Date: July, 02 – 2018.
The European Securities and Markets Authority (ESMA) has formally adopted new measures on the provision of CFDs and binary options to retail investors.
The measures have been published in the Official Journal of the European Union (OJ) today. They will start to apply from 2 July 2018 for binary options and from 1 August 2018 for CFDs and will apply as follows:
1. Binary Options (from 2 July 2018) - a prohibition on the marketing, distribution or sale of binary options to retail investors;
2. Contracts for Differences (from 1 August 2018) - a restriction on the marketing, distribution or sale of CFDs to retail investors. This restriction consists of: leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a firm specific risk warning delivered in a standardised way.
ESMA has adopted these measures in the official languages of the EU and they will remain in force for a period of three months from the date of application.
CFDs – measures from 1 August 2018
The product intervention measures ESMA has adopted under Article 40 of the Markets in Financial Instruments Regulation include:
- Leverage limits on the opening of a position by a retail client from 30:1 to 2:1, which vary according to the volatility of the underlying:
- 30:1 for major currency pairs;
- 20:1 for non-major currency pairs, gold and major indices;
- 10:1 for commodities other than gold and non-major equity indices;
- 5:1 for individual equities and other reference values;
- 2:1 for cryptocurrencies;
- A margin close out rule on a per account basis. This will standardise the percentage of margin (at 50% of minimum required margin) at which providers are required to close out one or more retail client’s open CFDs;
- Negative balance protection on a per account basis. This will provide an overall guaranteed limit on retail client losses;
- A restriction on the incentives offered to trade CFDs;
- A standardised risk warning, including the percentage of losses on a CFD provider’s retail investor accounts.
MiFIR gives ESMA the power to introduce temporary intervention measures on a three monthly basis. Before the end of the three months, ESMA will review the product intervention measures and consider the need to extend them for a further three months.
Date: June, 25 – 2018.
Trade war between the US and China. The situation is heating up.
Trump threatened to raise the tariff to 20% for all cars that are imported from the Euro zone on Friday.
The EU promised to respond to this step.
Investors and traders are worried that threats of higher U.S. tariffs and retaliatory measures by others could derail a rare period of synchronized global growth.
At the moment, Trump renewed his call for “fair trade” that reduced barriers to entry. Trade conflicts between the US and the rest of the trade participants could lead to a trade war with China and the EU.
Here’s the message that Trump posted on Twitter:
“The United States is insisting that all countries that have placed artificial Trade Barriers and Tariffs on goods going into their country, remove those Barriers & Tariffs or be met with more than Reciprocity by the U.S.A. Trade must be fair and no longer a one way street!”
U.S. plans limits on Chinese investment in U.S. technology firms.
WASHINGTON (Reuters) – The U.S. Treasury Department is drafting curbs that would block firms with at least 25 percent Chinese ownership from buying U.S. companies with “industrially significant technology,” a government official briefed on the mattersaid on Sunday.
Such restrictions will mean that the situation between the US and China is becoming even more intense in the face of a trade war.
Tariffs on $34 billion worth of Chinese goods, the first of a potential total of $450 billion, are due to take effect on July 6 over U.S. complaints that China is misappropriating U.S. technology through joint venture rules and other policies.
Such restrictions are aimed at key sectors of trade policy. Including, “Made in China 2025″ industrial plan, the U.S. official said.
The Wall Street Journal also said the U.S. Commerce Department and National Security Council were proposing “enhanced” export controls to keep such technologies as (information technology, aerospace, marine engineering, pharmaceuticals, advanced energy vehicles, robotics and other high-technology industries) from being shipped to China.
This is to ensure that China’s plan is limited to US technology.
Date: May, 28 – 2018.
Euro influenced by Italian Politics
EUR/USD has reached a goal to a minimum of 1.1596 due to the unclear situation in the political arena in Italy. The prospect of fresh elections in Italy dampened sentiment
The single currency initially rallied to as high as 1.1733, as Italy’s populist parties abandoned their bid to form a coalition government after the country’s President Sergio Mattarella blocked the nomination of a euro sceptic finance minister.
Investors had feared that the coalition could endanger Italy’s membership in the euro zone.
Now the market is expected to react to a minimum in price. A good news background in the Eurozone is expected on Tuesday, May 29.
Date: April, 24 – 2018.
Dollar rose this week
April 24, the dollar rose against the major currencies amid rising yields on US Treasury bonds.
The US dollar index, which shows the purchasing power of the dollar to the trade-weighted basket of six major currencies, was at position 90.70 after rising at night trades to 90.84 – the highest since March 1.
Yesterday, the yield of US ten-year government bonds reached 2.998% due to an increase in the probability of rising inflation and an increase in the Fed’s interest rate.
The EUR/USD rate reached support in the level of 1.2200.
The dollar’s exchange rate peaked in ten weeks against the yen. The pair USD/JPY rose to 108.87.
It should be noted that demand for the yen has decreased against the background of a weakening of geopolitical risks and tensions in international trade.
The pound fell against the dollar: the pair GBP/USD was trading at 1.3932 due to doubts that the Bank of England will raise the interest rate next month.
An additional factor in the decline of the pound is the growing uncertainty about the results of Brexit before the report on the growth of the British economy, which will be published on Friday.
Date: April, 16 – 2018.
Dollar and Strikes on Syria
The US currency becme lower against currency basket on Monday. U.S.-led missile strikes on Syria on Friday lead to a broader escalation in the conflict there than expected.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.3% to 89.24.
Russia didn’t response after a missile strikes on Syria. Markets are waiting for any signs of immediate military escalation of the conflict. The situation strongly effects on the market beavior.
