U.S stocks nosedive as data points to end of stimulus; Dow drops 2.34%

U.S. stocks plummeted on Thursday after regional U.S. manufacturing data and housing numbers beat expectations a day after Federal Reserve Chairman Ben Bernanke said stimulus measures may wind down this year and end next year if the economy improves.

Stimulus programs tend to push up stocks as a side effect, and talk of their dismantling can bruise equities prices.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 2.34%, the S&P 500 index ended down 2.50%, while the Nasdaq Composite index fell 2.28%.

The Federal Reserve Bank of Philadelphia said earlier that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April’s total of 4.97 million, far surpassing market calls for a 0.6% increase.

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week rose by 18,000 to 354,000 compared to expectations for an increase of 4,000 to 340,000.

Federal Reserve stimulus tools such as its monthly USD85 billion bond-buying program have pushed up stock prices in recent years, and the end of such liquidity injections could prompt investors to park their money elsewhere, which fueled a massive day of selling on Wall Street and elsewhere

Leading Dow Jones Industrial Average performers included Cisco Systems, down 0.93%, Alcoa, down 1.11%, and Caterpillar, down 1.25%.

The Dow Jones Industrial Average's worst performers included Walt Disney, down 3.61%, Intel, down 3.24%, and Microsoft, down 3.18%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 3.63%, France's CAC 40 fell 3.66%, while Germany's DAX 30 finished down 3.28%. Meanwhile, in the U.K. the FTSE 100 finished down 2.98%.

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Forex - Dollar gains as data points to eventual tapering of Fed stimulus

The dollar rose against most major currencies on Thursday after better-than-expected regional factory and housing data in the U.S. prompted investors to speculate that the Federal Reserve may soon scale back stimulus measures.

Monetary stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their dismantling can strengthen the U.S. currency.

In U.S. trading on Thursday, EUR/USD was down 0.67% at 1.3207.

Federal Reserve Chairman Ben Bernanke said earlier this week that monetary stimulus programs may scale back this year if the economy improves, and data released earlier Thursday pointed to a U.S. economy that may be on the mend.

The Federal Reserve Bank of Philadelphia said earlier that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April’s total of 4.97 million, far surpassing market calls for a 0.6% increase.

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week rose by 18,000 to 354,000 compared to expectations for an increase of 4,000 to 340,000, though the numbers failed to seriously halt the dollar's advance.

Meanwhile in Europe, Germany’s manufacturing purchasing managers’ index fell to 48.7 in June compared to expectations for a reading of 49.8 and down from a final reading of 49.4 in May, according to Markit Economics, which weakened the euro.

The eurozone's manufacturing PMI rose to 48.7 in June from a final reading of 48.3 in May, though the figure remained well below the 50 level that separates contraction from expansion.

The bloc’s service-sector PMI rose to a 15-month high of 48.6 from 47.2 in May, above expectations for an increase to 47.5.

The greenback, meanwhile, was up against the pound, with GBP/USDtrading down 0.02% at 1.5481.

The Office for National Statistics said earlier that U.K. retail sales climbed 2.1% in May, surpassing expectations for a gain of 0.8% after falling 1.1% in April, the largest drop in a year.

Retail sales were 1.9% higher from a year earlier, compared to expectations for a 0.2% increase.

The ONS said food sales rose 3.5% in May, the largest increase in two years, while non-store retailing, including online sales, was up 4.3%.

The dollar was up against the yen, with USD/JPY up 1.42% at 96.69, and up against the Swiss franc, with USD/CHF trading up 1.04% at 0.9296.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 1.05% at 1.0381, AUD/USD down 1.14% at 0.9188 and NZD/USD trading down 2.11% at 0.77732.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.75% at 82.06.

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Forex - GBP/USD hovers lower in choppy trading, U.S. data weigh

The pound weakened against the dollar in choppy trading on Thursday after better-than-expected regional factory data in the U.S. fanned already growing expectations that monetary stimulus programs will fade out soon and allow the greenback to strengthen over the long term.

Monetary stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their dismantling can strengthen the U.S. currency.

In U.S. trading on Thursday, GBP/USD was trading at 1.5474, down 0.07%, up from a session low of 1.5415 and off from a high of 1.5494.

Cable was likely to find support at 1.5415, the earlier low, and resistance at 1.5494, the earlier high.

