Ammeo

ECB considers Fed-style stimulus Negative interest rates? Printing money? They're now both firmly on the agenda in Europe if prices don't start to pick up soon. European Central Bank President Mario Draghi said the bank kept interest rates unchanged Thursday because a sharp fall in inflation in March could be reversed in April due to stronger demand for travel and other services around the Easter holiday. But the ECB was ready to act swiftly if the outlook deteriorates, Draghi made clear. At their meeting, policymakers discussed the merits of negative deposit rates -- effectively charging banks to hold excess cash with the ECB. They also debated quantitative easing, or Fed-style asset purchases. "The governing council is unanimous in its commitment to using also unconventional instruments ... to cope effectively with the risks of a too prolonged period of low inflation," Draghi told reporters. ECB ignores calls to tackle deflation risk - Apr. 3, 2014

Dollar Reaches Two-Month High Against Yen as Payrolls Increase Dollar Rises to Two-Month High Against Yen - Bloomberg

Weaker Gold Prices Seen For Next Week – Survey Participants Gold prices may continue to exhibit weakness following two weeks of softer values, said a majority of participants in the weekly Kitco News Gold Survey. In the Kitco News Gold Survey, out of 33 participants, 22 responded this week. Six see prices up, while 12 see prices down and four see prices trading sideways or neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts. Last week, a nominal number of participants were bearish. As of noon EDT, Comex June gold prices were down about $43 an ounce on the week. Those who see weaker prices said there are few bullish catalysts to propel gold higher. “Gold futures should remain under pressure as long as the issues with Russia and the Ukraine fade and investors remain focused on the thoughts of tapering (stimulus) and rising interest rates,” said Phillip Streible, senior market strategist at RJO Futures. Participants who see higher prices next week said they expect gold to hold this week’s lows that as of 11:45 a.m. EDT were around $1,286.10 for the June Comex contract. Kevin Grady, owner of Phoenix Gold Futures and Options, said he expects buyers will enter the market at these lower levels. “I still believe that the physical market is directing our underlying price…. In the gold forward rates we noticed that the physical tightness dropped off as we approached the $1,400 level. This situation put the shorts in control. We have noted that the rates have gotten tighter as we broke the $1,300 level. It appears that the price-sensitive buyers are back. We need to hold our major support level of $1,270 for gold to rebound,” Grady said. Darin Newsom, senior analyst at Telvent DTN, said he expects prices to trade in a sideways pattern next week after the recent price fall. “The June contract (is) testing support at $1,289.50. This price marks the 50% retracement level of the previous rally from $1,186.70 through last week’s high of $1,392.20. Next week could see the contract consolidate,” he said. Weaker Gold Prices Seen For Next Week ? Survey Participants | Kitco News

GBP/USD Outlook Mar 31-Apr 4 GBP/USD Outlook Mar 31-Apr 4 | Forex Crunch

USD/JPY Forecast Mar. 31 – Apr. 4 USD/JPY Forecast Mar. 31 ? Apr. 4 | Forex Crunch

Dollar reserve role secure but set to shrink -BIS Dollar reserve role secure but set to shrink -BIS | Reuters

Bundesbank, PBOC Sign Deal to Settle Renminbi Payments in Frankfurt Bundesbank, PBOC Sign Deal to Settle Renminbi Payments in Frankfurt - WSJ.com

