U.S stocks gain on talk Fed stimulus to stay; Dow gains 0.91%

U.S. stocks rose on Tuesday after the Federal Reserve kicked off a two-day monetary policy meeting, with many investors betting the U.S. central bank will keep stimulus measures in play in wake of soft inflation data.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.91%, the S&P 500 index ended up 0.78%, while the Nasdaq Composite index rose 0.87%.

The Labor Department said earlier that the country's consumer price index in May rose 1.4%  on year, in line with forecasts and up from 1.1% in April though below the Fed's 2.0% target.

Consumer prices rose 0.1% in May from April, slightly below expectations for a 0.2% increase.

Core inflation, which excludes food and energy costs, rose 0.2% in May from April, also in line with expectations.

The year-on-year core inflation rate came in unchanged at 1.7%

In a separate report, the Commerce Department said the number of building permits issued in the U.S. fell 3.1% in May to 974,000, outpacing expectations for a decline of 2.8% to 975,000 units.

U.S. housing starts rose by 6.8% last month to hit 914,000 units, below expectations for an increase of 11.4% to 950,000.

The data fueled expectations that the Fed will keep stimulus measures in play such as its USD85 billion asset-purchasing program for a while even if monetary authorities signal an exit strategy on Wednesday.

Stimulus tools tend to send stock prices gaining.

Leading Dow Jones Industrial Average performers included General Electric, up 2.40%, UnitedHealth Group, up 2.05%, and Verizon Communications, up 1.66%.

The Dow Jones Industrial Average's worst performers included Merck, down 0.08%, Microsoft, up 0.03%, and Procter & Gamble, up 0.09%.

European indices, meanwhile, finished mixed.

After the close of European trade, the EURO STOXX 50 fell 0.07%, France's CAC 40 fell 0.08%, while Germany's DAX 30 finished up 0.17%. Meanwhile, in the U.K. the FTSE 100 finished up 0.69%.

On Wednesday, all eyes will focus on the Federal Reserve and its announcement on monetary policy.

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Forex - Dollar holds steady ahead of Fed meet, data softens slightly

The dollar traded steady to lower against most major currencies on Tuesday as investors jumped to the sidelines ahead of the Federal Reserve's announcement on interest rates and monetary policy on Wednesday.

Inflation data released earlier largely met expectations though the numbers were soft enough to prompt some investors to speculate the Fed will keep stimulus measures such as its monthly USD85 billion bond-buying program in place for a while, which ultimately softened the greenback.

Stimulus programs weaken the currency to spur recovery.

In U.S. trading on Tuesday, EUR/USD was up 0.30% at 1.3406.

The Labor Department said earlier that the country's consumer price index in May rose 1.4%  on year, in line with forecasts and up from 1.1% in April though below the Fed's 2.0% target.

Consumer prices rose 0.1% in May from April, slightly below expectations for a 0.2% increase.

Core inflation, which excludes food and energy costs, rose 0.2% in May from April, also in line with expectations.

The year-on-year core inflation rate came in unchanged at 1.7%

In a separate report, the Commerce Department said the number of building permits issued in the U.S. fell 3.1% in May to 974,000, outpacing expectations for a decline of 2.8% to 975,000 units, which gave the euro room to rise.

U.S. housing starts rose by 6.8% last month to hit 914,000 units, below expectations for an increase of 11.4% to 950,000.

In the eurozone, the ZEW index of German economic sentiment rose to 38.5 in June from 36.4 in May, beating analysts' calls for the index to rise to 38.1.

The report said the German economy is likely to slowly pick up speed in the second half of this year, which strengthened the euro against the dollar.

Investors largely ignored comments by European Central Bank President Mario Draghi, who said the eurozone's monetary authority stood ready to use interest rates and non-standard measures to shore up growth in the currency bloc's economy.

The greenback, meanwhile, was up against the pound, with GBP/USDtrading down 0.47% at 1.5647.

The Office for National Statistics said the U.K. consumer price index rose 2.7% in May, above expectations for a 2.6% increase and up from a seven-month low of 2.4% in April. 

Core CPI rose 2.2% up from 2% in April.

