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Sunday, August 31, 2014

Overview Of The Previous Week's Key Economic Events

The previous week brought into light shaky political situation in Europe. French President ordered his Prime Minister Manuel Valls to form a new government as a response to the recent comments of outgoing Economy Minister Arnaud Montebourg, who criticized France's economic direction as well as Germany's economic policies of austerity



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Sterling Finds Support

Last week saw some positive news for the UK economyin the form of consumer confidence, which rose from -2.0 to 1.0, well ahead of estimates of -1.0. This was after the CBI Realised Sales (a measure of retail sales) also showed improvement from 21 to 37, ahead of market expectations



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EUR/USD: Euro Trading Lower, Ahead Of The Crucial Q2 German GDP

The pair is expected to find support at 1.3096, and a fall through could take it to the next support level of 1.3068. The pair is expected to find its first resistance at 1.3174, and a rise through could take it to the next resistance level of 1.3224.



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GBP/USD: Pound Trading Flat This Morning, Ahead Of Factory Data

The pair is expected to find support at 1.6569, and a fall through could take it to the next support level of 1.6540. The pair is expected to find its first resistance at 1.6620, and a rise through could take it to the next resistance level of 1.6642.



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AUD/USD: Aussie Trading Higher This Morning In Asian Session

The pair is expected to find support at 103.83, and a fall through could take it to the next support level of 103.50. The pair is expected to find its first resistance at 104.36, and a rise through could take it to the next resistance level of 104.55.



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USD/JPY: Japanese Yen Trading Lower In The Asian Session

The pair is expected to find support at 103.83, and a fall through could take it to the next support level of 103.50. The pair is expected to find its first resistance at 104.36, and a rise through could take it to the next resistance level of 104.55.



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USD/CHF: Swiss Franc Continues Its Losses This Morning, Ahead Of SVME PMI Numbers

The pair is expected to find support at 0.9155, and a fall through could take it to the next support level of 0.9117. The pair is expected to find its first resistance at 0.9214, and a rise through could take it to the next resistance level of 0.9235.



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USD/CAD: Canadian Economy Registered Its Fastest Growth In Q2 2014 Since Q3 2011

The pair is expected to find support at 1.0827, and a fall through could take it to the next support level of 1.0783. The pair is expected to find its first resistance at 1.0897, and a rise through could take it to the next resistance level of 1.0923.



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Daily FX Report

Last Friday the Dow Jones Index of shares rose 0.1 percent and the Standard Poor's Index also climbed 0.3 percent. On Friday data showed that euro zone inflation declined to a fresh five-year low in August, this might concern the European Central Bank which is going to meet this



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Foreign Exchange Market Commentary

THE EURO closed lower on Friday. The lowrange close sets the stage for a steady to lower opening when Tuesday's night session begins trading. Stochastics and the RSI remain neutral to bearish signalling that sideways to lower prices are possible nearterm. If it extends this summer's decline, the 75% retracement



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The RBA Remains On Hiatus

The Reserve Bank of Australia is widely expected to leave the official cash rate at 2.5% for the 13th straight month on Tuesday. In fact, the meeting may prove to be a non-event for the market. There haven't been any major changes to economic conditions in Australia since the RBA



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Asian Market Update: China Aug Manufacturing PMI Slows, Putin Calls For 'Statehood' In East Ukraine

China August official PMI came in at 51.1, slightly below the estimate of 51.2, even as the Production Operating component rose to 57.9 from 55.3. This marks the first sequential decline in 6 months, bolstering the case for a more aggressive PBoC policy easing before the end of 2014.



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EURUSD Bears Eyeing Up 1.31

The Greenback has seen significant inflows by speculative traders who have pushed the USD up to 12-month highs whilst Euro bears continue to increase their Net Short exposure. With several key FOMC members all talking this week it could be the ideal time to find out if the Hawkes are



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Manufacturing PMI Slows In China Threaten Growth Target

China's Manufacturing Purchasing Managers' Index slowed during the month of August to add threats to the nation's economic growth target this year. Meanwhile, the People's Bank of China may refer to add more stimulus packs to spur the world's second largest economy toward achieving the nation's 7.5% growth target this year.



