U.S. FED Hike Rates by 25 BP Again U.S. FED Hike Rates by 25 BP Again | DZHI - DZH International 
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U.S. FED Hike Rates by 25 BP Again

  • DAR Wong
  • 19 June 2017

Fundamental Outlook   The U.S. Federal Reserve raises interest by 25 basis points for the second time this year. Bank of Japan and Bank of England remains unchanged in monetary policy. China maintains growth while in U.K. sees a decline in average earning among the citizens.

The U.S. producer prices stayed flat in May on monthly comparison. Core prices, excluding food and energy, gained 0.3 percent. Another separate report on consumer prices shrank 0.1 percent in May while core prices, excluding food and energy, also rose only 0.1 percent. Both data were below forecast.

American core retail prices, exclude automobiles, shrank 0.3 percent and worst in past 10 months. Weekly claims for jobless benefits dropped to 237,000 in the week ended 10 June and lower than 245,000 in previous week.

Industrial production was flat in May and lowest in past 3 months. American building permits expanded 1.17 million in May and lowest in past 9 months.

FED Yellen raises 25 basis points in fed fund rate and brings it to 1.0 – 1.25 percent, matched market forecast. Yellen reiterates that inflation may be slow but will advance towards year-end.

China’s industrial production in May matched consensus by gaining 6.5 percent on annual basis. Fixed asset investment on non-rural facilities rose 8.6 percent from a year ago and maintained growth.

Japan’s core machinery orders, excluding ships and utilities, shrank 3.1 percent in April after positive gains in previous month. Producer prices rose 2.1 percent in May from a year and kept up with the pace.

Bank of Japan stays unchanged in its monetary policy. Overnight deposit rates with central bank remains at negative 0.1 percent while annual monetary expansion at JPY80 trillion.    

German ZEW sentiment expands at 18.6 in June and lowest in 3 months’ record. European Central Bank President Draghi says the stimulus may extend till early 2019 for support the recovery.

U.K. consumer prices rose 2.9 percent on annual basis in May and highest since June 2013. Retail prices also charted 5-year high at 3.7 percent growth in May from a year ago.   

In U.K., average earning index on quarterly basis ended in April rose 2.1 percent, worst in 12-month record. Monthly claimant counts for jobless benefits rose 7,300 in May, least jump in 6 past months after 22,000 filings in April. Unemployment stays at 4.6 percent.

U.K. retail sales swung down to minus 1.2 percent in May and below forecast. The Bank of England holds monetary policy unchanged with overnight lending rate at 0.25 percent; asset purchase program at GBP435 billion.

 

Technical Forecast   USD/JPY bounced from 109.00 bottom last week and settled around 110.60 before weekend. Technically, the market is prone to weakness while resisted at 111.50 region. This week, the trend may decline again but constricted from 109.00 – 111.50 range.

EUR/USD has revealed a toppish patter on day-chart. The trend is currently capped under 1.1250 while prone to test 1.1120 support. We reckon the trend will thread sideways inside this range until it breaks into either new directional headway. Risk control is advised in case of adversity against your position.

GBP/USD is uncertain of its directional trend while hovering around 1.2800 area. The market is likely to poise from 1.2650 – 1.2850 range until a new breakout is seen. Technically, we foresee a likelihood in either direction until U.K. new government begins the negotiation of BREXIT with European Union before end June.

 

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

DAR Wong is a registered fund manager in Singapore with 27 years of global trading experiences. You may reach him at dar@pwforex.com


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

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

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

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

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

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

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

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


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

References

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

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


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