Daily Market Analysis by FxGrow

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Daily Market Analysis – 25th May, 2015
By FxGrow Research & Analysis Team

Euro under pressure as Greece is set to default on Debt Repayment Loans

Greece is set to default on Debt repayment loans of €1.6billion which are due to IMF next month as it does not have the funds.

Greek Interior minister, Nikos Voutsis said that Greece needs to strike a deal with its European creditors soon or it would default on repayments to the International Monetary Fund. He said "This money will not be given and is not there to be given.”

If Greece is unable to repay its loans to the IMF, it would deepen the country’s economic crisis, force capital controls and foreclosure of Greek banks.

Euro is under pressure as Greek debt issue remains unresolved trading at 1.0976 in the Asian trading session. Outcome of the elections in Spain also weigh down on Euro with expectations of low liquidity amid market holidays in the UK, Germany and the US.

In USA Consumer Price Index rose 0.1% in the month of April, while CPI YoY rate remained negative, at -0.2% in April. The annual increase in core prices remained unchanged at 1.8%.

US Core Inflation in April, excluding Food and Energy, showed the biggest gain since January 2013.

Federal Reserve Chairwoman Janet Yellen said on Friday "If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target".

With upbeat US Inflation data and comments made by Yellen US Dollar strengthened against its major counterparts on Friday with EURUSD falling more than 200pips from its high of 1.1197

Crude Oil is trading at $59.60 on account of strong US Dollar ahead of US holiday.

Gold prices are flat in Asia at 1203.57 on the prospect of a Federal Reserve rate hike this year while Silver is down at 17.02

25th May 2015 – 08:09hrs GMT

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Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 26th May, 2015
By FxGrow Research & Analysis Team

US Dollar strong on prospects of a FED Rate Hike

Federal Reserve Vice Chairman Stanley Fischer said on Monday that "If the US Economy is growing very, very slowly we will wait. If the economy is growing faster we will do it quicker".

Fischer said that FED expects the interest rate will reach 3.25 to 4 percent by 2017-2018.

He further stated - "What we are thinking about is raising the interest rate from zero, which is an ultra-expansionary monetary policy to a quarter percent, which is an extremely expansionary monetary policy. This will be a gradual process".

US Dollar continues its Bull Run as Federal Reserve keeps its door open for a Fed rate hike.

Euro has dropped below 1.0900 in the Asian trading session amid fears of Greece inability to pay the IMF loan next week and the outcome of the Spanish regional elections.

Meanwhile Greek debt talks have resumed and officials have expressed confidence that Greece was close to a deal with its European creditors.

In Athens, government spokesman Gavriil Sakellaridis stated "We want to be consistent with our obligations and so we are striving for a deal so the economy can get some relief".

The US Dollar hit an eight-year high of 122.68 against the yen as it is expected that Federal Reserve will raise interest rates later this year.

Bank of Japan Governor Haruhiko Kuroda stated "The latest data point can be interpreted as confirming that underlying inflation in Japan has been improving significantly, although the firmness is currently masked by the temporary negative impact of the sharp decline in oil prices".

The New Zealand dollar lost ground as its Trade Surplus shrank in April due to decline in its exports to China. New Zealand's trade surplus shrank to NZ$123 million in April while analyst expectations were at $NZ100 million.

Crude Oil is trading at $59.40 after Iran's Oil Minister stated that the OPEC will maintain its monthly oil production limit.

Gold prices are lower in Asia at 1196.25 on the prospect of a Federal Reserve rate hike this year while Silver is down at 16.80

26th May 2015 – 08:31hrs GMT

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 27th May, 2015
By FxGrow Research & Analysis Team

Greek Talks Continue with G7 meeting in Dresden

G7 Finance ministers and Central bank chiefs begin a three-day meeting in Dresden today. Greece will be discussed and markets are looking for cues from the today’s meeting.

As time is running out Greece is close to a default on its next debt repayment to the International Monetary Fund.

Greece needs to repay €300m on 5 June, with €1.6 billion in total due to be repaid to the IMF next month. An official from Eurozone stated “There is the possibility of putting together several payments that Greece would need to make to the IMF in the course of June and then just make one payment.”

