• Insights


    News from our global and local partners

Weekly Market Update 18.04.2016

EURUSD: EURUSD pulled back sharply from key resistance around the 1.1450 level this past week. Prior to the retreat, the currency pair had been in a prolonged consolidation just under 1.1450 after having risen in a strong uptrend characterized by higher highs and higher lows since December’s lows near 1.0500. Much of EURUSD’s rise in the past four months can be attributed to a falling US dollar that has been pressured by an increasingly dovish Federal Reserve and the resulting lowered expectations for a regular pace of interest rate hikes in the US due to persistent global economic worries. The pullback brought EURUSD back down to a key uptrend line before a bounce at the end of the week. To the upside, the noted 1.1450 resistance area continues to be the primary level to watch. In the case of any resumed dollar weakness in the near-term, a sustained breakout above this resistance could go on to target the next major upside objective at the 1.1700 level, To the downside, key support continues to reside at the 1.1100 level.

USDJPY spent the earlier part of last week in a rebound from major support around 108.00. Towards the end of the week, however, the currency pair pared its gains, shifting momentum once again to the downside. That plunge prompted a breakdown below successively lower major levels, including key 111.00 support followed by the key 110.00 level, finally to hit its major downside support target at 108.00. Although the surging yen has raised speculation that the Bank of Japan may soon intervene to weaken its currency, skepticism remains over the efficacy of the central bank’s attempts to do so, especially in light of its recent easing into negative interest rate territory, which had no lasting impact on restraining yen appreciation. In the event of further yen strength and a resumption of dollar weakness, and in the absence of a successful attempt by the Bank of Japan to intervene, a sustained breakdown below the 108.00 level could target the next major downside objective at the 105.00 support level.






19 Apr/0130


Monetary Policy Meeting Minutes


21 Apr/1145


Minimum Bid Rate


21 Apr/1230


Unemployment Claims


22 Apr/1230


Core CPI m/m


Time : GMT (Source: Fab Trader Platform)

Fixed Deposit Rates (USD)

Tier30 Days90 Days180 Days360 Days
100k-499k 2.00 2.50 2.75 3.50
500k-999k 2.25 2.75 3.00 4.00
1 Million and above 2.50 3.00 3.50 4.25
(Source: Fab Treasury)

Fixed Deposit Rates (EUR & GBP)

Currency30 Days90 Days180 Days360 Days
EUR 0.10 0.16 0.22 0.27
GBP 0.70 0.80 0.89 0.98
(Source: Fab Treasury)

Market Rates (from 11th - 17th April)

USDJPY 111.587 111.782 107.656 108.051
GBPUSD 1.41526 1.43189 1.40029 1.41167
EURUSD 1.13796 1.14530 1.13245 1.13773
AUDUSD 0.76743 0.76766 0.74902 0.75374
USDZAR 14.61418 15.29478 14.49905 14.95788
USDGHS 3.83516 3.84553 3.82883 3.82883
USDNGN 199.11887 199.18532 199.05875 199.17452
USDKES 101.47669 101.47669 101.11037 101.11376
(Source: Fab Trader Platform & exchange-rates.org)

Metals and Stocks (from 11th - 17th April)

Silver 14.9880 15.3800 14.8765 15.3700
Gold 1,220.03 1,243.04 1,214.20 1,238.37
US 500 2,070.60 2,078.60 2,032.82 2,047.30
HK 50 20,297.0 20,382.0 19,969.0 20,364.0
UK 100 6,149.52 6,216.61 6,060.05 6,185.41
Germany 30 9,821.21 10,910.75 9,438.25 9,592.25
(Source: Fab Trader Platform)

