SREENIVAS SAMBARI
I have been associated with WSD from July 2010. The back office support is very good and prompt. Whenever I faced any technical problem with the platform it has been fixed efficiently and the WSD team makes sure that all my queries are answered. My experience of trading with MT4 provided by WSD is that trades are executed instantly and I get the price which I see while executing the trade. The most important aspect with WSD is that the deposits and the withdrawals via bank wire is the fastest I ever experienced with any other broker firm. The last but not the least point with WSD is that since WSD is a regulated firm my funds with WSD are safe. Because of these things which I personally experienced from the last 5 months of my association with WSD, I could gradually and consistently increase my business. Now WSD has become my prime broker firm.
Monday, December 27, 2010
Sunday, December 19, 2010
Weekly Review
CURRENCY: A rollercoaster ride for the NZD with Friday’s Asian session happy to hunt down short positions. The European and North American sessions were, however, happy to resume the downside pressure.
GLOBAL MARKETS: Friday night NZ time saw consolidation in markets as they realised they may have gotten a little carried away over the week. US 10 year Treasury yields dropped 9 basis points to 3.32 percent, on top of a 10 basis point fall the day before, while the S&P500 rose 0.1 percent. Oil prices rose, ending the week up around a quarter of a percent.
KEY THEMES AND VIEWS EUROZONE MUDDLING ON One would have thought it would have surprised few observers, but markets nonetheless weren’t happy on Friday night NZ time when Moody’s downgraded Irish debt by a whopping five levels from Aa2 to Baa1, with a negative outlook. US and European equities fell in response. Ireland’s 10 year bond yields rose 17 basis points to 8.60 percent, and credit default swaps on their sovereign debt climbed to their highest level since November 30. Meanwhile, putting the next couple of years in the “too hard” basket for now, EU leaders on Friday agreed to create a permanent debt-crisis mechanism in 2013. Germany pressed for assistance as a “last resort” only, but the final text read “if indispensible”. On the same day, Germany ruled out increasing the 750 billion euro emergency fund. The main question now is whether there is a better way of utilising the fund than last-minute rescues. Bond purchases or shorter-term credits would be obvious contenders, but anything other than an overtly necessary lifeline for the greater good is going to be politically unpopular, particularly in Germany. However, the EU needs to buy itself some time to come up with a plan on how to deal with the debt crisis more proactively. Since banks have been urged to hold ever more “safe” sovereign debt in recent years, defaults could have grave consequences for financial stability in the region. Events so far do not inspire great hope of coordinated, successful action.
A MEASURE OF SUCCESS? US 10 year Treasury yields may be up 70 basis points since Ben Bernanke announced the second round of quantitative easing in late August, but US equities have risen 17 percent (and oil futures too).
GLOBAL MARKETS: Friday night NZ time saw consolidation in markets as they realised they may have gotten a little carried away over the week. US 10 year Treasury yields dropped 9 basis points to 3.32 percent, on top of a 10 basis point fall the day before, while the S&P500 rose 0.1 percent. Oil prices rose, ending the week up around a quarter of a percent.
KEY THEMES AND VIEWS EUROZONE MUDDLING ON One would have thought it would have surprised few observers, but markets nonetheless weren’t happy on Friday night NZ time when Moody’s downgraded Irish debt by a whopping five levels from Aa2 to Baa1, with a negative outlook. US and European equities fell in response. Ireland’s 10 year bond yields rose 17 basis points to 8.60 percent, and credit default swaps on their sovereign debt climbed to their highest level since November 30. Meanwhile, putting the next couple of years in the “too hard” basket for now, EU leaders on Friday agreed to create a permanent debt-crisis mechanism in 2013. Germany pressed for assistance as a “last resort” only, but the final text read “if indispensible”. On the same day, Germany ruled out increasing the 750 billion euro emergency fund. The main question now is whether there is a better way of utilising the fund than last-minute rescues. Bond purchases or shorter-term credits would be obvious contenders, but anything other than an overtly necessary lifeline for the greater good is going to be politically unpopular, particularly in Germany. However, the EU needs to buy itself some time to come up with a plan on how to deal with the debt crisis more proactively. Since banks have been urged to hold ever more “safe” sovereign debt in recent years, defaults could have grave consequences for financial stability in the region. Events so far do not inspire great hope of coordinated, successful action.
A MEASURE OF SUCCESS? US 10 year Treasury yields may be up 70 basis points since Ben Bernanke announced the second round of quantitative easing in late August, but US equities have risen 17 percent (and oil futures too).
Monday, December 13, 2010
Weekly Review
CURRENCY: The range-bound trading to close the week for the NZD was duly delivered on Friday. It attempted unsuccessfully both sides of the recent range and finished slightly below 0.75USD.
GLOBAL MARKETS: US equities and Treasury yields rose on the back of stronger data to a post-Lehman high. European equities were very slightly stronger. Commodity prices were mixed, with some metals (except copper) falling on China growth fears, but other commodity prices rising on relief that Chinese interest rates were not raised over the weekend.
KEY THEMES AND VIEWS BUBBLE, BUBBLE, TOIL AND TROUBLE. The Chinese government in the weekend released their initial economic plan for the next five years. They pledged stabilising prices via more “prudent” monetary policy, more tightly managed liquidity, more targeted investment growth, and a shift in the focus of growth from exports and investment to consumption. However, no yuan appreciation targets were revealed that would assist this; rather they will target “basic stability” in the exchange rate. Chinese inflation was 5.1 percent for the year ended November, with food prices up almost 12 percent. The broad money supply, M2, is up 55 percent in two years. The sheer volume of credit growth forced down the economy’s throat in response to the GFC is starting to cause some indigestion. The authorities now face the delicate task of popping a real estate bubble and tidying up after the massive misallocation of resources that has occurred, while maintaining strong growth. Authorities held back on raising rates in the weekend, satisfying themselves with raising banks’ reserve requirements for the third time in five weeks. But use a pin or a blunt axe, the effect of the bubble’s bursting is going to be the same in the end. High commodity prices are the one bright spot for the New Zealand economy at present. If China’s cautious braking of their runaway economy results in an ugly skid and a loud thump, commodity prices will fall sharply.
