1200 psychological level will open the door for a larger drop. EUR/USD is trapped between the upper median line (UML) and the 1.1200 level, a valid breakout from this triangle will bring a great trading opportunity.   The pair has registered a false breakout also above the PP 1.1251 level, and now it seems undecided in the short term. It is very important to see what will happen on the USDX, the index is traded at 97.21, it has made only a false breakdown below the 97.00 level and below the minor up channels support, so the bias is still bullish.   A USDXs rally and a valid breakout above the 98.00 level will confirm a bullish reversal and the EUR/USD broader drop. Only another drop towards the 96.00 will push EUR/USD way higher in the short term. The pair has made a bearish engulfing pattern right on the upper median line (UML) of the descending pitchfork signaling a bearish momentum. Another lower low, a drop below the 1.1167 will validate a further decline in the short term.   The S1 (1.1081) and the S2 (1.0929) level could be used as downside targets, the 1.1 and the median line (ML) of the descending pitchfork are seen as obstacles as well. I believe that the downside scenario could be invalidated by a potential valid breakout above the upper median line (UML) and by another higher high, if EUR/USD will jump and close above the 1.1302 level.   EUR/USD continues to move sideways, but it will explode soon, a valid breakout from this minor chart pattern will confirm its upcoming period direction.

Some tips for ADX index that you must know

Some tips for ADX index that you must know ADX has been used in forex market for 40 years and was innovated by J. Welles Wilder Jr. in 1978. ADX, a mixture of two direction indicators including positive direction indicator(+DI) and negative direction indicator (-DI), indicates the trend strength with a simple moving average. Although both +DI and -DI indicate the trend direction, ADX only shows the intensity of trend. Because ADX is a lagging index, it is not an ideal choice to predict market changes, but a way to identify trend strength based on the existing price trends.To get more news about WikiFX, you can visit wikifx news official website.   In a chart, the horizontal axis represents time and vertical axis represents numerical unit. The number of days can be set for all three fluctuation curves, usually 14 days. 1: ADX index is not used to indicate the trend of fluctuations in foreign exchange rate.   2: The entry signal of the ADX index is +DI14-crossing, and the exit signal of ADX index is -DI14-crossing.   3: If the extreme trading rule starts to take effect, the second point will be unavailable to use. If the DI index breaks through, investors can use the extreme end as their own stop-loss point. And if there is no stop effect at the stop point in the next few trading days, investors dont need to worry about the break signal sent out by DI index +again.   4: If ADX is higher than the two DI lines and the direction of movement of ADX line changes, the trend may change, investors can make profits as soon as possible. When the DI line breaks through the stop point, which is when the extreme end causes the stop loss, the final closing can be made.   5: If ADX is higher than the two DI lines, and the ADX value is on the high side, it shows that the current exchange rate trend has been running for some time and is not a particularly good time to build positions, because the trend is likely to change later.   6: When ADX is lower than two DI lines, dont do anything, because there is no obvious trend at this time.   7: If ADX is lower 25, it also means there is no obvious fluctuations trend in exchange rate, you do not need to care DIs position.   8: Generally speaking, ADX represents the strength of trend. No matter which line, +DI or -DI, rises with the ADX, it shows the trend of exchange rate fluctuations by the related direction.   All in all, ADX can reflect forex trend accurately, compared with SAR, ADX can be used more in practice.

Inflation Retreat in Latin America Put to Test

Inflation Retreat in Latin America Put to Test: Eco Week Ahead Coronavirus cases in Latin Americas two biggest economies -- Brazil and Mexico -- are soaring, leaving the region with its worst recession since at least 1901.To get more news about WikiFX, you can visit wikifx news official website.   That downturn is reflected in consumer prices, with most countries now facing a rare period of disinflation as demand plunges. In May, all the major economies in the region apart from Argentina had an annual inflation rate below 3%.   Data published this week for June are forecast to show year-on-year consumer price increases in Chile and Brazil holding near May‘s levels while Mexico’s probably pushed just over 3% -- still well within the central banks target range. “After two consecutive months of deflation, Brazil inflation is expected to have risen slightly in June, driven mostly by recovering gasoline prices. Elsewhere, prices remains muted: core inflation readings are threading close to zero and inflation expectations remain well below the target for this year and the next, leaving plenty of room for interest rates to remain exceptionally low.”   --Adriana Dupita, senior economist   Elsewhere, Malaysia and Mauritius may cut interest rates, while central banks in Israel, Australia and Peru are predicted to hold.   Click here for what happened last week and below is our wrap of what else is coming up in the world economy.   U.S. and Canada   It‘s a relatively light week for U.S. data with most eyes focusing on Thursday’s jobless claims data to see if a rush for unemployment benefits remains underway. That follows the JOLTS report on Tuesday which is expected to show the number of unemployed exceeding job openings, highlighting the severeness of the labor market slack. Friday sees the release of producer prices numbers which are set to show factory-gate costs remain weak.   Canada‘s government will release its first estimate of this year’s budget deficit on Wednesday. Thats two day before the country is expected to report another half million workers found jobs last month as pandemic-related restrictions are gradually lifted, a second straight gain that will still leave the unemployment rate at near record highs.   For more, read Bloomberg Economics full Week Ahead for the U.S.   Europe, Middle East and Africa   U.K. Chancellor Rishi Sunak is set to unveil an economic update to Parliament on Wednesday, a week after a speech by Prime Minister Boris Johnson came under criticism for failing to deliver a meaningful stimulus package. For businesses and investors alike, the key will be what the finance chief can promise in the short term to save jobs.   May industrial production figures for countries including Germany, Spain and France could confirm European Central Bank policy makers recent comments that the euro-area recession may be bottoming out. The African Development Bank will probably make significant cuts to its growth forecasts when it releases a supplement to its January outlook on Tuesday: of sub-Saharan Africas five largest economies, only one, Ethiopia, is projected by the IMF to expand this year.   The Bank of Israel will probably hold its main interest rate at 0.1% on Monday, although one of the six members of the monetary policy committee voted at the last meeting for a cut to zero, saying itd be more appropriate given the magnitude of the Covid-19 crisis.