The Greek finance minister Yanis Varoufakis said ""It would be a disaster for everyone involved. It would be a disaster primarily for the Greek social economy, but it would also be the beginning of the end of the common currency project in Europe".

The IMF's MD Christine Lagarde said that an extension will not be granted, even with additional economic reforms, and that no developed nation has defaulted on the IMF in 30 years.
In UK retail sales growth surged in May to +51 while analyst expectations were at +17.

UK Confederation of British Industry's Director said "Low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power".

Bank of Japan said that risks to Inflation are on the downside and Growth is slow.

According to the minutes released by BOJ "With regard to the baseline scenario for prices, many members expressed the view that there was considerable uncertainty, mainly in developments in medium- to long-term inflation expectations, and risks on the price front were skewed to the downside".

FED Vice Chairman Stanley Fischer stated "The tightening of U.S. policy will begin only when the US expansion has advanced far enough - when we have seen further improvement in the labor market and when we are reasonably confident that the inflation rate will rise to our 2% goal. If foreign growth is weaker than anticipated, the consequences for the US economy could lead the Fed to remove accommodation more slowly than otherwise".

Crude Oil is trading lower at $58.90 on account of strong US Dollar.

Gold prices are lower in Asia at 1188.99 while Silver is flat at 16.78

27th May 2015 – 08:40hrs GMT

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Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 28th May, 2015
By FxGrow Research & Analysis Team

Greek deal hopes lift Euro, Greek bonds, Markets

European stocks, Greek bonds and Euro are moving higher as news reports from Bloomberg have indicated that Greece is close to reach a deal with its European creditors.

Globally markets are recovering with Major Indices ending in Green, and Euro is trading at 1.0926 up 100 pips from the yesterday's low of 1.0818

Greek Prime Minister Alexis Tsipras said "We have made many steps. We are on the final stretch towards a positive deal. This agreement will be positive for the Greek economy, this agreement will redistribute the financial burdens and I believe that, very soon, we will be in a position to present more information".

The Bank of Canada kept its rate unchanged at 0.75% as per the market expectations.
BOC stated "Despite the recent back-up in global bond yields financial conditions for Canadian households and firms remain highly simulative. The Canadian dollar has strengthened in recent weeks in the context of higher oil prices and a softer U.S. dollar".

In Japan's Retail Sales rose to 5% from the previous year and USDJPY hits a 13 year high of 124.30 on the backdrop of economic recovery in the US and expectations of a FED rate hike later this year.

In Germany Consumers’ confidence reached the highest level since 2001. The GfK Consumer sentiment rose to 10.2 in May. Very robust domestic demand in Germany and low inflation rates have caused economic expectations and willingness to buy to further improve again.

Tough negotiations on the future of Greece in the euro area, the Ukraine crisis, and IS terrorism could noticeably dampen consumption in Germany.

Crude Oil is trading lower at $57.96 on account of strong US Dollar.
Gold prices are lower in Asia at 1190.04 while Silver has recovered its losses at 16.72

28th May 2015 – 09:03hrs GMT

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 29th May, 2015
By FxGrow Research & Analysis Team

US Initial Jobless Claims Rise, Pending Home Sales reach a 9-Year High

In US the number of Americans filing for Initial Jobless benefits rose last week to 282K while analyst expectations were at 270K.

US pending home sales soared to a nine-year high in April in a strong start to the prime spring season, according to the National Association of Realtors. The National Association of Realtors said its Pending Home Sales Index rose 3.4% in April to a level of 108.7 which is the highest level since May 2006.

Jim O'Sullivan, US economist said "Housing is an important reason why the trend in growth looks much stronger for non-manufacturing and the overall economy, than for manufacturing now".

This uptrend in home sales came after a growth in US Jobs sector, which has increased demand to buy houses.

UK GDP expanded by 0.3% while analyst expectations were for a 0.4% increase. Economic growth slowed due to the service sector performing worse than expected and a widening UK trade deficit.

In Japan Inflation and Industrial production increased more than expected. Japan's Industrial production increased 1.0% in April, while inflation data showed the CPI moving higher 0.2% in May.

USD/JPY is steady at 13-year highs due to increased demand for US Dollar and the indications that the US economy is gaining momentum after a slowdown in the first quarter.