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The Daily Wave Analysis

The break of the resistance (red) has been short lived so far and wave 3 (blue) has not managed to pull away from wave 1 (blue), which means that a corrective count could still be likely.



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Market Morning Briefing

Euro keeps taking hits from various fronts like US data to the speculation that the QE from the ECB may come this week. The divergence between the US & Eurozone economies is getting more and more clearly reflected in the respective currencies.



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SKiLLeD LaBoR...

Australia 200 – Settles Above 5600

The Australian 200 Index has spent the last week consolidating and trading in a very narrow range right around 5620 after enjoying a strong surge higher to a new six year high around 5650 a couple of weeks ago. In moving up to the multi-year high it enjoyed a solid



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AUD/USD - Eases From Three Week High Back To 0.9330

The Australian dollar enjoyed a solid week last week moving up from below 0.9300 to a three week high around 0.9370 before easing a little lower to finish the week. For the best part of the last few weeks the Australian dollar has traded close and around the 0.93 level



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Weekly Wrap: Leaders And Laggards

AUD: Building Approvals, Cash Rate, GDP q/q, Retail Sales, Trade Balance. CAD: Overnight Rate, Trade Balance, Employment, Ivey PMI. CNY: Manufacturing PMI, Services PMI, Non-Manufacturing PMI,. EUR: GER Factory Orders, Manufacturing and Services PMI, Bid Rate & ECB Press Conference



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USDCHF - Faces Corrective Pullback Risk

USDCHF With USDCHF unable to follow through higher on the back of its previous week, it faces the risk of a pullback in the new week. On the upside, resistance resides at the 0.9200 level where a break will aim at the 0.9250 level. Further out, resistance resides at



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EURUSD - Susceptible, Risk Points Lower

EURUSD With a continuation of its previous week weakness seen the past week, further downside pressure is envisaged in the new week. Support lies at the 1.3100 level where a break will expose the 1.3050 level. Below here will pave the way for a move lower towards the 1.3000



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Capital Spending Weakened In Japan

Japanese capital spending weakened during the second quarter of this year amid the recent instable economic performance and downward pressure after applying the sales-tax hike plan on 1 st April.



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EURCAD Testing Make-Or-Break Level At 1.4260

The EURUSD is the world's most widely-traded currency pair so it's not surprising that this week's drop to an 11-month low has drawn all the headlines. However, to truly evaluate the single currency's strength, it's worthwhile to look at a variety of euro crosses beyond just the EURUSD pair.



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The Hard Life Of The First American

Submitted by Erico Tavares of Sinclair & Co.


The Hard Life of the First American



A forthcoming book titled “Kennewick Man: The Scientific Investigation of an Ancient American Skeleton” provides a very detailed account of what might have been the life of this remarkable American ancestor, who roamed Washington State 9,000 years ago. His skeleton was found by chance almost two decades ago, enabling scientists to glimpse into an era which is all but forgotten.


While genetic testing is still ongoing, the thin shape of his skull suggests that he is from Polynesian descent, not Native American as was previously thought. Some two thousand after the end of the last Ice Age humans were already crisscrossing the planet.


At 5ft 7 inches and 163 lbs (74 kg) the "First American" was very sturdy, going after big game animals such as deer, antelopes and sheep. However, he survived primarily on fish and marine mammals, drinking glacial melt-water. He was likely right handed.


But this man had a very hard life. He died at 40 for unknown reasons, after sustaining some major injuries during his lifetime, including major blows to the head, as well as broken ribs as a result of an impact trauma that never healed properly. His shoulder was damaged from the constant stress of throwing spears. And most incredibly, a spear lodged deep into his pelvis was also found, which must have been very painful to live with for several years.


