Aurix Exchange

(Discuss) Important Forex News Daily.

Andora Andrei

Active member
Saudi Arabia's Oil Wealth Is About to Get a Reality Check

Saudi Arabia's Oil Wealth Is About to Get a Reality Check

Wood Mackenzie said to estimate valuation at $400 billion
Aramco IPO underpins Saudi Arabia’s economic overhaul
Saudi Arabia has said oil giant Saudi Aramco is worth more than $2 trillion, enough to consume Apple Inc. twice, and still have room for Google parent Alphabet Inc.

The kingdom may have to settle for less. A lot less.

Industry executives, analysts and investors told Bloomberg their analysis -- based on oil reserves and cash flow projections under different tax scenarios -- suggests Aramco is worth no more than half, and maybe as little as a fifth, of that amount. This means Saudi Arabia would earn a fraction of the $100 billion implied by its valuation if it sells 5 percent to the public in 2018, as planned.

For example, Wood Mackenzie Ltd. came up with a rough valuation of Aramco’s core business of $400 billion, according to clients who attended a private meeting at the oil consultant’s City of London office this month and asked not to be named. The Edinburgh-based company, popular for its analysis and valuation of energy companies and assets, declined to comment.
You must be registered for see images attach
You must be registered for see images

An Aramco spokesperson said the oil producer doesn’t comment on rumors or speculation.

While there’s a lot of guesswork involved in sizing up a company that’s never divulged financial statements and may have its tax rate cut before the initial public offering, this valuation gap reveals the hurdles Saudi Arabia could face in preparing for the post-oil era.

A profitable IPO is meant to anchor a sovereign wealth fund that will, if things unfold as envisioned, generate enough investment income at home and abroad to dominate state revenue by 2030. Demand for oil will peak just before then, according to Royal Dutch Shell Plc projections, as alternative fuels and electric cars gain popularity, putting Middle East energy producers on shakier footing.
Even within the Saudi government, doubts are emerging. A person familiar with the flotation, who asked not to be named, said last week Aramco in its current form would probably be worth about $500 billion because a lot of its cash goes toward taxes and future investors won’t have a say on investments in non-core areas. Another person familiar with IPO talks put the figure at a little less than $1 trillion if investors base the valuation on Aramco’s ability to generate cash.

Selling a 5 percent stake would therefore raise at least $25 billion, still enough to match Alibaba Group Holding Ltd.’s unparalleled 2014 offering and dole out millions of dollars of fees to the advisers hired to manage the sale, namely JPMorgan Chase & Co., Moelis & Co. and independent consultant Michael Klein.

For a QuickTake on why Saudis are banking on a giant IPO, click here

The $2 trillion estimate was initially put forward by Deputy Crown Prince Mohammed bin Salman last March. There are two key issues, according to interviews with a dozen industry analysts, investors and executives, who asked not to be named because of the sensitivity of the matter.

The first is that it’s premised on a simple calculation: Take the 261 billion barrels of reserves Saudi Arabia says lie under oil fields like the onshore Ghawar and offshore Safaniya, and multiply by $8 (a benchmark used to value reserves). An independent auditor is assessing Saudi reserves, the second-biggest worldwide, before the IPO.
Oil’s Future

By that logic, though, Russian producer Rosneft PJSC’s market capitalization would be $272 billion instead of $64 billion, and the valuation of Exxon Mobil Corp., the world’s largest publicly traded energy producer, would be 53 percent smaller than it is.

“I didn’t know that the value of an oil company was a multiplicator of the reserves of the company," Total SA chief executive officer, Patrick Pouyanne, told investors on a Feb. 9 conference call. Several factors should be “discounted” before “we’ll see what will be the real value of" Aramco, he said.
You must be registered for see images attach
You must be registered for see images

The rationale also assumes Saudi oil, due to last about 73 years if pumped at the existing pace, will be viable for decades even if global warming curbs the world’s appetite for crude.

Toyota Motor Corp. wants to rely on hydrogen to all but replace traditional-engine models by 2050. Use of gasoline, which accounts for one in four barrels consumed globally, is already peaking according to the International Energy Agency. Officials including Bank of England Governor Mark Carney have warned investors it’s a matter of time before reserves are "stranded" in the ground.

For more on the Tesla shock to the global gasoline industry, click here.

The second factor throwing doubt on the Saudi valuation is the centrality of tax and dividend policy in assessing a company’s fair value. Aramco, formally known as Saudi Arabian Oil Co., pays a 20 percent royalty on revenues and an 85 percent income tax. Levies this big reduce cash available for dividends to shareholders, diminishing the appeal to overseas investors.
Different Math

Wood Mackenzie, according to two clients, said it based its calculation on the current tax rate, a cost of capital of 10 percent and an in-house oil-price forecast. It used a so-called discounted cash flow method to value Aramco’s upstream business, which is very sensitive to taxation.

So if Aramco CEO Amin Nasser follows through with plans he unveiled in Davos last month to lower taxes "to be aligned with other listed companies," Wood Mackenzie’s estimate also stands to rise. But the scope for loosening levies may be limited because oil is the lifeblood of a budget the government is struggling to balance due to depressed oil prices.

Wood Mackenzie’s estimate also doesn’t factor in Aramco’s downstream, or refining, operation. That business is similar in capacity to that of Texas-based Valero Energy Corp., which has a market value of about $30 billion.
Two Apples?

Another caveat is that traders tend to demand discounts for political risks surrounding state-linked companies. A corruption scandal ensnaring Brazil’s Petroleo Brasileiro SA sent shares sliding to a 16-year low early last year. Investors in Rosneft, meanwhile, have to contend with sanctions that limit the stock’s upside versus emerging-market peers.

Allianz Global Investors, which owns energy shares including Exxon, Shell and BP Plc, is unlikely to buy Aramco stock at the IPO, according to energy analyst Rohan Murphy. “We have generally found investing in companies so closely tied to the state to be unattractive," he said.

While Saudi Arabia is relatively stable in the turbulent Middle East, it’s not immune to concern that decisions on oil output will be guided more by geopolitics than what’s best for minority shareholders.

The kingdom’s oil wealth also enabled it to appease its 32 million people as unrest flared regionally during the so-called Arab Spring. At issue is whether Saudi royals can sustain this calm as the government slashes fuel subsidies and imposes value-added taxes.

In the end, Aramco’s market size may struggle to equal two Apples and a Google in rankings of the world’s biggest companies.