NZDUSD fell to 0.7115 undermined by New Zealand's lac of business optimism and estimates of inflation below the central bank's target.

In a report, European Central Bank said that Euro Zone M3 Money Supply rose to 5.3%. It is the amount of domestic currency in circulation and deposited in banks.

The Euro Zone Consumer and Business Confidence was stable in May at 103.8, overall economic sentiment was mixed across the Euro zone. While it improved in Germany, France, and the Netherlands, it dropped in Italy and Greece.

Howard Archer, Chief UK and European Economist said "The fact that overall Eurozone economic sentiment held up well in May could ease concern that the Eurozone's recovery is starting to flag as the recent stimulus it has received is diluted by a recent firming in the euro, oil prices and bond yields from very low levels".

Crude Oil is trading higher at $58.60 after US Crude Stockpile fell for 4th Week.

Gold is trading stronger in the Asia at 1189.63 while Silver has recovered its losses at 16.75

29th May 2015 – 09:32hrs GMT

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 01st June, 2015
By FxGrow Research & Analysis Team

Euro Drops amid ongoing Greece talks

Euro is trading lower against all its counterparts amid concerns that Greece will be unable to repay over €300 million due to the IMF on June 5 and a possible exit from the Eurozone.

Euro recovery seems to have lost steam as concerns are rising over a possible Greek default if it is unable to reach a deal with its European creditors soon. Greek negotiations are going on as its creditors are pressing for action in areas including the pension system, labor market and sales tax.

Greek Prime Minister Alexis Tsipras has said “The lack of an agreement so far is not due to the supposed intransigent, uncompromising and incomprehensible Greek stance. It is due to the insistence of certain institutional actors on submitting absurd proposals and displaying a total indifference to the recent democratic choice of the Greek people".

Germany's EU Commissioner Guenter Oettinger said "We will need progress at the working group level, in order that we can agree on a reform agenda, perhaps even by the end of the week, which would trigger the payment of the last tranche of aid from the current aid program".

"Greek debt yields provide only a rough guide, and although a missed deadline will not spell default, market concern remains high. It's difficult to quantify how much the currency market has factored in the possibility of Greece missing the June 5 repayment deadline" said Shinichiro Kadota, chief Japan Forex strategist at Barclays in Tokyo.

China HSBC Manufacturing PMI for May came at 49.2 in line with analyst expectations.

Annabel Fiddes, Economist at Markit, on the HSBC PMI, said it "signaled a further deterioration in the health of China's manufacturing sector in May."

In Japan, capital spending for non-financial firms jumped 7.3% in the first quarter, while Japan manufacturing for May was steady at 50.9 as expected.

Euro zone’s Manufacturing PMI fell to 52.2 while analyst expectations were at 52.3

Germany’s Manufacturing PMI fell to 51.1 while analyst expectations were at 51.4

Crude Oil is trading higher at $59.85 as traders await OPEC meeting in Vienna on June 5.

Gold is trading lower in the Asia at 1187.22 while Silver has recovered its losses at 16.68

01st June 2015 – 09:31hrs GMT

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 02nd June, 2015
By FxGrow Research & Analysis Team

US ISM Manufacturing Index Increased to a 3-month high in May

US Institute for Supply Management (ISM) manufacturing index increased to a 3-month high in May as manufacturing activity in the US expanded at a faster pace than expected.

US Manufacturing expanded in May as the PMI registered 52.8 percent, an increase of 1.3 percentage points over the April reading of 51.5 percent, indicating growth in manufacturing for the 29th consecutive month.

US consumer spending remained flat in April as households cut back on purchases of luxury items and continued to increase savings.

"While the US economy still looks set to rebound from the decline seen in the first quarter, the extent of the second quarter recovery therefore remains highly uncertain and could well disappoint. It therefore remains too early to take a reliable reading on the health of the economy and the data flow over the summer will be crucial in determining the timing of the first Fed rate hike." - said Chris Williamson, Chief Economist at Markit.

The Reserve Bank of Australia kept interest rates unchanged at a record low 2.0 percent, in line with analysts' expectations. Following the news Australian dollar remained bullish and AUDUSD touched a high of 0.7700

"There are a lot of factors influencing the currency. One of those is probably tomorrow, the GDP number for the first quarter. It's probably going to be very strong," Matthew Circosta, an analyst at Moody's Analytics, told CNBC. "But moving forward, you'll see that Aussie dollar weakness coming through in the next few months, because the U.S. is going to be raising interest rates."

