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Action Insight: Special Reports
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Action Insight is the most popular section of the site, read by traders around the world. Our team of analysts work around the clock, analyzing the markets from technical and fundamental perspectives in providing the reports in this section to you.
- Market overviews covers major happenings in the markets as well as their impacts.
- Technical analysis of specific currency pair will be found in the technical outlook section. Covered pairs include EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, EUR/JPY, EUR/CHF, EUR/GBP, GBP/JPY
- Special reports covers medium to longer term forecasts on exchange rates based on fundamentals, central bank meetings previews and reviews, plus any current issues that will have an impact on exchange rates.
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Special Reports |
Written by ActionForex.com |
Oct 06 11 15:22 GMT
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The ECB left the main refinancing rate unchanged at 1.5% in October. However, a series of liquidity provision measures, including LTROs, MROs and the most awaited covered bond purchases program, were announced. The central bank remained cautious towards the economic outlook as there are 'intensified downside risks'. Moreover, 'ongoing tensions in financial markets and unfavorable effects on financing conditions are likely to dampen the pace of economic growth in the euro area in the second half of this year'.
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Special Reports |
Written by ActionForex.com |
Oct 06 11 12:30 GMT
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The BOE surprised the market by increasing the bond purchase program by +75B pound to 275B pound in response to the dramatic deterioration in global economic outlook. The Bank rate was kept at 0.5%, though. The central bank was in a dilemma on whether to tighten or to ease as the UK’s economy has been torn between dismal growth and high inflation. Reactivation of bond purchases was based on the belief that inflation will undershoot the 2% target in the medium-term due to 'the deterioration in the outlook’
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Special Reports |
Written by ActionForex.com |
Oct 04 11 05:03 GMT
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As expected, the RBA left the cash rate unchanged at 4.75%. Yet the post-meeting statement came in more dovish than the previous one. Governor Glenn Stevens downplayed impacts of recent deterioration US and European outlook. Nevertheless, it now appears more likely that the central bank will consider a rate cut in coming months if inflation is under control. We retain our view that a rate cut will be carried out in the fourth quarter.
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Special Reports |
Written by ActionForex.com |
Oct 03 11 03:28 GMT
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China's manufacturing PMI climbed for a second consecutive month, by +0.3 points, to 51.2 in September, reversing the declining trend formed since March. The report suggested China's manufacturing activities have stabilized modestly and should alleviate some concerns on a hard landing. However, the seasonally-adjusted picture appeared less rosy with the index falling to 51.3 from 51.7 in August. The index compiled by HSBC PMI was revised higher to 49.9, same as Augusts' reading and staying below the expansion-contraction threshold of 50. Therefore, investors should not turn too optimistic about the country's manufacturing sector yet.
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Special Reports |
Written by ActionForex.com |
Sep 29 11 07:20 GMT
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Global economic outlook and sovereign debt crisis in the Eurozone have deteriorated rapidly since the last RBA meeting. While domestic growth had remained solid, Australia's economy will inevitably be damped should world economic uncertainty increase. Some investors have since the last meeting anticipated a rate cut by the RBA. Cash-rate futures show that investors are betting the RBA will cut the key rate to 4.03% by December from the current rate of 4.75%.
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Special Reports |
Written by ActionForex.com |
Sep 28 11 09:45 GMT
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The annual World Bank/IMF meeting indeed showed some influences by urging European leaders to deliver more effective measures to resolve the sovereign debt crisis engulfing the Eurozone. Apart from heightening speculations for an expansion and leverage of the new EFSF, hopes loomed for the ECB to cut interest rates, as soon as at the meeting next week, in addition to other easing measures including re-launch of the covered bond purchase program and reintroduction of the 12-month loans for the region’s banks.
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Special Reports |
Written by ActionForex.com |
Sep 22 11 04:16 GMT
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As expected, the Fed announced to extend the average maturity of its holdings of securities so as to stimulate the economic recovery and to help ensure inflation is consistent with the dual mandate over time. The operation twist that the Fed adopts is an active one. It involves selling $400B of Treasury securities with maturities of 3 years or less and simultaneous purchase of a similar amount of Treasuries in the 6-30 year remaining maturity range. The Fed funds rate was keep unchanged at 0-0.25%. 3 Fed presidents who voted against additional policy easing were Richard Fisher, Narayana Kocherlakota, and Charles Plosser.
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Special Reports |
Written by ActionForex.com |
Sep 19 11 04:54 GMT
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The most critical event this week is definitely the 2-day FOMC meeting on September 20-21. At the Jackson Hole Symposium in August, Fed Chairman Ben Bernanke first signaled that the meeting has been scheduled to 2 days (originally 1day) so that 'a fuller discussion'; on 'a range of tools that could be used to provide additional monetary stimulus'; is warranted. Also indicated in the August FOMC statement, the September meeting should be extended as policymakers need more time to discussion about 'the possible costs and benefits of various potential tools';. It would be anticlimactic if nothing happens at the meeting. As unveiled in the August FOMC minutes, the range of tools discussed among members included reinforcing forward guidance about the likely path of monetary policy, additional asset purchases, increasing the average maturity of securities holdings, reducing the interest rate paid on excess reserve balances. Yet, no preference was indicated.
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Special Reports |
Written by ActionForex.com |
Sep 16 11 03:46 GMT
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The ECB announced that, in coordination with the Fed, the BOE, the BOJ and the SNB, to conduct 3-month USD liquidity operations for 3 times through the year. In addition to the 7-day USD facility announced on May 10, 2010, the new operation aims to ensure sufficient liquidity in banks. The offerings will be carried out at in the form of repo, at fixed rate and with full allotment. Tender dates will be October 12, November 9 and December 7. The move had sent stocks higher on improved sentiment as central bankers attempted to ease liquidity problems associated to Eurozone's sovereign debt crisis. The euro advanced.