His man-made injuries raise some interesting questions. While they may have resulted from an accident, like a spear gone astray during a hunting expedition, squaring off with patterns from other ancient tribes suggests that serious conflicts among humans must have been a regular fact of life back then. Our ancestors from that era lived in a world which was far less than idyllic.


And this legacy continued throughout the centuries. Native Americans appear to have been in a constant state of warfare, with many tribes becoming extinct well before the arrival of Columbus. Not only did these tribes have to compete for food but also genes, where problems associated with inbreeding likely led to the common practice of raiding one another for women and slaves. The arrival of the Europeans did not make things any better, and not before long they were also fighting among each other.


It took us 9,000 years – the equivalent of 225 Kennewick Man lives – to get to where we are today. Thankfully things are much better now. Cooperation, education, innovation and exploring new frontiers have proven to be incredibly more productive endeavors to our survival and quality of life than warfare and conflict.


And yet, as a species it appears we still have a lot to do here. If he were alive today, the First American might have agreed.











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THe EViDeNCe...

As we embark on yet another ever widening gyre of military violence, I would like to remind all of the truth and veracity of our overlords in these matters...







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Saturday, August 30, 2014

Corporations Join Droves Renouncing US Citizenship

The Economics Of Perpetual War

Submitted by Matt McCaffrey via The Mises Economics Blog,


The 100th anniversary of the beginning of World War I seems like an ideal opportunity to spread a message of peace and economic cooperation; sadly, 2014 has so far been a year of new and renewed conflict far more than one of reconciliation.


By now, talk of the horrors of war is nothing new. Everyone knows about the total destruction war brings; in fact, we’ve known for millennia. As Lew Rockwell points out, “just about everyone makes the perfunctory nod to the tragedy of war, that war is a last resort only, and that everyone sincerely regrets having to go to war”—but war continues all the same. Even classical military strategists like Sun Tzu believed war should only be used only as a last resort, and argued that military campaigns could bankrupt states and ultimately, destroy them. Art of War actually states that “no country has ever profited from protracted warfare,” and cautions generals to “fight under Heaven with the paramount aim of ‘preservation.’” Yet as far back as we have historical records, these sorts of ideas have fallen on deaf ears among governments and military organizations alike.


Economics offers many insights into war making and why it persists, but the most fundamental explanation is an institutional one. It’s tragically simple: warnings about the horrors of war go unheeded because the power to make war—as well as “justify” it in the eyes of those forced to fight and finance it—lies in the hands of the state and its business and intellectual allies. States are monopolists of organized force, and as such decide when and how to use their power on a grand scale, especially when they wish to confront other monopolists.


In fact, economic reasoning tells us that conflict is an integral part of the logic of states, which are inherently prone to warfare and imperialism. That war is an essential and practically inevitable behavior of government has been known since ancient times: for instance, Art of War begins by stating that “War is the greatest affair of state, the basis of [its] life and death, the Tao to survival or extinction.”


The central problem is that government is based on the use of the “political means” rather than the “economic means” of social organization. States are not producers of goods and services in the market; rather, they operate by forcible redistribution. They are therefore founded on a conflict of interest between the rulers and the ruled, especially between the winners and losers of the redistribution process.


Furthermore, because state decisions are not guided by entrepreneurial calculation, they result in the waste and destruction of resources, resources that must be replenished if the ruling class hopes to continue to consume. States therefore search constantly for new sources of revenue to support themselves, and to that end they use traditional methods of public finance: taxation, borrowing, and inflation. But these policies ultimately compound their difficulties, generating poverty and inequality, and intensifying social conflict.


Every way they turn, states face recurring economic problems and the need to distract or suppress the victims of exploitation; war making serves the dual purpose of (a) disguising fundamental social conflicts by refocusing attention and/or blame, and (b) providing economic gains to the state and its allies. This then is one economic explanation of how organized violence on a small scale leads to organized violence on a massive scale.


If we want to understand why war persists, we have to take account of the economic foundation of the state. We can’t reason in an institutional vacuum, like the many people throughout history who believed it was enough to simply point out the obvious calamity of war, while leaving the power to make it in the hands of a ruling class.











