This week has been marked by some interesting scandals involving major banks and their executives: first Goldman Sachs “misplaces” $1.2 billion in Libyan money left over from the Qaddafi era, and then Wells Fargo CEO turned down $41 million in stock awards, in a rare show of integrity – albeit a costly and slightly coerced one. Still, this is only one good news in a sea of trouble for Wells Fargo, considering their latest scandal as well as the backlash that is definitely going to hurt them in the long run. However, despite these major “losses”, let us see how major currencies have been doing.
The Week Behind Us:
EUR/USD: The neutral phase has lasted throughout the week for the EUR, and it does not seem that a breakthrough is likely in the short run at least. The range is now at 1.1120/1.1290 but this has been a rather peaceful week for this currency pair.
GBP/USD: It seems as though the bearish days for this pair are coming to an end, although not just yet. It took almost two weeks for this trend to subside, but this does not mean things are settled just yet. From this point on, it will either retreat below the 1.2980 or it stands a good chance to reach 1.3060. This would mark the beginning of a short-lived neutral phase, likely between 1.2930 and 1.3160.
AUD/USD: It seems as though the bullish phase for the AUD is here to stay, at least for another day or two. Currently, the target should be around 0.7740 and anything up to 0.7760 is expected to offer a strong resistance. The stop-loss at 0.7605 seems like a good idea, for now.
NZD/USD: Well, it took a while but the NZD/USD pair is back in the relatively stable range of 0.7200/0.7375, which is on par from the movement that we have seen in the previous range. It may be roughly the same, but the way it moves would indicate a possible breakthrough below the 0.7200 line, albeit not very likely at this point.
USD/JPY: As we said last week, way too many people were investing in the yen, and this trend may yet claim its due soon enough. The USD is still relatively weak, and most traders are hoping for a consolidation above 100.00/05. That being said, the USD may yet strengthen up and break above the 101.50 line.
Forex Forecast for Major Pairs:
EUR/USD: Neutral, the range is 1.1120/1.1290.
GBP/USD: Bearish, possible short-term low.
AUD/USD: Bullish, target 0.7740.
NZD/USD: Neutral, with a 0.7200/0.7375 range.
USD/JPY: Bearish, possible short-term low.
Goldman Sachs “Misplaced” $1.2 Billion of Libya’s Money
You have to hand it to Goldman Sachs – they sure know how to pick their clients. When they accepted Moammar Qaddafi, the year was 2008. Just a few years after he had given up on nuclear and chemical weapon ambitions, Libya was transformed from a relatively isolated desert backwater plagued with sanctions and an economical pariah into one of the most developed countries in Africa.
It had been two decades since Western banks had left the country and all that wealth in oil made Qaddafi a client that few would reject. Of course, this was before the civil war wrecked the country. Since that time, a lot has changed. Qaddafi is dead, Libya is divided and all that money in all those banks is up for grabs. In the meantime, it would appear that Goldman Sachs has lost track of a “small” sum of merely $1.2 billion.
Wells Fargo CEO in dire straits
It appears that the CEO of one of the biggest and strongest banks in the US, John Strumpf, is going to lose some of his 2016 salary, as well as some $41 million in stock awards that he was due as a bonus for this year. The reason? Why, it is only a probe into one of the largest banking scandals in recent history.
To anyone who follows the news, the trouble that Wells Fargo is in for opening false accounts and charging their clients for it has been a huge shock, but what is even more shocking to some is that someone is actually being called to account. The head of the division behind the fake accounts was forced to resign a hear before retirement, and this is only the tip of the huge iceberg that may well sink the bank altogether.
The bank is now forced to take action, as lawmakers and shareholders alike are out for blood. However, Tolstedt not exercising her $34 million in stocks and losing $19 in awards is not enough, so Strumpf himself may be facing some serious difficulties as well as personal financial losses. Despite everything, however, neither Tolstedt nor Strumpf are going destitute any time soon, each with tens or hundreds of millions of US dollars in stocks, rewards and assets.