Andora Andrei

Active member
Caution Prevails for Asia Stocks, Iron Ore Drops: Markets Wrap

Caution Prevails for Asia Stocks, Iron Ore Drops: Markets Wrap

Dow posts its longest streak of record closes since 1987
Oil and gold head for weekly gain; dollar poised for a loss

Investors adopted a cautious tone at the end of a positive week for Asian stocks. Raw-materials shares slumped, while gold headed for a fourth weekly increase.

The dollar was mixed against major currencies after weakening Thursday on Treasury Secretary Steven Mnuchin’s statement that fiscal stimulus effects on the economy this year may be limited. Hong Kong stocks fell for a second day, while Tokyo shares dropped even as the yen retreated after a two-day gain. Commodity producers dragged equities lower after iron ore tumbled. Oil was poised for its best week of the year.
A fifth weekly gain for Asian shares that’s helped push the value of global equities above $70 trillion is losing momentum as money managers grapple with political uncertainty and the Federal Reserve’s schedule for lifting borrowing costs. Fed Bank of Dallas President Robert Kaplan urged his colleagues at the U.S. central bank to seize opportunities to raise interest rates, even as he said they should keep their options open ahead of next month’s policy meeting.
There are those out there thinking, ‘Well, markets have had such a big runup, it’s time to take a bit of money off the table,”’ said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which managed about $120 billion as of December 2016. “It wouldn’t surprise me to see a bit of consolidation or correction, and maybe we’re starting to see signs of that.”

Markets from stocks to currencies have been subjected to intraday fluctuations this week as investors hang on each word from central bank officials and politicians. In addition to concerns about interest rates and Donald Trump’s economic policies, traders are also watching developments in French presidential elections and the U.K.’s Brexit plans.

“As the market waits for details on U.S. tax cuts, it’s more likely that officials’ comments affect the market,” said Kenji Ueno, portfolio manager at Sompo Japan Nipponkoa Asset Management. “U.S. fiscal policy is moving toward expansion, but the administration may be trying to cool off some of the expectation.”

Read our Markets Live blog here.
You must be registered for see images attach
You must be registered for see images

What are traders are watching for:

Investors will be looking for any policy details when Trump addresses Congress next week.
Billionaire Warren Buffett releases his annual letter to shareholders with Berkshire Hathaway Inc.’s earnings over the weekend.
Legislators in the U.K. will consider changes to the Brexit bill next Monday and Wednesday that may address the rights of EU citizens in Britain and give parliament a binding vote on the final deal.

Here are the main moves in markets:


The yen dropped 0.2 percent to 112.80 per dollar as of 4 p.m. in Tokyo, after rising 0.6 percent Thursday. The currency is little changed for the week.
The Bloomberg Dollar Spot Index dropped less than 0.1 percent after falling 0.3 percent in the previous session.
The South Korean won climbed 0.5 percent, rising for a fourth day in the longest streak of gains since August.
The Australian dollar was little changed. Central bank Governor Philip Lowe said he expects “a period of stability” in interest rates and suggested further cuts could push already high household debt to “dangerous” levels.


The MSCI Asia Pacific Index fell 0.5 percent, paring this week’s advance to 0.5 percent. Japan’s Topix index lost 0.4 percent. The gauge rose 0.4 percent for the week.
Australia’s S&P/ASX 200 Index retreated 0.8 percent. BHP Billiton declined 5.9 percent for the week in Sydney, the biggest loss since May.
Hong Kong’s Hang Seng dropped 0.4 percent, retreating for a second day after reaching the highest since August 2015. The Hang Seng China Enterprises Index lost 0.9 percent, paring the week’s advance.
Futures on the S&P 500 fell 0.1 percent. The index rose less than 0.1 percent on Thursday, while the Dow posted a 10th day of gains, its longest streak of record closes since 1987.
Baidu Inc. surged in after-hours trading in New York as profit topped estimates.


Gold added 0.3 percent to $1,253.22 an ounce after rising 1 percent on Thursday. The metal is up 1.5 percent for the week, heading for the highest closing level since November.
Iron ore tumbled 4.2 percent, and is poised for a weekly loss. After a surprise rally last year, the commodity roared into 2017 on optimism that Chinese demand would prove robust. This week has seen a series of warnings the gains may be overextended.
Oil slipped 0.2 percent to $54.36, after jumping 1.6 percent in the previous session as government data showed a smaller-than-expected increase in crude inventories. Crude is trading near the highest level since July 2015.


Yields on 10-year Treasuries were little changed at 2.38 percent, after dropping four basis points on Thursday.
Australia 10-year yields fell six basis points to 2.73 percent.

Andora Andrei

Active member
U.S. Crude Exports Surge to a Record

U.S. Crude Exports Surge to a Record

U.S. crude output rises above 9 million barrels a day
Domestic refiners using all the local supply they can: analyst

Another week, another record for U.S. crude exports.

Producers and traders shipped out 1.21 million barrels of crude a day from the U.S. in the week that ended February 17, the most in Energy Information Administration data going back to 1993. Domestic output increased to 9 million barrels per day last week, the fastest pace since April, while U.S. refiners used the least crude since October 2015.

Shale output has surged and tankers loaded in the Middle East during the last days of all-out production by OPEC nations arrived this month in the U.S., swelling stockpiles to a record. Prices for West Texas Intermediate crude have averaged $2.24 a barrel below global marker Brent this year, making U.S. oil more attractive to refiners around the world.
You must be registered for see images attach
You must be registered for see images

Local refiners are using as much domestic crude as they can and the remaining incremental production is being exported, Gary Morgan, director for Clarksons Platou Shipping Services USA LLC’s analyst group, said by phone from Houston. "Going forward, most of the increasing production will be for exports. As output moves from 9 million barrels a day to 9.3 million or 9.4 million, three-quarters of that increased output will be for export."

For now, U.S. crude is looking especially attractive to buyers in Asia. WTI has averaged 22 cents below Dubai, a lower-quality grade that’s the benchmark for Asia, this year, based on front-month swaps data from broker PVM Oil Associates Ltd.. That compares to a $3.76 premium a year ago.

Most of the incremental volumes from last week were destined for the Far East, Court Smith, director of research with shipbrokers MJLF & Associates, said by instant message from Stamford, Connecticut. "The Far East will remain the main destination for U.S. crude exports in the short-term, assuming there are no big swings in price spreads."