US DATA STRONGER. The stronger run of US data, interrupted only briefly by the November payrolls shocker, continued on Friday as US consumer confidence climbed to a six-month (still-fragile) high, holiday sales were forecast to be the strongest in four years, and exports hit a two-year high. The passing of the tax cut extension also boosted growth expectations, and, accordingly, longer-dated Treasuries. US 10-year bond yields finished the week up a whopping 32 points despite the Fed's ongoing QE2 and comments from Bernanke that the programme would be extended if necessary. Movements in US long rates do have an impact here in New Zealand, so despite the RBNZ's downbeat MPS on Thursday we may see some upward pressure on long rates.
GLOBAL MARKETS: US equities and Treasury yields rose on the back of stronger data to a post-Lehman high. European equities were very slightly stronger. Commodity prices were mixed, with some metals (except copper) falling on China growth fears, but other commodity prices rising on relief that Chinese interest rates were not raised over the weekend.
KEY THEMES AND VIEWS BUBBLE, BUBBLE, TOIL AND TROUBLE. The Chinese government in the weekend released their initial economic plan for the next five years. They pledged stabilising prices via more “prudent” monetary policy, more tightly managed liquidity, more targeted investment growth, and a shift in the focus of growth from exports and investment to consumption. However, no yuan appreciation targets were revealed that would assist this; rather they will target “basic stability” in the exchange rate. Chinese inflation was 5.1 percent for the year ended November, with food prices up almost 12 percent. The broad money supply, M2, is up 55 percent in two years. The sheer volume of credit growth forced down the economy’s throat in response to the GFC is starting to cause some indigestion. The authorities now face the delicate task of popping a real estate bubble and tidying up after the massive misallocation of resources that has occurred, while maintaining strong growth. Authorities held back on raising rates in the weekend, satisfying themselves with raising banks’ reserve requirements for the third time in five weeks. But use a pin or a blunt axe, the effect of the bubble’s bursting is going to be the same in the end. High commodity prices are the one bright spot for the New Zealand economy at present. If China’s cautious braking of their runaway economy results in an ugly skid and a loud thump, commodity prices will fall sharply.
US DATA STRONGER. The stronger run of US data, interrupted only briefly by the November payrolls shocker, continued on Friday as US consumer confidence climbed to a six-month (still-fragile) high, holiday sales were forecast to be the strongest in four years, and exports hit a two-year high. The passing of the tax cut extension also boosted growth expectations, and, accordingly, longer-dated Treasuries. US 10-year bond yields finished the week up a whopping 32 points despite the Fed's ongoing QE2 and comments from Bernanke that the programme would be extended if necessary. Movements in US long rates do have an impact here in New Zealand, so despite the RBNZ's downbeat MPS on Thursday we may see some upward pressure on long rates.
Monday, December 6, 2010
Weekly Review
CURRENCY: A much weaker than expected US November non-farm payrolls delivered the expected upside moves for the Australasian currencies. The NZD closed around the highs as commodity prices lifted further.
GLOBAL MARKETS: US equities fell on disappointing payrolls data but then recovered on the prospect of more helicopter cash from the Fed. European equities weakened a little in tandem, but still had their best week in a month. A broad range of commodities were higher on USD weakness, with oil hitting a 25 month high of near $89/barrel (helped by cold weather in Europe). US 10-year bond yields rallied on the weak payrolls number, but subsequently sold off, with yields closing at 3.00 percent.
KEY THEMES AND VIEWS
HAPPIER US DATA RUN TRIPS UP ON LABOUR MARKET. US Non-farm payrolls data was a shocker. 39,000 new jobs were created in November versus market expectations of 145k, and the unemployment rate rose from 9.6 to 9.8 percent. The data flew in the face of recent more upbeat messages coming from the likes of the manufacturing sector and improved holiday sales, and was seen as confirming that QE2 would sail on for the foreseeable future. While stocks fell on the news, the resulting USD weakness drove up commodity prices, and commodity-related firms’ stock prices drove up US stock indices. Stocks were also helped along by a report that Ben Bernanke had stated he has not ruled out extending quantitative easing beyond the mooted $600bn. Are we returning to the "good news is good, bad news is better" days? Seems highly unlikely. Markets have surely realised by now that central banks are not omnipotent. It probably more reflects the fact that labour market data always lags the rest of the economy, and a broad range of other US data has been looking a little less bleak lately (including the ISM non-manufacturing index that was also out on Friday). Meanwhile, President Obama's Debt Panel scuttled his $3.8 trillion plan for budget cuts, in protest against higher taxes (Republicans) and cuts in benefits (Democrats). Good luck negotiating that one through the tortuous maze that is US politics.
CONTINUING STRESS IN EUROPE. The ECB on Friday directly bought “modest” quantities of Portuguese and Irish government bonds, which caused a narrowing in spreads to German bunds. Time will tell how long the effect lasts. Disagreement is rife regarding a longer-term solution to contain the crisis. Meanwhile the Spanish government unveiled new austerity measures just a week after stating that they wouldn't be needed, after their 10 year bonds suffered in the aftermath of the Irish bail-out. The measures will hit smokers and the elderly in the pocket. Fortunately the two groups tend to have little crossover.
GLOBAL MARKETS: US equities fell on disappointing payrolls data but then recovered on the prospect of more helicopter cash from the Fed. European equities weakened a little in tandem, but still had their best week in a month. A broad range of commodities were higher on USD weakness, with oil hitting a 25 month high of near $89/barrel (helped by cold weather in Europe). US 10-year bond yields rallied on the weak payrolls number, but subsequently sold off, with yields closing at 3.00 percent.