Federal Reserve Chairman Ben Bernanke has said monetary stimulus programs, which weaken the dollar to spur recovery, may scale back this year if the economy improves, and data released earlier Thursday pointed to a U.S. economy that is on the mend.

The Federal Reserve Bank of Philadelphia said earlier that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April’s total of 4.97 million, far surpassing market calls for a 0.6% increase.

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week rose by 18,000 to 354,000 compared to expectations for an increase of 4,000 to 340,000, though the numbers failed to seriously halt the dollar's advance.

Better-than-expected retail sales data out of the U.K. cushioned Cable's losses.

The Office for National Statistics said earlier that U.K. retail sales climbed 2.1% in May, surpassing expectations for a gain of 0.8% after falling 1.1% in April, the largest drop in a year.

Retail sales were 1.9% higher from a year earlier, compared to expectations for a 0.2% increase.

The ONS said food sales rose 3.5% in May, the largest increase in two years, while non-store retailing, including online sales, was up 4.3%.

The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP trading down 0.52% at 0.8541 and GBP/JPY up 1.24% at 151.21.

On Friday, the U.K. is to release official data on public-sector net borrowing.

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Gold plunges to near 3-year lows on surging Philly Fed index

Gold prices hit lows not seen since September of 2010 in U.S. trading on Thursday after a manufacturing gauge for the Philadelphia area of the U.S. beat expectations and strengthened the dollar, which tends to trade inversely with gold.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were down 5.80% at USD1,294.35 a troy ounce in U.S. trading on Tuesday, up from a session low of USD1,285.25 and down from a high of USD1,352.05 a troy ounce.

Gold futures were likely to find near-term support at USD1,271.80 a troy ounce, the low from Sept. 21, 2010 and resistance at USD1,391.35, Monday's high.

Gold prices fell after Federal Reserve Chairman Ben Bernanke said Wednesday that monetary stimulus measures may taper this year and possibly end next year if the economy improves, though the bottom fell out on better-than-expected data out of the U.S. on Wednesday.

Stimulus programs such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, which makes gold an attractive hedge.

The Federal Reserve Bank of Philadelphia said earlier that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April’s total of 4.97 million, far surpassing market calls for a 0.6% increase.

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week rose by 18,000 to 354,000 compared to expectations for an increase of 4,000 to 340,000, though the numbers failed to seriously halt the dollar's advance, which punished gold even more.

Elsewhere on the Comex, silver for July delivery was down 8.22% at USD19.845 a troy ounce, while copper for July delivery was down 2.62% and trading at USD3.059 a pound.

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Forex - EUR/USD drops as regional U.S. manufacturing gauge surges

The euro fell against the dollar on Thursday after a manufacturing barometer for the Philadelphia area of the U.S. grew at its fastest pace since April 2011 and cemented expectations that monetary stimulus programs may soon unwind.

Federal Reserve Chairman Ben Bernanke has said monetary stimulus programs, which weaken the dollar to spur recovery, may scale back this year if the economy improves.

In U.S. trading on Thursday, EUR/USD was down 0.79% at 1.3190, up from a session low of 1.3161 and off from a high of 1.3301.

The pair was likely to find support at 1.2956, the low from June 3, and resistance at 1.3416, Wednesday's high.

The Federal Reserve Bank of Philadelphia said earlier that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April’s total of 4.97 million, far surpassing market calls for a 0.6% increase.

Elsewhere, the Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. last week rose by 18,000 to 354,000 compared to expectations for an increase of 4,000 to 340,000, though the numbers failed to seriously halt the dollar's advance.

Fed Chairman Ben Bernanke said Wednesday that monetary authorities could begin scaling back its USD85 billion-a-month asset purchasing program later this year and close it down completely by the middle of 2014 if the economy gains steam.

The Fed added the U.S. economy should grow between 2.3% and 2.6% in 2013, while the unemployment rate should fall to between 6.5% and 6.8% by the end of 2014, when inflation should approach its 2% target.

Meanwhile in Europe, Germany’s manufacturing purchasing managers’ index fell to 48.7 in June compared to expectations for a reading of 49.8 and down from a final reading of 49.4 in May, according to Markit Economics, which weakened the euro.

The eurozone's manufacturing PMI rose to 48.7 in June from a final reading of 48.3 in May, though the figure remained well below the 50 level that separates contraction from expansion.

