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Stress Tests Shows All European Banks Passed

  • DAR Wong
  • 5 November 2018

Fundamental Outlook   The U.S. adds higher payroll amid stronger consumer confidence. European Banking Authority conducts stress test and all 48 banks have passed. U.K. manufacturing slows amid rising uncertainty in BREXIT deal.

The U.S. personal spending grew 0.4 percent in October and matched forecast. Conference Board of consumer confidence rose 137.9 in October and higher than forecast, compared to 135.3 in prior month.

The U.S. ISM manufacturing index grew 57.7 in October and lowest in 6-month record. American payroll added 250,000 in October and better than forecast, after revised gains of 118,000 in previous month. Unemployment rate stays unchanged at 3.7 percent.

China reports the manufacturing index expanded 50.2 in October while services index grew at 53.9, both below forecast.

Trade war has caused the Chinese Yuan to weaken with USD/CNY testing 6.96 last week, making a double-top formation. On Friday, USD/CNY closed at 6.89 after Yuan recovered moderately.

Eurozone GDP for Q3 season grew 0.2 percent on quarterly base and missed forecast. German consumer prices expanded 0.2 percent and lower than 0.4 percent gains in September.

Eurozone consumer prices rose 2.2 percent in October from a year ago, while core prices expanded 1.1 percent on annual basis. Both are below consensus. Unemployment rate remains high at 8.1 percent and unchanged from September.

European Banking Authority (EBA) releases a report after 48 European banks were put on a stress test. All passed but Barclays Bank scores the lowest among all. However, European Central Bank comments that large banks are more resilient now in case of recurring crisis and facing adverse market environment.

U.K. authority reports net lending to individuals in October at GBP4.3 billion and highest in 3 months record, surpassed expectation. Construction index remains robust in October at 53.2 and best record in 3 months.

Markit reports U.K. manufacturing index expanded at 51.1 and slowest pace in more than 2 years. Bank of England remains unchanged in monetary policy while maintains asset purchase facility at GBP435 billion. Governor Carney says British economy is closed to a maximum uncertainty as BREXIT looms around the corner. 

 

Technical Forecast   USD/JPY closed at 113.16 on higher demand as Dollar strengthened last week. This week, the trend is supported at 111.80 region and probably will advance higher to 113.80 level. Focus will be staked on Dollar trend over the mid-term election on this Tuesday.

EUR/USD bounced off 1.1300 level last week after forming a double-bottom. This week, much uncertainty is overshadowing the market while we forecast the initial range will be contained from 1.1300 – 1.1500 region. Eventually, the trend may break in either direction after mid-week based on the outcome of Dollar trend.

GBP/USD has bounced off 1.2700 last week and jumped high at 1.3000 region. This week, we expect sideways trend to occur in market with mixed sentiment. Fundamentally, we reckon the market attention will focus more on the above 2 market pairs while Pound will be left aside for a while.

 

 

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 professional in financial industry based in Singapore with 29 years of global trading experiences. The expression is solely at his own. 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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