Andora Andrei

Active member
Asian Emerging Market Stocks Poised to Relive Glory Days: Old Mutual

Asian Emerging Market Stocks Poised to Relive Glory Days: Old Mutual

You must be registered for see images attach
You must be registered for see images

After shrugging off their U.S. election hangover, Asia's emerging-market stocks scrub up rather well.

That is the view of Joshua Crabb, head of Asian equities at a unit of Old Mutual Plc, who draws hope from 10 to 15 years ago, when the U.S. Federal Reserve embarked on a series of interest-rate increases and Asia Pacific ex-Japan stocks stormed higher.

"If you look at the period between 2003 and 2007 we saw a very similar scenario — a well-valued U.S. and a stronger global economy and Asia actually performed very well," Hong Kong-based Crabb said in an interview. "I think there's a similar parallel we can draw from today and it's a great opportunity to sit in Asia right now."
In the years leading up to the financial crisis, the Fed consistently raised interest rates. Stocks in emerging markets soared about 240 percent from 2003 to 2007, while the dollar was largely in a weakening cycle. In contrast, the dollar was at the peak of an eight-year rally shortly after Donald Trump's victory in the U.S. election and Asian EM stocks slid as global funds pulled out about $11 billion.

The Fed isn't expected to follow such a sharp tightening path this time, but the general consensus is there will be two or three rate increases in the U.S. this year. The market currently prices in a 38% chance of a rate hike coming as soon as March, rising to 63 percent in May.

Crabb said he's not bearish on the greenback in 2017, but he reckons it may not be as strong as some forecasts suggest. Expectations on inflation and growth elsewhere "may change more than the U.S. from here," he said.

Old Mutual Global Investors manages $37.6 billion in assets globally, Crabb said.

Here are some of his other views:

China is "cheap" and the outlook has improved
In expensive markets like India there are some "good and cheap" areas as well, especially those that should benefit from domestic spending, like infrastructure
Taiwan and South Korea will have some issues given their large reliance on trade, but select areas like materials will do well due to factory closures driven by China's pollution concerns
With the global economy improving, cheap cyclical companies should be better placed after six tough years

Andora Andrei

Active member
Trump Love Can't Save Caterpillar or U.S. Steel From Slump

Trump Love Can't Save Caterpillar or U.S. Steel From Slump

Infrastructure bill may have to wait until 2018, Axios reports
Metals from aluminum to zinc and iron ore also dipped Thursday

You must be registered for see images attach
You must be registered for see images

Doting words from President Donald Trump about Caterpillar Inc.’s bulldozers and U.S. Steel Corp.’s pipeline prospects couldn’t save the two companies from a slump in material stocks Thursday.

Shares of the Peoria, Illinois-based machinery maker posted the biggest decline in five months while the Pittsburgh-based steelmaker lost as much as 10 percent and ended down 7.9 percent. A report emerged Thursday that a jammed congressional to-do list could push a massive U.S. infrastructure bill back to 2018, delaying new demand for raw materials and construction equipment.

Trump has touted a $1 trillion infrastructure spending package over 10 years that would invest in roads, bridges and airports, as well as Buy America policies that would boost domestic companies that sell metals and machinery. Copper has risen more than 10 percent since Trump was elected on bets of improving demand helped by the president’s spending pledge.
At a White House meeting with industry executives on Thursday, Trump said, “I love Caterpillar,” and indicated he might go out and drive one of the company’s machines soon. He then told U.S. Steel Chief Executive Officer Mario Longhi that he will be putting domestic producers of the metal “heavy” into the pipeline business and that projects like Keystone XL and Dakota Access would need to use American-made steel.

While Trump’s public comments and Twitter postings over the past month have moved the share prices of aircraft manufacturers to drug makers, they failed to abate Thursday’s selloff. Caterpillar is still up 45 percent in the past year and 13 percent since the election, while U.S. Steel more than quadrupled in the past year and is also up 78 percent since the election, helped by an increase in demand and a slew of successful trade cases against foreign steel products.

Repealing and replacing Obamacare, tax reform, the budget and the Supreme Court vacancy could push Trump’s infrastructure bill to 2018, Axios reported, citing Republicans it didn’t name.

Metals from aluminum to zinc and iron ore also fell.

Andora Andrei

Active member
Landlords Are Taking Over the U.S. Housing Market

Landlords Are Taking Over the U.S. Housing Market

As rising home prices, slow new home construction, and demographic shifts push homeownership rates to 50-year lows, the U.S. is increasingly a country of renters—and landlords.

Last year, 37 percent of homes sold were acquired by buyers who didn’t live in them, according to tax-assessment data compiled in a new report published by Attom Data Solutions and Inc.

That number may include second homes, or properties acquired by investors who seek to fix up old homes and resell them at a profit. But it’s also a strong indication that landlords are playing a larger role in the U.S. housing market.
You must be registered for see images attach
You must be registered for see images

In the years following the foreclosure crisis, Wall Street drove a rise in the share of homes purchased by landlords, as private equity firms bought thousands of cheap homes. In 2012, institutional investors accounted for 7.8 percent of home sales, according to the report.

Rising home prices led big investors to curtail their purchases, and the share of homes acquired by institutional investors fell to 2.9 percent last year. But as Wall Street backed off, smaller investors picked up the slack, aided by tools developed to help big investors find, finance, and manage rental properties.

Smaller investors—particularly those who have already paid off their mortgages on the homes they live in—see rental properties as an attractive way to save for retirement.

To some extent, they’re focusing their resources on cheaper markets, because the profit margins are better at lower price points, said Daren Blomquist, senior vice president at Attom Data Solutions.
You must be registered for see images attach
You must be registered for see images

In Seattle, where the median home price was $414,000 at the end of last year, the annual share of sales to non-occupiers peaked in 2013, at 23 percent. But in cheaper Dallas, where the median home price was $201,000, the share of homes sold to people who don’t live in them nearly doubled over the last 12 years.

Whether the rise of the rental landlord is a positive development is an open question, said Blomquist. "On one hand, landlords are filling a need that exists because of the low homeownership rates. They may also be crowding out folks that want to be homeowners but can’t compete with investors.”

