Asia stocks mostly up on Japan, China data, Hang Seng ends a.m. higher

Asian stocks mostly rose on Monday with the Hang Seng index ending the morning session up 0.12% as solid regional data pointed to growth prospects for the global economy.

The Nikkei rose 1.2% as showed a wider than expected surplus of JPY587.3 billion in October, marking an eighth straight month in the black on a weaker yen boosting earnings from abroad. The Nikkei tends to gain on a stronger dollar which boosts the earnings of exporters, but investors are also focusing on overall global economic health.

In Asia, a strong U.S. jobs report last week strengthened concerns that the Federal Reserve could start to roll back its USD85 billion bond-buying program by the end of the year, pushing the dollar generally higher in the region on Monday. 

However in the Philippines, where a super cyclone struck at the weekend possibly killing as many as 10,000 people, the PSE Composite lost 1.6%.

China at the weekend reported industrial production grew by 10.3% on-year in October and a key meeting of senior party leaders reviewing economic plans for the next decade continued. The scope for reforms in China is likely limited, but investors are watching for signals on a timetable for full convertibility of the yuan.

At the close of U.S. trade Friday, the Dow Jones Industrial Average finished up 0.98%, the S&P 500 index rose 1.34%, while the Nasdaq Composite index rose 1.60%.

After the close of European trade Friday, the EURO STOXX 50 fell 0.33%, France's CAC 40 fell 0.48%, while Germany's DAX 30 fell 0.03%. Meanwhile, in the U.K. the FTSE 100 finished up 0.17%.

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Forex Trading Signal for 11th November 2013

                                                                                


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

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EUR/USD

 Down Trend :

 (1) SELL

E/P: 1.33690

T/P: 1.33490

S/L: 1.34000

GBP/USD

Down Trend:

(1) SELL

E/P: 1.60203

T/P: 1.60000

S/L: 1.60600

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Forex - EUR/USD weekly outlook: November 11 - 15

The euro ended the week sharply lower against the broadly stronger dollar on Friday after a better-than-forecast U.S. jobs report for October reinforced expectations that the Federal Reserve may start reducing stimulus measures next month.

EUR/USD ended Friday’s session at 1.3364, down 1.12% for the week, but still holding above the seven week low of 1.3294 struck on Thursday.

The U.S. economy added 204,000 jobs in October, the Department of Labor said Friday, significantly higher than the 125,000 expected by economists. The unemployment rate ticked up to 7.3% from an almost five year low of 7.2% the previous month.

The robust data indicated that the U.S. economy shrugged off the impact of the government shutdown and fuelled expectations that the Fed may start to reduce its USD85 billion-a-month asset purchase program as soon as next month.

The report came one day after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.

The euro weakened broadly on Thursday after the European Central Bank surprised investors with a rate cut.

The ECB unexpectedly cut its benchmark interest rate to 0.25% from 0.5% and indicated that further rate cuts are still possible. 

ECB President Mario Draghi warned that the euro zone may experience "a prolonged period of low inflation", followed by a gradual return back to the bank’s target of close to, but still below 2%. 

Sentiment on the shared currency was also hit after ratings agency Standard & Poor’s cut France’s sovereign rating to AA from AA+ on Friday, warning that the economic reforms of the past year were not sufficient to lift growth.

EUR/JPY settled at 132.41 on Friday, up from Thursday’s three week lows of 131.20, but still ended the week with losses of 0.67%.

EUR/GBP settled at 0.8346 on Friday, after falling to 10-month lows of 0.8299 in the previous session and ended the week 1.37% lower.

In the week ahead, investors will be closely watching Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve. Meanwhile, the euro zone is to release preliminary data on third quarter growth.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Tuesday as there are no relevant events on these days.

Wednesday, November 13

The euro zone is to publish data on industrial production, an important indicator of economic health.

Thursday, November 14

The euro zone is to release a flash estimate of third quarter GDP, while Germany, France and Italy are also to release preliminary estimates of third quarter growth. The ECB is to publish its monthly bulletin.

The U.S. is to release official data on the trade balance, the difference in value between imports and exports and the weekly report on initial jobless claims.

Friday, November 15

The euro zone is to release data on consumer price inflation, which accounts for the majority of overall inflation.

The U.S. is to round up the week with data on manufacturing activity in the New York region, as well as reports on industrial production and import prices.

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Forex - GBP/USD weekly outlook: November 11 - 15

The pound was lower against the dollar on Friday after strong U.S. nonfarm payrolls data for October bolstered expectations that the Federal Reserve could start to scale back stimulus before the year's end.

GBP/USD ended Friday’s session at 1.6012, down 0.51% for the day, after falling to session lows of 1.5958 earlier. For the week, the pair was up 0.26%.

The U.S. economy added 204,000 jobs in October, the Department of Labor said Friday, significantly higher than the 125,000 expected by economists. The unemployment rate ticked up to 7.3% from an almost five year low of 7.2% the previous month.

The robust data indicated that the U.S. economy shrugged off the impact of the government shutdown and fuelled expectations that the Fed may start to reduce its USD85 billion-a-month asset purchase program as soon as next month.

The report came one day after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.

In the U.K., data on Friday showed that the trade deficit widened to GBP9.82 billion in September from GBP9.55 billion in August. Economists had been expecting a trade deficit of GBP9.2 billion.

The report said that in the three months to September exports fell by 4.6% while imports rose 1.3%. 

The weak trade data raised concerns that U.K. third quarter growth would be dragged down. Preliminary data released last month showed that the U.K. economy expanded by 0.8% in the third quarter.