The bloc’s service-sector PMI rose to a 15-month high of 48.6 from 47.2 in May, above expectations for an increase to 47.5.

The euro, meanwhile, was down against the pound and up against the yen, with EUR/GBP trading down 0.53% at 0.8540, and EUR/JPY trading up 0.92% at 129.40.

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Natural gas futures tumble 2% after U.S. supply data

Natural gas futures extended losses on Thursday, falling to the lowest level of the session after a report from the U.S. Energy Information Administration showed that natural gas supplies rose more-than-expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD3.889 per million British thermal units during U.S. morning trade, down 1.9% on the day.       

It earlier fell by as much as 2.7% to hit a session low of USD3.855 per million British thermal units.

The July contract traded at USD3.887 prior to the release of the U.S. Energy Information Administration report.  

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended June 14 rose by 91 billion cubic feet, below market expectations for an increase of 90 billion.

Inventories rose by 63 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 80 billion cubic feet.

Total U.S. natural gas storage stood at 2.438 trillion cubic feet as of last week. Stocks were 559 billion cubic feet less than last year at this time and 47 billion cubic feet below the five-year average of 2.485 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 94 billion cubic feet below the five-year average, following net injections of 60 billion cubic feet. 

Stocks in the Producing Region were 3 billion cubic feet above the five-year average of 930 billion cubic feet after a net injection of 20 billion cubic feet.

Nymex gas futures rose to a two-week high of USD3.982 per million British thermal units on Wednesday, as forecasts for warmer weather across key parts of the U.S. boosted near-term demand expectations for the fuel.  

The U.S. National Weather Service's six-to-ten-day outlook released Tuesday called for above-normal readings for much of the country.

The Commodity Weather Group also said hot weather will spread across the northern part of the country from June 23 to June 27.

Demand for natural gas tends to rise in the summer months as warmer-than-normal temperatures increase the need for gas-fired electricity to power air conditioning.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in August tumbled 2.85% to trade at USD95.67 a barrel, while heating oil for July delivery lost 2.75% to trade at USD2.890 per gallon. 

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U.S. futures lower on Fed jitters, data ahead; Dow Jones down 0.70%

U.S. stock futures pointed to a lower open on Thursday, ahead of the release of U.S. data later in the day, as comments by Federal Reserve Chairman Ben Bernanke weighed heavily on risk sentiment. 

Ahead of the open, the Dow Jones Industrial Average futures pointed to a 0.70% drop, S&P 500 futures signaled a 0.85% decline, while the Nasdaq 100 futures indicated a 0.97% slump. 

Stocks came under pressure after Fed Chairman Ben Bernanke said the bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects. 

Sentiment was also hit after data earlier showed that China’s HSBC preliminary manufacturing purchasing managers’ index fell to a nine month low of 48.3 in June from 49.2 in May as new orders fell, indicating that the slowdown in manufacturing is worsening. 

Tech stocks were expected to be active, amid reports Microsoft had planned to acquire Finland's Nokia, but talks broke down, sending the tech giants shares down 0.98% in pre-market trade. 

Separately, Microsoft announced a major change to its Xbox One late Wednesday, saying it will no longer require an internet connection to play offline games. 

Internet-related companies were also likely to be in focus, as Facebook was preparing to host a press event at its headquarters on Thursday. The social network giant was widely expected to announce a video function for its photo-sharing app, Instagram. 

Elsewhere, Men’s Wearhouse slipped 0.24% in extended trading, after the company ousted its founder and exectutive chairman George Zimmer following repeated clashes over strategy with Chief Executive Officer, Douglas Ewert. 

Adding to losses, Jabil Circuit plummeted 3.58% after hours, as it reported a steep drop in quarterly profits after the close of the U.S. trading session on Wednesday. 

Across the Atlantic, European stock markets were sharply lower. The EURO STOXX 50 plunged 2.48%, France’s CAC 40 plummeted 2.33%, Germany's DAX retreated 2.36%, while Britain's FTSE 100 tumbled 2.26%. 

During the Asian trading session, Hong Kong's Hang Seng Index sank 2.88%, while Japan’s Nikkei 225 Index tumbled 1.74%. 

Later in the day, the U.S. was to release the weekly government report on initial jobless claims, in addition to data on existing home sales and the Philly Fed manufacturing index.