Andora Andrei

Active member
Investors Flock to Supercharged Gold Bet That's Returned 180%

Investors Flock to Supercharged Gold Bet That's Returned 180%

Direxion ETF sees surge in volume of shares and options
‘This is a way of maximizing your potential returns,’ TD says

Gold doesn’t offer yield. Junior miners may, and a leveraged exchange-traded fund tracking them has investors flocking to it.
As the Direxion Daily Junior Gold Miners Index Bull 3x Shares almost tripled in the past two months, the number of shares changing hands has surged nearly fourfold this year. That’s even as trading has dropped for an ETF tracking larger mining peers and for the SPDR Gold Shares, the largest bullion-backed fund. The boost in volume has also led to a jump in bullish options on the leveraged security, with more than two calls for each put.
You must be registered for see images attach
You must be registered for see images

Investors seeking refuge from political uncertainty in the U.S. and Europe have piled into gold in recent weeks, its appeal further buoyed by a perception that the Federal Reserve would be slow to raise borrowing costs. Betting on miners has the advantage of giving exposure to dividends, and going for a leveraged security amplifies the returns in a rallying market. The Direxion fund has soared almost 180 percent from a 10-month low in December, while the precious metal has climbed about 10 percent.

“These are bets on turmoil,” Bart Melek, TD Securities’ head of commodity strategy, said in a telephone interview from Toronto. “This is a way of maximizing your potential returns.”

As the number of shares traded on the leveraged ETF surged to a daily average of 54 million this year, the volume of bullish options doubled to almost 19,700, compared with about 7,900 bearish contracts. At 1.6-to-1, the ratio of outstanding calls to puts on the fund is higher than for the VanEck Vectors Gold Miners ETF, data compiled by Bloomberg show.

Andora Andrei

Active member
The Trump Team's Evolving Currency-Market Rhetoric: A Timeline

The Trump Team's Evolving Currency-Market Rhetoric: A Timeline

Dollar soared after Nov. 8 as Trump inspired reflation trades
Greenback has fluctuated since January ‘too strong’ comments

Donald Trump continues to be perhaps the biggest single influence over the dollar, more than three months after his shock election victory.

While policy pledges drove the greenback’s 3.9 percent gain in November, its best rally in more than two years, pronouncements on the currency, and its peers, from him and his administration have whiplashed traders over the past six weeks.
You must be registered for see images attach
You must be registered for see images

Treasury Secretary Steven Mnuchin has also helped muddy the waters at times, either on his own or in combination with his boss. Mnuchin injected an element of calm Thursday, signaling the administration won’t rush to label China a currency manipulator. Trump’s own take a few hours later -- reading from his campaign-trail rhetorical playbook -- was less nuanced.

“It’s unusual in the U.S. for the president to talk as much about the currency as this president has chosen to, usually they leave that to the Treasury Secretary,” said Sean Keane, an Auckland-based analyst at Triple T Consulting and the former head of Asia-Pacific rates trading at Credit Suisse Group AG. “There’s also an unusual level of confusion generated because Trump seems to feel free to say whatever he wants, while leaving the actual policy execution to his appointees. The outcome is that the president can take the credit for a good outcome, whilst others take the blame if things go wrong.”

Certainly the president and the U.S. currency are more in the news now than they were under Trump’s predecessor.
You must be registered for see images attach
You must be registered for see images

Andora Andrei

Active member
Top China Stock Fund Says Hong Kong Best Place to Make Money

Top China Stock Fund Says Hong Kong Best Place to Make Money

Harvest’s fund doubled its assets in 2017 on Hong Kong appeal
PBOC’s tightening may actually boost stocks: fund manager

Zhang Jintao is sticking with the bet that’s made his stock fund China’s top performer: Hong Kong equities.

Harvest Fund Management Co.’s fund has returned 13.4 percent this year after putting 70 percent of its stock holdings in the former British colony, where the local benchmark has jumped 8.9 percent. With the market now near a 1 1/2-year high, Zhang says the rally can continue as earnings improve and China’s economy stabilizes.
You must be registered for see images attach
You must be registered for see images

“The yuan is stable, the U.S. has paused its rate hikes and the entire Chinese macro environment is better,” Zhang said in an interview on Tuesday. “There’s more upside because earnings growth will be better than in 2016. Valuations will rise.”

Chinese cash has been pouring into Hong Kong’s stock market through links with mainland exchanges to take advantage of the city’s cheaper shares while also hedging against yuan weakness. Zhang’s fund is a testimony of such red-hot demand: its assets have doubled to 2.7 billion yuan ($393 million) this year alone, with inflows picking up over the past week amid a surge in interest from retail investors, he said.

The Harvest SH-HK-SZ Selected Equity fund is the top-performing active Chinese stock fund this year, according to data compiled by Bloomberg. The firm is planning a new fund that also invests in Hong Kong shares but with more flexibility across asset classes, Zhang said.

The Hang Seng Index -- which includes Hong Kong and mainland Chinese companies --slipped 0.6 percent on Friday after a technical indicator signaled the shares are overbought earlier this week. Mainland stocks now trade at an 19 percent premium over their Hong Kong listings, compared with 26 percent six months ago.
The fundamentals of Chinese and Hong Kong stocks have brightened. The nation’s January economic data from new credit to exports beat estimates, and the dollar’s pullback has fueled a rebound in the Chinese currency, removing a source of anxiety for investors. Earnings per share on the Hang Seng are projected to climb 14 percent this year, data compiled by Bloomberg show. Rising producer prices and capacity reduction will boost profits, Zhang said.

Shanghai Composite

For similar reasons, the Shanghai benchmark, which has risen 4.8 percent so far this year, will gain in 2017, Zhang predicted. Policy makers shifted their focus to curbing bubble risks in the second half of last year, raising rates on liquidity tools incrementally and adding restrictions on home buying.

“Money in the system is less loose, but it’s still ample,” he said. “So if the bond market is doing badly, property buying is curbed, then the stock market will be the target for investments.”

Andora Andrei

Active member
Pimco Urges China to Get Tougher in Cat-and-Mouse Debt Game

Pimco Urges China to Get Tougher in Cat-and-Mouse Debt Game

Policy makers’ ‘cautious tightening’ largely ignored by banks
China is aiming to curb leverage without derailing growth

Whatever China is doing to deleverage, it isn’t enough.

Beijing’s “cautious tightening signals” are largely being ignored by banks and at the local level, where attention is focused on maintaining steady economic growth, especially with key Communist Party meetings looming this year, according to Gene Frieda, executive vice president and global strategist for emerging markets at Pacific Investment Management Co.