KEY THEMES AND VIEWS
HAPPIER US DATA RUN TRIPS UP ON LABOUR MARKET. US Non-farm payrolls data was a shocker. 39,000 new jobs were created in November versus market expectations of 145k, and the unemployment rate rose from 9.6 to 9.8 percent. The data flew in the face of recent more upbeat messages coming from the likes of the manufacturing sector and improved holiday sales, and was seen as confirming that QE2 would sail on for the foreseeable future. While stocks fell on the news, the resulting USD weakness drove up commodity prices, and commodity-related firms’ stock prices drove up US stock indices. Stocks were also helped along by a report that Ben Bernanke had stated he has not ruled out extending quantitative easing beyond the mooted $600bn. Are we returning to the "good news is good, bad news is better" days? Seems highly unlikely. Markets have surely realised by now that central banks are not omnipotent. It probably more reflects the fact that labour market data always lags the rest of the economy, and a broad range of other US data has been looking a little less bleak lately (including the ISM non-manufacturing index that was also out on Friday). Meanwhile, President Obama's Debt Panel scuttled his $3.8 trillion plan for budget cuts, in protest against higher taxes (Republicans) and cuts in benefits (Democrats). Good luck negotiating that one through the tortuous maze that is US politics.
CONTINUING STRESS IN EUROPE. The ECB on Friday directly bought “modest” quantities of Portuguese and Irish government bonds, which caused a narrowing in spreads to German bunds. Time will tell how long the effect lasts. Disagreement is rife regarding a longer-term solution to contain the crisis. Meanwhile the Spanish government unveiled new austerity measures just a week after stating that they wouldn't be needed, after their 10 year bonds suffered in the aftermath of the Irish bail-out. The measures will hit smokers and the elderly in the pocket. Fortunately the two groups tend to have little crossover.
Sunday, November 28, 2010
week-of-november-28-2010
Is it time to panic yet?--Brian Dolan, Chief Currency Strategist
North Korea is firing artillery shells at South Korea, the Irish banking system is on the verge of collapse, with fears of broader contagion steadily increasing, China is pursuing additional credit restraint, and the Fed is undertaking QE2 in last ditch effort to salvage the US recovery. If ever there were a time to hit the panic button, now would seem to be it. While we certainly think the environment is ripe for a major risk sell-off (USD, CHF, JPY, gold higher/EUR, GBP, AUD, stocks, commodities lower), we think it's going to be more of a slow motion train wreck rather than a sudden bus plunge.
The risk to this view is that we do have a more sudden risk relapse, and we would note in particular the time of year (end of year profit-taking/positioning reduction around the corner) and the US Thanksgiving holiday week (where lower liquidity can trigger exaggerated movements), as increasing that potential. But our primary scenario is a gradual decline in the beginning, likely followed by an accelerating cascade of risk selling over the next few weeks and months. From a strategic point, this suggests looking for opportunities to get short of risk. From a tactical point, it suggests there is still time, and likely multiple opportunities, to get short risk in the weeks ahead.
In broad brush strokes, our thinking on the crisis topics above, which we look at in greater detail below, is as follows. The North Korean provocation should be a flash in the pan, as neither side wants to risk a full-out military conflict. We expect China to work behind the scenes to rein in its psychopathic ward and that crisis tensions should fade relatively quickly as in past.
The Eurozone debt crisis is far more troubling and there's clearly a growing sense of inevitability of sovereign defaults in the Eurozone, though it's likely to drag out over years. In the shorter term, a two-tiered European debt market is in the process of becoming entrenched, and we think there is more potential of the core being dragged down with the peripherals when investors suffer the expected crisis of confidence in the EUR and Eurozone debt as a whole. We would note a chart of Periphery-German bond spreads shows an ascending triangle, suggesting that yield spreads may blow-out sharply within the next couple of months. EUR/USD has also closed (slightly) below the 1.3374 bottom of its daily Ichimoku cloud.
China's efforts to rein in inflation may temporarily upset the growth/commodity demand apple-cart in the short-run, but Chinese demand is a fierce beast and should prevent a sudden collapse in commodity prices or commodity currencies. A greater Euro-zone financial crisis is also a risk for a sudden collapse in commodities, but our preferred view is that ongoing US weakness and weakening European demand will gradually impact China's growth, and that's what will send commodities lower. On the charts, we would note what looks to be a 'head and shoulders' topping formation on the CRB, AUD/USD, gold, and WTI crude oil. At the minimum, the symmetry among these suggests a continued correlation-based approach to FX and commodities. At the extreme, if the right shoulder equals the left shoulder in duration, a break lower could occur within the next 1-3 weeks.
For the Fed's QE2, the flood of dollars that many feared is instead staying on banks' balance sheets. At the same time, US data have shown some encouraging signs, suggesting the Fed may not need to do the full QE2. We think there is still a more significant round of USD short-covering to come as worst-case fears of QE2 are priced back out. For the USD index, we would note the Fibonacci significance of the 80.00/10 level, with a break above it suggesting a higher USD ahead. The 1.3330/40 level is the equivalent support in EUR/USD.
Eurozone crisis is only just beginning--Kathleen Brooks, Research Director UK/EMEA
Those who thought a bailout of Ireland by the EU and the International Monetary Fund would calm the markets and ease pressure on Portugal and Spain were sorely disappointed. Irish bond yields have risen more than 80 basis points since the start of this week. Spain is arguably the bigger problem for the Eurozone and its 10-yr bond yield is now nearly double that of Germany’s at more than 5 per cent, pushing the Spanish/German bond spread to record highs.
Spain’s precarious financial position is extremely worrying for the markets. It is the fourth largest economic force in the Eurozone and has a EUR1trilion economy. Its budget deficit is projected to be 9.5 per cent of GDP for this year, and, like Ireland, it has a weak banking sector, hobbled by the bursting of a giant real estate bubble that caused the unemployment rate to surge to more than 20 per cent. Ireland’s bailout will amount to EUR85bn Dublin announced this week, this is small change compared to Spain where estimates for the cost of financing a Spanish bailout top EUR450bn. Investors are now concerned that the EU/IMF stabilization fund, which totals EUR440bn, would be inadequate and Spain may be too big to bail.
Right now, the small risk that Spain may need a bailout is the biggest threat to the Eurozone project. Without a permanent mechanism to deal with the troubled economies it appears that the markets will continue to target Europe’s weakest economies.