The US dollar gained against the euro and the yen, but lost ground against the other currencies. the ECB rate decision, Janet Yellen’s speech, US ISM Manufacturing PMI, important employment data culminating in the all-important Non-Farm Payrolls and rate decision in the Eurozone are the highlights of this week. Here is an outlook on the main events awaiting us this week. Final US GDP growth for the final quarter of 2013 was slightly revised to the upside, reaching 2.6%. In the meantime, weekly jobless claims surprised with a 10,000 drop to 311,000, beating forecast for a 326,000 reading, indicating the US job market continues to improve. Will this trend continue? In the euro-zone, dovish comments by the ECB pushed the euro down, while UK retail sales gave a boost to the pound. NZD/USD reached the highest levels since 2011 and also the Aussie and the loonie enjoyed significant gains. Let’s start: Updates: Eurozone inflation data: Monday, 9:00. Inflation in the Eurozone eventually increased by only 0.7%. The initial reading was 0.8%, better than the 0.7% increase predicted by analysts, but this changed in the final read. The core CPI figure, excluding energy, food, alcohol & tobacco, edged up 1% in February, following 0.8% posted in the previous month. Markets had expected the pace of price acceleration to remain steady for the month. Eurozone inflation is expected to reach 0.6%. The low expectations are due to the weak German inflation numbers. Canadian GDP: Monday, 12:30. Gross domestic product in December fell more than expected, dropping 0.5% after a 0.2% gain in the previous month. Analysts expected a smaller decline of 0.2%. This was the biggest monthly decline since March 2009. Weakness was visible across the board however; Bank of Canada Governor Stephen Poloz said this could be a temporary relapse due to weather related factors. Nonetheless real gross domestic product grew by 2.0% in 2013 compared to 2012. Gross domestic product is expected to expand 0.4%. Janet Yellen speaks: Monday, 13:55. Federal Reserve Chair Janet Yellen is scheduled to speak in Chicago. Yellen may explain the Fed’s latest decision to continue tapering, cutting another $10bn from its economic stimulus. The Federal Reserve Chair may also elaborate on the rate hike intentions for 2015. Volatility is expected. Australian rate decision: Thursday, 3:30. Australia’s central bank maintained its cash rate at a record low of 2.5% in March, in line with market consensus. The weakening of the Australian dollar will help boost growth. The RBA kept an accommodative monetary policy with credit growth rising gradually. Domestic demand showed signs of improvement and the labor market is expected to grow in the coming months. Rates are expected to remain unchanged. US ISM Manufacturing PMI: Tuesday, 14:00. Manufacturing activity expanded more rapidly than expected in February, emerging from the harsh winter weather rising to 53.2 from 51.3 in January. The manufacturing expansion could have been stronger, if it had not been for a shortage of parts. However, orders have improved, ensuring larger growth in the coming months. Another improvement to 54.2 is anticipated now.

Euro zone private sector loans contract further in Feb -ECB Euro zone private sector loans contract further in Feb -ECB | Reuters

Seems like the Asian session has seen traders buy at seemingly bargain prices; I am of the view that the down-trend will continue through London session and be amplified during NY session.

U.K. current account balance -22.4B vs. -14.0B forecast U.K. current account balance -22.4B vs. -14.0B forecast By Investing.com

Fed's Bullard says U.S. jobless rate expected to fall below six percent this year The U.S. unemployment rate will fall below 6 percent by the end of this year, a Federal Reserve official said on Wednesday, offering a bullish view on the country's economy after central bank comments sent shock waves through financial markets last week. James Bullard, president of the Federal Reserve Bank of St. Louis, said that the outlook for the U.S. economy is "quite good," despite data from early in the year. "The biggest thing is that unemployment has come down more quickly than expected," said Bullard, speaking on a panel at the annual Credit Suisse investor conference in Hong Kong. He added later during a question and answer session that more progress is needed in the labor market before U.S. policymakers can consider raising interest rates. Bullard is known to be one of the Fed's more hawkish policymakers. He previously advocated for a rate hike as early as 2014, a stance he appears to have backed away from. U.S. monetary policy tightening took center stage last week after a two-day policy meeting, when the Fed said it expected to keep benchmark interest rates near zero for a "considerable time" after it wrapped up a bond-buying stimulus program, which it is widely expected to do toward the end of the year. Fed's Bullard says U.S. jobless rate expected to fall below six percent this year | Reuters

Gold Prices To Move Lower As U.S. Economy Improves Gold News, Gold Market, Mining Companies, Silver News | Kitco News

Ive been looking at hourly and monthly chart. Hourly looks like its hits support three times and that we are looking for a retrace upwards but monthly looks like we are about to start a downward trend. Am I reading this right?