“The cautious type of tightening usually doesn’t work that well for China” as it turns into a “cat-and-mouse game” between regulators and lenders, London-based Frieda said in a phone interview. “If there’s a willingness to allow credit to expand, credit expands. The only way to slow it down is to impose tight constraints.”
You must be registered for see images attach
You must be registered for see images

The People’s Bank of China, which says its role is to enact prudent monetary policy, has been relying on more targeted tightening measures. In early February, just after the Lunar New Year holiday, it raised the interest rates charged on open-market operations and on funds lent via its Standing Lending Facility. The central bank hasn’t altered its benchmark rate since October 2015, when one-year lending and deposit rates were cut to record lows.
A hike in benchmark loan and deposit rates would send a stronger signal of a desire to tighten policy, but blunt tightening would be in the form of quantitative restrictions on various types of credit growth,” Frieda said. These restrictions could be introduced as soon as next quarter should inflation continue to build and credit growth doesn’t slow, Frieda said, though he added this isn’t his base-case view.

While China has pledged to deflate asset bubbles and reduce corporate leverage, aggregate financing jumped to a record 3.74 trillion yuan ($544 billion) in January. On the inflation front, there are signs policy makers may need to contain growth, with data showing factory prices last month jumped the most since 2011.
Trump Factor

But tightening is a tricky proposition given the economy is growing at the slowest pace in a quarter of a century and there is uncertainty over the global picture, not least the impact of U.S. President Donald Trump’s potential policies.

Meanwhile, China wants to support the yuan and limit capital outflows as the Federal Reserve looks set to raise interest rates. Financial News, a PBOC publication, cited a regulatory official on Saturday as saying the impact of a Fed rate increase on capital flows and the yuan constrain what they can do with monetary policy.

Pressures from the U.S. will weigh on Chinese bonds in the first half of this year, Frieda said, with the market only recently emerging from a record selloff. The nation’s 10-year government debt has declined this year, with yields rising 27 basis points from December.

“It’s going to be challenging for the bonds in the first half of this year,” he said. “For the second half, we may see some inflation pressures recede. At that point, yields can look more constructive and interesting.”

Here are some other views the executive at Pimco, which had more than $1.4 trillion under management as of December, shared on China’s markets and economy:

The yuan will be stable near term due to tighter capital controls but it will decline in the long run
Liquidity will remain tight in the offshore yuan market as China has reduced channels for the currency to flow offshore
If the economy weakens, the yuan will be used as a “pressure release valve”
China’s leaders will be more reactive to developments in the U.S. and will attempt to be conciliatory, apart from in matters such as the “One China” policy
Caution is needed as the U.S. may wage a trade war against China given the hawkish voices in government. What Trump said during the campaign trail shouldn’t be ignored
China and U.S. will likely communicate more efficiently as the stakes are high and “everyone tends to lose in a trade war”

Andora Andrei

Active member
Wall Street Dissenters Emerge Calling for May Fed Rate Increase

Wall Street Dissenters Emerge Calling for May Fed Rate Increase

BNP Paribas, JPMorgan join Mizuho in calling for May hike
Most banks are set on June as timing for first 2017 move

At least four of Wall Street’s biggest banks are breaking with their bulge-bracket brethren, telling clients that the Federal Reserve will probably raise interest rates before June.
BNP Paribas SA, JPMorgan Chase & Co. and Mizuho Securities USA Inc. predict a hike at May’s meeting, even though there’s no press conference scheduled and it comes days before a vote in France’s presidential election that could roil markets. Jefferies Group LLC is alone among Fed primary dealers in calling for an increase next month, while noting that it’s a close call between March and June. As for the rest of the 23 firms, most are set on June, though two point to September, a Bloomberg survey shows.
You must be registered for see images attach
You must be registered for see images

Mizuho has been in the May camp since December. BNP and JPMorgan pulled forward calls for a hike in notes published last week, citing signs of strength in inflation and jobs data. Traders have already ramped up bets on a hike as soon as May, with futures signaling a 63 percent chance of an increase by that month, up from 49 percent at the start of February.

“The data is enough,” Steven Ricchiuto, U.S. economist at Mizuho, said in a phone interview. While he initially pegged his May call to the prospect of more aggressive fiscal stimulus from the Trump administration, he’s now looking to the president’s focus on deregulation and jobs to help spur economic growth this year.
Inflation Crossroads

Personal-consumption data due March 1 may confirm that inflation has reached the Fed’s 2 percent target for the first time since 2012. After last week’s consumer-price report, some analysts boosted estimates for the Fed’s preferred gauge.

BNP, which previously anticipated two rate moves in 2017, both in the second half of the year, now projects three, in line with quarterly projections that policy makers released in December. JPMorgan, which had expected the first hike of 2017 to be in June, continues to expect two increases this year, with the second in September. Mizuho anticipates moves in May and in the third quarter.

For JPMorgan and Mizuho, the May 7 run-off in French elections isn’t an excuse for the Fed to forgo tightening May 3. A hike in May may help markets by offering more certainty on the path of policy, Ricchiuto said.

The first round of France’s election takes place in April and could spur market volatility if it looks like National Front leader Marine Le Pen, who’s expected to advance, may be able to defeat her second-round opponent. Her prospects have garnered traders’ attention in part because she’s voiced policies that could threaten the stability of the euro area.
No Dealbreaker

Nor is the lack of a May press conference a dealbreaker, Laura Rosner, senior U.S. economist at BNP, said in an interview. The Fed would likely hold a special news conference to explain a rate increase then, she said.

Fed funds futures are pricing in about a 38 percent chance policy makers will raise rates a quarter-point next month, data compiled by Bloomberg show. That compares with about a 63 percent probability of a move by May, rising to 75 percent by the June meeting.

Mohamed El-Erian, chief economic adviser at Allianz SE, said Wednesday that traders are underestimating the odds of a move next month, which he pegged at 50 percent to 60 percent.

El-Erian, who’s also a Bloomberg View columnist, said February jobs figures to be released March 10, particularly wage data, will have a "notable impact" on the Fed’s thinking at the March meeting.

Andora Andrei

Active member
Will Brexit Encourage Another Scottish Referendum?

Will Brexit Encourage Another Scottish Referendum?

If you’ve been trading currencies long enough, then you’ll know that Scotland has been crying for independence before it was cool. Heck, it even held a referendum back in 2014! What happened in 2014?