Consumer prices rose 0.2% from a month earlier, compared to expectations for a 0.1% increase, after rising 0.2% in April, though Fed uncertainty kept Cable lower.

The dollar was up against the yen, with USD/JPY up 0.80% at 95.26, and down against the Swiss franc, with USD/CHF trading down 0.35% at 0.9194.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.20% at 1.0207, AUD/USD down 0.56% at 0.9488 and NZD/USD trading up 0.09% at 0.8002.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.07% at 80.76.

On Wednesday, all eyes will focus on the Federal Reserve and its announcement on monetary policy.

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Forex Trading Signal for 18th June 2013

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

For more easy access,,,,,,Download our mobile application on your mobile :   Click Fxsignals 

For Eur/Usd, there will be a continuous rise from yesterday close

EUR/USD

 Up Trend :

 (1) BUY

E/P: 1.33587

T/P: 1.34100

S/L: 1.33000

  For Gbp/Usd, there will be a little drop down at the early start of the market before it will resume its rise again.

GBP/USD

UP Trend:

(1) BUY

E/P: 1.57200

T/P: 1.57500

S/L: 1.56700

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
Daily forex signals are sent ontime to only our subcribers.

To subcribe: click here

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Forex - GBP/USD drops despite U.S. inflation data, eyes Fed meet

The pound slumped against the dollar on Tuesday despite spotty inflation data out of the U.S., as investors remained camped out in the dollar ahead of the Federal Reserve's Wednesday statement on interest rates and monetary policy.

In U.S. trading on Tuesday, GBP/USD was trading at 1.5653, down 0.43%, up from a session low of 1.5566 and off from a high of 1.5723.

The pair was likely to find support at 1.5496, the low from June 10, and resistance at 1.5752, Monday's high.

Uncertainty over the Federal Reserve's plans to scale back stimulus measures has fueled volatility in global markets in recent days.

Despite conflicting U.S. housing and pricing data, many investors remained parked in the dollar to await the Fed to make its announcement on interest rates and monetary policy on Wednesday followed by a press conference with Chairman Ben Bernanke afterwards.

Official data on Tuesday showed that U.S. consumer prices rose in line with expectations in May. 

The Labor Department said the country's consumer price index in May rose 1.4%  on year, in line with forecasts and up from 1.1% in April.

Consumer prices rose 0.1% in May from April, slightly below expectations for a 0.2% increase.

Core inflation, which excludes food and energy costs, rose 0.2% in May from April, also in line with expectations.

The year-on-year core inflation rate came in unchanged at 1.7%

In a separate report, the Commerce Department said the number of building permits issued in the U.S. fell 3.1% in May to 974,000, outpacing expectations for a decline of 2.8% to 975,000 units, which gave the euro room to rise.

U.S. housing starts rose by 6.8% last month to hit 914,000 units, below expectations for an increase of 11.4% to 950,000.

Meanwhile across the Atlantic, the U.K.'s consumer price index rose more than expected in May. 

The Office for National Statistics said consumer inflation rose 2.7% in May, above expectations for a 2.6% increase and up from a seven-month low of 2.4% in April. 

Core CPI rose 2.2% up from 2% in April.

Consumer prices rose 0.2% from a month earlier, compared to expectations for a 0.1% increase, after rising 0.2% in April.

Cable still traded lower due to Federal Reserve uncertainty.

The pound, meanwhile, was down against the euro and up against the yen, with EUR/GBP trading up 0.72% at 0.8565 and GBP/JPY up 0.35% at 149.05.

In the eurozone, the ZEW index of German economic sentiment rose to 38.5 in June from 36.4 in May, beating analysts' calls for the index to rise to 38.1.

The report said the German economy is likely to slowly pick up speed in the second half of this year, which further fueled the euro's gains against both the pound and the dollar.

Investors largely ignored comments by European Central Bank President Mario Draghi, who said the eurozone's monetary authority stood ready to use interest rates and non-standard measures to shore up growth in the currency bloc's economy.

