[{"post_title":"November US Retail Sales","content":"The big American data for the day is scheduled for 08:30 EST (14:30 CET) when the Census Bureau releases November retail sales data. The data can move the market including forex, and given that it is one of the last major releases before the extended holidays when most traders will be away from their desks, it could be especially relevant.\r\n\r\n[shortcode-variables slug=\"trade-usd-movement-open-account\"]\r\n

Why the Data Matters<\/strong><\/h2>\r\nRetail sales are a monthly survey of how much retail outlets have sold in the prior month. The data closely resembles total consumer spending, and as consumers constitute the bulk of the US economy, it's seen as a gauge of overall economic health.\r\n\r\nIn general, better retail sales are understood to support the dollar. They shows strength in the economy, despite increasing sales seen as\u00a0supporting inflation.\r\n\r\nRetail sales also impact the stock markets. Lower retail sales have a negative effect on businesses in general, but especially retailers. This can lead the stock market to underperform - which would typically imply a reduced demand for dollars.\r\n\r\nHowever, the US is still seen as a safe-haven, so underperformance in the economy can sometimes\u00a0counterintuitively\u00a0lead\u00a0<\/span>to a stronger dollar.\r\n

Expectations<\/strong><\/h2>\r\nThe top number to look at is Retail Sales Ex-Auto<\/strong>, which strips the more volatile auto sales component from the data, giving a better look at the underlying economy.\r\n\r\nThe previous month's numbers<\/a> can be revised, which can also move the market if they revision is large or unexpected. Last month, this data came in above expectations, registering the best performance since May and opening the door to revisions to the downside this time around. For now, consensus expectations are more modest at 0.3% vs. 0.7% prior.\r\n\r\nConcurrently, there is the release of the slightly less important total retail sales<\/strong> number, which isn't likely to move the markets unless there is a major discrepancy with the ex-auto number. Expectations are for a 0.2% increase to the 0.8% recorded last month (which also came in way above expectations, leading analysts to suggest it might also be revised downwards.)\r\n\r\nFinally there is Retail Sales control group<\/strong>, which strips off autos, as well as energy and construction. This is seen as the core rate of increase in retail sales, and typically isn't given as much attention by the market as it is by analysts looking at longer trends. The consensus for the control group is an increase of 0.4% vs. an increase of 0.3% last month.\r\n

Considerations<\/strong><\/h2>\r\nThis is the first retail sales data that will include the effect of the drop in crude<\/a>, and therefore, the prices at the pump. This is likely to drag on retail performance, and analysts will be looking at this segment to see how much an impact it has on the total number.\r\n\r\nNormally, retail sales increase in the lead-up to Christmas and can be a reflection of consumer sentiment. When there is broad uncertainty in the economy, Christmas spending is\u00a0typically\u00a0<\/span>muted, which translates into financial markets as a lot of seasonal spending based on credit.\r\n\r\nAnother factor analysts are going to be looking at is the auto sector given the issues related to financial stability in auto lending. US car dealers showed a further slump in sales in November, and this is likely to be reflected in the retail sales number.\r\n\r\nIn that vein, concern persists in the housing sector, so the building materials sector will get some extra attention as reconstruction following the summer hurricanes is likely to start winding down during these months.\r\n\r\nGenerally speaking, over the last few months, retail sales have been largely driven by core sales (even during September's first negative revised result in a year), which has allowed investors to shrug off momentary volatility in the numbers. As long as that trend remains, it would allow analysts to feel more comfortable about the practical impact of the trade war and rising interest rates.\r\n\r\n[shortcode-variables slug=\"testusd\"]","link":"https:\/\/www.orbex.com\/blog\/?p=69702","createdAt":"2018-12-14 17:00:56","image":"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2018\/12\/nyc-1-300x200.jpg"},{"post_title":"Weekly Metals Wrap","content":"

Gold<\/strong><\/h2>\r\nAfter breaking out above the 1235 resistance level\u00a0last week<\/span>\u00a0which has capped price over the past six months, gold prices retreated lower this week as the US Dollar pushed back up toward recent highs. US Dollar has come back into favor ahead of the December FOMC meeting next week which is widely expected to see the Fed raise rates for the fourth time this year. USD was also bolstered this week by dovish comments from ECB president Draghi who acknowledged that risks to the Eurozone are starting to tilt to the downside. Gold prices had been gaining recently due to ongoing geopolitical risks from Brexit<\/a> and trade wars. \u00a0However, even with US equities plunging to fresh 2018 lows, gold\u2019s safe-haven status was unable to keep it supported.\r\n\r\n\"forex<\/a>\r\n\r\nDespite the sell-off this week, gold prices are still sitting above the key 1235.30 level which is currently holding as support. While above here, focus is on further upside with the retest of the broken bullish trend line from 2015 lows, the next key resistance to watch.\r\n\r\n[shortcode-variables slug=\"fomc\"]\r\n