Fed says 29 out of 30 banks meet stress test capital requirements The Federal Reserve's most recent stress test shows 29 out of 30 U.S. banks met their stress test capital requirements. Only one smaller bank, Zions Bancorporation, failed to pass the annual test. Shares of that Salt Lake City-based bank's stock fell more than 1 percent in extended trading. The results showed continued improvement in banks' financial positions since the 2008 crisis, the Fed said. That built on positive results in last year's tests. The Fed will announce next week whether it will approve plans by some of the banks to increase dividends or buy their own stock. Following the announcement, Discover Financial, one of the 30 banks tested, said it will increase its quarterly dividend by 4 cents to 24 cents per share. Other banks tested included Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. The annual testing has become an increasingly important tool for regulators to ensure that banks are not eating too much into their capital cushions, by examining how banks would weather a hypothetical major market shock. Earlier, analysts predicted that the larger U.S. banks would most likely meet the Fed's requirements, having reduced their leverage, the amount of debt compared to shareholder equity, since the 2007-2009 financial crisis. Bigger fireworks could come next week, when the Fed will either approve or reject each firm's plans to pay dividends to shareholders or buy back shares. The Fed conducts stress tests each year to measure how banks' loan books and security portfolios would hold up under extreme economic scenarios not unlike those experienced during the last crisis. Some 30 banks participated in this set of tests, up from 18 last year. Fed says 29 out of 30 banks meet stress test capital requirements

Forex Weekly Outlook Mar. 24-28 The US dollar had a successful week, rising against most currencies thanks to a hawkish move from the Federal Reserve. German Ifo Business Climate, Inflation data in the UK, US consumer sentiment and housing data as well as jobless claims are the highlight events . Here is an outlook on the main market-movers this week. Fed Chair Janet Yellen, hinted about a rate hike in the spring of 2015 causing a multi-layered USD rally. Positive US data released at the end of last week backed the Fed’s intentions. Philly Fed Manufacturing Index rebounded to 9 points in March. Furthermore, US weekly unemployment claimsrose less than expected to 320K, continuing the recovery process in the US labor market. But are we seeing a serious change or will her words be watered down? The biggest victim was CAD, which reached a new multi year low, and also GBP/USD suffered. EUR/USD was also hit by disappointing German data. The yen enjoyed the Ukraine crisis and the kiwi showed its own strength. Forex Weekly Outlook Mar. 24-28 | Forex Crunch

US must have something in their favour for this move or else they wont appreciate it. Maybe its just mind games they playing, who knows what the real deal is. Only the insiders may have a full picture of it.

EUR/USD Forecast March 24-28 EUR/USD was not able to conquer 1.40 and was eventually hit hard. Is this a temporary dip or a change of courseFlash manufacturing and services PMIs, German Ifo Business Climate and inflation data are the main market-movers this week. Here is an outlook on the main events ahead. The disappointing ZEW economic sentiment from Germany only had a temporary effect, and it seemed that the euro could still move higher. But later came Janet Yellen: the Fed tapered bond buys once again and Yellen also released a comment about raising rates. The resulting dollar strength sent EUR/USD below uptrend support. The Russia – Ukraine crisis is humming in the background. EUR/USD Forecast March 24-28 | Forex Crunch

Germany's Economic Growth To Continue In Near-Term: Conference Board Germany's leading index increased for the fourth successive month in January, suggesting that the current expansion in economic activity will continue in the near term, survey data published by the Conference Board revealed Friday. The leading economic index advanced 0.2 percent sequentially to 128.3 in January, after growing 0.9 percent in December and 0.3 percent in November. All the seven components the constitute the leading index increased in January, with the biggest contributions coming from the yield spread, investment goods and new orders. Conference board further noted that the coincident economic index, which measures the current situation, moved up 0.2 percent month-on-month to 123.7 in January. This followed increases of 0.1 percent and 0.2 percent respectively in December and November. During the six months ended January, the leading index logged a 2.3 percent expansion, and the coincident index recorded a 0.8 percent rise. Germany's Economic Growth To Continue In Near-Term: Conference Board