BOE Governor Warns Over Negative Interest Rates

BOE Governor Warns Over Negative Interest Rates The governor of the Bank of England, Andrew Bailey, has warned lenders of the challenges negative interest rates would bring, the Sunday Times reported.To get more news about WikiFX, you can visit wikifx news official website.   Bailey said in a letter sent last month that adapting to a move into negative territory would be a “significant operational undertaking for firms,” according to the newspaper.   He said many would need a year to alter computer systems, update contracts designed for an environment of positive rates and work out how to communicate with clients, the Times reported.   The letter is a sign that the bank is preparing the City for the possibility of a shift into negative territory for the first time in its 325-year history, the newspaper said. State government payrolls fell by another 25,000 -- the fourth straight decline -- as budget situations grew more dire amid falling tax revenues.   Key Numbers   Unemployment among minorities and women remained worse than among White Americans and men. The Black unemployment rate fell to 15.4% from 16.8%, while it declined to 10.1% from 12.4% among White Americans. Hispanic unemployment dropped to 14.5% from 17.6%.   Meanwhile, the household survey showed more than 2.8 million Americans permanently lost their job in June, a 588,000 increase from a month earlier that was the biggest since the start of 2009. While the total number is the highest in six years, the figure bears watching for more systemic damage to the labor market caused by the pandemic.   Average hourly earnings fell 1.2% from the prior month, reflecting job gains among lower-paid workers, following a 1% drop in May. Wages were up 5% from the year before, as employment in lower-paid sectors remains well below year-earlier levels.   The average workweek fell to 34.5 hours from 34.7 hours in May.   The U-6 rate, also known as the underemployment rate, also fell to 18% in a sign of positive momentum for the economy. Unlike the headline unemployment rate, also known as the U-3 rate, it accounts for those who quit looking for a job because they were discouraged about their prospects and those working part-time but desiring a full workweek.   A mass of Americans left the labor force after economic shutdowns led to widespread layoffs, but those people have started to come back. The labor force participation rate, or the proportion of the working-age population that is either working or actively looking for work, rose to 61.5% from 60.8% the prior month, though thats the still far shy of where it was in February -- at 63.4%.

Series of Bad Messages May Lead to a Weak CAD

Series of Bad Messages May Lead to a Weak CAD| KOL Analysis•Jasper Lo Affected by some unexpected bad messages this week, CAD is expected to weaken repeatedly and likely to have a complete sluggish trend in market.To get more news about WikiFX, you can visit wikifx news official website.   Firstly, Tiff Macklem, the new governor of Bank of Canada, delivered his first speech after taking office that Canada will need more time to recovery its economy, and the Bank will continuously purchase government bonds and maintain a record-low interest rate indefinitely. Tiff Macklem‘s dovish message increased investors’ pessimism about the future market of CAD.   Secondly, US president Donald Trump changed his words again and suddenly announced that they consider to impose 10% tariff on Canadian aluminum products again, which makes Canadian economy even worse. Thirdly, crude oil prices eased back from a high level due to the continuous recovery in its inventory, which is harmful to CAD.   Fitch Ratings has downgrated Canada‘s ratings to AA+ from AAA for the first time, but the ratings’ outlook are stable. The rating downgrate indicates the deterioration of Canadas public finance and severer recession in economy resulting from the COVID-19 and low oil price.   Meanwhile, the US Fed released a balance sheet with the date of June 24, Wednesday, which presents a total of US$7.13 trillion, a decrease of US$10 billion week-on-week, which is a fall for two weeks in a row. And USDX continues to rise due to its advantage as a safe-haven currency. In conclusion, CAD has a bad situation at present. If USD/CAD can break upward the resistance of 1.3686 successfully, it has great opportunity to challenge bigger resistance of 1.3850. And the success in breaking the level would lead to a strong USD/CAD again.   [About The Author]   Since 1987, Jasper Lo has been engaged in the financial industry (forex, futures and gold) for more than 32 years and holds forex R.O., securities and futures broker licenses. Mr Lo is an expert in trading forex, precious metals and commodity futures and an basic and technical analyst.   Over the years, Mr Lo won many individual and team sales champion awards, as well as outstanding employee awards. He was invited, as a guest mentor, to the University of Hong Kong, Guangdong Ocean University and Guangzhou Jinan University. And he was also appointed as the chief training consultant by Hantang Securities and Dongguan Securities in China.