Source: CNN Money
Forex Reminder: The Upcoming Week
09:15 CHF Retail Sales (Real) (YoY) (AUG)
09:30 CHF SVME-Purchasing Managers Index (SEP)
10:30 GBP Markit UK PMI Manufacturing s.a. (SEP)
15:30 CAD RBC Canadian Manufacturing PMI (SEP)
16:00 USD Construction Spending (MoM) (AUG)
16:00 USD ISM Manufacturing (SEP)
16:00 USD ISM Prices Paid (SEP)
16:00 USD ISM New Orders (SEP)
NZD Dairy Auction Avg. Winning Price MT (OCT 4)
NZD Dairy Auction Whole Milk Powder MT (OCT 4)
01:50 JPY Monetary Base (YoY) (SEP)
01:50 JPY Monetary Base End of period (SEP)
02:30 AUD Building Approvals (MoM) (AUG)
02:30 AUD Building Approvals (YoY) (AUG)
05:30 AUD Reserve Bank of Australia Rate Decision (OCT 4)
07:00 JPY Consumer Confidence Index (SEP)
10:30 GBP Markit/CIPS UK Construction PMI (SEP)
00:30 AUD AiG Performance of Service Index (SEP)
02:30 JPY Nikkei Japan PMI Services (SEP)
02:30 JPY Nikkei Japan PMI Composite (SEP)
02:30 AUD Retail Sales s.a. (MoM) (AUG)
10:30 GBP Official Reserves (Changes) (SEP)
10:30 GBP Markit/CIPS UK Services PMI (SEP)
10:30 GBP Markit/CIPS UK Composite PMI (SEP)
11:00 EUR Euro-Zone Retail Sales (YoY) (AUG)
13:00 USD MBA Mortgage Applications (SEP 30)
14:15 USD ADP Employment Change (SEP)
14:30 USD Trade Balance (AUG)
16:00 USD ISM Non-Manufacutring Composite (SEP)
16:00 USD Factory Orders (AUG)
16:00 USD Factory Orders Ex Trans (AUG)
16:00 USD Durable Goods Orders (AUG F)
16:00 USD Durables Ex Transportation (AUG F)
16:00 USD Cap Goods Orders Nondef Ex Air (AUG F)
16:00 USD Cap Goods Ship Nondef Ex Air (AUG F)
16:30 USD DOE U.S. Crude Oil Inventories (SEP 30)
16:30 USD DOE Cushing OK Crude Inventory (SEP 30)
16:30 USD DOE U.S. Gasoline Inventories (SEP 30)
16:30 USD DOE U.S. Distillate Inventory (SEP 30)
01:50 JPY Japan Buying Foreign Bonds (Yen) (SEP 30)
01:50 JPY Japan Buying Foreign Stocks (Yen) (SEP 30)
01:50 JPY Foreign Buying Japan Bonds (Yen) (SEP 30)
01:50 JPY Foreign Buying Japan Stocks (Yen) (SEP 30)
02:30 AUD Trade Balance (Australian dollar) (AUG)
08:00 EUR German Factory Orders s.a. (MoM) (AUG)
08:00 EUR German Factory Orders n.s.a. (YoY) (AUG)
09:00 CHF KOF Institute Autumn Economic Forecast
09:15 CHF Consumer Price Index (MoM) (SEP)
09:15 CHF Consumer Price Index (YoY) (SEP)
09:15 CHF CPI EU Harmonized (MoM) (SEP)
09:15 CHF CPI EU Harmonized (YoY) (SEP)
10:10 EUR Markit Germany Retail PMI (SEP)
10:10 EUR Markit Eurozone Retail PMI (SEP)
14:30 USD Initial Jobless Claims (OCT 1)
14:30 USD Continuing Claims (SEP 24)
02:00 JPY Labor Cash Earnings (YoY) (AUG)
02:00 JPY Real Cash Earnings (YoY) (AUG)
07:00 JPY Leading Index (AUG P)
07:00 JPY Coincident Index (AUG P)
08:00 EUR German Industrial Production s.a. (MoM) (AUG)
08:00 EUR German Industrial Production n.s.a. and w.d.a. (YoY) (AUG)
10:30 GBP Industrial Production (MoM) (AUG)
10:30 GBP Industrial Production (YoY) (AUG)
10:30 GBP Manufacturing Production (MoM) (AUG)
10:30 GBP Manufacturing Production (YoY) (AUG)
10:30 GBP Visible Trade Balance (Pounds) (AUG)
10:30 GBP Trade Balance Non EU (Pounds) (AUG)
10:30 GBP Total Trade Balance (Pounds) (AUG)
14:30 USD Unemployment Rate (SEP)
14:30 USD Change in Non-farm Payrolls (SEP)
14:30 USD Change in Private Payrolls (SEP)
14:30 USD Change in Manufacturing Payrolls (SEP)
14:30 USD Two-Month Payroll Net Revision (SEP)
14:30 USD Average Hourly Earnings (MoM) (SEP)
14:30 USD Average Hourly Earnings (YoY) (SEP)
14:30 USD Average Weekly Hours All Employees (SEP)
14:30 USD Change in Household Employment (SEP)
14:30 CAD Unemployment Rate (SEP)
14:30 CAD Net Change in Employment (SEP)
14:30 CAD Full Time Employment Change (SEP)
16:00 GBP NIESR Gross Domestic Product Estimate (SEP)
19:00 USD Baker Hughes U.S. Rig Count (OCT 7)
21:00 USD Consumer Credit (AUG)