EU strikes deal on banking union EU strikes deal on banking union ? EUbusiness

Existing Home Sales Lowest In 19 Months, Cheapest Home Sales Tumble 18% Another month, another confirmation that the so-called housing recovery is sputtering on its last breath and is being held up entirely by the higher end segment, which however is also coming to an end now that wealthy Chinese have started liquidating their ultra luxury housing. In February, according to the NAR, some 4.6 million annualized existing homes were record, in line with expectations, and a 0.4% decline from the 4.62 million print in January. This was the 19th monthly drop in a row, and the lowest since July 2012, and a 7.1% drop year over year. But the worst news is that housing is increasingly unaffordable to the poorer Americans, with houses costing in the $0-$100 bucket down 18% from a year ago. Since nobody is applying for a mortgage any more this is hardly surprising. Finally, in addition to the usual weather excuse for weak housing sales, a new scapegoat has appeared: soaring student loans: "20 percent of buyers under the age of 33, the prime group of first-time buyers, delayed their purchase because of outstanding debt. 56 percent of younger buyers who took longer to save for a downpayment identified student debt as the biggest obstacle." Oops. The median home price remained largely flat in February at $189,000, and has continued on a shallow downward slope which peaked in mid-2013. Not helping things is that distressed homes – foreclosures and short sales – accounted for 16 percent of February sales, compared with 15 percent in January and 25 percent in February 2013. Existing Home Sales Lowest In 19 Months, Cheapest Home Sales Tumble 18%; Weather, Student Loans Blamed | Zero Hedge

5 reasons for USD rally on the Fed decision The third taper of bond buys was certainly expected and priced in. So was the removal of the 6.5% threshold in the Fed’s forward guidance. So, why did the US dollar enjoy a rally enjoy a strong rally that sent USD/CAD to multi year highs and EUR/USD below key support? Here are 5 hawkish events that stirred the rally: Lower unemployment forecasts: the big difference in the accompanying economic forecasts lies in the lowering of the unemployment forecasts: For 2014: 6.1-6.3% instead of 6.3% for 6.6%. And for 2015: 5.6-5.9% instead of 5.8-6.1%. Maximum employment is one of the Fed’s two mandates. No change in inflation forecasts: for the Fed’s second mandate, core inflation, no excitements were recorded. 2014 is still expected to see 1.4 to 1.6%. 2015 is expected to have a core PCE inflation rate of 1.7 to 2% instead of 1.6 to 2% beforehand. This is very stable and quite healthy. A dovish dissenter: During many of the Fed’s meetings, we had one hawkish dissenter. When we have a dovish one, this is a hawkish sign.Narayana Kocherlakota dissented to the dovish side, saying that the commitment regarding inflation is not strict enough. Blaming the weather: The FOMC statement’s opening paragraph acknowledged the slower growth but immediately mentions the weather. This shows that the Fed is not too worried about the lower growth and probably sees weather as a bump and not as a game changer. Rate hike hint: This may have been unintended, but it is critical. When asked about what “considerable time” means in relation to the period between ending QE and starting to raise rates, Yellen answered 6 months. QE is expected to end in around 7 months, at the October 29th meeting. 6 months later is April 2015. Though far from explicit, here we finally have less than vague expectations for a rate hike in the US, after long years of near zero rates. Needless to say, the next moves depend on the data, but the Fed is certainly leaning to the hawkish side. 5 reasons for USD rally on the Fed decision | Forex Crunch