European authorities need to address both sovereign and banking sector issues. Germany is leading these preliminary discussions and it wants all bonds issued by the Eurozone nations to include standardized “collective action” clauses, which would be the first step to private investors sharing the burden in case of a default. Germany wants this clause to be included from next year, two years before the automatic default mechanism will be implemented. The European Central Bank also wants the troubled financial sectors of Europe’s periphery to be fully recapitalized. Irish banks alone have sucked in more than EUR130bn of special ECB loans, if they can be recapitalized and weaned off ECB funds then the central bank can concentrate on its aim to normalize monetary conditions by removing these special liquidity facilities.
Eurozone officials need to agree on these measures and implement them quickly and efficiently to bring some certainty to the markets and help ease pressure on the peripheral economies. Right now there is a cacophony of voices talking at odds to each other. To settle the markets, Eurozone officials need to stand firm and start singing from the same hymn sheet.
Fears of China tightening have become a reality--Dan Hwang, Senior Market Strategist
Fears of further monetary tightening out of China have become a reality undermining global equity and commodity prices. The PBOC has taken a myriad of measures in the past months to rein in lending and curb growth and inflation. Last Friday’s announcement of an additional 50bp hike to the reserve requirement ratio (RRR) was the 5th increase this year and brings up the average RRR across Chinese banks to 17.5%. In monetary terms, the hike is equivalent to the removal of approximately 350bln Yuan in banks’ lending capacity and is in direct response to elevated loan levels despite past attempts to depress lending (latest Net Yuan Loans release was 588bln Yuan vs. expected 450bln). Furthermore, on October 19th the PBOC raised the benchmark interest rate by 25bps to 5.56, the first hike since 2007. Despite the historic hike, the higher than expected October CPI release (4.4% vs. expectations of 4.0% YoY) reflects continued upside pressures on inflation and suggests further tightening measures may be necessary. We believe the PBOC will continue its gradual tightening cycle and expect another hike to the benchmark interest rate by early to mid-December.
The impact of Chinese tightening measures on commodities has been loud and clear - gold prices have declined about 7% from recent highs to lows, oil prices have seen a greater than 9% move, and silver has witnessed a 14% high to low range. Declining commodity demand as a direct result of China’s policy direction has translated into the currency markets with commodity currencies (AUD, NZD, CAD) seeing significant declines of late. AUD/USD tested highs around 1.0180 in early November but fell precipitously to test the key 55-day SMA (support on recent uptrend) around 0.9750. The kiwi traded close to the 0.8000 level against the dollar but stalled just ahead of it and saw a subsequent 3 big figure decline to current levels around 0.7630. The loonie was not spared in the China-induced commodity currency selloff - USD/CAD traded under parity in early November but has since seen a test just short of the 1.0300 level. Wednesday’s Thanksgiving eve risk rally has seen commodity currencies recover some of their recent losses, but we believe further strength may be used as an opportunity to sell at more attractive price points. The impending reality of a hike to China’s benchmark interest rate in December, along with persistent euro-zone periphery woes, will likely cap commodity and commodity currency upside in the weeks ahead.
Post QE2 – Has the Fed got it all wrong?--Chris Tevere, CMT, Senior Currency Strategist
Yesterday the Fed released the minutes of the November FOMC policy meeting. Traders wanted to see if the decision to provide another $600 billion in additional asset purchases was as contentious in the Fed, as it was in Congress and the media. As it turns out, “nearly all members” backed QE2, however they differed over the costs and benefits associated with the program. Overall, “most” participants judged that additional quantitative easing would put “downward pressure on longer-term interest rates and boost asset prices”; meanwhile “some” noted concerns that the expansion of the Fed’s balance sheet may lead to a “reduction in value” of the U.S. Dollar and “several” suggested it may cause an “undesirably large increase in inflation”.
In the early aftermath, it appears the Fed may have gotten it wrong in their assessment of the effects of additional QE. Treasury yields have risen (especially in the long end of the curve), asset prices have fallen, the USD has rallied and today’s October PCE – one of the Fed’s primary tools to measure inflation – came in line with consensus expectations. Additionally, the newly elected House members are keen to keep the seemingly ever rising costs of government at bay. Taken together, this suggests mounting inflationary fears are largely unfounded at the moment. In fairness, a majority of the USD strength can be attributed to European peripheral sovereign debt concerns, as well as the unwinding of extreme short-positioning in the dollar; however the back up in 10-year treasury yields may continue to unpin the USD in the weeks to come. From a technical perspective, 10-year yields look to have stabilized between 2.72% and 2.96%. Should a breakout occur, we believe it will be rebuffed on either side as there is strong resistance from 3.06-3.13% – a series of horizontal pivots and the 200-day SMA – and support around 2.60%, followed by 2.45%. USD/JPY will likely see a similar pattern as it has traded between 82.80 – 83.90 of late, with further support seen into 81.50/82.00 and resistance near 84.50/85.00.
Key data and events to watch next week-- Eric Viloria, CMT, Senior Currency Strategist
Unites States:
Monday – Nov. Dallas Fed manufacturing activity
Tuesday – Sept. and 3Q S&P/Case Shiller Home Price Index, Nov. Chicago PMI, Nov. Conference Board Consumer Confidence, Nov. NAPM-Milwaukee, Fed Chairman Ben Bernanke speaks in Ohio
Wednesday – Nov. ADP employment change, 3Q final nonfarm productivity, 3Q unit labor costs, Nov. ISM manufacturing and prices paid, Oct. construction spending, Fed’s Beige Book, speeches by the Fed Vice Chairman Janet Yellen and Dallas Fed Preside Richard Fisher
Thursday – Weekly jobless claims, Oct. pending home sales, speeches by Philadelphia Fed President Charles Plosser and St. Louis Fed Preside James Bullard
Friday – Nov. employment report, Nov. ISM non-manufacturing index, Oct. factory orders
Euro-zone:
Monday – EZ consumer, economic, industrial, and services confidence indicators for Nov.
