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Federal Reserve Raises 25 Basis Point Rate

  • DAR Wong
  • 1 October 2018

Fundamental Outlook   The U.S. Federal Reserve hikes 25 basis points and signals another hike will come before year-end. American GDP grows 4.2 percent in improvement.  The money supply slows down in Eurozone and consumer prices slide. U.K. is hitting a stonewall with EU negotiation on BREXIT deal and faces challenges in economic progress.

The U.S. Conference Board of consumer confidence rose to 138.4 in September and higher than previous month. New home sale rose 629,000 in August and higher than revised 608,000 in July. Another report on pending home sale slid 1.8 percent in August and worse than expectation.

American durable goods order grew 4.5 percent and jumped higher than consensus. Excluding auto sales, core orders rose 0.1 percent and stagnated in August. Weekly jobless claims increased slightly to 214,000 for the week ended 22 September and higher than previous week.

Final GDP gained 4.2 percent in the quarter ended June. The U.S. policymakers increase FED fund rate by 25 basis point, bringing it to 2.0 – 2,25 percent. FOMC also projects one more rate hike before year-end.

German ifo business climate on manufacturers and wholesalers’ confidence grows 103.7 in September and beat forecast.  German prelim consumer prices gained 0.4 percent in August from a year ago.

The M3 money supply in eurozone increased 3.5 percent and slowest pace since December 2014. In the 19 nations, consumer prices gained 2.1 percent in September while core prices, excluding food and energies, rose 0.9 percent from a year ago.

British Government’s current account slid GBP20.3 billion in Q2 seasons and worse than consensus. Final GDP grew 0.4 percent on quarterly seasons ended June.

EU officials say BREXIT negotiation is not heading to a closing deal. U.K. may face many setbacks amid restriction for serving other European clients. 

 

Technical Forecast   USD/JPY has climbed higher as Dollar firms up over U.S. rate hike. The market closed at 113.60 region on Friday and met resistance area. In our opinion, the trend is still bullish and will probably attempt higher level this week. Range is expected to move from 112.60 – 114.60 region if the aforementioned support can be protected.

EUR/USD fell after topped out 1.1800 region and confluent with EMA200 resistance area. This week, we forecast the trend will test 1.1530 support before moving into sideways. Resistance will emerge from 1.1730 onwards with much selling interest. Risk control is recommended if the trend goes against your interest.

GBP/USD has turned into weak trend from fundamental and technical appearance. This week, we reckon the market will be resisted at 1.3250 area and head down to 1.2900 ground. The bullish factor has faded in the market and unlikely to rise beyond 1.3250 unless we see some unexpected news positive to BREXIT deal. 

 

 

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 professional in financial industry based in Singapore with 29 years of global trading experiences. The expression is solely at his own. 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.