Shares follow oil down after Doha disappointment

A dive in oil prices sent stock markets lower on Monday after producers meeting in Qatar failed to agree on a plan to curb global supply, quashing the more optimistic tone which prevailed for much of the past week. Japan's Nikkei index led the way, tumbling more than 3 percent after a devastating earthquake in the southwest of the country, with signs from a summit in Washington that other Group of 20 governments oppose intervention against the strength of the yen also playing a role. Europe's major exchanges all fell by more than half a percent on opening .FTEU3, while markets in Hong Kong .HSI and Shanghai .CSI300 .SSEC lost around 1 percent. Oil prices were down 4 percent on the day, with U.S. crude falling back below $40 for the first time in a week. Some 18 oil-exporting nations, including OPEC members, had gathered in Doha, the capital of Qatar, over the weekend in an attempt to agree to stabilise output at January levels until October 2016. The pact fell apart after Saudi Arabia demanded that Iran join in. "The short-term impact on prices is clear to see this morning, while longer term it’s hard to see supply slowing much this year," said Joe Rundle, Head of Trading at ETX Capital in London. "In the end it proved just too much for the Saudis to cut a deal with Iran." The plunge in crude oil prices took a large slice out of commodity currencies, pushing the dollar almost 1 percent higher against its Canadian counterpart to C$1.2926. The yen, traditionally a target for capital in times of global stress, hit a 3-year high against the euro . It rose half a percent against the dollar but was still well short of highs of 107.63 yen per dollar hit a week ago. The 7.3 magnitude quake struck early on Saturday and was centred in Japan's Kumamoto prefecture, an important manufacturing hub. Shares of Sony Corp fell almost 7 percent after the electronics giant said its image sensors plant in Kumamoto would remain suspended. Toyota Motor Corp tumbled 4.8 percent after suspending production at plants across Japan due to disruptions to its supply chain.  "Many are waiting for the dust to settle as it is not yet possible to quantify the damage in its entirety," said Martin King, co-managing director at Tyton Capital Advisors. One big exception to the rule was Brazil, where stock markets are expected to react euphorically to a vote to impeach President Dilma Rousseff that looked set to force her from office after 13 years of leftist Workers Party rule. Brazil's stocks and currency have been among the world's best-performing assets in recent weeks on growing bets that Rousseff would be removed from office, allowing her successor to adopt more market-friendly policies. "Brazilian assets will most likely react positively to news of Rouseff's impeachment," analysts from retail broker Swissquote said in a note. "But we expect the overall risk-off sentiment to cap the potential gains." (Source: reuters.com)

Funds Are Betting the Gravity-Defying Gold Rally Isn't Over Yet

When it comes to gold, hedge funds are betting that what goes up will continue to go up. Even after bullion’s best start to a year since at least 1975, investors are positioning themselves for more gains. Money managers increased their wagers on a price rally to the highest since 2012, taking their optimism to a level last seen before a three-year bear market started. The metal has jumped 17 percent this year. Federal Reserve officials are cautious about raising U.S. interest rates amid persistent risks facing the global outlook. Investors are snapping up bullion as the shaky economy picture spurs haven demand, while low borrowing costs keep the metal competitive against interest-bearing assets. “There’s a lot of fundamental uncertainty out there, and of course gold has long-term stability,” said John Crumb, the chief strategy officer who helps oversee $1.7 billion at investment firm GoldMoney in Vancouver. “The upside is still greater than the downside.” The net-long position in gold futures and options jumped 13 percent to 184,218 contracts in the week ended April 12, according to Commodity Futures Trading Commission data released three days later. That’s the highest since October 2012. Holdings have almost doubled from two months ago, even as the rally stalled since mid-March. Futures prices rose 0.2 percent to $1,237.10 an ounce on Monday after dropping 0.7 percent last week.  (Source: bloomberg.com)

Buhari Turns to Taxman as Nigeria Gets Weaned From Crude

After gorging itself for decades on petrodollars, the Nigerian state has been forced by tumbling oil prices to turn to a new source of cash: the taxman. With crude holding sway as the main source of state revenue, tax enforcement was lax and people showed little interest in what those in power did with the funds, Clement Nwankwo, the executive director of Abuja-based Policy and Legal Advocacy Centre, said in an interview. Now the government of Africa’s biggest oil producer is unable to fund its budget and is counting on ramped up borrowing and taxes to fill the gap. President Muhammadu Buhari, who came to power last May, has outlined a record budget of 6.1 trillion naira ($30.6 billion) for 2016 to spend the country out of the current economic slowdown. Higher taxes and improved efficiency in collection are among the cornerstones of the plan. That may carry a political price.  (Source: bloomberg.com)

Be invited to your account today

Contact Us

Email Us
T: +233 209 532244 (Head Office)
T: +60 320 261 151 (Marketing Office)

Follow Us on

Fab uses cookies on our website to provide the most effective user experience possible. For more details about cookies and how to manage them please refer to our Cookie policy.