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Dollar extends gains as Fed signals end to easing

The dollar extended gains against the other major currencies on Thursday after the Federal Reserve said it could start scaling back its bond buying program by the end of the year.

During European late morning trade, the dollar rallied against the yen, with USD/JPY surging 1.46% to 97.85.

The dollar strengthened across the board after Fed Chairman Ben Bernanke said the bank could begin tapering its USD85 billion-a-month asset purchase program later this year and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.

The dollar was sharply higher against the euro, with EUR/USD dropping 0.79% to 1.3189.

The euro came under pressure after data showed that manufacturing activity in Germany contracted more than expected in June.

Germany’s manufacturing purchasing managers’ index fell to 48.7 in June compared to expectations for a reading of 49.8 and down from a final reading of 49.4 in May.

Activity in Germany’s services sector rose to a four-month high, with the services PMI improving to 51.3 from 49.7 in May. 

The euro zone manufacturing PMI rose to 48.7 in June from a final reading of 48.3 in May, but remained well below the 50 level that separates contraction from expansion.

The bloc’s services PMI rose to a 15-month high of 48.6 from 47.2 in May, above expectations for an increase to 47.5. 

Elsewhere, the greenback was higher against the pound, with GBP/USDdown 0.23% to 1.5448.

The pound pared back losses after official data showed that U.K. retail sales climbed 2.1% in May, outstripping expectations for a gain of 0.8% and were 1.9% higher from a year earlier.

The dollar was stronger against the Swiss franc, with USD/CHF climbing 0.67% to 0.9343. 

The Swiss National Bank kept its benchmark interest rate unchanged at zero on Thursday and said the Swiss franc remains “high”.

The bank also maintained the minimum exchange rate floor at 1.20 per euro saying the measure is “important in order to avoid an undesirable tightening of monetary conditions.” 

The greenback was sharply higher against its Australian, New Zealand and Canadian counterparts, with AUD/USD dropping 0.98% to 0.9202,NZD/USD tumbling 1.63% to 0.7769 and USD/CAD advancing 0.83% to 1.0357.

The New Zealand dollar came under heavy selling pressure earlier Thursday after official data showed that the economy expanded 0.3% in the first quarter, undershooting expectations for a 0.6% increase.

Meanwhile, data on Thursday showed that China’s HSBC preliminary manufacturing PMI fell to a nine month low of 48.3 in June from 49.2 in May as new orders fell, indicating that the slowdown in manufacturing is worsening.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.85% to 82.16. 

The U.S. was to release the weekly government report on initial jobless claims, in addition to data on existing home sales and the Philly Fed manufacturing index later in the trading day.

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Gold futures extend losses, down 6% to hit USD1,290 a troy ounce

Gold futures extended heavy losses to trade at the lowest level since September 2010 on Thursday, after the Federal Reserve said it could start scaling back its bond buying program by the end of the year.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,290.15 a troy ounce during European morning hours, down 6.1% on the day.

Comex gold prices fell by as much as 6.3% earlier in the session to hit a daily low of USD1,287.25 a troy ounce, the weakest level since September 28, 2010.

Gold futures were likely to find near-term support at USD1,277.10 a troy ounce, the low from September 28, 2010 and resistance at USD1,365.20, the high from May 19.

Fed Chairman Ben Bernanke said the bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.

The bank said it expects the U.S. economy to grow between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to fall to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.

Moves in the gold 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.

Indications the Fed will begin to taper asset purchases sent the U.S. dollar higher across the board. 

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.85% to trade at a two-week high of 82.22.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Elsewhere on the Comex, silver for July delivery plunged 8.3% to trade at USD19.83 a troy ounce, the lowest level since September 2010, while copper for July delivery fell 2.2% to trade at a seven-week low of USD3.070 a pound.

Copper prices came under heavy selling pressure following the release of weak Chinese manufacturing data.

Data on Thursday showed that China’s HSBC preliminary manufacturing purchasing managers’ index fell to a nine-month low of 48.3 in June from 49.2 in May as new orders fell, indicating that the slowdown in manufacturing is worsening.

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Forex Trading Signal for 20th June 2013

                                                                                


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

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

EUR/USD

 Down Trend :

 (1) SELL

E/P: 1.33197

T/P: 1.32500

S/L: 1.33600

GBP/USD

Down Trend:

(1) SELL

E/P: 1.55323

T/P: 1.54700

S/L: 1.55800

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.

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