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American Payroll May Spur Rate Hike

  • DAR Wong
  • 10 September 2018

Fundamental Outlook   The U.S. payroll rises in confidence with strong gains in hourly earnings, sparking expectation of another rate hike in end September. President Trump shocks the world by intention to add another USD267 billion on tariffs on Chinese goods that plummet Apple stock. The EU chief negotiator adds new hope to BREXIT deal.

The U.S. ISM manufacturing index rose 61.3 in August and highest record in more than 7 years. Another report on ISM services index rises in September to 58.3 and higher than consensus and previous month 55.7 reading.  The weekly claims for American jobless benefits dropped to almost 49-year low at 203,000 for the week ended 1 September.

Before the weekend, non-farm payroll rose 201,000 in August and beat forecast. Jobless rate at 3.9 percent. Average hourly earnings on year comparison grew 2.9 percent and strongest since 2009, lifting the probability of rate hike in month end.

President Trump hints he may take on Japan as next target for reducing mutual trade imbalance. In addition, he also adds that he could slap another USD267 billion of import tariffs on Chinese goods in addition to the latest USD200 billion imposed.

After Trump’s comments, Apple stock fell on Friday before closed and traders fear of rising trade conflict that will deter global trading ties. However, former Governor of PBoC Zhou comments that the total USD500 billion trade tariffs will be insignificant to China and the Beijing leaders will be sure to retaliate soon.

German factory orders slid 0.9 percent in July, improved from June data but still fell short from forecast. Among The 19 nations, the Eurozone GDP grew 0.4 percent in Q2 season.

Markit reports the British manufacturing index expanded 52.8 in August, lowest since July 2016 and probably affected by threats of BREXIT. Before the weekend, BREXIT chief negotiator Michel Barnier from EU mentioned other deals can be discussed to rout around BREXIT challenges. Sterling rose. 

British construction PMI grew at 52.9 in August, lower than expectation and fell from previous month 55.8. Markit reports the U.K. services index 54.3 in August and beat forecast.

 

Technical Forecast   USD/JPY traded sideways last week and settled near 111.00 level on Friday. The market is still searching for directional headway while supported above 110.00 region. This week, we reckon the trend will thread from 110.00 – 112.00 range but breaking beyond will lead into a new directional trend.

EUR/USD has been trading in tight range last week. The range is constricted from 1.1500 – 1.1730 region and tend to break in either side this week. In our opinion, there is higher probability of declining since Dollar is prone to rise in coming week. Risk control is advised if the trend moves against your favor.

GBP/USD traded in sideways but supported by some recovery demand on Friday. This week, we forecast the trend is still uncertain and might continue to whipsaw from 1.2800 – 1.3050 until we see clearer fundamental news. BREXIT deal will stay in focus and a lead catalyst in Pound direction in addition to the Dollar demand in-lieu of expected rate hike. 

 

 

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 29 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.


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