U.S. prepared to announce a fresh round of economic sanctions on Russia after chemical-weapon attack on Syria.
The military strikes were made in response to a chemical-weapon attack on civilians in Damascus and were the largest intervention yet by Western countries against Syrian President Bashar al-Assad.
Date: April, 02 – 2018.
The U.S. Labor Department will release the nonfarm payrolls report for March
(at 8:30 AM ET (12:30GMT) on Friday)
Let’s analyze the main points of this event.
The forecast is as follows:
jobs growth of 198000, after adding 313000 positions in February and the unemployment rate will fall to 4.0% from 4.1%. In addition, the forecast for wages is expected to increase from 2.6% to 2.7%;
This trend directly affects inflationary pressure and wage growth will increase this pressure. Inflation, in turn, affects the tendency of raising rates from the Fed.
At the moment, Fed follows the policy of two more interest rate hikes this year.
This week’s calendar also features reports on ISM manufacturing and service sector growth, ADP private sector payrolls, auto sales, construction spending, trade figures as well as factory orders. In addition, it is worth paying attention to the performance of several Fed speakers this week.
Today and Tomorrow: FOMC Member Kashkari Speaks
Tomorrow: FOMC Member Brainard Speaks
April, 4: FOMC Member Bullard Speaks, FOMC Member Mester Speaks
April, 5: FOMC Member Bostic Speaks
Friday: Fed Chair Powell Спеакс
Elsewhere, news out of Washington D.C. is expected to keep investors on their toes, as they watch further developments amid a brewing trade war between the U.S. and China.
Date: March, 14 – 2018.
Google is going to put restrictions to crypto ads
Alphabet Inc’s Google (NASDAQ:GOOGL) said on Wednesday it will ban ads for cryptocurrencies and related content also starting in June.
According to a new policy, Google inc explained that it will ban ads for unregulated or speculative financial products like binary options, cryptocurrency and financial spread betting among others.
Should be noted that this news was combinated with downward pressure in the cryptocurrency market on Wednesday.
Bitcoin, the world’s biggest virtual currency by market cap, was down around 1.1% to $9,097.50.
Other major cryptocurrencies were also lower, with Ethereum, the world’s second largest cryptocurrency by market cap, falling about 1.7% to $689.11.
The third largest cryptocurrency Ripple lost roughly 7% to trade at $0.77531.
Date: March, 12 – 2018.
U.S. added 313,000 jobs. Investors disappointed because of wage slow growth.
USD ranked slightly lower compared to other major currencies today. The beginning of the week after the NFP so that markets can handle this event.
U.S. economy added 313,000 jobs last month, according to the Labor Department report on Friday. The forecast was 200,000 jobs. It is worth noting that this is a strong trend, which strengthened the state of USD.
But investors were once again disappointed because of a decrease in probability of the four rate hikes by the Federal Reserve this year, as wage growth turned out to be too slow (+ 0.1%). (now 2.7%, which shows a decrease against 2.8% in January).
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.08% at 90.04 by 06:05 a.m. ET (10:05 GMT), off Friday’s one-week high of 90.36.
The euro and the pound were higher, with EUR/USD up 0.18% at 1.2329 and with GBP/USD adding 0.13% to 1.3871.
Date: Feb. 27 – 2018.
The report of Fed Chairman Jerome Powell
The report of Fed Chairman Jerome Powell will be today. This will be his first official appearance on the Capitol Hill after taking the oath of office to head the Fed earlier this month. The dollar is getting cheaper on the back of expectations.
The US dollar index, which shows the purchasing power of the dollar to the trade-weighted basket of six major currencies, fell to 89.66.
On a large scale, the dollar strengthened and took the position at the bottom of the uptrend. Any signals that the Fed is leaning towards a faster rate of interest rate increase this year can affect the recovery of the dollar from a minimum in three years.
Investors also expect the set of US economic reports this week, including US consumer confidence index, updated data on fourth-quarter economic growth, industrial production, as well as data on income and expenditure of individuals.
Date: Feb. 14 – 2018.
Inflation news US and the U.S. dollar index down
The US dollar has reached the minimum weekly value today and is trading with EUR at 1.2350 now. The decline is due to the fact that the mood of the USD remains vulnerable before the release of data on inflation in the US.
Investors are watching and forecasting an upcoming report on U.S. consumer price inflation data, which will take place today at 8:30 a.m. GMT-5
Today we will be able to find out how fast the Federal Reserve will raise interest rates this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.19% at 89.43 by 02:05 a.m. ET (06:05 GMT), the best since February 6.
Date: Feb. 12 – 2018.
News of the week’s start and the results of investors’ fears since Friday.
The US dollar began the week with a price reduction. At the same time, Asian stock exchanges stabilized after a sell-off last week. This process caused a decline in demand for the American currency.
But, the dollar increased last week. The US Congress adopted a two-year budget agreement before the end of the brief government shutdown on Friday.
The agreement is set to boost federal spending by almost $300 billion and suspend the debt ceiling for a year.
The indices of the exchanges of Hong Kong and mainland China rose, as well as futures on Wall Street. It should be noted that the Nikkei is not traded because of the national holiday in Japan.
The indices of US stock exchanges showed rather poor results by the end of last week, despite the growth on Friday. This collapse occurred because of fears of investors about accelerating inflation.
Market players are waiting for the publication of an inflation report in the US on Wednesday. If inflation indicators are higher than forecasts, a new collapse may occur in the markets.
The head of Brexit talks from the EU, Michel Barnier warned that an agreement on the UK’s exit from the EU has not yet been achieved and may not be achieved at all. This statement led to a decrease in the price of the pound against the US dollar on Friday.