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FED Yellen Worries of Flat Inflation May Obstruct Hike

  • DAR Wong
  • 17 July 2017

Fundamental Outlook   The U.Sconsumer prices stays flat and worries Federal Reserve (FED) Yellen for deviating from plan of rate hike. China grows in steady pace from inflation rise and trade surplus. U.K. expands in claimant count while unemployment rate rises.

The U.S. weekly claims expanded 247,000 in the week ended 6 July and matched forecast. Producer prices rose 0.1 percent in June and above forecast. Core producer prices, excluding food and energy, also rose 0.1 percent but below expectation.

American consumer prices laid flat in June while core prices rose 0.1 percent, both were below forecast. Another report on retail sales and core retails were both sunken 0.2 percent and also below consensus.

FED Yellen clarifies her remarks made few weeks ago that the subprime crisis has made the financial system stronger, but could not discount the possibility of another strike in such crisis. Before the weekend, she also expresses concern on low inflation in congressional committee when she says this would deviate from the policy path planned earlier. Policymakers initially predicted the low inflation could be temporary and would not hamper the growth.

China’s consumer prices rose 1.5 percent in June from a year ago. Producer prices expanded 5.5 percent in the same month on year basis. Both data remained steady and matched forecast. Another report on trade surplus rose CNY294,000 approximately at USD42.8 billion, in June and highest record in past 5 months. 

Japan’s core machinery orders contracted 3.6 percent in May and worse than previous month, against a positive consensus.  Revised industrial production shrank 3.6 percent in May and worse than consensus.

British average earning over the 3 months ended May rose 1.8 percent and matched forecast. Claimant count for jobless benefits rose 6,000 in June but lower than expectation and compared to revised 7,500 in May. Unemployment rate dropped to 4.5 percent in May.

 

Technical Forecast   USD/JPY has begun to drop after hitting 114.50 top recently. This week, we predict the trend will continue to decline at 111.50 region before moving into sideways. Range is expected to be constricted in mixed sentiment for 1-2 weeks if the aforementioned support could hold at 111.00 – 111.50 region.

EUR/USD spiked on Friday and closed at 1.1460 level. Market will be very tricky this week as the bull might charge above 1.1500 resistance and climb higher to 1.1600 target. Alternatively, reversing below 1.1380 support will trigger a new selling force and drive the trend into correction.

GBP/USD shot up above 1.3050 resistance on Friday and settled at 1.3090 level. This week, the trend may ascend higher with possibility aimed at 1.3350 if market faces a short-squeeze. The sudden spike in Pond could come from rumor of another election as Theresa’s led Government may collapse. Support will ambush strongly at 1.3000 – 1.3050 for bargain-hunting but breaking beneath this region will reverse the market sentiment rapidly.

 

Disclaimer: This article is written for general information only. No liability by the writer, publisher or any third party involved in the distribution of this work.

DAR Wong is a registered fund manager in Singapore with 27 years of global trading experiences. You may reach him at dar@pwforex.com


About the Author
DAR Wong (Singapore)
An international speaker with 27 years of trading experience in the global financial markets, DAR is a Market Master and author of “Living Daylight in Stock Market: Monetizing Your Profits in 8 Days”.

DAR Wong is an active market trader, registered fund manager, educator and author.He began his career in 1989 as an institutional Futures trader with Bank of America. DAR Wong specializes in trading global derivatives and financial markets. He has 26 years of experience accumulated through tenure with Bankers Trust, Barclays Bank, Citigroup (Smith Barney Shearson Inc) and as an independent trader.

DAR is the author of “8 Ways to Invest in China’s Emerging Market” and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional traders and active investors.

He is a popular and sought after international speaker who has presented to financial professionals and investors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China, Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East (UAE).

DAR is registered with NASD (now known as FINRA) series 3 and 5 as approved by National Futures Association (NFA) of USA and holds a current portfolio as Fund Strategist and Advisor with Dektos Investment registered with Monetary Authority of Singapore.

DAR is profiled as “One of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading “. In January 2015, DAR was honored with Outstanding Award for International Financial Market Analysis granted by ASEAN Commerce (Thailand).

DAR is the author of "8 Waysto Invest in China's Emerging Market" and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional tradersand active investors.1

He is a popular and sought after international speaker who has presented to financialprofessionals and inverstors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China,Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East(UAE).2


Year
2003 - Set up ASPRI to provide hedging advisory for corporate clients and training for financial professionals
2009 - Released first book “8 Ways to Invest in China’s Emerging Market”
2010 - Profiled as “one of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading” along with Larry Williams, Andrea Unger, Michael Cook, and Daryl Guppy etc
2011 - Received “Spirit of Enterprise”awarded by Singapore Management University in Singapore
2012 - Honored with Individual Diamond Career (Thailand) awardedby Royal Privy Council of Kingdom of Thailand
2013 - Appointed Vice Chairman of ASEAN-China Commerce Association and led a delegationtothe annual China-Asean Expo in Guangxi Province, China
2014 - Fund Manager cum Director in Dektos Investment Corporation registered with Monetary Authority of Singapore
2015 - Released new book “Living Daylight in Stock Market - Monetizing Your Profits in 8 Days” in January
2015 - Honored with Outstanding Award in International Financial Market Analysis awarded by ASEAN Commerce (Thailand)
2016 - Honored with Medal of Integrity by Royal Councilin Palace of Palembng, Indonesia

References

1.TV programs on ChannelNewsAsia (Singapore);Radio on 95.8 Capital (Singapore); Newspapers such as The Borneo Post (Malaysia), 资汇报 (Malaysia); Regional financial magazines such as The Analyst (India), 东盟商界(ASEAN, China), 资本杂志 (Malaysia).

2.Spoke at events for CME Group, Euronext LIFFE, Tokyo Commodity Exchange, Singapore Exchange, Korea Exchange, Bursa Malaysia, Thailand Futures Exchange, Jakarta Futures Exchange, Indonesia Commodity and Derivatives Exchange, Tokyo Commodity Exchange, Interactive Brokers, Xinhu Futures, Hangzhou Money Fair, China (Shenzhen) International Finance Expo, China (Guangzhou) International Finance Expo, Euromoney, CIMB, Maybank, RHB, UOB Bank, Asia Trader & Investor Convention, Global Rubber Conference, International Rubber Conference, Malaysia Rubber Board, International Rubber Research and Development Board,Malaysia Ministry of Agriculture, Rubber Industry Smallholders Development Authority, Vietnam Rubber Association, Cambodian Rubber Association, Bureau of Agriculture Research Philippines, Myanmar Rubber Planters & Producers Association etc.