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    Afternoon Report – Friday 16th August

    THE DAILY REPORT

    AFTERNOON REPORT

    TOP THINGS TO KNOW

    Asia stocks take heart in stimulus speculation

    (Reuters 16/08/2019) - Asian shares found some footing on Friday after a turbulent week as China hinted at more support for its economy, amid growing expectations of aggressive stimulus from all the major central banks.

    Sentiment got a lift when China’s state planner said Beijing would roll out a plan to boost disposable income, though details were lacking.

    The Sino-U.S. trade dispute remained a drag after Beijing on Thursday vowed to counter the latest tariffs on $300 billion of Chinese goods.

    U.S. President Donald Trump said on Thursday he believed China wanted to make a deal and that the dispute would be fairly short, despite it already lasting more than a year.

    With no settlement in sight, investors have hedged against a global slowdown by buying bonds. Yields on 30-year debt hit an all-time low of 1.916% to be down 27 basis points for the week, the sharpest such decline since mid-2012.

    That meant investors were willing to lend the government money for three decades for less than the overnight rate.

    Such is the gloom that surprisingly strong U.S. retail sales came and went with no impact on the bond rally.

    “The bond market may have got it wrong this time, but we would not dismiss the latest recession signals on grounds of distortions,” said Simon MacAdam, global economist at Capital Economics.

    “Rather, it is of some comfort for the world economy that unlike all previous U.S. yield curve inversions, the Fed has already begun loosening monetary policy this time.”


    Gold on the bids near $1523 following latest trade/political headlines

    (FXStreet 16/08/2019) - Despite the US President’s latest trade-positive claims, Gold takes the bids to $1523 as China’s press defies statements from the White House leader during early Friday.

    The US President Donald Trump recently said that China wants to make a deal with the US and he doesn’t expect any retaliation to the latest tariffs from the dragon nation. However, China’s Global Times, later on, poured cold water on it while anonymous official inside China’s Ministry of Commerce who told specific measures are planned after the US tariffs activate.

    Adding to the safe-haven demand is the news that North Korea again test-fired two projectiles and dovish recent comments from the US Federal Reserve officials.

    As a result, the US 10-year treasury yield remains on the back foot while making the rounds to 1.523%. However, the recent recovery in the 2-year notes keeps the bullion’s upside checked.
    Investors may now keep an eye over the trade/political news as the US housing/consumer sentiment numbers are a bit away from publishing.

    Technical Analysis: Buyers are looking for a successful break of $1,535, in order to aim for $1,565, $1,600 and then targeting March 2013 top near $1,620. However, a downside break of $1,500 could trigger fresh pullback towards $1,485 and July month high surrounding $1,453.

    US: Strong data pulse – Danske Bank
    (FXStreet 16/08/2019) - According to Danske Bank analysts, US data yesterday were strong, not least US retail sales (control group) which rose 1.0% in July suggesting private consumption remains a strong growth driver in Q3.

    Key Quotes: “We also believe the fundamentals for continued private consumption growth are strong with e.g. high consumer confidence and solid real wage growth.” “Both the Philly Fed and Empire PMI manufacturing indices signal a rebound in ISM manufacturing in August. It may seem odd that the Fed is easing while economic data is strong but the Fed will be concerned whether data will continue to stay strong without further easing.”

    TRADE OPPORTUNITIES

    Below are Trading Central's Intraday preference recommendations. Short (SELL) positions and long (BUY) positions have two targets issued which may be used as take profit levels. Above or below a certain figure indicates the pivot level which may be used as a level for stop loss.

    HANG SENG Daily – Short positions below 26300 with targets at 24550 & 23780.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    PALLADIUM 30 Minute – As long as 1429.25 is support look for 1486.25.

    GOLD 30 Minute – Short positions below 1522.00 with targets at 1506.00 & 1501.00.

    FTSE Daily – Short positions below 7305.00 with targets at 7000.00 & 6750.00.

    AUDJPY Daily – The downside prevails as long as 73.78 is resistance.

    ASX 200 Daily – Short positions below 6630.00 with targets at 6210.00 & 6100.00.

    SILVER Daily – Long positions above 16.3500 with targets at 17.7000 & 18.2000.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    Economic Announcements
    (times in AEST)

    Risk Warning
    Trading FX and CFDs involves a substantial degree of risk and should only be undertaken with risk capital. Please consider our PDS and FSG before trading with us. A copy can be found on our website www.forexct.com.au. Forex Capital Trading Pty Ltd provides general advice that does not take into account your objectives, financial situation or needs. Investors do not own or have rights to underlying assets. Forex Capital Trading Pty Ltd is regulated by ASIC (AFSL 306400), ABN (69119086270). Forex Capital Trading Pty Ltd’s AFS license and Australian regulation only applies to the financial services being provided in Australia only.

    Posted: August 16, 2019 | 5:47 AM