FX markets in anticipation of Nonfarm payrolls in the US

The United Sates Nonfarm payrolls , which will be published on Thursday attracted investors' attention with the impact that might have on the Fed's decision to increase interest rates. 

The disappointing data from the beginning of the month passed a belief that this decisive step will be taken in September.
The market participants have expectations that on Friday this idea rather will consolidate than reverse the sentiment and central bankers would proceed to interest rate hikes. 

Such scenarios would support the dollar, but would have a negative effect on the indexes and the gold.

Surge in exports boosts British economy

The Office for National Statistics (ONS) in the United Kingdom announced that the British economy has grown by 0.7% in the second quarter,  unrevised from the previously published estimate.
The expansion is supported by a 3.9 percent surge in exports, while imports increased by only 0.6%. Thus, the trade balance contributed 1 percentage point to the increase in gross domestic product.
Household final consumption expenditure increased by 0.7%, while the government final consumption expenditure increased by 0.9% in Quarter.
Business investments recorded most sensitive jump of more than a year, or 2.9 percent.
General economic growth continues to be led by the services sector, with expansion of 0.7%. Industry data were adjusted downward to indicate recovery of 0.7% instead of 1% earlier calculations.
The British economy is strengthening amid accelerating growth of wages, and analysts expect the Bank of England soon to announce that it is ready to take the increase in interest rates towards their current record low levels.

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Oilfield-services giant Schlumberger acquires Cameron in $14.8 billion deal

The world’s leading supplier of technology, integrated project management and information solutions in the oil and gas industry – Schlumberger (NYSE:SLB) announced the acquisition of oilfield equipment maker Cameron International (NYSE:CAM).  

The total transaction value is $14.8 billion.

This raised the shares of the Cameron by 37%, or up to $ 66.36 per share.

The transaction will be paid in shares of Schlumberger and cash. 

Closing of the transaction is expected in the first quarter of 2016.

The expectations of Schlumberger are that this merger will bring the company approximately $300 million and $600 million in the first and second year, respectively. 

The two companies in 2014 had revenues of $ 59 billion.

DJIA plunges for a second day

The major US  indexes  tried to recover during the session on Tuesday, but at the end of the day all accumulated earnings were lost.

At the beginning of yesterday's market visibly prevailed optimism as China's central bank reduced the  interest rates and at the same time decreased the requirements for mandatory reserves to creditors. These changes were necessary and investors took a breath of fresh air after the chaos of the stock markets since the beginning of the week. The serenity of the markets did not last long and in the following hours the market participants reconsidered the situation and the red wave swept over Wall Street.

It has become less likely Fed to raise interest rates until the end of the year due to the worsening economic situation in developing markets, the low price of oil and the weak dollar. The US situation is not satisfactory having in mind the slowing inflation.

 Dow Jones Industrial Average was about to erase much of Monday’s losses after the beginning of the session climbed more than 440 pips, but at the end of the day ended at a level of 15 662 points and reported a decline of 1.3%. The price continues to fall freely, as so far broke many levels of support along the way. The crossing of the two moving averages shows that the downward movement may be severe and prolonged, such as forecasts of some analysts. RSI oscillator shows that the market is oversold and it is possible to record increases in the index values, even in short-term.

The growth of gold halted and turned to losses

Gold fell on Tuesday with over 1% after the reduction in interest rates in China, which calmed global markets after panic sales in the previous day. 

The yellow metal extended losses after the submitted data showing that US consumer confidence in August reached a seven-month peak. This hints that the economy is strong enough to allow raise of interest rates this year by the Federal Reserve.

The spot price ended at 1139 dollars per troy ounce.

Gold fell on Monday too and the dealers liquidated positions to cover losses in other markets caused by the collapse of the Chinese stock exchanges.

The dollar rose on Tuesday, and the knowledge that US interest rates will still be increased constrains opportunities for profits of gold. However, expectations for growth in rates in September fell last week after the publication of the Protocol by the last meeting of the Fed.

Twitter shares fall below initial market price

Shares of American social network Twitter  Inc (NYSE: TWRT) crash to below the  initial public offering (IPO) price in November 2013. On Thursday session the shares fell by 6% and they were trading at price of 26 dollars. From the beginning of the year the company's market value has fallen by over a quarter.

Twitter currently makes a change in the company’s management  after the withdrawal of CEO Dick Costolo. Company co-founder Jack Dorsey took place  until the company can find a permanent replacement.

Recently it became clear that Twitter targets expansion in  Asia-Pacific and Middle East.

How China crisis affect USD

The US dollar fell to its lowest level for the last 8 weeks against 10 major currencies. 

This  happened  when during the Asian session were submitted  new disappointing economic data from China, which further strengthened speculation that the Fed will refrain from raising interest rates next month.

A report from China indicated that industrial activity in August has shrank by fastest pace in six and a half years. This means that economic growth is slowing sharply, which will lead to a significant slowdown in global economic growth.