UK manufacturing activity increased in May to 52.0 which accounts for about 10% of the UK economy.

"Expectations of a broad rebound in U.K. economic growth during the second quarter of the year is called into question by these readings" – said Rob Dobson, senior economist at Markit.

Greek debt negotiations continue between Greece and its European creditors. IMF chief Christine Lagarde, ECB president Mario Draghi, French president Francois Hollande and European Commission president Jean-Claude Juncker met yesterday to give out an offer for Greece to consider.

Crude Oil is trading higher at $60.90 ahead of weekly US supply data.
Gold is trading lower in the Asia at 1187.26 while Silver is weak at 16.65

02nd June 2015 – 09:54hrs GMT

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 03rd June, 2015
By FxGrow Research & Analysis Team

Euro Surges on Greek Deal Hopes

The euro surged against its major counterparts on hopes that Greece will soon reach a deal with its European creditors. EURUSD touched a two week high of 1.1195 and US Dollar plunged with Dollar index recording a 1.5% decline, the biggest decline in 24hrs since July 2013.

Greek Prime Minister Alexis Tsipras is going to Brussels today to discuss his government's proposal for deal with its creditors and secure the bailout funds.

European institutions and the International Monetary Fund have completed the draft of an agreement to unlock bailout aid for Greece. Greek Prime Minister Alexis Tsipras said that he has submitted his terms for a deal to European institutions and the IMF, and he is optimistic that Greece’s proposal would be accepted.

Greece needs to repay IMF 1.6 billion euros this month. The first installment of 300 million euros is due Friday, with other installments due on June 12, 16 and 19. Greece is running out of cash without a deal and is close to a default.

Greek Prime Minister Alexis Tsipras said "We have submitted a realistic plan for Greece to exit the crisis. We are not waiting for them to submit a proposal, Greece is submitting a plan - it is now clear that the decision on whether they want to adjust to realism... the decision rests with the political leadership of Europe."

European Central Bank will announce its monetary policy and rate decision today. It will be followed by the press conference of ECB President Mario Draghi. It is expected that ECB will continue to implement its €60/month QE program.

In Euro Zone Inflation is back according to a report from Eurostat, consumer prices have jumped to 0.3% in the last month while core inflation is at 0.9%, but is below the ECB's target of 2%.

"Spain and Italy appear to be staging strong recoveries, benefiting in particular from impressive export performances”. - Chris Williamson, Markit's chief economist.

UK Construction PMI climbed to 55.9 as the construction sector continues its recovery and growth after Prime Minister David Cameron unexpectedly won the general election with an outright majority.

"Additionally, construction firms experienced an upturn in new business growth from April's near two-year low and job creation was the fastest recorded so far in 2015" - Tim Moore, Markit

Australian GDP surged to 4.3%, while analyst expectations were at 4.1%. Australian economy faces pressure as domestic demand and consumption remains low, followed by slowdown in China and lower global commodity prices.

Crude Oil is trading lower at $59.95 on bets for US supply gain.

Gold is trading lower in the Asia at 1187.06 while Silver is weak at 16.60

03rd June 2015 – 09:41hrs GMT

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 04th June, 2015
By FxGrow Research & Analysis Team

Greek deal hopes and Euro zone debt yields lift Euro

Greek Prime Minister Alexis Tsipras said after talking with the senior EU officials that Greece was close to a deal with its creditors and it would make a payment due to the IMF on Friday.

"It was a good, constructive meeting. Progress was made in understanding each other's positions on the basis of various proposals. It was agreed that they will meet again. Intense work will continue." - Statement given by the European Commission.

Greece has enough cash to repay a €300 million payment due to the IMF on Friday.

German 10-year bond yields climbed to 0.887 percent, after the ECB raised its inflation forecast for the year 2015.

The 10 year US Treasury yields reached at 2.3696% the highest level since Nov 2014.

"The biggest positive about the bond market weakness is that yields’ going higher is a net positive for all of the financials. Higher yields on fixed income translate into higher rates and that increases the net interest margin for financials," - Michael James, MD Wedbush Securities, Los Angeles.