The Scottish Independence Referendum Bill, which set the arrangement for the referendum, was passed by the Scottish Parliament in November 2013 and was enacted as the Scottish Independence Referendum Act 2013.

After months of campaigning for both the Yes Scotland and Better Together camps, the Scots were asked the question “Should Scotland be an independent country?”

And, with a voter turnout of 84.6% – the highest recorded for an election or referendum – the “remain” votes (55.3%) won over the “leave” voices (44.7%). At the time, threats of uncertainty and economic instability were enough to convince the Scots against a breakup from the U.K.

READ: Why the Scottish Independence Vote Matters for the Pound What has happened since then?

In a word, Brexit.

If you recall, Scotland had the biggest margin against a Brexit during the June 2016 EU referendum (despite what Donald Trump says). 62% voted to remain while only 38% voted to leave.

Fast forward a couple of months and the Scots who wanted to avoid economic uncertainty are facing the exact problem exiting the EU. Not surprisingly, market bees are buzzing that the Scottish government is getting ready for another referendum.

Charles Grant, an adviser to the Scottish government’s Standing Council on Europe, shared “I believe the Scottish government is thinking very, very seriously about going for an independence referendum,” adding that “They feel they have enough emotion and momentum to overcome the economic downsides.”

Scottish First Minister Nicola Sturgeon, who published a draft bill for a second referendum back in October 2016, is adding to the pressure. She believes that the circumstances have changed, as those who have voted to remain the U.K. also voted to be part of the EU.

She also reminded that “an independence referendum is very much an option on the table if it becomes clear that it is the best or only way to protect Scotland’s vital national interests.” Of course, it also doesn’t help that proposals of a separate Scottish deal within Brexit are reportedly not being “seriously considered” by the U.K. government. How could a Scottish referendum affect the pound?

If you roll your charts back to 2014, you can see that fears over a possible separation really started weighing on the pound about two months before the actual vote.

You must be registered for see images attach
You must be registered for see images

GBP’s daily charts around the Scottish Referendum

GBP/USD managed to stay on its long-term uptrend until six weeks into the campaign period before it fell by a whopping 900+ pips just before the actual referendum. We then saw a bit of retracement as soon as traders got a whiff that the “remain” votes would have it, but the pound’s downtrend eventually won out as other bearish factors played in.

How likely is a referendum this year?

Not very likely. Even the major players are estimating next year as the earliest opportunity for a referendum. And that’s if the Scottish government does decide to hold another one!

You see, Scotland might not even remain on the EU bloc even if it’s separated from the U.K. Just last Wednesday Britain’s Secretary of State for Scotland David Mundell told the Scottish parliament that the country would have to leave the EU whether or not it became independent. Yikes!

Despite that, Sturgeon’s pro-EU Scottish National Party has warned that Theresa May’s push for a “hard Brexit” has pushed independence back on the agenda.

At the end of the day, the Scots might have to choose between the devil they don’t know and the devil they don’t know.

Andora Andrei

Active member
Donald Disillusion: Dollar sells off across the board

Donald Disillusion: Dollar sells off across the board

After the upbeat FOMC meeting minutes failed to boost the greenback, a second wave of selling is seen in the following US session. The release of the weekly jobles claims seems to serve as an excuse or the trigger for a bit more of selling off.

Weekly unemployment claims stood on 244K, very marginally worse than 244K but still in line with recent lows.

What is wrong with the dollar? This may be part of the Donald Disillusion. Recently minted Treasury Secretary Steve Mnuchin made a few media events and laid out the new administration’s intentions. All in all, the agenda is not that ambitious, to say the least.

The main focus is tax cuts, and the secondary is regulation. There was no mention of infrastructure spending.

And what about taxes? These will be carved out with Congress during long months, hopefully reaching a conclusion in the summer. This is not the hopeful and “phenomenal” plan described by his boss Donald Trump.

And what about growth? Mnuchin sees a growth rate of 3% or higher, but not now: only in 2018. This is a very long time from now.

EUR/USD is trading aroudn 1.0580. Support awaits at 1.0520 and resistance at 1.0650. The common currency is sensitive to the opinion polls coming out of France.
GBP/USD is hugging the 1.25 levels. An updated report on immigration failed to move sterling.
USD/JPY stands out with a big fall, trading around 112.72. Low support is at 111.40.
USD/CAD is under 1.31 once again. Support awaits at 1.30. Jitters in oil prices hurt.
AUD/USD defies the weak Capital Expenditure report, which was certainly worrying, and climbs over 0.77. Resistance awaits at 0.7740.
MZD/USD is tackling resistance at 0.7230.

Andora Andrei

Active member
FOMC Minutes and the next rate hike – 3 opinions

FOMC Minutes and the next rate hike – 3 opinions

The FOMC meeting minutes were relatively upbeat, seeing the glass half full regarding the economy, but the dollar failed to rally. When will we see the next hike? Here are three opinions:
FOMC Minutes: We Still See 2 Hikes In June And December – Danske

As expected, we did not get much new from the FOMC minutes, as many FOMC members have already expressed their views since the meeting, not least Fed Chair Janet Yellen in connection with her semiannual hearing in Congress.

The FOMC members think the economy continues to improve but that Trumponomics make the outlook more uncertain. ‘Uncertain’ was mentioned 14 times in the minutes (versus 15 in December despite the hike and just five in November).

Although ‘many participants’ expect a hike ‘fairly soon’, only ‘a few participants’ expect a hike ‘at an upcoming meeting’. This supports our view that a March hike is unlikely. The Fed can afford to stay patient for now due to the strong USD, which puts downward pressure on import prices, and PCE core inflation, which continues to run below 2% target.

We still expect the Fed to hike twice this year (in June and December) with risk skewed towards a third hike. If economic indicators continue to be strong and we get more information on Trumponomics, we cannot rule out a May hike.
You must be registered for see images attach
You must be registered for see images

FOMC Minutes: Wording Still Consistent With A March Hike – CIBC

It was a very plain statement, but there was a little more flavour in the minutes to hint at what policymakers need to see before raising rates again.

Indeed, the minutes showed that many officials saw another hike “fairly soon” as long as the economy remained on track. That’s a stronger hint that a March hike could be coming than anything included within the statement itself, although some may interpret “fairly” as just meaning some time before mid-year. Several officials saw unemployment undershooting what they would expect to be a level consistent with full employment, and only a few still saw downside risks to inflation. Having said that “many” noted only a modest risk of a future overshoot in inflation. The minutes suggested that the committee will start to discuss the size of the Fed’s balance sheet at upcoming meetings, while starting next month the Fed will publish fan charts of uncertainties regarding their economic projections.

