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    Afternoon Report – Monday 19th August

    THE DAILY REPORT

    AFTERNOON REPORT

    TOP THINGS TO KNOW

    Asia stocks advance as China's rates tweak improves investor mood

    (Reuters 19/08/2019) - Asian stocks rode a Wall Street rally on Monday and were also cheered by a decision from China’s central bank to alter the way it sets a key interest rate benchmark, a move seen by analysts as reducing borrowing costs for companies.

    The People’s Bank of China (PBOC) on Saturday unveiled key interest rate reforms to help steer borrowing costs lower for companies and support a slowing economy caught in the grip of a bruising trade war with the United States.

    That move helped Chinese stocks lead regional gains on Monday amid a broadly more upbeat investor mood. Hopes major economies will seek to prop up slowing growth with fresh stimulus have helped ease some of the recession fears unleashed in markets last week.

    “The decline in loan rates bodes well for China’s credit demand and growth outlook in the second half of 2019 to offset the impact of the ongoing trade disputes,” wrote Zhaopeng Xing and Raymond Yeung, economists at ANZ.

    “However, the reform is unlikely to have a stimulative effect on China’s property markets with the authorities still insisting on tight regulations to prevent the crowding-out effect from high home prices.”

    AUD spot currently above fair value model mid point

    (ForexLive 19/08/2019) - This is via Westpac, the bank note the negative impact of falling commodity prices on the rate:

    12% drop in Westpac export weighted commodity price index in the quarter.

    Midpoint for fair value model is now at 0.6550.

    above 0.68 AUD would be deemed 'expensive' by this model.

    Eurozone Final CPI: Risks lie toward a downward revision – TDS

    Analysts at TD Securities (TDS) see Eurozone CPI steadying at 1.1% y/y, but the final version remains open to a downward revision.

    Key Quotes: “EUR The only data release today is the final reading of July HICP for the Eurozone, which is expected to remain unchanged at 1.1% y/y. Risks lie toward a downward revision if anything, due to rounding.”

    Focus on US Huawei decision today – TDS
    (FXStreet 19/08/2019) - The TD Securities analysts note that the main driver of the risk sentiment on Monday is likely to be the much-awaited US decision on Huawei, in the face of the ongoing US-China trade war.

    Key Quotes: “US license for companies to do business with Huawei for 90 days.
    However, President Trump poured cold water on this by stating that “Huawei is a company that we may not do business with at all”. An extension would likely boost risk sentiment. An announcement is due today.”

    EUR/GBP losses could extend to 0.9017 – Commerzbank

    Karen Jones, Team Head FICC Technical Analysis at Commerzbank, suggested the European cross could slip back to the 0.9020/15 band.

    Key Quotes: “EUR/GBP is at last starting to correct lower – the market has temporarily topped at .9327 and the market has already sold off to .9088, the 31st July low. We look for losses to the 55 day ma at .9017 and there is scope for the 50% retracement at .8896”.

    “Intraday rallies are likely to hold below .9225. Above .9327 targets .9403, the 2016 high and eventually .9803. Only below the July low at .8891 will alleviate upside pressure”.

    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 24900 & 24550

    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.

    CRUDE OIL 30 Minute – Long positions above 54.95 with targets at 56.00 & 56.25.

    GBPJPY 30 Minute – As long as 128.78 is support look for 130.31.

    AUDUSD Daily – Short positions below 0.6850 with targets at 0.6740 & 0.6670.

    GOLD
    Daily – Long positions above 1465.00 with targets at 1565.00 & 1600.00

    EURUSD Daily – Short positions below 1.1230 with targets at 1.1025 & 1.0950.

    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 19, 2019 | 5:48 AM