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Stronger sterling

GBP:  Last month saw some fairly good CPI numbers, the headline rate falling to 2.4%. There were several one-off factors contributing to this, which are likely to unwind this month. The market expects an increase to 2.6%.  A reading stronger than this could offer some further support to sterling, which reached a 4 month high vs. the dollar yesterday.

USD:  At the same time that we are seeing nervousness regarding the prospects for the Fed to become less accommodating, inflation in the US has been moving lower. Market expects increase from 1.1% to 1.4% for the May data. Dollar will be sensitive to the data, softer data pushing dollar lower ahead of Fed meeting tomorrow.

EUR: The ZEW data can impact the euro as it is seen as a precursor to the other surveys.  The sentiment reading for Germany has been relatively steady of late, market expecting move higher from 8.9 to 9.5.

Idea of the Day             

Before the Fed meeting tomorrow evening, sterling provides some distraction. Cable made a 4 month high yesterday in relatively muted trade, with sterling the strongest performer on the majors so far this month (after the yen).  The currency has been helped by the better shine to some of the recent data, reducing expectations that the new Bank of England governor will start next month with an agenda to introduce more stimulus.  The risks to today’s inflation numbers are skewed to the upside as there were one-off factors (partly related to the timing of Easter) in last month’s data that pushed the headline rate lower than was expected.  A stronger reading could mean further sterling strength short-term, but the currency is unlikely to run away as the new governor is still an unknown for sterling, which warrants some caution.

Latest FX News

EUR:  Moving higher into the close yesterday on the back of comments from German Chancellor Merkel, which were not that significant, but managed to give the single currency a lift in otherwise quiet markets.  The move has been unwound in full during the Asia session, bringing EURUSD back towards the 1.33 level. Headlines stated that ECB President Draghi was open to non-standard measures also pushing EUR lower early on.

GBP:  As mentioned above, sterling has been doing fairly well in a quiet fashion, making a 4 month high vs. the USD yesterday. 

AUD: The minutes to the last meeting of the RBA showed the central bank discussing the scope for a further weakening of the exchange rate. This knocked the Aussie lower by some 40 pips, trading briefly below the 0.95 level as European markets open.

JPY: Wedge pattern forming on the daily chart for USDJPY suggesting break one way or the other from the diminishing volatility of recent days.  Data overnight showed industrial production rising 0.9% for the final April data.

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German ZEW economic sentiment improves to 38.5 in June

German economic sentiment improved more-than-expected in June, easing concerns over the impact of the euro zone’s debt crisis on the region’s largest economy, industry data showed on Tuesday.

In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment rose by 2.1 points to 38.5 in June from May’s reading of 36.4. 

Analysts had expected the index to rise by 1.7 points to 38.1 in June.

The Current Situation index declined unexpectedly to 8.6 in June from 8.9 in May, compared to expectations for an increase to 9.5.

On the index, a level above 0.0 indicates optimism, a level below 0.0 indicates pessimism. 

Meanwhile, the index of euro zone economic sentiment improved to 30.6 in June from a reading of 27.6 in May. Economists had expected euro zone economic sentiment to rise to 29.4 this month.

Following the release of that data, the euro added to gains against the U.S. dollar, with EUR/USD rising 0.23% to trade at 1.3396.

Meanwhile, European stock markets remained mixed following the data. The EURO STOXX 50 fell 0.25%, France’s CAC 40 declined 0.35%, Germany's DAX slumped 0.35%, while London’s FTSE 100 eased up 0.3%. 

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Forex - GBP/USD off session lows after U.K. CPI data

The pound pulled back from session lows against the dollar on Tuesday after official data showed that consumer inflation in the U.K. rose more than expected in May.

GBP/USD pulled back from 1.5663, the pair’s lowest since Friday, to hit 1.5682 during European morning trade, still down 0.24% for the day.

Cable was likely to find support at 1.5643, the low of June 13 and resistance at 1.5736, the high of June 13.

The Office for National Statistics said the rate of consumer price inflation accelerated at a seasonally adjusted 2.7% in May, above expectations for a 2.6% increase and up from a seven month low of 2.4% in April. 

The ONS said the rise was due to higher costs for air fares, motor fuel, clothing and footwear.