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Weekly Review and Outlook: Euro Broadly Lower as Focus Turns to ECB

Euro turned into consolidation after initial dip against the greenback last week. But finally, the common currency seemed to have given up on Friday and extended recent decline, closing near the weekly low at 1.3130 against dollar. Indeed, weakness of the euro was rather broad based. In particular, EUR/AUD and



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EUR/USD Weekly Outlook

EUR/USD's fall extended to as low as 1.3103 last week after some consolidations. Initial bias remains on the downside this week. The decline from 1.3993 would target 161.8% projection of 1.3993 to 1.3502 from 1.3700 at 1.2906 next. On the upside, above 1.3221 minor resistance will turn bias neutral and



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USD/JPY Weekly Outlook

USD/JPY edged higher to 104.27 but turned sideway since then as it faced some resistance from 104.12. With 103.49 minor support intact, further rise is mildly in favor. Above 104.27 will bring retest of 105.41 high. On the downside, below 103.49 will turn bias back to the downside for 103.08.



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GBP/USD Weekly Outlook

GBP/USD edged lower to 1.6534 and formed a temporary bottom there and turned sideway. Initial bias is neutral this week for some sideway trading. But upside of recovery should be limited by 1.6737 resistance and bring fall resumption. Below 1.6534 will extend the fall from 1.7190 to 1.6251 cluster support (38.2% retracement of 1.4813 to 1.7190 at 1.6282).



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USD/CHF Weekly Outlook

USD/CHF turned into sideway consolidation last week after breaking 0.9156 key resistance. Initial bias is neutral this week. Another fall cannot be ruled out as the consolidation extends. But we'd expect downside to be contained well above 0.9022 support and bring another rally. Break of 0.9184 will target 161.8% projection



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AUD/USD Weekly Outlook

AUD/USD's recovery last week suggests that the corrective fall from 0.9504 has completed at 0.9236 already, just ahead of 38.2% retracement of 0.8659 to 0.9504 at 0.9181. Further rise is in favor this week as long as 0.9300 minor support holds, for 0.9475/9504 resistance zone. Break of 0.9504 will extend



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USD/CAD Weekly Outlook

USD/CAD's fall from 1.0997 extended lower last week. The break of 1.0859 support suggests that deeper decline would be seen before the correction completes. As long as 1.0908 minor resistance holds, we'd probably see another fall to 61.8% retracement of 1.0620 to 1.0997 at 1.0764. But we'd expect strong support



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GBP/JPY Weekly Outlook

GBP/JPY's rebound from 170.42 extended higher last week and the development suggests that fall from 175.36 has completed at 170.42 already, ahead of 169.53 key support. The development argues that price actions form 175.36 are developing into a sideway consolidation pattern rather than reversing the trend. Initial bias is mildly



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EUR/JPY Weekly Outlook

EUR/JPY continues to stay in range below 138.02 resistance and outlook remains mildly bearish. Initial bias is neutral this week first. With 138.02 intact, deeper decline is still mildly in favor for 135.50 key support level. Decisive break there will carry larger bearish implications. Nonetheless, break of 138.02 will indicate



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EUR/GBP Weekly Outlook

EUR/GBP's fall from 0.8305 extended lower last week and the break of 0.7920 support aurges that rebound form 0.7873 has completed already. The corrective structure of such rebound indicates that the larger decline is still in progress and is possibly resuming. Initial bias is mildly on the downside for 0.7873



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EUR/CHF Weekly Outlook

EUR/CHF's decline continued last week and reached as low as 1.2048. There is no clear sign of bottoming yet even though the cross is losing downside momentum as seen in bullish convergence in 4 hours MACD. Further fall is still expected initially this week. But again, we're expecting strong support



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Friday, August 29, 2014

Weekly Economic and Financial Commentary

Despite some noisy numbers this week, the U.S. economy continues to strengthen. The biggest headline of the week came from the durable goods report, where orders jumped a massive 22.6 percent. July's gain the largest on record was exaggerated by a surge in aircraft orders for Boeing's 777