Elsewhere, sterling ended the week sharply higher against the euro after the European Central Bank unexpectedly cut its benchmark interest rate to 0.25% from 0.5% on Thursday and indicated that further rate cuts are still possible. 

Sentiment on the shared currency was also hit after ratings agency Standard & Poor’s cut France’s sovereign rating to AA from AA+ on Friday, warning that the economic reforms of the past year were not sufficient to lift growth.

EUR/GBP settled at 0.8346 on Friday, after falling to 10-month lows of 0.8299 in the previous session and ended the week 1.37% lower.

The Bank of England left interest rates on hold at 0.5% on Thursday and made no changes to the GBP375 billion quantitative easing stimulus program.

In the week ahead, investors will be closely watching Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve. Meanwhile, the Bank of England is to publish its closely watched quarterly inflation report.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, November 12

The U.K. is to produce data on consumer price inflation, which accounts for the majority of overall inflation.

Wednesday, November 13

The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings. Meanwhile, the BoE is to publish its closely watched quarterly inflation report and BoE Governor Mark Carney is to speak at a press conference to accompany the report.

Thursday, November 14

The U.K. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. 

The U.S. is to release official data on the trade balance, the difference in value between imports and exports and the weekly report on initial jobless claims.

Friday, November 15

The U.S. is to round up the week with data on manufacturing activity in the New York region, as well as reports on industrial production and import prices.

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Forex Weekly Outlook November 11-15

The US dollar enjoyed a second strong week, riding on better than expected data. Will it take a break now, or continue climbing? Inflation and employment data in the UK, Ben Bernanke’s speech, US Trade Balance and unemployment claims are the highlights of this week. Here is an outlook on the main market-movers ahead.

The all-important NFP posted a strong gain of 204K jobs more than doubling expectations. The figures may have been distorted by the government shutdown but the Fed will find it hard to disregard this high reading and the strong Q3 GDP report, in its next rate decision on December 18^th. Will we see tapering before the end of 2013? In the euro-zone, the ECB surprised with a rate cut, and this sent the euro tumbling down. Mario Draghi made it clear that he still has more tools in his shed.

Updates:

1. UK inflation data: Tuesday, 9:30. The consumer price index in the UK remained unchanged in September at 2.7%. Prices of energy products fell but were offset by an increase in air fare prices. The Bank of England’s promised to maintain rates, supporting the fragile employment recovery; however inflation remains above the BOE target of 2.0% which nay compel the bank to raise rates in 18 months to two years’ time. A drop to 2.5% is forecast.
2. UK employment data: Wednesday, 9:30.  A major improvement occurred in UK’s job market during September, when the number of unemployed plunged 41,600, the biggest fall in more than 16 years, following a 32,600 decline in the previous month. This decline was far better than the 24,300 drop anticipated by analysts. Meantime, unemployment rate remained unchanged at 7.7%. The BOE announced it will not raise rates before unemployment rate drops to 7.0%. Another drop of 30,200 unemployed is expected while unemployment rate is predicted to remain unchanged at 7.7%.
3. UK Inflation Report: Wednesday, 10:30.In this quarterly event in August,  BOE Governor Mark Carney revealed his Forward Guidance program. Will he change policy now? Carney will speak in London about the inflation report. Mark Carney does not wish to raise rates before the economy gains strength. He may also discuss the continuous improvement in UK’s job market.  The BOE left rates unchanged as expected.
4. US Federal Budget Balance: Wednesday, 19:00. The U.S. narrowed its budget deficit to the smallest rate in five years, amid stronger hiring. A surplus of $75.1 billion was recorded in September nearly unchanged from the same month last year. The major revenues came from higher payroll taxes. A deficit of $104.3 billion is expected this time.
5. US Trade Balance: Thursday, 13:30. The U.S. trade deficit widened mildly in August, reaching $38.6 billion, following $39.15 billion in the previous month. In light of these figures it is unlikely that trade will boost GDP in the third quarter. Economists expected a bigger deficit of $39.4 billion. The three-month average of the trade deficit, fell to $37.3 billion in the three months to August from $39.0 billion in the prior period.  A smaller deficit of $38.7 billion is forecast.
6. US Unemployment Claims: Thursday, 13:30. The number of Americans filing initial claims for unemployment benefits fell 9,000 to a seasonally adjusted 336,000 last week, rebounding to pre-recession levels. The reading was in line with market forecast, lowering the four week average by 9,250 to 348,250. The low level applications, indicate fewer layoffs, but hiring slowed in recent months instead of accelerating. A further drop to 331,000 is expected now.
7. Ben Bernanke speaks: Thursday, 0:00. Head of the Federal Reserve Ben Bernanke will speak in Washington DC. His words will cause volatility in markets following the unexpectedly strong US data and its possible effect on the Fed’s tapering decision.
8. Euro-zone GDP: Thursday, France at 6:30, Germany at 7:00, Italy at 9:00 and all the euro-zone at 10:00. The euro-zone officially exited the recession in Q2, enjoying a growth rate of 0.3%. This was mostly led by strong German growth: 0.7%, as well as French growth of 0.5%. Both core countries are expected to experience a slowdown in growth. While Spain already reported growth in Q3, Italy isn’t expected to get out of the woods just yet. Germany’s growth rate is expected to stand at 0.3%, France at 0.1% and the euro-zone at 0.2%.
9. Janet Yellen speaks: Thursday, 15:00. Yellen will take over the Fed in January, and will now testify before the Senate Banking Committee. She will have an opportunity to express her vision and will probably be asked some tough questions. Any tapering or no tapering hints will rock the markets.

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