Silver<\/strong><\/h2>\r\nAfter making moves both higher and lower on the week, Silver prices ended the week broadly unchanged. While the upcoming FOMC meeting<\/a> is weighing on silver we could see a bounce later next week if the meeting gives any indication that the Fed will slow the pace of hikes. Recent comments from Fed chairman Powell suggest that the Fed is considering slowing the pace of hikes though traders will be watching the meeting for confirmation of this view.\r\n\r\n\"forex<\/a>\r\n\r\nFor now, silver prices remain stagnant just above the 13.6704 \u2013 13.9612 level support. Focus remains on further eventual downside unless we see a break back above the 15.1825 \u2013 15.5734 level.\r\n

Copper<\/strong><\/h2>\r\nThe red metal has been caught this week between conflicting news flow around the health of trade negotiations between the US and China. Earlier in the week, copper investors were buoyed by news that China was committed to agreeing on a deal before Trump\u2019s March 1st<\/sup> deadline and was reportedly even considering postponing starting its \u201cMade in China 2025\u201d campaign to which Trump has been opposed. Trump then said that he would intervene in the arrest of Chinese businessmen Meng Wanzhou if it would help trade negotiations. However, later in the week copper was then hit by a stronger US Dollar as well as reports that China has arrested a second Canadian diplomat in retaliation against Wanzhou\u2019s arrest, putting pressure on trade talks.\r\n\r\n\"forex<\/a>\r\n\r\nAs has been the story over the last three months, copper prices continue to battle it out around the key 2.767 region which has been a heavy order flow pivot. The key medium-term markers remain support at the rising trend line from 2016 lows, structural support at the 2.443 level and resistance above at the 2.951 level.\u00a0 However, in the short term, the key structure to note is the ascending triangle pattern which has framed price action over the last six months. The break of this patter will be crucial in determining near term direction for copper.\r\n

Iron<\/strong><\/h2>\r\nBucking the trend in the commodities market, this week, iron ore prices rose as investor sentiment was buoyed by news that the Chinese government is preparing to launch more infrastructure projects next year such as the\u00a0construction of road and waterways. Such projects would see a big boost in demand for steel and consequently iron ore which is a major steelmaking component.\r\n\r\n\"forex<\/a>\r\n\r\nAfter bouncing off the $64 level low, which has been strong support this year, prices have now traded back up to just shy of $68.\u00a0 The focus now will be on a break back above the $69 \/ $70 level which was the top of the range for Q2 and Q3 and will be needed to confirm bullish momentum. Until then, the range is likely to persist.\r\n\r\n[shortcode-variables slug=\"tradingmetals\"]","link":"https:\/\/www.orbex.com\/blog\/?p=69730","createdAt":"2018-12-14 15:43:45","image":"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2018\/10\/gold-5-750x430-1-150x150.png"},{"post_title":"Orbex Market Flash","content":"

Despite the swirling downside risks, the ECB announced an end to its large\u00a0Quantitative Easing program at its December rates meeting yesterday. The programme, which has been in place since January 2015, has seen the bank pumping roughly 2.5 trillion Euros into the Eurozone.<\/p>\r\n[shortcode-variables slug=\"eurwillfare\"]\r\n

Weak Momentum Acknowledged<\/strong><\/h2>\r\n

Alongside the announcement, the statement was relatively unchanged from last time around. The ECB continues to see rates staying on hold until at least after summer 2019, and although it acknowledges weakened momentum in the economy, the governing council maintains that the \u201cunderlying strength of demand\u201d means \u201cthe convergence of inflation to our aim will proceed.\u201d<\/p>\r\n

While the tone of the statement was broadly positive, Draghi did note in comments following the decision that risks to the eurozone economy are starting to tilt to the downside. This view was clearly reflected in the downgraded outlooks for both growth and inflation over the coming year.<\/p>\r\n\r\n

Reinvestments To Continue For An \"Extended Period\"<\/strong><\/h2>\r\n

Regarding reinvestments, the bank said that these would continue for an \u201cextended period\u201d of time past the first-rate hike and adjustments to the new capital key will take place gradually in order to \u201csafeguard orderly market conditions.\u201d<\/p>\r\n

In all, the meeting was rather a non-event. The announcement of an end to QE was widely signaled<\/a>, but many suspect the decision was made more for technical reasons rather than full confidence in the underlying economy, and with Draghi acknowledging that risks are tilting<\/a> to the downside, it is safe to assume the bank is likely more worried than it let on at this stage.<\/p>\r\n\r\n