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Special Reports |
Written by ActionForex.com |
Sep 15 11 10:20 GMT
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The SNB revised down its growth and inflation forecasts at the September meeting global economic slowdown and strength in Swiss franc are beginning to erode Swiss growth. In the meeting statement, the central bank showed its commitment in defending EURCHF at 1.20 or above. The SNB pledged it has ‘utmost determination’ and may take ‘further measures’ to enforce the minimum exchange rate.
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Special Reports |
Written by ActionForex.com |
Sep 15 11 04:20 GMT
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The RBNZ left the OCR unchanged at 2.5% and delivered a less hawkish statement in September. Where these have been widely expected, NZD fell after the announcement as the chance of a rate hike this year has markedly reduced given global economic uncertainty. The central bank also trimmed growth and inflation forecasts, signaled the macroeconomic shock in the US and Europe would have some impacts on New Zealand’s path of recovery.
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Special Reports |
Written by ActionForex.com |
Sep 14 11 06:37 GMT
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The SNB meeting on Thursday will likely be reiteration on what was said on September 6, when the central bank drew a line in sand to curb Swiss franc's appreciation. We are, however, interested to see how the SNB would update the inflation forecasts. We expect to see downward revisions from 3 months ago given the recent global economic turmoil and strength in CHF.
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Special Reports |
Written by ActionForex.com |
Sep 13 11 07:30 GMT
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Given the dramatic global economic downturn since the July RBNZ meeting, we now believe that the central bank will remain on hold in September and probably in October. While there is yet little evidence showing New Zealand's outlook has been hurt by the rising uncertainty in US economy and European debt crisis, such a small and open economy is vulnerable to international shocks. We believe it's prudent for the RBNZ to leave the OCR unchanged at 2.5% and to deliver a less hawkish statement than the previous one.
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Special Reports |
Written by ActionForex.com |
Sep 12 11 07:19 GMT
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The ECB announced in a statement last Friday that Jürgen Stark, after being a member of the Executive Board and Governing Council of the central bank since June 2006, will resign before the end of his term of office on May 31, 2014 due to 'personal reason. It's also stated that Stark will stay in his current position until a successor is appointed. According to the appointment procedure, it will be by the end of this year. The euro slumped after the news, plummeting as much as -1.8% against USD at one point, amid worries about ECB's monetary stance in the future. We believe Stark's resignation would not affect the central bank's future strategies as all decisions will be based on the mandate to maintain price stability across the Eurozone.
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Special Reports |
Written by ActionForex.com |
Sep 10 11 14:26 GMT
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Moderation of headline CPI to +6.2% y/y in August from +6.5% in the prior month signaled that inflation in China probably peaked in July. Yet, price levels remained elevated and it would be premature to expect China will abandon tightening or even shift to easing monetary policy. Growth of industrial production and fixed asset investment and retail sales decelerated further in August as a result of government's tightening measures. Yet, the rate of expansion remained resilient despite recent global economic turmoil. We expect to see further slowdown in economic activities in coming months but do not envisage any signs of hard landing.
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Special Reports |
Written by ActionForex.com |
Sep 08 11 15:21 GMT
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The ECB left the main refinancing rate unchanged at 1.5%. While this had been widely anticipated, the accompanying statement turned out to be more dovish than the market forecast. The central bank revised lower growth forecasts and did not signal upside risks to inflation. The tone appeared that the central bank is ready for a rate cut should the economy deteriorate further.
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Special Reports |
Written by Bank of Canada |
Sep 07 11 14:24 GMT
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As expected, the BOC decided to leave the overnight rate unchanged at 1% and correspondingly, Bank Rate and the deposit rate at 1.25% and 0.75% respectively. The accompanying statement delivered a less hawkish tone than before. As global economic has deteriorated in recent weeks and total CPI inflation will continue to moderate as temporary factors unwind, the central bank believed the need to withdraw monetary policy stimulus has 'diminished'.
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Special Reports |
Written by ActionForex.com |
Sep 06 11 06:32 GMT
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As expected the RBA left the cash rate unchanged at 4.75% in September. The initial market reaction was a rebound in the Aussie as the post-meeting statement turned out to be less dovish than previously anticipated. The central bank attributed the pause to the growing uncertainty in global economic outlook. Recent developments have damped confidence and tamed inflation. Against some of the market participants’ forecasts, the RBA did not hint any signs on rate cut.
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Special Reports |
Written by ActionForex.com |
Sep 05 11 07:27 GMT
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Recent headwind in global economic outlook should deter BOC's tightening schedule. We believe the central bank will leave the policy rate unchanged at 1% in September. Indeed, Fed's decision to keep interest rates at exceptionally low levels at least until mid-2013 and the increasing downside risks to inflation signaled the BOC will leave the overnight rate unchanged at least until mid -2012. That said, it's also unlikely for the central bank to trim interest rates as headline inflation remains high and the job market is robust.
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Special Reports |
Written by ActionForex.com |
Sep 05 11 06:44 GMT
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The RBA will likely be on hold at the September meeting. Indeed, the central bank is now expected to leave interest rates unchanged longer than previously expected. Some market participants even bet a rate cut later in the year after the governor's testimony to the House of Representatives Standing Committee on Economics. The latest Credit Suisse swap index shows the market has priced in -114 bps rate cut by the RBA over a year. We have not yet changed our monetary forecast from tightening to easing. However, we do expect the central bank will not raise interest rate anymore at for the rest of the year.
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