Frozen Treasury Yields Belie Hedging Bets on Stronger Fed Action

Frozen Treasury Yields Belie Hedging Bets on Stronger Fed Action Dwindling volumes in interest-rates markets suggest that the normal summer doldrums are arriving on time, yet underneath the surface there are signs that traders are bracing for more drama ahead.To get more news about WikiFX, you can visit wikifx news official website.   From trades anticipating yield-curve control measures by the Federal Reserve, to lingering bets on negative interest rates and even positions that would benefit from an eventual rate increase by the Fed, traders are searching for the next edge based on what they expect the central bank will do.   The positioning highlights the array of options that remain on the table for Fed policy this summer and beyond, depending on how the economic outlook evolves with the spread of the coronavirus.   The latest read on growth briefly buoyed bond bears on Thursday: Ten-year Treasury yields touched a roughly one-week high of 0.71% after June employment data came in stronger than forecast. Yet in a sign of how uncertain the outlook remains as the virus spreads, that move quickly faded. The rate ended the day at 0.67%, right in-line with its average for the past three months.   Here are some of the possible scenarios that investors and strategists are considering in the months ahead:   Yield-Curve Control   The base-case scenario for many economists is that the Fed will set target yields for certain maturities of Treasury securities by the end of the year, though policy makers appeared unconvinced of the need for that when they met at their June meeting, according to minutes released Wednesday.   Strategies targeting curve control are starting to emerge in rates volatility, such as receiver spreads that bet that the fixed rates paid in interest-rate swaps will remain above the floating rate they‘re swapped for. Barclays late last month recommended similar trades “to express the view that short to intermediate rates can grind lower,” a bet on curve control after the Fed’s policy review in September.   Should the Fed adopt a type of curve control favored by former Chair Ben Bernanke, expect the central bank to rule out targeting rates on securities of more than two to three years maturity. This may trigger more intermediate curve plays in the futures market, such as 5- and 7-year spreads, a popular recent theme. Open interest in 5- and 10-year futures -- a tally of outstanding positions -- has surged, a likely indication that traders are positioning for the prospect of curve control.   Negative Rates   Fed funds futures continue to price in a chance of a negative policy rate from around mid-2021 and positioning for that scenario has been a popular theme in eurodollar options.   While options hedging activity has slowed, there remains a significant amount of risk in calls targeting an equivalent yield of 0% or lower, despite continued push-back from Fed officials. More recently, demand has shifted into mid-curve eurodollar plays which target a negative policy rate for 2022 but with quicker payouts. The Feds most-recent summary of economic projections shows expectations that the policy rate will be on hold at the current level through 2022. Treasury volatility has subsequently remained at depressed levels over the past two months.   A popular play to benefit from continued subdued volatility has been via Treasury options: selling volatility structures known as straddles and strangles that will be profitable if interest rates remain in tight ranges. A recent trade included a sizable $21 million short-volatility position in 10-year Treasury options.   Low-volatility plays have also emerged in the eurodollar options market. This past week a $6 million wager targeted a potential $25 million payout that benefits from a continued low-volatility environment.

Australian Dollar Fundamental Forecast for Q3 2020

Australian Dollar Fundamental Forecast for Q3 2020 The Australian Dollar trades to fresh 2020 highs in June as the Reserve Bank of Australia (RBA) keeps the official cash rate (OCR) at the record low of 0.25%, and the central bank may continue to tame speculation for additional monetary support as “members agreed that the Bank's policy package was working broadly as expected.”To get more news about WikiFX, you can visit wikifx news official website.   In turn, the RBA may adjust the forward guidance over the coming months as “it was possible that the downturn would be shallower than earlier expected,” and a material shift in the monetary policy outlook should heighten the appeal of the Australian Dollar if the central bank prepares to remove the yield target later this year.   However, it remains to be seen if the unprecedented measures taken by monetary as well as fiscal authorities will jumpstart the economy amid the gradual approach in rolling back the social distancing orders, and the threat of a protracted recovery may force the RBA to act as Standard and Poor‘s and Fitch Ratings cut Australia’s credit rating outlook to ‘negative’ from ‘stable.’   With that said, the RBA may come under pressure to further support the economy as fiscal authorities show little intentions of extending stimulus programs like the Jobkeeper Payment, which is set to expire on September 27, and the Australian Dollar is likely to face headwinds if Governor Lowe and Co. revert back to a dovish forward guidance.