Markets are judging the minutes as slightly dovish with bond yields and the US$ lower, however we think that the wording is still consistent with a March hike particularly should earnings growth pick up again in the next payrolls report.
FOMC Minutes: March Clearly On The Table But We Still See Next Hike In June – SEB

After the fed funds rate was raised by 25bps to 0.50-0.75% at the December meeting the FOMC voted unanimously to leave monetary policy unchanged at the first meeting of the year, a decision that was widely anticipated. The statement from the meeting was almost the same as in December. However, one sentence had been added where the FOMC highlighted that measures of consumer and business sentiment “have improved of late”. Probably one way to signal that upside risks to growth had increased slightly.

Overall we regard the message in Minutes as slightly more hawkish than the statement following the Jan/Feb meeting and recent communication by the Fed Chair a week ago.

A March hike is clearly still on the table, which also would increase the probability for three hikes this year. Given the fact the Fed has been very cautious in tightening monetary policy while there are few signs of an accelerating cost pressure we, however, think it is a little too early to change our call on the Fed already now.

Therefore we maintain our forecast of two rate hikes this year for now, with the next one in June. However, we will follow closely all future communication from committee members and consider a March rate hike if there are additional signals going in the same direction.

Andora Andrei

Active member
EUR/USD: Oscillating Amid Counterintuitive Reaction To Data; Positioning Key Driver

EUR/USD: Oscillating Amid Counterintuitive Reaction To Data; Positioning Key Driver

EUR/USD has not always provided the “correct” reaction to economic data releases. What does it mean? The team at ANZ provides some answers:
The response in currency markets to data releases over the past week has been instructive in that it has been counterintuitive.

In the wake of better than expected US January retail sales data, February regional PMI numbers and a hawkish tilt from Fed Chair Janet Yellen, the dollar sold off last week. This week, the euro has sold off despite better than expected PMI data which imply that the momentum in the euro area economy is accelerating during Q1.

EUR/USD is oscillating and the price action would suggest that coincident data are not affecting central bank policy expectations at present.

Market positioning is dominating for now and the market is awaiting clarification on planned US fiscal initiatives.

….Our forecasts continue to anticipate gradual USD appreciation vs EUR in coming months.
You must be registered for see images attach
You must be registered for see images

Andora Andrei

Active member
Gold Recovers As Uncertainty Rises

Gold Recovers As Uncertainty Rises

News and Events:

EUR/USD suffers from EU political uncertainty
The US dollar continued to retrace gains on Friday as investor confidence in the strength of the US economy continues to dwindle. This week's FOMC minutes suggest that the Fed is in no hurry to lift borrowing rates, while on the political front, investors are becoming increasingly impatient to know the details of Donald Trump's fiscal boost. After testing the 1.05 support level, EUR/USD bounced back to 1.06 on Friday. The currency pair is still trading below its 50dma, suggesting that the momentum remains on the downside. However, a break of that key resistance would open the road toward the next one standing at around 1.0750-1.08.
The upside is however quite limited in EUR/USD due to the highly uncertain political environment stemming from the ongoing French presidential elections. This environment has further capped euro gains against the greenback despite an improving economic outlook in the European Union. Against this backdrop, the risk remains on the downside in EUR/USD.
Gold is showing strong demand
Things are certainly looking up for the precious metal, which has hit its highest level since November 11th. The bullish pressures on gold are further bolstered by this week's Fed minutes. We have maintained a dovish stance on the US economy for the past two years and believe that there is further room still for disappointment on the monetary policy front. In our view, the Fed will not raise rates more than once this year and in this regard we believe that financial markets have overestimated the number of rate hikes. The demand for gold is therefore unlikely to stop.
All eyes will soon be on Trump's upcoming talk in front of congress. So far, no defined plan to increase jobs has been revealed but even IF there is a plan there is nothing that will magically transform the economic situation overnight. This is why we maintain our bullish view on gold. Technically speaking, the road is now wide-open towards $1300 an ounce.
You must be registered for see images attach
You must be registered for see images

Today's Key Issues (time in GMT):

Jan Retail Sales YoY, last 0,00% DKK / 08:00
Jan PPI MoM, last 1,50%, rev 1,60% EUR / 08:00
Jan PPI YoY, last 2,80%, rev 2,90% EUR / 08:00
Feb Consumer Confidence, exp 104,1, last 104,6 SEK / 08:00
Feb Manufacturing Confidence s.a., exp 117,8, last 119,1, rev 118,7 SEK / 08:00
Feb Economic Tendency Survey, exp 111,1, last 112, rev 111,9 SEK / 08:00
Feb 23 FIPE CPI - Weekly, exp 0,02%, last 0,02% BRL / 08:00
Dec Industrial Orders MoM, last 1,50%, rev 1,70% EUR / 09:00
Dec Industrial Orders NSA YoY, exp -0,80%, last 0,10% EUR / 09:00
Dec Industrial Sales MoM, last 2,40% EUR / 09:00
Dec Industrial Sales WDA YoY, last 3,90% EUR / 09:00
Jan BBA Loans for House Purchase, exp 42600, last 43228 GBP / 09:30
Feb Economic Sentiment, last 102,5 EUR / 10:00
Feb Manufacturing Confidence, exp 104,6, last 104,8 EUR / 10:00
Feb Consumer Confidence Index, exp 108,8, last 108,8 EUR / 10:00
Jan National Unemployment Rate, exp 12,50%, last 12,00% BRL / 12:00
Jan CPI NSA MoM, exp 0,40%, last -0,20% CAD / 13:30
Jan Primary Budget Balance, exp 17.7b, last -70.7b BRL / 13:30
Jan CPI YoY, exp 1,60%, last 1,50% CAD / 13:30
Jan Nominal Budget Balance, exp -10.2b, last -105.2b BRL / 13:30
Jan CPI Core- Common YoY%, last 1,40% CAD / 13:30
Jan Net Debt % GDP, exp 46,50%, last 45,90% BRL / 13:30
Jan CPI Core- Median YoY%, last 2,00% CAD / 13:30
Jan CPI Core- Trim YoY%, last 1,60% CAD / 13:30
Jan Consumer Price Index, exp 128,8, last 128,4 CAD / 13:30
Jan New Home Sales, exp 571k, last 536k USD / 15:00
Jan New Home Sales MoM, exp 6,40%, last -10,40% USD / 15:00
Feb F U. of Mich. Sentiment, exp 96, last 95,7 USD / 15:00
Feb F U. of Mich. Current Conditions, last 111,2 USD / 15:00
Feb F U. of Mich. Expectations, last 85,7 USD / 15:00
Feb F U. of Mich. 1 Yr Inflation, last 2,80% USD / 15:00
Feb F U. of Mich. 5-10 Yr Inflation, last 2,50% USD / 15:00
Jan Total Jobseekers, exp 3446.0k, last 3473.1k EUR / 17:00
Jan Jobseekers Net Change, exp -10, last 26,1 EUR / 17:00