The US Federal Reserve will refrain from interest rate hikes in the next month, and even until the end of the year. Inflation slowed down minimally in July, and the forecasts are that the slowdown will continue in August as the strong decline in energy prices leads to a decrease in prices in a number of goods and services.

As an external factor that could affect the Fed's decision, analysts define the crisis in China. Slowing growth in Asian countries leads to weaker trade between China and the US and a reduction in economic activity, which according to experts will have direct pressure on the US economy.

US housing market rise to 8-year high

The real estates market in USA is showing that the recovery continues as the number of the concluded deals of previously owned homes reached 5.59 million yoy in July.

This is the best  result since February 2007 and  represents an increase of 10.3% yoy and 2% - monthly. Analysts had expected a decline in the number of purchased homes from 5.48 million to  5.45 million. 

The report of the National Association of Realtors also reveals that the proposals on the housing market decreased by 0.4 percent compared to June and by 4.7% compared to July 2014, to 24.2 million. The average selling price of homes increased by 5.6% for the last 12 months and reached  $ 234,000. 

Gold falls upon the approaching increase in US interest rates

Yesterday gold was again trading without clear direction. After all the precious metal finished with a minimal decrease, breaking the two-day positive session. However gold felt the support of investors in recent days. In the last statement of the largest fund trading gold in the world SPDR Gold Trust, it was announced that their assets grew last week by 0.6%.

Gold futures for delivery in October finished the session at 1 117.53 dollars per troy ounce.

Gold continues to be in a strong downtrend. 

Is it a matter of time to witness a test of the psychological level of 1000 dollars per troy ounce? 

The moment at which could be unlocked this highly negative wave of sales might be raising the interest rates by the Federal Reserve.

US Dollar is rising

The US dollar is gaining good positions against a basket of six major currencies for third consecutive day after the focus of the market participants again turned to the monetary policy of the Federal Reserve. The hopes that Fed will raise interest rates in September disappeared over the past week as China's decision to devalue the yuan created pressure in foreign exchange market .

This week the central bank in Beijing suspended the depreciation of the yuan and thus reduced the fear of more serious devaluation.The respective pacification of the situation in Asia over the last two days allowed the markets to re-focus on the Federal Reserve at the time the institution is considering to raise interest rates. Analysts believe that the macroeconomic data from the US are stable and the only factor that could derail the Fed's plans is an aggressive new devaluation of the Chinese yuan. If this does not happen, Fed will probably fall back on interest rate hikes.The most important news from the US today is associated with data on the primary housing and building permits for July. The reports targeted real estates sector in the country and they are of high importance as the purchase of property creates some of the most important movements of capital for households and shows the extent to expanding economic activity in the country.

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Devaluation of the yuan continues

For third consecutive day China devalued the yuan. Before the start of trading today the rate against the dollar was reduced by 1%. On Tuesday, the yuan was devalued by 1.9% and on Wednesday  another 1.6% were added.

Today yuan fell to 6.4510 against the dollar, which is the lowest value since August 2011.

The Ministry of Economy said that the yuan policy will help exports. 

MSCI Emerging Markets index fell by 1.1% to 878.27 points.

Compared to the peak values ​​in September 2014 the index lost almost 20% and now is in bearish mood.

Asian currencies dropped amid concern that the weak yuan will force other countries of the region to take similar action.

Meanwhile, oil is under pressure on the decision of the Chinese authorities. 

The euro reached a one-month high of 1.1215 after the Chinese central bank set an average benchmark of 6.3306 yuan per dollar, which is a lower level than the devaluation on Tuesday.

China’s yuan devaluation positively affect the US indices

US indices recorded significant losses during the session on Tuesday after the People's Bank of China surprisingly devalued the yuan to a record high.

Chinese currency fell to lowest level for the past three years, as central bankers in Beijing were forced to take the devaluation of its currency after surprisingly weak data on exports.

The weakness of the yuan will boost exports, which would have a positive impact on the Chinese economy, but there are questions about the future increase in US interest rates as the Fed plans to raise interest rates in September, based on stable economic growth.

Dow Jones Industrial Average collapsed by  212 points and there is no hint of the strong performance earlier in the week. The index depreciated by 1.2 percent to a level of 17,431 points. Most losing in the index were the shares of Apple inc, which fell by over 5% because of the depreciation of the yuan. 

The price indicator continues to move in a downward trend, it is located below the two moving averages, which is considered a sell signal.

Gold is rising

Gold rose by more than 1% to over 1100 dollars per troy ounce on Monday, accomplishing the biggest intraday growth for the past seven weeks as the dollar fell and Fed’s comments increased the uncertainty surrounding the forthcoming increase in interest rates.

The price of gold fell during the second half of the year due to the perspectives for the increase in interest rates.

However, last month the gold found support around 5 and a half year low of 1077 dollars.

Spot gold gained 1% to 1 104.07 dollars per troy ounce. US gold futures for December delivery rose by 0.9% to 1 104.10 dollars per troy ounce.