Fed may raise rates as soon as next spring, Yellen suggests The Federal Reserve will probably end its massive bond-buying program this coming fall, and could start to raise interest rates around six months later, Fed Chair Janet Yellen said on Wednesday. That's a somewhat more aggressive path toward higher rates than some investors had anticipated, and both U.S. stocks and bonds slumped. Futures traders now are pricing in a first rate hike as soon as April 2015. "She certainly moved (the timetable) up a little bit and I don't think the market was expecting that at all because she is widely viewed as being more on the dovish side of the aisle than she is on the hawkish side," said Peter Kenny, CEO of Clearpool Group in New York. In announcing its view on future rates after a two-day policy meeting, the Fed dropped a set of guideposts it was using to help the public anticipate when it would finally start bumping overnight borrowing costs up from zero. Yellen used her first press conference as Fed chair to emphasize that rates will stay low for a while, rise only gradually, and could end up staying lower than normal "for some time" even after the economy regains its health given lasting scars from the financial crisis. Yellen was at pains to say that dropping the 6.5 percent unemployment rate as a guideline in deciding when to raise rates did not represent a change in the Fed's policy intentions. The Fed said it would instead consider a wide range of economic indicators when deciding the future path of overnight rates. She also said policymakers would be looking not only at how close inflation and unemployment are to the Fed's goals, but how fast, or slowly, those measures are approaching those goals. The central bank noted in its statement that its embrace of easy money policies could continue even after the Fed achieves its goals of full employment and 2 percent inflation. In a news conference Yellen said Fed officials cited "the residual impacts of the financial crisis" for this, with some noting "the potential growth rate of the economy may be lower at least for a time." Even so, the majority of Fed policymakers expect overnight interest rates to rise in 2015, according to forecasts released by the Fed on Wednesday. The unease in markets "might be a sign that people think Yellen will tighten sooner rather than later, or that inflation could come into the market if the Fed keeps rates low well past 6.5 percent (unemployment)," said Wayne Kaufman, chief market analyst at Rockwell Securities in New York. The central bank proceeded with its well-telegraphed reductions to its massive bond-buying stimulus, announcing it would cut its monthly purchases of U.S. Treasuries and mortgage-backed securities to $55 billion from $65 billion. Minneapolis Fed President Narayana Kocherlakota dissented, saying that dropping the unemployment threshold could hurt the credibility of the Fed's commitment to return inflation to 2 percent.

FOMC Expected To Continue To Taper QE, Update Forward Guidance Economists expect the Federal Reserve to cut another $10 billion from its monthly asset-purchase program at its two-day monetary-policy meeting, lowering its monthly bond buys to $55 billion. The Federal Open Market Committee meets Tuesday and Wednesday, and it will be the first one overseen by new Fed Chair Janet Yellen. Traders will focus on the commentary that accompanies the decision, which is slated to be released Wednesday afternoon. Additionally, during this meeting, the Fed will release its new economic forecasts. Fed watchers said it’s likely the FOMC will talk about the impact of the severe winter weather and the effect on the economy. Economic data from January and February were lower than anticipated and many analysts and economists blamed this on the wintry weather that has hit much of the U.S. Brown Brothers Harriman said the Fed will likely signal that growth is expected to rise in the coming months and quarters now that winter is nearly over. That could change the Fed’s economic forecasts, BBH said. The Fed “is likely to pare slightly this year's GDP (gross domestic product) forecast of 2.8-3.2%, which would simply recognize weaker (first quarter) activity, without changing its medium-term view. The unemployment forecast may also be tweaked lower. We would not expect the core PCE (personal consumption expenditures) forecasts to change,” BBH said. Economists said financial and commodity markets will closely watch how the Fed modifies its forward guidance, especially as it relates to the monthly unemployment rate. The Labor Department said in the February nonfarm payrolls report that the unemployment rate is 6.7%. The Fed’s “threshold” for considering an increase in interest rate is 6.5%, and many economists said the central bank is likely to ditch that firm figure for something more nuanced. Since December 2012, the FOMC has said it wouldn’t raise the target for short-term interest rates until the medium-term outlook for inflation rose above 2.5% or the jobless rate fell to 6.5%. “We expect it to drop the … thresholds, while maintaining other elements of the current forward guidance – including the notion that the committee still believes any increase in short-term rates is still a long way off,” said analysts at Nomura. Gold News, Gold Market, Mining Companies, Silver News | Kitco News

Russia may offer special tax regime for Crimea Russia's finance ministry said on Monday Moscow may offer a special tax regime for Ukraine's southern Crimea region, which voted overwhelmingly in a referendum on Sunday to join Russia. "Undoubtedly, the probable accession of Crimea to Russia will have a very serious impact," Deputy Finance Minister Sergei Shatalov told a local business conference. "I do not rule out a special tax regime (during Crimea's transition period)," he added, without giving any further details. Russia may offer special tax regime for Crimea - Finance Ministry | Reuters