Technical Perspective<\/strong><\/h2>\r\n\"eurusd\"<\/a>\r\n

The sell-off in EURUSD on the back of yesterday\u2019s ECB meeting has seen price breaking down below the local contracting triangle pattern. The current 2018 low of 1.1214 is now the next key support zone, and below there, price has room to move down to 1.0912 before we see further structural support.<\/p>\r\n[shortcode-variables slug=\"orbex-360\"]","link":"https:\/\/www.orbex.com\/blog\/?p=69710","createdAt":"2018-12-14 13:35:57","image":"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2018\/12\/drag-1-1-300x200.jpg"},{"post_title":"5 Eye-Popping Market Movements of 2018","content":"By the end of 2017, both escalating stock prices and growth in the digital currency market cap made the headlines. The global economic growth rate indicated a steady rise and the emerging market currencies recorded their highest gains in eight years, on account of a weaker US Dollar. Brexit was on everyone\u2019s minds, as were the elections in countries like the US, Russia, Brazil, and Mexico.\r\n\r\nNow, as 2018 draws to a close, it is time once again to look back and see how the global markets fared this year. It was a year full of surprises. Here are five major market movements that had far-reaching repercussions in 2018.\r\n\r\n[shortcode-variables slug=\"act_tradeideas\"]\r\n

1. US Dollar Weakness Led to Robust Growth for Multiple Sectors<\/strong><\/h2>\r\nAlthough the US economic momentum remained strong, a tighter economic policy by the Fed led to a weaker US Dollar, which benefitted many industries. The FTSE All-Share index fell 1.9% in January 2018, on account of the rising Pound Sterling against the Dollar. The Japanese yen strengthened against the USD too. Other markets that rose include the Russian energy sector and the emerging market equities.\r\n

2. Global Sell-Offs Triggered Major Plunge in Stock Prices<\/strong><\/h2>\r\nPanic sell-offs triggered a significant decline in the stock markets across the world in February 2018. The US Fed raising the interest rates led to the Dow Jones Industrial Average plummeting 1,500 points, its most significant decline ever in its 122-year history. The pan-European Euro Stoxx 600 fell, suffering a six-month low. Japan\u2019s Nikkei 225 was down almost 5%.\r\n\r\n\r\n

3. US Decision to Impose Tariffs on Chinese Imports and Withdrawal from Iran Nuclear Deal Caused Major Global Repercussions<\/strong><\/h2>\r\nThe Trump administration decided to impose tariffs on some countries, including China, Mexico, and Canada, leading to a change in market momentum. Withdrawal from the Iran nuclear deal led to a sharp rise in global crude oil prices. Oil prices were also affected by rising global demand and supply discipline. But, perhaps the major brunt was taken by the emerging markets. A 10% tariff on $200 billion worth of Chinese imports led to a declining MSCI Emerging Markets Index, which was already suffering in Q2 2018. An increase in US interest rates led to the devaluation of many currencies, like the Turkish Lira, which has fallen 48% against the US dollar in 2018.\r\n

4. Increasing Likelihood of No-Brexit Deal Affects the UK Economy<\/strong><\/h2>\r\nAround September 2018, it became increasingly clear that the UK might have to sever ties with the EU in March 2019 with a no-deal Brexit agreement<\/a>. The FTSE All-Share fell 0.8%, and the GBP weakened against the US dollar. The strengthening of the USD continues to affect the emerging markets, with a major blow to Chinese equities. US interest rates were hiked for the third consecutive time in 2018.\r\n

5. The Cryptocurrency Market Crashes Big Time<\/strong><\/h2>\r\nNovember 2018 will be remembered as the month of the greatest crypto market crash. Bitcoin\u2019s price fell 37%, and the crypto market cap declined by $70 billion. Experts believe that this crash was a result of the delay by the US SEC in regulating Bitcoin futures, along with a messy fork in the Bitcoin Cash network.\r\n\r\nThese were some of the major market moving developments of 2018. As 2019 comes closer, all eyes are on the US-China trade relations. The Brexit chapter will also get increasingly gripping over the next few months. It\u2019s a case of waiting to see how the global economy will be affected by all this.\r\n\r\n[shortcode-variables slug=\"confidenttotrade\"]","link":"https:\/\/www.orbex.com\/blog\/?p=69687","createdAt":"2018-12-14 12:27:59","image":"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2018\/12\/shutterstock_419654884-1-150x150.jpg?theia_smart_thumbnails_file_version=2"}]