Tuesday – German Nov. unemployment data, French Oct. producer prices, EZ CPI estimate for Nov., EU’s Olli Rehn will speak on securing financial stability
Wednesday – Nov. final German, French, and EZ manufacturing PMI
Thursday – French 3Q employment data, 3Q preliminary EZ GDP figures, Oct. EZ PPI, ECB interest rate announcement
Friday – Nov. final German, French, and EZ services PMI, Oct. EZ retail sales
United Kingdom:
Monday – Nov. Hometrack Housing survey, Oct. net consumer credit and net lending secured on dwellings, Oct. mortgage approvals
Tuesday – Nov. GfK Consumer Confidence survey
Wednesday – Nov. Nationwide House prices, Nov. manufacturing PMI
Thursday – Nov. construction PMI
Friday – Nov. services PMI
Japan:
Monday – Oct. retail trade, Nov. small business confidence, BOJ Governor Masaaki Shirakawa and Deputy Governor Nishimura are set to speak
Tuesday – Oct. household spending, Oct. employment data, Oct. preliminary industrial production, Oct housing starts and construction orders
Thursday – 3Q capital spending, BOJ Deputy Governor Nishimura speaks
Canada:
Monday – 3Q current account, Oct. industrial product price and raw materials price index
Tuesday – Sept. and 3Q GDP numbers
Friday – Nov. employment report
Australia & New Zealand:
Monday – Australia Oct. HIA new home sales, Australia 3Q company operating profit & inventories, New Zealand Oct. trade balance data, Nov. NBNZ Activity Outlook and Business Confidence, speech by RBA Governor Glenn Stevens
Tuesday – Australia Oct. building approvals, 3Q current account balance, Oct. private sector credit, NZ Oct. building permits
Wednesday – Australia Nov. AiG Performance of Manufacturing index, Australia 3Q GDP figures, Nov. RBA commodity price index, New Zealand Nov. ANZ commodity price
Thursday – Australia Oct. trade balance, Oct retail sales
Friday – Australia Nov. AiG Performance of Service index
China:
Wednesday – Nov. China manufacturing PMI and HSBC manufacturing PMI
Friday – Nov. China non-manufacturing PMI and HSBC services PMI
North Korea is firing artillery shells at South Korea, the Irish banking system is on the verge of collapse, with fears of broader contagion steadily increasing, China is pursuing additional credit restraint, and the Fed is undertaking QE2 in last ditch effort to salvage the US recovery. If ever there were a time to hit the panic button, now would seem to be it. While we certainly think the environment is ripe for a major risk sell-off (USD, CHF, JPY, gold higher/EUR, GBP, AUD, stocks, commodities lower), we think it's going to be more of a slow motion train wreck rather than a sudden bus plunge.
The risk to this view is that we do have a more sudden risk relapse, and we would note in particular the time of year (end of year profit-taking/positioning reduction around the corner) and the US Thanksgiving holiday week (where lower liquidity can trigger exaggerated movements), as increasing that potential. But our primary scenario is a gradual decline in the beginning, likely followed by an accelerating cascade of risk selling over the next few weeks and months. From a strategic point, this suggests looking for opportunities to get short of risk. From a tactical point, it suggests there is still time, and likely multiple opportunities, to get short risk in the weeks ahead.
In broad brush strokes, our thinking on the crisis topics above, which we look at in greater detail below, is as follows. The North Korean provocation should be a flash in the pan, as neither side wants to risk a full-out military conflict. We expect China to work behind the scenes to rein in its psychopathic ward and that crisis tensions should fade relatively quickly as in past.
The Eurozone debt crisis is far more troubling and there's clearly a growing sense of inevitability of sovereign defaults in the Eurozone, though it's likely to drag out over years. In the shorter term, a two-tiered European debt market is in the process of becoming entrenched, and we think there is more potential of the core being dragged down with the peripherals when investors suffer the expected crisis of confidence in the EUR and Eurozone debt as a whole. We would note a chart of Periphery-German bond spreads shows an ascending triangle, suggesting that yield spreads may blow-out sharply within the next couple of months. EUR/USD has also closed (slightly) below the 1.3374 bottom of its daily Ichimoku cloud.
China's efforts to rein in inflation may temporarily upset the growth/commodity demand apple-cart in the short-run, but Chinese demand is a fierce beast and should prevent a sudden collapse in commodity prices or commodity currencies. A greater Euro-zone financial crisis is also a risk for a sudden collapse in commodities, but our preferred view is that ongoing US weakness and weakening European demand will gradually impact China's growth, and that's what will send commodities lower. On the charts, we would note what looks to be a 'head and shoulders' topping formation on the CRB, AUD/USD, gold, and WTI crude oil. At the minimum, the symmetry among these suggests a continued correlation-based approach to FX and commodities. At the extreme, if the right shoulder equals the left shoulder in duration, a break lower could occur within the next 1-3 weeks.
For the Fed's QE2, the flood of dollars that many feared is instead staying on banks' balance sheets. At the same time, US data have shown some encouraging signs, suggesting the Fed may not need to do the full QE2. We think there is still a more significant round of USD short-covering to come as worst-case fears of QE2 are priced back out. For the USD index, we would note the Fibonacci significance of the 80.00/10 level, with a break above it suggesting a higher USD ahead. The 1.3330/40 level is the equivalent support in EUR/USD.
Eurozone crisis is only just beginning--Kathleen Brooks, Research Director UK/EMEA
Those who thought a bailout of Ireland by the EU and the International Monetary Fund would calm the markets and ease pressure on Portugal and Spain were sorely disappointed. Irish bond yields have risen more than 80 basis points since the start of this week. Spain is arguably the bigger problem for the Eurozone and its 10-yr bond yield is now nearly double that of Germany’s at more than 5 per cent, pushing the Spanish/German bond spread to record highs.
Spain’s precarious financial position is extremely worrying for the markets. It is the fourth largest economic force in the Eurozone and has a EUR1trilion economy. Its budget deficit is projected to be 9.5 per cent of GDP for this year, and, like Ireland, it has a weak banking sector, hobbled by the bursting of a giant real estate bubble that caused the unemployment rate to surge to more than 20 per cent. Ireland’s bailout will amount to EUR85bn Dublin announced this week, this is small change compared to Spain where estimates for the cost of financing a Spanish bailout top EUR450bn. Investors are now concerned that the EU/IMF stabilization fund, which totals EUR440bn, would be inadequate and Spain may be too big to bail.