Core CPI, which excludes energy, food and tobacco costs, rose 2.2% up from 2% in April.

Consumer prices rose 0.2% from a month earlier, compared to expectations for a 0.1% increase, after rising 0.2% in April. 

Investors were looking ahead to outcome of the Federal Reserve’s meeting on Wednesday amid uncertainty over the bank’s next move after Chairman Ben Bernanke said last month the bank could begin to taper asset purchases if the economy continued to improve.

Sterling was lower against the euro, with EUR/GBP rising 0.34% to 0.8531.

The ZEW Institute was to release its closely watched report on German economic sentiment later Tuesday, while the U.S. was to release official data on consumer inflation, building permits and housing starts.

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Silver futures seesaw in rangebound trade ahead of Fed meeting

Silver futures swung between small gains and losses in rangebound trade on Tuesday, as investors stuck to the sidelines ahead of the outcome of the Federal Reserve’s keenly anticipated policy meeting on Wednesday.

On the Comex division of the New York Mercantile Exchange, silver futures for July delivery traded at USD21.73 a troy ounce during European morning trade, down 0.1% on the day.

Comex silver prices held in a range between USD21.68 a troy ounce, the daily low and a session high of USD21.87 a troy ounce.

Silver prices were likely to find near-term support at USD21.34 a troy ounce, the low from June 10 and resistance at USD22.24, June 14’s high.

Investors remained cautious amid speculation over whether the Fed will begin to scale back its easing program after Chairman Ben Bernanke said last month the bank could begin to taper asset purchases if the economy continued to improve.

Attention will focus on Bernanke’s press conference on Wednesday, which investors are hoping will provide further clues on how long the central bank will maintain its USD85-billion-a-month in bond purchases.

Moves in the silver price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

Silver, like gold, can benefit from such an environment of easy money because of expectations that ample liquidity would put a damper on the value of paper currencies.

Indications of robust physical demand supported the precious metal after the U.S. Mint said Monday that sales of silver coins hit a record high in the first half of 2013.

The Mint has already sold 23.3 million ounces of silver coins so far in 2013. The Mint's previous first-half sales record of 22.3 million ounces was set in the first six months of 2011.

Elsewhere on the Comex, gold for August delivery was down 0.35% to trade at USD1,378.45 a troy ounce, while copper for July delivery fell 0.65% to trade at USD3.177 a pound.

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Dollar rises vs. yen, gains capped ahead of Fed

The dollar pushed higher against the yen on Tuesday and was trading in a tight range against the other major currencies as markets positioned ahead of the Federal Reserve’s policy statement on Wednesday.

During European morning trade, the dollar gained ground against the yen, with USD/JPY climbing 0.61% to 95.06.

Investors were looking ahead to outcome of the Fed meeting amid uncertainty over the bank’s next move after Chairman Ben Bernanke said last month the bank could begin to taper asset purchases if the economy continued to improve.

The dollar fell to two-month lows against the yen last week as growing expectations that the Fed will to start to unwind its USD85 billion-a-month bond purchasing program later this year spooked investors and fuelled a broad based sell-off in risk assets.

The yen was also boosted after the Bank of Japan disappointed expectations for measures to ease market volatility following its latest policy meeting.

The dollar was trading close to four month lows against the euro, withEUR/USD rising 0.13% to 1.3387.

Elsewhere, the greenback hovering close to four month lows against the pound, with GBP/USD slipping 0.10% to 1.5700.

The dollar was lower against the Swiss franc, with USD/CHF sliding 0.14% to 0.9212. 

The greenback was broadly higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD down 0.59% to 0.9484,NZD/USD falling 0.25% to 0.7974 and USD/CAD dipping 0.01% to 1.0183.

Earlier Tuesday, the minutes of the Reserve Bank of Australia’s June policy meeting said the inflation outlook left scope for further rate cuts if necessary and added that further falls in the Australian dollar would help the domestic economy.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched down 0.02% to 80.80. 

The ZEW Institute was to release its closely watched report on German economic sentiment later Tuesday, while the U.S. was to release official data on consumer inflation, building permits and housing starts.

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