The gold price continued rising because of covering of short positions and because of the activation of deferred orders for purchase around the level of 1100 dollars.

Last week, gold achieved a seventh consecutive weekly loss, recording its longest losing streak since 1999 until now.

On Friday the stocks of the largest public fund in the world, based on gold, SPDR Gold Trust, fell to lowest level since September 2008 until now.

A look at China

The biggest economic problem for global markets at the moment is neither Greek drama or conflict between the West and Russia or slow recovery in the euro area. This is China.

Over the weekend, the second largest economy in the world continued with the series of bad news.

While consumer price inflation increased in July, which is not good news for domestic consumption, the collapse of producer prices continues.

The consumer price index has increased by 1.6% yoy, after rising 1.4% in June. At the same time production prices fell by 5.4% compared to a decrease of 4.8% the previous month.

China's foreign trade has also continued to deteriorate. Exports decreased by 8.3% compared to 195.1 billion dollars in July 2014, while imports declined by 8.1 % to 152.07 billion dollars. The trade surplus decreased by 10% to 43.03 billion dollars.

These data deepened concerns that the Chinese economy is heading towards crisis. Globally the country is the biggest consumer in copper, gold, steel and many other goods.

Russian ruble falls

For first time in the last six months the Russian ruble depreciated again. Yesterday it worth 70 rubles for one euro and 64 rubles per $ 1. Experts predict that the decline may continue because of the depreciation of the oil and Western sanctions against Moscow.

The currencies of many developing countries, especially those that export oil and gas continue to depreciate because of the worsening situation in China and the increase of the dollar.

In late July the Central Bank of Russia announced that reduces the base interest rate in the country by 50 basis points to 11%. This decision aims to boost the Russian economy.

Facebook introduced new service for business users

Facebook introduced a new service that allows business companies to communicate directly with customers  through private messages. With this step the company in trying to separate the message application and to set up new platform.

The business companies now have the opportunity to include a button "send message" in their ads that appear in the toolbar. This allows them to send messages that are personal.

For example, if a user posts a comment on the business page on Facebook, the respective company can send a private message to the user.

The innovation is part of the experience of the social network to convince more small and medium- sized business companies, especially those in developing economies like India, Brazil and Indonesia, to publish ads on its platform.

Uncertainty on the stock markets in USA today

The beginning of US session today started with great uncertainty. The day began with profit taking from short positions as risk appetite was supported by fundamental news. But at the same time the stock market consolidation continues.

Indicative of this is the movement of Apple’s shares. The tech giant depreciated for a fifth consecutive day. Today, the company lost 3.91% on the market capitalization, after yesterday fell by 2.4 percent. Shares passed two technical levels of support and are situated on 6-month low. And behind the corrective movement there are not standing bad financial results or forecasts.

In fact, the market is preparing for the expected change in monetary policy by the Fed in September. Rising interest rates will affect export companies, financial institutions, retailers, virtually the entire American economy.

Apple may become mobile operator

Apple is negotiating with several telecommunications companies for the creation of their own virtual mobile operator in the US and Europe. Sources close to the corporation claimed that it had already tested a similar service in the US, reports Business Insider.

If the project is implemented, Apple will be able to provide services to the owners of the iPhone, using the infrastructure of existing operators, under their own brand. It seems logical step after the release of iPad Air and iPad Mini 2 3 with the new SIM card working with several operators, including global GigSky.Earlier this year, Google launched a similar project. Project Fi now works for the owners of the smartphone Nexus 6.

USD slowed its rise in anticipation of new economic data

The dollar recorded greater losses on Friday when several weak report from the US provoked misgivings that the Fed may slow the interest rates increase. The greenback took a breather in the early morning yesterday amid hopes that the data on personal spending and business activity will return positive sentiment among investors.

On Friday the euro recorded solid gains against the dollar, but failed to hold to the end of the day. The greenback came under pressure after several weaker reports about the US economy, including that of gross domestic product, and this hesitated the investors.

Analysts believe that the dollar may return to profits this week, if supported by the upcoming macroeconomic news from the US. Later today will be presented the data of ISM regarding the manufacturing activity and with highest interest is expected the report on the change in non-agricultural employment, which will be published on Friday.

Another important event of the week will be associated with the meeting of the Bank of Japan, which will also be held on Friday. Set by the institution aims for growth in inflation does not justify in any way and the market participants expect to see a further expansion of the incentives. Such attitudes had previous meetings of the central bank, but for the moment the institution to refrain from this move.

The Canadian economy shrank by 0.2% in May

The Canadian economy continues to shrink for a fifth consecutive month in May, as gross domestic product decreased by 0.2% to 1.64 trillion Canadian dollars. 

Analysts had expected zero change indicator, after falling by 0.1 percent in April.

Over the outcome prevailed the weak performance of oil and gas, wholesale and industrial production. Production of durable consumer goods decreased by 2.4% and non-durable - by 0.7 percent. In general, the industrial production is down by 1.7%.