International Financial News
· US President Trump: The problem facing the United States is that the Fed, the Fed’s interest rate cuts are too slow.The Fed must act, the Fed is the central bank of the United States, not the world. This is true.
· EIA Report: US commercial crude oil stocks with strategic reserves increased by 1.58 million barrels to 440.5 million barrels last week.
· Fed Brad said that the US economy is in good condition and policy evaluation should aim to avoid deflation traps.St. Louis Fed President Brad said that the current US economic situation is "very good" and that the goal of the central bank's policy framework assessment should be to avoid falling into the trap. Japanese-style deflation trap. The unemployment rate is close to the lowest point in 50 years. The inflation rate is low and stable, and the economy is not in recession, so it is actually a good time to think strategically about the future.
· Former Federal Reserve Chairman Yellen: The United States will not enter the economic recession at a high probability. The US economy is enough to avoid a recession, but the risk is rising. Historically, the bond yield curve is upside down or not a suitable indicator of economic recession.
Summary of investment bank views
- Dominion Bank: The HFFV model continues to bearish on the euro against the US dollar, with the downside target at 1.1010.
Toronto Dominion Bank (TD) released an analysis report indicating that the bearish EUR/USD is kept bearish, which is in line with the bank's high-frequency fair value model (HFFV) signal, with a target of 1.1010. The current weak trend of the euro is also reflected in the HFFV model, so we don't think the euro will effective rally. Our macroeconomic team expects the Fed to release the hawkish argument.
Market pricing has hinted that the Fed will cut interest rates by about 90% in the next year. The euro zone's short-term news is not expected to bring support to the euro, which makes the market continue to hold a bearish view on the euro. According to our expectations, the EURUSD downside target should be around 1.1010.
- Dutch International Bank: No agreement to leave the European Union will make the pound fall to parity against the euro, the pound fell to 1.10 against the dollar.
The most likely situation for Brexit is that the parliament passed the no-confidence motion and forced a postponement of Brexit at some point in October to prepare for the election in late November or December. It is expected that the UK will postpone the possibility of holding the election and holding the election is 40%; if Lisbon Article 50 is withdrawn, the pound is expected to rise to 1.45 against the US dollar.
- Deutsche Bank: The current target of the euro against the pound is 0.9400 and above.
EUR/GBP broke the resistance line of 2008-2019 on the basis of the weekly closing price. It is expected that the pair may continue to expand its gains to a high of 0.9403 in 2016. If it breaks through this target, it will continue to look at 0.9803; The short-term high has not yet been confirmed by the RSI of the daily chart. We may see that the exchange rate will be further adjusted after the exchange rate is adjusted. Only the drop below the July low of 0.8891 will ease the upward pressure. The initial support is at the July 17 high of 0.9052.
- ANZ Bank: The pressure of economic growth is huge, the Australian dollar will look down 0.65 at the end of the dollar.
ANZ issued a research report saying it maintains a bearish Australian dollar against the US dollar and looks at 0.65 at the end of the year. Given the growing environment, cyclical currencies face challenges, and the Australian dollar is no exception. It is currently difficult to find a series of factors that can help the global economic growth recovery, which is the trigger point for the Australian dollar.
However, there is a factor that can partially offset some of the pessimism, that is the current valuation of the Australian dollar is 'cheap', the US and Australian spreads are expected to stop worsening, and Australia may announce the first current account surplus since 1975. The current underlying situation shows that as the price of public debt rebounds in an environment of high uncertainty, the Australian dollar is expected to fall further to 0.65 against the US dollar.
- `HSBC: AUD/NZD 1.03 is the bottom line of the New Zealand Federal Reserve
The sharp cut in interest rates by the New Zealand Federal Reserve reflects the need for New Zealand to move ahead of other developed countries in terms of relaxation policies, given the benefits of being a small open economy and a weaker New Zealand dollar. It is worth mentioning that before the Reserve Bank of New Zealand cut interest rates sharply, the exchange rate of the Australian dollar against the New Zealand dollar has fallen to 1.03, and the currency pair is also at this level when the bank suddenly turned to a loose position in March, which again indicates this level. It is the bottom line of the level.