The official report from the Federal Reserve of New York show the data from the manufacturing sector of the city of New York of September contracted by 14.7 percent from the forecast of economists at the level of minus 0.5 percent. Data this month only slightly lower than last month's contraction of 14.9 percent.

Contraction for two consecutive months on manufacturing the largest US cities indicates a decrease in the number of orders and jobs. This shows still solid parts factory activity and weak market demand for goods in the production of the factory in New York, northern New Jersey and southern Connecticut.

Besides the New York Fed also released the index data outlook for 6 months experienced a decline to the lowest level since January 2013, the orders index seems to have not been able to expand this month after 3 months earlier continued to contract, index jobs at the plant also dropped to its lowest level since 2012 and the prospect producer index for the next 6 months also declined sharply this month.

So deep contraction in New York manufacturing also contributed greatly affect the data Industrial Production in the US state as a whole recorded suffered deterioration as much as 0.4 percent so far when compared with the data in the previous month, which rose by 0.9 percent. Poor industrial production data this month as well as a sixth month indicator of US Industrial Productions worse than the previous month.

Results of survey of German economic sentiment failed to provide any boost to the euro. EUR/USD was trading at around USD 1:13 on Tuesday (09/15) morning.

Index Zentrum fur Europaische Wirtschaftsforschung (ZEW) was based on a survey conducted in Germany to gauge the views of investors and analysts about the German economy and the Euro next six months. German ZEW economic sentiment showed optimism dropped from 25.0 becomes 12.1 and lower than analysts' estimates of 18.4. ZEW optimism for the euro zone also declined to 33.3 from 47.6 in the previous month, did not reach the predicted 42.1.
EUR/USD is relatively unaffected by the results of the survey, proved still traded around USD 1.1305. Data that supports only Eurozone Trade Balance surplus, increased to 31.4 billion better than the previous 26.4. Currently the focus turned to the US retail sales data for August, which was scheduled to be released tonight at 19:30 pm. Although the possibility of traders still refrained from open positions before the Fed's monetary policy announcement.
Although declining, the ZEW survey results still show optimism of investors and analysts about the state of the German economy and the euro zone, which is shown on the figure of more than zero (positive). German ZEW index has been dimmed during the nine months of this year, amid concerns about China's economic slowdown that could affect German exports.
China's recent economic slowdown threatens the global economy and the possibility of also providing a negative impact for Germany which is the largest trading partner of China. As is known, the economic growth of the country with the largest economy in Europe is the main backer of exports.

Goldman Sachs Group Inc. predicted that the Yen and the Euro will weaken as a result of additional quantitative easing program (QE) conducted by Japan and Europe while the US Federal Reserve was still preoccupied with the possibility to raise the benchmark interest rate in the monetary policy meeting this week.
Yen And Euro Will Decline Sharply
The Japanese currency will decline reached 130 against the US dollar within 12 months in line with Bank of Japan Governor Haruhiko Kuroda, who is expected to return to add stimulus in October, as told by a Goldman Sachs analyst, Robin Brooks, in New York to Bloomberg. On the other hand, according to Goldman Sachs, the currency is nicknamed the single currency, the Euro, will plunge to 95 US cents next year due to the expansion of the asset purchase program in order to achieve the inflation target.
Strengthening of the Euro and the Yen broke down in the middle of the global markets, triggered by the shocking devaluation of the action taken by the Chinese government against their Yuan last August. The investors also have the opportunity to sell the currency-their currencies, Goldman wrote. The Japanese currency got a 6.2 percent gain in the past three months, most currencies rose prestige among 10 other major currencies. Following the existing Euro Yen which appreciated by 4.3 percent, as shown by the Bloomberg index.
"The devaluation of the RMB a month ago, as well as a surge in risk aversion generated, has made the forex market 'cloudy' or hard to read him," wrote Goldman Sachs. Risk aversion, plus Goldman Sachs, has made price action increasingly separated from the fundamental happening in the last few weeks.
The Fed Hold Lift-Off
The yen was little changed at 120.42 per US dollar figures at 12:39 this afternoon Tokyo time, while the euro rose 0.1 percent to 1.1350 per US dollar figures at the same time. As for interest rate hikes the Fed, Goldman Sachs estimates that the US central bank will not change interest rates tomorrow and Thursday only give a signal that the "lift-off" will be conducted in the near future.

The euro climbed to a two and a half week high against the US Dollar on Monday (14/09) afternoon as investors still wait and see the outcome of US FOMC monetary policy this week. EUR / USD touched 1.1360 at the end of today's Asian session, the pair became the highest level since August 27. EUR / USD then consolidated in the 1351 figures, up 12:11 percent. Meanwhile, against the pound sterling, the euro topped 0.7345 figure.

