Impressive US consumer confidence data added impetus to the US dollar bullish sentiment, driving the greenback higher yesterday. On the daily Forex news and trade opportunities, we look at more potential market drivers for the day.
31 August, AtoZForex – Topping the list of the daily Forex news and trade opportunities, we have the ADP Non-Farm Employment Change and more.
#1 EU banks prepared for a financial crisis?
European banks have a very tough beginning of the year, as the volatility in the wake of Brexit had a huge impact on the banking stocks. For example, Deutsche Bank and Credit Suisse has experienced quite a loss in their shares after the referendum results were announced. The current state of the EU banks is highly dependent on the start of the UK government’s process of implementing the Article 50. However, the economists say that the EU banks are “preparing for an economic nuclear winter situation.”
#2 No Fed rate hike in September?
Based on Janet Yellen’s economic outlook, she expects that “gradual” fed funds rate increases will be “appropriate” over time. She added, “I believe the case for an increase in the federal fund’s rate has strengthened in recent months.” However, Japanese financial holding company Nomura still thinks that “the most likely outcome is that the next hike will come in December.” Since recent data out of US has been mixed and activity only picked up in June and July.
#3 Saudi feeling the heat from oil decline
There are new warning signs regarding Saudi’s economy in the past months. The oil-rich kingdom’s economy grew at its slowest pace since 2013, as the non-oil sector fell by 0.7% and output in the construction sector dipped by 1.9% year-over-year in July.
Opportunity: Sell Brent on rallies
#4 New hacking attacks on SWIFT member banks
Following the high-profile $81 million heists at Bangladesh Bank, the global financial messaging system has reported new hacking attacks of member banks. SWIFT is now compelling banks to apply the fortified security standards put in place following the initial Bangladesh attacks.
#5 Oil is dipping
Following an amazing three week rally, oil prices are now on the decline. Thanks to dollar strength and tapered sentiment about a September OPEC output freeze. The crude oil report due today is likely to show 1.1m rise in stockpiles in the last week.
Opportunity: Sell WTI on rising stockpiles
#6 ADP Non-Farm Employment Change
The ADP is estimated to show a 174k change in the number of employed people during the previous month, excluding the farming industry and government. Last month’s figure was at 179K.
Opportunity: Buy USDCAD on a positive reading
#7 Exodus from European stocks
HSBC has pointed that investors have been fleeing European stocks at a high pace, last seen during the financial crisis. Analysts at the banks said: “prevailing uncertainty in Europe continues to drive investors away from the region… with outflows now running into their 26th week, now the joint longest streak of redemptions from European equities.”
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