The Risk Today:

EUR/USD is back around 1.0600. Hourly resistance is given at 1.0679 (16/02/2017 high) while hourly support can be found at 1.0521 (15/02/2017 low). The technical structure suggests that the current underlying move is a bullish consolidation. In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity.
GBP/USD has exited symmetrical triangle. However, the pair is still lying below strong resistance given at 1.2771 (05/10/2016 high). Key support is given at 1.2254 (19/01/2016 low) while hourly support is given around 1.2400. The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.
USD/JPY's demand is fading after its increase from support given at 111.36 (28/11/2016 low). Bearish pressures arise around hourly resistance given at 115.62 (19/01/2016 high). The technical structure suggests further weakness around former resistance given at 112.57 (17/01/2017 low). We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).
USD/CHF's short-term momentum is definitely bullish. The pair lies within an uptrend channel. Hourly resistance is implied by upper bound of the uptrend channel. Key resistance is given at a distance at 1.0344 (15/12/2016 high). We believe that the pair is likely to strengthen again above parity. In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.
1.1300 1.3445 1.1731 121.69
1.0954 1.3121 1.0652 118.66
1.0874 1.2771 1.0344 115.62
1.0590 1.2536 1.0052 112.48
1.0454 1.2254 0.9967 111.36
1.0341 1.1986 0.9862 106.04

Andora Andrei

Active member
Euro Set for Third Weekly Decline; Further Losses Seen Limited

Euro Set for Third Weekly Decline; Further Losses Seen Limited

ABN Amro lifts euro forecast, says dollar rally has peaked
UBS Asset takes ‘overweight’ position in euro versus dollar

The euro was on course for a third straight week of losses versus the dollar amid political uncertainties centered on France but some analysts and investors see limited further downside.
ABN Amro has revised up its euro forecasts while UBS Asset Management is overweight the single currency versus the dollar. The euro fell to a six-week low against the dollar this week amid heightened investor worries that France’s far-right presidential candidate Marine Le Pen was gaining traction in the polls. Le Pen, who wants to take her country out of the euro, is seen winning the first round of voting but will likely lose the second, polls signaled.
You must be registered for see images attach
You must be registered for see images

The single currency is likely to find some stability from here against the greenback, according to Georgette Boele, a currency strategist at ABN Amro Bank NV in Amsterdam.

“The euro has been under pressure because of the political headlines,” she said. “But I think that the euro has been pretty resilient especially versus the dollar. With all the political headlines, I would’ve expected it even lower.”

The dollar’s rally had peaked, Boele said, which means it is unlikely the euro would weaken as much as she had previously predicted. ABN Amro have lifted their 2Q EUR/USD forecast to 1.05 from their earlier call of 0.95
“At the moment the dollar is not profiting much from stronger U.S. data and hawkish Fed comments, which signals that market is already overly optimistic and investors are already positioned for dollar strength,” Boele said
A gauge of the dollar headed for a weekly decline as uncertainty over President Donald Trump’s policies persisted and after Treasury Secretary Steven Mnuchin said on Thursday the impact of fiscal stimulus this year on the economy may be limited
“We are overweight the euro versus the U.S. dollar,” Mark Haefele, global chief investment officer at UBS Wealth Management, writes in a client note
“At 1.06 versus the U.S. dollar, the euro is undervalued. Our estimate for the purchasing power parity of EUR-USD is 1.24. The magnitude of the euro’s undervaluation suggests that markets are underestimating the sustainability of the euro zone’s recovery”
“Even if the Fed hikes rates more than twice this year due to stronger growth and inflation, putting downward pressure on EUR-USD, our overweight U.S. equity position would likely get an additional boost,” Haefele writes
EUR/USD climbs 0.1% to 1.0594; on track for a 0.2% fall on the week, extending the 1.5% drop in the previous two weeks
The pair tests 55-DMA resistance at 1.0594 a second day with resistance at 1.0602-05, Feb. 20 low, 21 high and 1.0635, Feb. 20 high. Support was at 1.0538, Feb. 23 low and 1.0494, Feb. 22 low

Andora Andrei

Active member
Citigroup Sees German Two-Year Yields Below -1% as Rally Extends

Citigroup Sees German Two-Year Yields Below -1% as Rally Extends

Securites set for best week since debt crisis on haven demand
ECB seen buying $85 billion of short-term German notes in 2017

The rally in German two-year notes gathered steam on Friday, with Citigroup Inc. predicting yields could drop to minus 1 percent and beyond.
The securities headed for the best weekly gain since the euro area’s debt crisis, buoyed by demand for safer assets amid rising French political risks and the European Central Bank’s stepped-up purchases below its old deposit-rate floor. Citigroup estimates the ECB will buy about 80 billion euros ($85 billion) of one- to six-year German bonds this year even as it trims its overall monthly purchases from April, analysts led by Harvinder Sian wrote in a client.
You must be registered for see images attach
You must be registered for see images

The two-year yield fell four basis points to minus 0.94 percent on Friday, after touching a record minus 0.953 percent. The yield is set for five-day decline of 13 basis points.

Ten-year yields fell two basis points to 0.22 percent. Citigroup is targeting a yield of 0.1 percent, the analysts wrote in the note
The French-German 10-year yield spread was at 74 basis points. It reached 84 basis points on Monday, the highest since 2012

William Castillo

Banned Users
Forex is a fluctuated market. The price always fluctuates in this market. So, it is quite tough to assume the price earlier. anything can happen at any time in this volatile market. As a trader, I always try to make the trade easy and simple. Because I don't want to face any losses. My broker Tpglobalfx helps me a lot to make a profit. They are really helpful.

Aurix Exchange