Forex Markets Wait And See
Sentiment towards the US dollar is still quite vulnerable amid US economic data recorded diverse and global financial market volatility lately that have the potential to destabilize the US Federal Reserve's determination to raise its benchmark interest rate Thursday tomorrow.
The latest data released on Friday from the US explained the figures are preliminary index of consumer sentiment slipped to 85.7 from the 91.9 figure in July, as well as lower than the 91.2 forecast. A separate report on the same day showed US consumer price index was observed flat in December after increase of 0.2 percent in July, as reported by the US Department of Labor.
The Fed's monetary policy committee (FOMC) will again hold a two-day meeting on September 16 to 17 next. Market participants are waiting and watching (wait and see) whether interest rates will rise this month, December, or early next year. Chairman of the Fed, Janet Yellen, it has been said that the interest rate increases will depend on the data. However, some people digest the statement as an indication that Yellen expects to start its benchmark interest rate hikes the Fed before the end of this year.

Ahead of the trial on 16 to 17 September FOMC tomorrow, analysts tend to doubt the Fed will take advantage of the moment to raise interest rates. According to a note published earlier this week, the market appears to be more convinced the Fed interest rate hikes for the first time in nine years that will be conducted in December instead of September.
Nomura: FOMC Not Raise Interest Rates This Week
Nomura explicitly states that it does not expect the FOMC to raise interest rates this week, while projecting the increase in December. Further, Nomura expects the FOMC chairman Janet Yellen on post-FOMC conference will emphasize that the FOMC has come closer to a rate hike and that the committee still hopes to raise this year. Projection Nomura noted, Yellen will reaffirm what the next FOMC decision will depend on the outlook for the economy and inflation, and that the pace of interest rate hikes (after the first rise) will be slow and dependent on data.
However, Nomura believes that the market still has plenty of material to be observed, including the latest economic forecast, including the expectation that records the dot plot will FOMC interest rate short to medium term. They expect a significant decrease in the dot plot of tomorrow.

 DailyFX: Two Alternatives
In a different note, Christopher Vecchio of DailyFX cites the view of San Francisco Fed President John Williams, famous for centrist views similar to Yellen. Comments Williams previously mentioned that the Fed still wants to raise interest rates this year, and would probably do so, with one caveat: if the market risks subside. By looking at the market conditions after the comment was triggered, it appears that market risk has not abated and the less likely there will be improvement in the next few days ahead of the FOMC meeting.
Correspondingly, Vecchio says there are two possibilities for the decision of the Fed tomorrow. First, the Fed will raise interest but states will not increase again until the inflation target is reached. The forex market is continually ignoring predictions of future policy, so that an indication that the Fed will not do it again in the near future would be detrimental Dollars. The second being, the Fed will not raise interest rates at this meeting, while the current market has accounted in December as the time when the increase is most likely done (according to Fed funds futures contracts projections). Meeting that ended like this (like the possibility of a second), according to Vecchio will revive memories of the FOMC meeting in March where the US dollar has depreciated sharply after the Fed null and begin the process of normalizing policy.

 Kathy Lien: Dollar Long Positions Reduced
Meanwhile, Kathy Lien of BK Asset Management at the end of last week noted, "(if expected) based on the performance of the US economy alone, the Federal Reserve will raise interest rates as the unemployment rate has dropped to levels that are often associated with full employment. Salary is on the rise, Housing market steady, and the manufacturing and service sectors to expand. emergency condition that requires the application of a zero interest rate policy is no longer there, and hence the (then) it's time to raise interest rates. "
"However," according to Lien, "The Fed does not operate in an empty space and amid the volatility of stocks internationally, his dovish ECB, and bias dovish central banks other, it would be difficult for Janet Yellen to pull the trigger (rising interest rates ), 60 percent of economists surveyed by Bloomberg still expect the Fed to raise interest rates next week, but the Fed fund futures are only taking into account a 30% probability (rate) changes. It will be a difficult decision for the central bank, and therefore we expect investors will reducing their exposure on long dollar positions ahead of interest rate decisions on Thursday. In other words, the dollar will weaken at the beginning of the week. "
Furthermore, "Although the Fed to raise (interest rates), the rally will be short by followed by choppy trading as we expect the tightening to be accompanied by economic projections are lower. We only estimate one rate hike this week, and they (the Fed ) will try to ensure that the markets understand it. "

 Many Other Highlights
Meanwhile, Lien also warned that the market movers this week is not just the Fed. There are two other central banks will provide an important announcement this week, the Swiss Central Bank and the Bank of Japan. England will also be highlighted because there CPI data release, employment, and retail.
Bank of Japan, especially, many observed market because in recent times the porch Japanese officials have expressed their dissatisfaction with the performance of the economy and expect further monetary easing. Credit Agricole, in a note published by eFXnews, said that although the BoJ might expand further monetary stimulus, but there is little room for them to consider additional policy this week. Therefore, the Japanese Yen will still be driven by external factors such as global risk sentiment. According to them, "If it is assumed that the Fed will refrain from tightening monetary policy this week (then) we see room for the fall of the safe-haven demand will hurt the currency. However, it should be noted that the uncertainty over China will make the market remains unstable. "
While the data from the UK are expected to be disappointing. Morgan Stanlet mentioned that they are still bearish on the GBP, and will likely sell (GBP) against the USD and JPY. According to them, the data UK has begun to weaken, so that they remain bearish even though the Bank of England is not so concerned with market volatility recently.