EURUSD is trading at 1.1345 in the European trading session having touched a high of 1.1378

European Central Bank kept its benchmark rates unchanged at 0.05 percent and increased its forecast for inflation in the Eurozone this year to 0.3 percent.

ECB President said bond buying program of 60 billion euros per month will continue till September 2016 with an aim to inject liquidity into the financial system and drive up the Eurozone’s low rate of inflation.

Draghi said "The full implementation of all our monetary policy measures will provide the necessary support to the euro area's economy."

On Greek Debt deal Draghi called for a strong agreement between Greece and its Creditors saying "A strong agreement is one that produces growth, that has social fairness but that is also fiscally sustainable and addresses the remaining sources or factors of financial instability in the financial sector."

In China HSBC PMI climbed to 53.5 the highest level in 8 months as growth remains sluggish in China.

"Overall, growth momentum in China appears relatively weak, weighed down by an ongoing deterioration in manufacturing operating conditions" - Annabel Fiddes, economist at Markit.

In UK the services PMI declined to 56.5 in May, while the UK's economy grew by 0.3% in the first quarter of the year. The UK service sector forms a large part of the economy.

"Additionally, construction firms in UK experienced an upturn in new business growth from April's near two-year low and job creation was the fastest recorded so far in 2015" - Tim Moore, Markit.

Crude Oil is trading lower at $59.56 after Russian Energy Minister's confirmation that the OPEC would not cut output at Friday's meeting.

Gold is trading lower in the Asia at 1182.65 while Silver is flat at 16.46

04th June 2015 – 09:30hrs GMT

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

 

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Daily Market Analysis – 05th June, 2015
By FxGrow Research & Analysis Team

Greece delays IMF payment until end of June

Greece moves closer to default and a possible exit from the Eurozone as it will not make a scheduled €300m loan repayment to IMF on Friday.

IMF said on Thursday "The Greek authorities have informed the fund today that they plan to bundle the country's four June payments into one, which is now due on June 30," Gerry Rice, IMF spokesperson, said, citing rules allowing debtor countries to regroup "multiple principal payments falling due in a calendar month".

It is the first time that Greece will postpone a repayment to IMF as Prime Minister Alexis Tsipras is facing opposition from his supporters on tough terms associated with the debt deal.

Greek prime minister has come under pressure from his supporters to withhold the payment of €300m due to IMF on June 5. The country is running out of funds and needs the final €7.2bn bailout funds to be able to repay €1.54 billion to IMF by June 30.

Greece PM Tsipras said “Such extremist proposals cannot be accepted by the Greek government. Everyone must understand that the Greek people have greatly suffered over the last five years and some have to stop playing games at their expense.”

EURUSD pulled back yesterday after this decision from a high of 1.1365 to a low of 1.1178 in the Asian trading session today.

Traders are focusing on the US Non-Farm Payroll report due to be released today at 12:30 GMT. Analysts expect a growth of 227K in the job markets for the month of May. Pre-NFP data suggest a strong NFP report today. Analysts forecast for the Unemployment rate is at 5.4%, the lowest level in seven years.

Today’s NFP report will indicate whether Fed is willing to hike interest rates in September 2015. Fed will hike interest rates this year if the NFP data picks up in May.

In UK the Bank of England kept its benchmark interest rate at 0.5%, the lowest level since 2009. The decision by BoE to hold interest rates was supported by data that showed growth of the UK economy slowed down in the Q1 2015 to 0.3%.

"In UK much will clearly depend on how economic growth, earnings and productivity develop over the coming months, as well as just how quickly inflation moves up later on this year" - Howard Archer, chief UK and European economist at IHS Global Insight.

In Canada Ivey PMI rose to 62.3 supported by an increase in employment and inventory levels. Today investors will focus on CAD Full Time Employment Change report due on 12:30 GMT. Analysts estimate that Canada's economy will add 10K jobs in May with jobless rate remaining at 6.8%.

Crude Oil is trading lower at $57.85 on concerns over spiking European yields.

Gold is trading lower in the Asia at 1176.26 while Silver is flat at 16.18

05th June 2015 – 10:16hrs GMT

For more in depth Research & Analysis please visit FxGrow.

Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.