Right now, the small risk that Spain may need a bailout is the biggest threat to the Eurozone project. Without a permanent mechanism to deal with the troubled economies it appears that the markets will continue to target Europe’s weakest economies.
European authorities need to address both sovereign and banking sector issues. Germany is leading these preliminary discussions and it wants all bonds issued by the Eurozone nations to include standardized “collective action” clauses, which would be the first step to private investors sharing the burden in case of a default. Germany wants this clause to be included from next year, two years before the automatic default mechanism will be implemented. The European Central Bank also wants the troubled financial sectors of Europe’s periphery to be fully recapitalized. Irish banks alone have sucked in more than EUR130bn of special ECB loans, if they can be recapitalized and weaned off ECB funds then the central bank can concentrate on its aim to normalize monetary conditions by removing these special liquidity facilities.
Eurozone officials need to agree on these measures and implement them quickly and efficiently to bring some certainty to the markets and help ease pressure on the peripheral economies. Right now there is a cacophony of voices talking at odds to each other. To settle the markets, Eurozone officials need to stand firm and start singing from the same hymn sheet.
Fears of China tightening have become a reality--Dan Hwang, Senior Market Strategist
Fears of further monetary tightening out of China have become a reality undermining global equity and commodity prices. The PBOC has taken a myriad of measures in the past months to rein in lending and curb growth and inflation. Last Friday’s announcement of an additional 50bp hike to the reserve requirement ratio (RRR) was the 5th increase this year and brings up the average RRR across Chinese banks to 17.5%. In monetary terms, the hike is equivalent to the removal of approximately 350bln Yuan in banks’ lending capacity and is in direct response to elevated loan levels despite past attempts to depress lending (latest Net Yuan Loans release was 588bln Yuan vs. expected 450bln). Furthermore, on October 19th the PBOC raised the benchmark interest rate by 25bps to 5.56, the first hike since 2007. Despite the historic hike, the higher than expected October CPI release (4.4% vs. expectations of 4.0% YoY) reflects continued upside pressures on inflation and suggests further tightening measures may be necessary. We believe the PBOC will continue its gradual tightening cycle and expect another hike to the benchmark interest rate by early to mid-December.
The impact of Chinese tightening measures on commodities has been loud and clear - gold prices have declined about 7% from recent highs to lows, oil prices have seen a greater than 9% move, and silver has witnessed a 14% high to low range. Declining commodity demand as a direct result of China’s policy direction has translated into the currency markets with commodity currencies (AUD, NZD, CAD) seeing significant declines of late. AUD/USD tested highs around 1.0180 in early November but fell precipitously to test the key 55-day SMA (support on recent uptrend) around 0.9750. The kiwi traded close to the 0.8000 level against the dollar but stalled just ahead of it and saw a subsequent 3 big figure decline to current levels around 0.7630. The loonie was not spared in the China-induced commodity currency selloff - USD/CAD traded under parity in early November but has since seen a test just short of the 1.0300 level. Wednesday’s Thanksgiving eve risk rally has seen commodity currencies recover some of their recent losses, but we believe further strength may be used as an opportunity to sell at more attractive price points. The impending reality of a hike to China’s benchmark interest rate in December, along with persistent euro-zone periphery woes, will likely cap commodity and commodity currency upside in the weeks ahead.
Post QE2 – Has the Fed got it all wrong?--Chris Tevere, CMT, Senior Currency Strategist
Yesterday the Fed released the minutes of the November FOMC policy meeting. Traders wanted to see if the decision to provide another $600 billion in additional asset purchases was as contentious in the Fed, as it was in Congress and the media. As it turns out, “nearly all members” backed QE2, however they differed over the costs and benefits associated with the program. Overall, “most” participants judged that additional quantitative easing would put “downward pressure on longer-term interest rates and boost asset prices”; meanwhile “some” noted concerns that the expansion of the Fed’s balance sheet may lead to a “reduction in value” of the U.S. Dollar and “several” suggested it may cause an “undesirably large increase in inflation”.
In the early aftermath, it appears the Fed may have gotten it wrong in their assessment of the effects of additional QE. Treasury yields have risen (especially in the long end of the curve), asset prices have fallen, the USD has rallied and today’s October PCE – one of the Fed’s primary tools to measure inflation – came in line with consensus expectations. Additionally, the newly elected House members are keen to keep the seemingly ever rising costs of government at bay. Taken together, this suggests mounting inflationary fears are largely unfounded at the moment. In fairness, a majority of the USD strength can be attributed to European peripheral sovereign debt concerns, as well as the unwinding of extreme short-positioning in the dollar; however the back up in 10-year treasury yields may continue to unpin the USD in the weeks to come. From a technical perspective, 10-year yields look to have stabilized between 2.72% and 2.96%. Should a breakout occur, we believe it will be rebuffed on either side as there is strong resistance from 3.06-3.13% – a series of horizontal pivots and the 200-day SMA – and support around 2.60%, followed by 2.45%. USD/JPY will likely see a similar pattern as it has traded between 82.80 – 83.90 of late, with further support seen into 81.50/82.00 and resistance near 84.50/85.00.
Key data and events to watch next week-- Eric Viloria, CMT, Senior Currency Strategist
Unites States:
Monday – Nov. Dallas Fed manufacturing activity
Tuesday – Sept. and 3Q S&P/Case Shiller Home Price Index, Nov. Chicago PMI, Nov. Conference Board Consumer Confidence, Nov. NAPM-Milwaukee, Fed Chairman Ben Bernanke speaks in Ohio
Wednesday – Nov. ADP employment change, 3Q final nonfarm productivity, 3Q unit labor costs, Nov. ISM manufacturing and prices paid, Oct. construction spending, Fed’s Beige Book, speeches by the Fed Vice Chairman Janet Yellen and Dallas Fed Preside Richard Fisher
Thursday – Weekly jobless claims, Oct. pending home sales, speeches by Philadelphia Fed President Charles Plosser and St. Louis Fed Preside James Bullard
Friday – Nov. employment report, Nov. ISM non-manufacturing index, Oct. factory orders
Euro-zone:
Monday – EZ consumer, economic, industrial, and services confidence indicators for Nov.
