AUDJPY Long term anomaly? 30-Jul-2015

Since early last month, some of stock indices have been downward trend with Chinese stock market plummeted. List of major stock indices are listed on a post in the past.

By the way, although anomaly is just anomaly without any fundamentals evidence, it implies the time for risky asset to be adjusted. We have introduced anomaly in stock market on this blog, Forex Flyer.

AUDJPY 1993 - Present

For a last 2-3 years, AUD has been declined against major currencies due to the interest rate lowered. Some market analysts mention Australian economy highly depends on Chinese economy nowadays, and it implies current Chinese market slow down badly affect to Australian market. If Australian market is being slow down further, the interest rate could be cut to ease financial policy. It means AUD will be at downside risk in that situation.
This is just a mathematical trick, anomaly oddly describe AUDJPY stays near the peak, applying trend & momentum analysis. JPY is typically strong while global market is shrink and vulnerable while AUD is considered more risky asset relatively.

The fact is the market has become very volatile for months, facing geopolitical issues, such as Greek bailout or Chinese stock market.

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[NZD] RBNZ indicates further depreciation at NZD 29-Jul-2015

Data: RBNZ statistics

RBNZ governor's comment implied further weakness at New Zealand Dollar near future. According to the comment, inflation figures in a last few years encouraged to ease financial market in New Zealand economy.

Ref. 
 RBNZ >> Monetary policy supporting growth and inflation goal
 The Reserve Bank today confirmed that at this stage some further monetary policy easing is likely to be required to maintain New Zealand’s economic growth around its potential, and return CPI inflation to its medium-term target level.

Further exchange rate depreciation is necessary, given the weakness in export commodity prices and the projected deterioration in the country’s net external liabilities over the next two years, Governor Graeme Wheeler said.

 Scoop >> HiFX - RBNZ Governor Wheeler comments - NZD higher

 On the other hands, property market in New Zealand has been hot for a last few years. Normally, easing financial market brings cheap money in the market, and it creates bubble in stock market or property market. For example, in London, the property market had been upward trend while quantitative easing was introduced.
 Commodity market has been sharply downward trend, and it is burden in the countries such as New Zealand, Australia, Russia or Canada.


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[Announcement] Trend & Momentum upgraded 20-Jul-2015

Trend & Momentum signals, available on Mobile App and Website, have been upgraded from today. The new signals more precisely catch up volatility fluctuation in the analysis period.

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[Forex Signal by QROSS X] Promotion video is live on Youtube 18-Jul-2015

The promotion video of Android App, "Forex Signal by QROSS X", has been live on Youtube.

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NZD interest rate cut further next week? 16-Jul-2015

Canadian dollar
 Yesterday, Bank of Canada unexpectedly cut 25bp at the interest rate which is now 0.50%. This is because of uncertainty in such energy sector or export of manufacturing goods, according to the source. CAD has been weaken against other currencies. GBPCAD was around 1.9995 before the rate changing and it is 2.022 now.

Financial Post >> David Rosenberg: Why the Bank of Canada cut now


New Zealand Dollar
 On the other side, Reserve Bank of New Zealand (RBNZ) plans the rate decision 23-Jul in next week. NZD has been weak against other major currencies such as GBP and USD since beginning of this year. The interest rate has been expected to be cut this year, as it was mentioned on this blog last Jan.
If the rate is cut next week, NZD will be likely weaker even though the market will have already expected the rate cut. Actually, the inflation rate is lower than RBNZ targeted, and it implies the interest rate is expected to be cut further. GBPNZD is at around 2.393 now, the highest level for almost 6 years.

Scoop >> Keep the interest rate cuts coming - 16 July
Today’s inflation release by Statistics New Zealand showed a Consumer Price Index (CPI) increase of 0.3% annually and 0.4% on last quarter; inflation continues to come in at well below the Reserve Bank of New Zealand’s (RBNZ) target band of 1% to 3% over the medium term – more cuts are justified and helpful to counteract headwinds in our economy, says the New Zealand Manufacturers and Exporters Association.
NZMEA Chief Executive Dieter Adam says, “Inflation remains low and the June CPI would have been flat on last quarter if not for petrol prices. This is further reason for the RBNZ to keep cutting interest rates over this year, to spur growth and help the New Zealand dollar continue its downward trend, improving the competitiveness of our manufacturers and exporters. The continued fall of the currency will also help our dairy sector and the related manufacturers, who are facing hard times with the reduction in dairy prices.


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Description about Newsensus on the official website 12-Jul-2015

A new page has been added on Newsensus Official Website. This is description about Newsensus App.

Newsensus App is available on Google Play.

Newsensus covers international news from major economic zones in the world including Europe, Asia, America, Middle East, Africa and Oceania.

RBA rate decision early in the morning UK time 7-Jul-2015

[AUD] Rate decision will be taken by Reserve Bank of Australia, early in the morning UK time. Although the rate is at the record low 2.0%, unexpected cut might be occurred while Chinese stock market is volatile. Australian economy has highly relied on Chinese economy, but since Chinese demand for natural resources, such as iron ore, got slow down, monetary policy has been eased by cutting the interest rate.

Ref. [Brisbane times] need2know: RBA in focus
Macquarie Wealth Management says that with the RBA cutting rates into USD weakness, policy is yet to deliver any meaningful AUD depreciation, with 2Q15 AUDUSD remaining about 9 per cent above our forecasts. "We now expect a stronger AUD for the remainder of 2015."
One-month implied volatility, a measure of anticipated price swings in the euro-US dollar exchange rate, rose to as much as 13.61 per cent on Monday, compared with an average of 11.78 per cent this year.

AUD has been weaken at market opening after Greek referendum was decisively resulted "No". GBPAUD is now as same as the level of 2009. If unexpected rate cut happened, AUD will be weaken further against other currencies and eventually inflation risk would be concerned.


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Greek referendum, impact at EUR 4-Jul-2015

Back to 1 year ago, Jul-2014, EURGBP was 0.790 - 0.800. It is now 0.713 significantly down more than 10%. It is mainly because of intermittent quantitative easing by ECB and Greek election on Jan-2015 which resulted SYRIZA's win.

Greek referendum, Yes or No?
Greek people are voting for whether they accept the proposal from the creditors, European Commission, ECB and IMF.
The poll indicates "Yes" is slightly supported than "No". We won't have no idea of the result most likely. Leading party, SYRIZA, has basically support "No", particularly Greek finance minister Yanis Varoufakis.

Ref.
Greek referendum poll shows 'Yes' 41.7 percent, 'No' 41.1 percent
TV poll puts 'Yes' vote marginally ahead before Greek referendum
Greece debt: Varoufakis accuses creditors of 'terrorism'


What about EUR?
Some sources say result of the referendum will not change the situation as bail out program has been terminated on the end of last month, but it still may affect to FX market against EUR.
"Yes" means Greece will accept the proposal from the creditors. If it is agreeable for both sides, Grexit and its default are unlikely to happen soon.
If the result is "No", the worst scenario is Greece being default before or after Grexit. No matter which Greece exit from Eurozone, the related debt is default, which was denominated in EUR. It implies credit of EUR currency will be deteriorated, and it leads to EUR become weaken against other currencies.

Ref.
What might happen if Greeks vote ‘yes’ — or ‘no’ — on Sunday
Greece Referendum: What Happens If They Vote ‘No’


By the way, the trend & momentum on QROSSX.com indicates unclear signal whether EUR is go up or down...


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