US Dollar, Euro and Yen began with sluggish movement at the opening of the market this week, investors chose to wait for the announcement of the Fed is going to raise rates or not. The euro changed little in the range of USD 1.1342, last at 1.8 percent rise last week. Similarly greenback was also sluggish at 120.65, while the euro around 136.80 against the Yen.

source : beiruttimes

Disappointing report on China released Sunday also failed to move the market. Growth in Chinese investment and factory output in August was better than expected, increasing the risk of further slowdown in Chinese economic growth below 7 percent in the third quarter, which has never happened again since the global financial crisis (2009). "The weakening in China's industrial production and fixed asset investment data at the end of last week will affect the AUD and NZD, but market participants are still waiting for (action) the Fed," said ANZ analyst notes on his client.

The Fed will hold a two-day meeting on September 16 to 17 and market participants can only speculate whether the interest rate will be increased this month, whether December or early next year. This uncertainty is also seen in US Government Securities whose value has shrunk in the range of 2.109 percent to 2,254 percent in the past three weeks.

Before the meeting the Fed, Bank of Japan (BOJ) will hold a meeting on 14-15 September and released Tuesday the results tomorrow. There are blowing news that the BOJ is likely to continue its policy of monetary stimulus, but the source of the nearby told Reuters that there was no desire to take such action this week.

Canada’s economy unexpectedly added jobs in August, mostly full-time work in services such as education and health care, in another sign of sustained momentum in a labor market that has defied the oil price shock.

Canadian employment grew by 12,000 during the month, bringing to 193,300 the number of new jobs over the past 12 months, Statistics Canada said Friday in Ottawa. The unemployment rate rose to 7 percent from 6.8 percent as more Canadians entered the labor force. Economists surveyed by Bloomberg had predicted a drop of 5,000 jobs in August.

The employment gains are defying gross domestic product data that show Canada’s economy contracted in the first two quarters of the year amid a plunge in oil prices that’s prompting businesses to scale back investment.

Services-related industries are doing much of the heavy lifting, adding 17,200 jobs in August to offset job losses for goods producers such as factories. Over the past 12 months, the country has added 201,600 service jobs, while losing 8,300 goods producing jobs.

The composition of new jobs is also improving. The nation created 54,400 full time jobs in August, offsetting a drop of 42,400 part-time jobs. Over the past 12 months, Canada added 317,900 new full-time workers, offsetting a 124,500 drop in part-time work.

The total number of actual hours worked jumped 0.8 percent in August from the month before, the most since November 2010.

WIESBADEN – Based on provisional data, the Federal Statistical Office (Destatis) reports that price-adjusted new orders in manufacturing in July 2015 decreased a seasonally and working-day adjusted 1.4% on June 2015. In June 2015, the increase on the previous month showed a corrected –1.8% (primary +2.0%) In July 2015, domestic orders increased 4.1% while foreign orders decreased 5.2% on the previous month. As regards the direction of trade in foreign transactions, new orders from the euro area were up 2.2% on the previous month, new orders from other countries decreased 9.5%.

In July 2015 the manufacturers of intermediate goods recorded decreases in new orders of 0.2% on the previous month and capital goods decreased 1.6%. For consumer goods, a decrease in new orders of 6.3% was recorded.

The rates of change are based on the volume index of new orders for manufacturing (2010 = 100). Seasonal and working day adjustment is done using the Census X-12-ARIMA method.

IMF's Japanese mission chief with some good news for Japan

• There's a good chance of cutting growth forecasts in next global economic outlook report
• BOJ should focus on inflation expectations in deciding whether to ease monetary policy rather than underlying weakness in economy
• Doesn't see the need for BOJ to ease in October, even if it cuts GDP and CPI forecasts, as long as inflation expectations are well anchored
• Exchange rate is not and has not been a target for Japan
• It's not clear whether BOJ alone can boost economy
• Efforts to change Japan's wage dynamics is also critical

Reuters with the comments from the IMF. Looks like a downgrade to forecast is on the cards

Staying in Japan the Nikkei closed down 2.15% at 17792, -390.23 points, and ends the week -7.02%

source : forexlive