Tuesday – German Nov. unemployment data, French Oct. producer prices, EZ CPI estimate for Nov., EU’s Olli Rehn will speak on securing financial stability
Wednesday – Nov. final German, French, and EZ manufacturing PMI
Thursday – French 3Q employment data, 3Q preliminary EZ GDP figures, Oct. EZ PPI, ECB interest rate announcement
Friday – Nov. final German, French, and EZ services PMI, Oct. EZ retail sales
United Kingdom:
Monday – Nov. Hometrack Housing survey, Oct. net consumer credit and net lending secured on dwellings, Oct. mortgage approvals
Tuesday – Nov. GfK Consumer Confidence survey
Wednesday – Nov. Nationwide House prices, Nov. manufacturing PMI
Thursday – Nov. construction PMI
Friday – Nov. services PMI
Japan:
Monday – Oct. retail trade, Nov. small business confidence, BOJ Governor Masaaki Shirakawa and Deputy Governor Nishimura are set to speak
Tuesday – Oct. household spending, Oct. employment data, Oct. preliminary industrial production, Oct housing starts and construction orders
Thursday – 3Q capital spending, BOJ Deputy Governor Nishimura speaks
Canada:
Monday – 3Q current account, Oct. industrial product price and raw materials price index
Tuesday – Sept. and 3Q GDP numbers
Friday – Nov. employment report
Australia & New Zealand:
Monday – Australia Oct. HIA new home sales, Australia 3Q company operating profit & inventories, New Zealand Oct. trade balance data, Nov. NBNZ Activity Outlook and Business Confidence, speech by RBA Governor Glenn Stevens
Tuesday – Australia Oct. building approvals, 3Q current account balance, Oct. private sector credit, NZ Oct. building permits
Wednesday – Australia Nov. AiG Performance of Manufacturing index, Australia 3Q GDP figures, Nov. RBA commodity price index, New Zealand Nov. ANZ commodity price
Thursday – Australia Oct. trade balance, Oct retail sales
Friday – Australia Nov. AiG Performance of Service index
China:
Wednesday – Nov. China manufacturing PMI and HSBC manufacturing PMI
Friday – Nov. China non-manufacturing PMI and HSBC services PMI
Monday, November 15, 2010
“WSD NZ Offers Middle Eastern Investors a Slice of World’s Financial Markets at the 3rd ME Forex Expo”
“WSD NZ Offers Middle Eastern Investors a Slice of World’s Financial Markets at the 3rd ME Forex Expo”
WSD Financial (NZ) Ltd, a leading International brokerage house that specializes in Foreign Exchange, Precious Metals, Futures, Options, and CFD’s, will be one of the exhibitors at the 3rd Middle East Forex Expo in Bahrain on April 23-24 2008.
“This event is a perfect platform to showcase WSD’s products and to offer the local market an alternative brokerage where client fund safety is paramount and is also backed by New Zealand’s strong client fund segregation laws," says Dean Crowle-CEO
WSD Financial (NZ) Ltd. is a premier investment house headquartered in Auckland that caters to retail investors across various countries. “Today, more than anything clients need personal attention without preferences of whether the client is high net worth or just investing his savings for a better tomorrow. WSD Financial understands this very well, and provides each client with personalized attention and customized solutions. Being a "retail investment house", WSD is able to provide a varied range of services and personalized service to its clients using global standard procedures and a 24/7 help desk," says, Savas Macun- Director- Middle East Region.
WSD overtime has reinvented itself as a client oriented service provider. With flexibility and dedicated account managers, WSD has been able to expand its services in various regions. It is not only personalized service that is important, but the technology and ease of use like unrivalled trading tools and state-of-the-art trading software which has given WSD’s clients a winning edge.
WSD is the clear choice for the beginner or experienced individual investor, introducing broker, CTA, institutional investor, fund manager or corporate institution looking to safely and securely invest, hedge or speculate in Foreign Exchange, Precious Metals, Futures, Options, CFD’s and virtually every other financial instrument.
Client Safety has always been a primary concern for investors. WSD being regulated in New Zealand has a strong regulatory framework that offers investors the peace of mind that their investment assets are well protected in segregated accounts with regulated, licensed companies like WSD. New Zealand’s Futures Industry strictly enforces “Segregation" regulations where client funds and investments are deposited in segregated bank accounts, often in prime banks.
This ensures that client assets are never co-mingled. Further asset protection is enforced in New Zealand by requiring regulated, licensed companies like WSD to provide professional indemnity insurance coverage for the protection of client and company assets against unforeseeable events that if left uninsured, may result in the loss of client funds. Under this system, clients are secured to the extent that WSD is regulated under NZ and licensed under both NZ and U.S. laws. WSD owns WSD USA which is a registered Futures Commission Merchant (FCM) with the CFTC and a good standing member of National Futures Association (NFA). The professional indemnity insurance policy is an added layer of protection for client assets and is another important reason why New Zealand favors investors and investors favor WSD.
Personalized Services: WSD’s team of account managers is well respected and experienced in the industry. With Senior Dealers offering clients unparalleled trading expertise and service that is unquestionably second to none. Multi-lingual customer service technicians are trained to enhance your trading experience, offering a wide array of hands-on assistance via on-line chat or over the telephone.
Products and Services: WSD’s Online trading brand WSD DIRECT provides execution of trades on all principal exchanges and markets 24 hours a day with access to all global exchanges through key market-making relationships in major financial centers including New York, Chicago, London, Hong Kong, Singapore and Dubai. Products offered include foreign exchange, futures, options, and CFD’s, but can vary according to local regulatory requirements. WSD provides 24-hour dealing and a choice of telephone or online trading via desktop, laptop or PDA. Clients can access live prices through WSD’s 24 hour desk in Auckland via telephone, email or several chat services.
WSD Financial (NZ) Ltd, a leading International brokerage house that specializes in Foreign Exchange, Precious Metals, Futures, Options, and CFD’s, will be one of the exhibitors at the 3rd Middle East Forex Expo in Bahrain on April 23-24 2008.
