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Investors are Wary of European Tapering in Stimulus

  • DAR Wong
  • 12 March 2018

Fundamental Outlook   The U.S. payroll grows above forecast and signals possible rate hike coming soon. China regains growth in consumer inflation. European Central Bank stays unchanged in monetary policy but investors are worried of weak economy due to tapering stimulus coming near year-end.

The U.S. ISM services index grew 59.5 in February and maintained good growth. Trade deficits widened to USD56.6 billion in January and worse than previous month, also highest in last 10 years’ record.

American jobless claims for the week ended 3 March increased to 231,000 and higher than previous week. On Friday, non-farm payroll grew 313,000 in February and much higher than median forecast, spiking new consensus of impending rate hike. However, hourly wages rose 0.1 percent and below target expectation.

China Caixin’s services index rose to 54.2 in February and matched forecast. Another report on trade surplus expanded CNY225 billion (est USD33.7 billion) in February and much higher than CNY136 billion in January.

China’s consumer prices rose 2.9 percent in February and highest since 2013. Producer prices grew 3.7 percent and matched forecast.

Japan’s leading indicators, comprising 11 economic indicators, grew 104.8 percent in January and slowest pace in last 8 months. Bank of Japan holds policy unchanged with short-term interest rate at minus 0.1 percent, while guiding 10Y-JGB yield a zero percent.  

European Central Bank holds interest rate unchanged at zero and continues its asset purchase at EUR30 billion monthly till September. Market investors are wary since President Draghi has not emphasized of continual easing like before.

Markit reports U.K. services index expanded at 54.5 in February, best record in 4 months and above forecast. Another report on manufacturing production rose 0.1 percent in February and lowest in 3 months’ record. Trade deficits performed worst in January at GBP12.3 billion after it was reported at minus GBP11.8 billion in December.

 

Technical Forecast   USD/JPY made a slight rebound last week after hitting 105.35 bottom. This week, we foresee the trend will be consolidating sideways from 106.00 – 107.50 range without clear headway. Risk control is advised in case the trend moves beyond the aforementioned range.

EUR/USD has been resisted at 1.2450 area last week. Technically, we reckon the trend is still unclear as the fundamental forces behind both currencies are still unclear. This week, the trend will probably be contained from 1.2200 – 1.2450 range while trading in mixed sentiment.

GBP/USD has shown a gradual bearish pattern on day-chart. The market is likely to fall soon if the trend cannot challenge above 1.3930 this week. Downside support is identified at 1.3700 level and driving beneath here will initiate a new south trend. Observe the BREXIT threats and social politics in U.K. are slowly waning the investors’ confidence.

 

 

Disclaimer: This article is written for general information only. No liability by the writer, publisher or any third party involved in the distribution of this work.

DAR Wong is a registered fund manager in Singapore with 29 years of global trading experiences. You may reach him at dar@pwforex.com


About the Author
DAR Wong (Singapore)
An international speaker with 27 years of trading experience in the global financial markets, DAR is a Market Master and author of “Living Daylight in Stock Market: Monetizing Your Profits in 8 Days”.

DAR Wong is an active market trader, registered fund manager, educator and author.He began his career in 1989 as an institutional Futures trader with Bank of America. DAR Wong specializes in trading global derivatives and financial markets. He has 26 years of experience accumulated through tenure with Bankers Trust, Barclays Bank, Citigroup (Smith Barney Shearson Inc) and as an independent trader.

DAR is the author of “8 Ways to Invest in China’s Emerging Market” and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional traders and active investors.

He is a popular and sought after international speaker who has presented to financial professionals and investors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China, Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East (UAE).

DAR is registered with NASD (now known as FINRA) series 3 and 5 as approved by National Futures Association (NFA) of USA and holds a current portfolio as Fund Strategist and Advisor with Dektos Investment registered with Monetary Authority of Singapore.

DAR is profiled as “One of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading “. In January 2015, DAR was honored with Outstanding Award for International Financial Market Analysis granted by ASEAN Commerce (Thailand).

DAR is the author of "8 Waysto Invest in China's Emerging Market" and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional tradersand active investors.1

He is a popular and sought after international speaker who has presented to financialprofessionals and inverstors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China,Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East(UAE).2


Year
2003 - Set up ASPRI to provide hedging advisory for corporate clients and training for financial professionals
2009 - Released first book “8 Ways to Invest in China’s Emerging Market”
2010 - Profiled as “one of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading” along with Larry Williams, Andrea Unger, Michael Cook, and Daryl Guppy etc
2011 - Received “Spirit of Enterprise”awarded by Singapore Management University in Singapore
2012 - Honored with Individual Diamond Career (Thailand) awardedby Royal Privy Council of Kingdom of Thailand
2013 - Appointed Vice Chairman of ASEAN-China Commerce Association and led a delegationtothe annual China-Asean Expo in Guangxi Province, China
2014 - Fund Manager cum Director in Dektos Investment Corporation registered with Monetary Authority of Singapore
2015 - Released new book “Living Daylight in Stock Market - Monetizing Your Profits in 8 Days” in January
2015 - Honored with Outstanding Award in International Financial Market Analysis awarded by ASEAN Commerce (Thailand)
2016 - Honored with Medal of Integrity by Royal Councilin Palace of Palembng, Indonesia

References

1.TV programs on ChannelNewsAsia (Singapore);Radio on 95.8 Capital (Singapore); Newspapers such as The Borneo Post (Malaysia), 资汇报 (Malaysia); Regional financial magazines such as The Analyst (India), 东盟商界(ASEAN, China), 资本杂志 (Malaysia).

2.Spoke at events for CME Group, Euronext LIFFE, Tokyo Commodity Exchange, Singapore Exchange, Korea Exchange, Bursa Malaysia, Thailand Futures Exchange, Jakarta Futures Exchange, Indonesia Commodity and Derivatives Exchange, Tokyo Commodity Exchange, Interactive Brokers, Xinhu Futures, Hangzhou Money Fair, China (Shenzhen) International Finance Expo, China (Guangzhou) International Finance Expo, Euromoney, CIMB, Maybank, RHB, UOB Bank, Asia Trader & Investor Convention, Global Rubber Conference, International Rubber Conference, Malaysia Rubber Board, International Rubber Research and Development Board,Malaysia Ministry of Agriculture, Rubber Industry Smallholders Development Authority, Vietnam Rubber Association, Cambodian Rubber Association, Bureau of Agriculture Research Philippines, Myanmar Rubber Planters & Producers Association etc.


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