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The Weekly Bottom Line

Optimism over the U.S. economy is quite high at the moment, and it is warranted. The second estimate of real GDP showed that the economy grew 4.2% in the second quarter, above the previous estimate of 4%. The underlying details revealed stronger business fixed investment, with less inventory accumulation, suggesting



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ECB: From Jackson Hole to Frankfurt, a World of Difference

This past weekend, the most influential central bankers from around the world gathered in Jackson Hole, Wyoming to compare business cards, challenge each other to Rubik's-Cube-solving contests and, occasionally, give speeches that impact the lives of billions of people and the future of global economies and markets. European Central Bank



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Week in FX Americas - BoC To Remain With Neutral Stance

Friday's data revealed that the Canadian economy accelerated at the fastest pace in nearly three-years in Q2. The usual culprits supported the annualized +3.1% gain between April and June: exports, consumer spending and business investments (an area that Canada is falling well behind in to its largest trading partner, the



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Canada Q2 Current Account Deficit Shrinks

Canada's current account deficit narrowed slightly in the June quarter to register the smallest gap in more than two years as exports rose to record dollar value and foreign investment remained strong. According to Statistics Canada, the shortfall was 11.87 billion Canadian dollars, compared to the revised C$12.03 billion in



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Europe Experiences Continued Negative Economic Data

The economic releases for Thursday provided further indication that the Euro zone might currently be contracting as the news were mainly disappointing. The day started with Spain's GDP data, which was in line with expectations at 1.2% for the year. Furthermore, Spain's HICP was better than expected at -0.5% but



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U.S. Economy Grew More Than Initially Thought In Q2

The U.S Department of Labor's latest report indicates that the number of jobless claims have slightly decreased during seven-day period, nonetheless surpassing experts' forecast. The number of jobless claims has decreased from 299,000 down to 298,000, helping push the eight-week average for new claims to below 300,000 for the first



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Economic Data Point To Spotty Recovery In Japan

The recent fundamentals from the world's third largest economy showed uneven economic recovery, as the consumption tax increase in April continue to affect growth. Inflation rate in Japan remained unchanged in July after slowing a month earlier, underscoring challenge for Governor Haruhiko Kuroda in achieving the BoJ's goal. Nationwide core



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British Retailers Report Strong Sales

The U.K reported retail sales to advance in this year to August period, beating experts' forecast by wide margin. Furthermore, the numbers for the next quarter are said to be the most optimistic ones since 2002. According to Confederation of British Industries, overall sales balance surged by +37 compared with



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USD/CAD Candlesticks and Ichimoku Analysis

Despite this week's brief rise above previous resistance at 1.0986, lack of follow through buying and the subsequent sharp retreat (a long black candlestick was formed on the daily chart) suggest top is possibly formed at 1.0998 and consolidation with mild downside bias is seen for retracement of recent rise



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Euro Area Inflation Retreats To 0.3% In August, Euro Ticks Up

Euro area inflation took further steps away from the ECB target in August, putting more pressure on policymakers to adopt new measures. CPI estimate for the year ended August slipped to 0.3 percent, the lowest since October 2009, moving in line with analysts' forecasts, from 0.4 percent in July. The



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Gold Gains As Tensions In Ukraine Are Rising

The euro (EUR) lost all previous gains andretraced back to 1.3159 against the US dollar (USD). The single currency remains fragile as betterthan expected data are coming out from US and strengthens the US dollar. TheEuropean yearly CPI is on the calendar with expectations at 0.3%, while theeuro needs very



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Today's Market Outlook

The Euro remains in near-term range and trades in the range's lower part, after recovery attempts failed to complete Monday's gap and rally stalled at pivotal 1.3220 barrier, last week's low. Fresh weakness nearly fully reversed corrective rally off 1.3149, threatening break lower and extension of larger downtrend, as sentiment



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