“This event is a perfect platform to showcase WSD’s products and to offer the local market an alternative brokerage where client fund safety is paramount and is also backed by New Zealand’s strong client fund segregation laws," says Dean Crowle-CEO
WSD Financial (NZ) Ltd. is a premier investment house headquartered in Auckland that caters to retail investors across various countries. “Today, more than anything clients need personal attention without preferences of whether the client is high net worth or just investing his savings for a better tomorrow. WSD Financial understands this very well, and provides each client with personalized attention and customized solutions. Being a "retail investment house", WSD is able to provide a varied range of services and personalized service to its clients using global standard procedures and a 24/7 help desk," says, Savas Macun- Director- Middle East Region.
WSD overtime has reinvented itself as a client oriented service provider. With flexibility and dedicated account managers, WSD has been able to expand its services in various regions. It is not only personalized service that is important, but the technology and ease of use like unrivalled trading tools and state-of-the-art trading software which has given WSD’s clients a winning edge.
WSD is the clear choice for the beginner or experienced individual investor, introducing broker, CTA, institutional investor, fund manager or corporate institution looking to safely and securely invest, hedge or speculate in Foreign Exchange, Precious Metals, Futures, Options, CFD’s and virtually every other financial instrument.
Client Safety has always been a primary concern for investors. WSD being regulated in New Zealand has a strong regulatory framework that offers investors the peace of mind that their investment assets are well protected in segregated accounts with regulated, licensed companies like WSD. New Zealand’s Futures Industry strictly enforces “Segregation" regulations where client funds and investments are deposited in segregated bank accounts, often in prime banks.
This ensures that client assets are never co-mingled. Further asset protection is enforced in New Zealand by requiring regulated, licensed companies like WSD to provide professional indemnity insurance coverage for the protection of client and company assets against unforeseeable events that if left uninsured, may result in the loss of client funds. Under this system, clients are secured to the extent that WSD is regulated under NZ and licensed under both NZ and U.S. laws. WSD owns WSD USA which is a registered Futures Commission Merchant (FCM) with the CFTC and a good standing member of National Futures Association (NFA). The professional indemnity insurance policy is an added layer of protection for client assets and is another important reason why New Zealand favors investors and investors favor WSD.
Personalized Services: WSD’s team of account managers is well respected and experienced in the industry. With Senior Dealers offering clients unparalleled trading expertise and service that is unquestionably second to none. Multi-lingual customer service technicians are trained to enhance your trading experience, offering a wide array of hands-on assistance via on-line chat or over the telephone.
Products and Services: WSD’s Online trading brand WSD DIRECT provides execution of trades on all principal exchanges and markets 24 hours a day with access to all global exchanges through key market-making relationships in major financial centers including New York, Chicago, London, Hong Kong, Singapore and Dubai. Products offered include foreign exchange, futures, options, and CFD’s, but can vary according to local regulatory requirements. WSD provides 24-hour dealing and a choice of telephone or online trading via desktop, laptop or PDA. Clients can access live prices through WSD’s 24 hour desk in Auckland via telephone, email or several chat services.
WSD Global Markets Ltd in Need of Fresh Talent to Push Its Development in 2009
Auckland, New Zealand, January 24th, 2009 - (Business Wire) - “While the rest of the global financial sector is firing – WSD Global Markets is hiring!” Despite the global economic crisis and the rather disheartening situation of the financial sector, WSD Global Markets can proudly announce a positive balance for the past year. Not only is WSD Global Markets still among the global financial players but also still growing!
With regards to the growing demand for a reliable and safe trading service provider many brokers as well as private investors have discovered the outstanding services of WSD Global Markets. Offering latest standard in trading technology paired with a high regard for personal service WSD Global Markets emerged out of the global financial crisis as one of the winners.
Today WSD Global Markets can proudly publish positive numbers for the months that have passed despite all difficulties and a more so a positive outlook for the new business year 2009.
Why is WSD Global Markets so popular? The management has a simple answer: “Because we care.” It is a quite simple Motto but according to WSD Global Markets that is the big difference between those who can announce growth today and those who have disregarded the trust put in them and had to close their doors. WSD Global Markets’ success recipe is based on the outstanding mixture of favorable circumstances as the legal and geographical location of its Headquarters in Auckland, New Zealand and the solid base of state of the art software combined with excellent client service.
In order to understand the unique combination one must know the legal framework of the New Zealand financial market which is focused on a successful and thriving economic outcome of course but not disregarding ethical and moral standards which assure the protection of the invested capital from private individuals. The system how the client funds are being managed is highly transparent, which does empower the client instead of distancing him from decision making about an investment in such a company.
WSD Global Markets is built on client cooperation and the commitment to serve in order to generate profit which as today’s numbers have shown us, has obviously been the right choice.
With regards to the growing demand for a reliable and safe trading service provider many brokers as well as private investors have discovered the outstanding services of WSD Global Markets. Offering latest standard in trading technology paired with a high regard for personal service WSD Global Markets emerged out of the global financial crisis as one of the winners.
Today WSD Global Markets can proudly publish positive numbers for the months that have passed despite all difficulties and a more so a positive outlook for the new business year 2009.
Why is WSD Global Markets so popular? The management has a simple answer: “Because we care.” It is a quite simple Motto but according to WSD Global Markets that is the big difference between those who can announce growth today and those who have disregarded the trust put in them and had to close their doors. WSD Global Markets’ success recipe is based on the outstanding mixture of favorable circumstances as the legal and geographical location of its Headquarters in Auckland, New Zealand and the solid base of state of the art software combined with excellent client service.
In order to understand the unique combination one must know the legal framework of the New Zealand financial market which is focused on a successful and thriving economic outcome of course but not disregarding ethical and moral standards which assure the protection of the invested capital from private individuals. The system how the client funds are being managed is highly transparent, which does empower the client instead of distancing him from decision making about an investment in such a company.
WSD Global Markets is built on client cooperation and the commitment to serve in order to generate profit which as today’s numbers have shown us, has obviously been the right choice.
Subscribe to:
Posts (Atom)