Advisable Investment

P.I.C Referral Plan For Quarter 4

The Private Investment Club has a very prosperous referral plan where any of our clients can refer friends, family or even associates to join and the referrer would be compensated on the following

- P.I.C has a profit share of 25% on each client, we would give you, the referrer 12.5% (50% of our gain)

- 5$ per $100,000 traded (On a $10,000 investment we normally open between $10 Million and $50 Million)

In the meantime, we will continue to provide alternative investment opportunities that will accrue throughout the upcoming weeks, and we will contact you and others via email and telephone, thus keep a lookout for any emails regarding EQ5’s Private Investment Club as they will be of outmost importance.

We invite you to read our investment broche and trust that you will choose EQ5 to meet your financial goals for this year.

ECB Opportunity

The stance at the latest ECB meeting was surprisingly dovish and according to Draghi, the ECB is open to a whole menu of monetary policy instruments.

We expect the ECB to cut the deposit rate and extend and expand its monthly QE purchases in the upcoming meeting on December 3^rd 2015.

Ø Such an announcement should have a positive market impact, especially as we expect the deposit rate cut to be accompanied by a strengthening of the ECB’s forward guidance. This should lead the market to price in some probability of further rate cuts immediately after the first has been delivered.

Ø Our expectation of higher monthly QE purchases is a change to our previous forecast and reflects our view that the ECB aims to accelerate the impact of the additional easing as it did when announcing the QE program in January.

Ø Specifically, we expect the ECB to extend the QE purchases by three months to December 2016 and expand the monthly purchases to EUR75bn, which should bring the ECB’s balance sheet up to around EUR3.6trn.

Ø Increasing the scope of the QE program could imply the issue cap becomes an issue even for big sovereigns towards the end of 2016 but this is a headache for 2016 and does not prevent the ECB increasing purchases in December.

Ø We expect the expanded monthly purchases to include corporate bonds in the QE universe. This should follow, as the ECB has stated this would be the most appropriate instrument for achieving additional monetary easing.

The stance at the ECB meeting in October was surprisingly dovish, particularly as Draghi opened the door for further deposit rate cuts. Previously the message had been that the ECB had reached the lower bound on the deposit rate, but according to Draghi things had changed and “the degree of monetary policy accommodation will need to be re-examined at our December monetary policy meeting”.

On the back of this dovish stance, we now expect the ECB to cut the deposit rate by 10bp at the December meeting and to keep the door open for further rate cuts. At the same time, we expect an expansion of the QE purchases to EUR75bn per month and that the ECB will continue the purchases until December 2016 while keeping it open-ended as ending it should still be dependent on a sustainable adjustment in the inflation path.

Regarding the choice of instruments, Draghi said “we are open to a whole menu of monetary policy instruments”. Generally, we expect the ECB to have a bias in favor of wanting to surprise the markets and this time also a desire to weaken the euro in order to get a quick boost to inflation through higher import prices. Draghi also surprised the market, when the PSPP was launched as the monthly QE purchases of EUR60bn was somewhat higher than ECB’s chief economist Peter Praet’s initial suggestion of a pace of EUR50bn per month.

In this paper we focus on how the QE program can be changed while other instruments including cutting the deposit rate further will be considered in our upcoming papers.

FED Opportunity

The August and September employment reports showed a slowdown in job growth, with the three-month average pace of job growth at 167,000 in September down from 201,000 in August. As we highlighted in the labor market monitor for September, we do not think that a slowdown of this magnitude is an obstacle for a coming Fed hike.

Currently, potential labor force growth, under a positive assumption about a rebound in the labor participation rate, is around 150,000 per month and even lower if the participation rate fails to increase.

This means that with job growth at an average of 170,000 per month in the coming six months, the unemployment rate will reach the low end of the Fed’s projected NAIRU range (4.9%) early next year and continue lower thereafter. This is on the assumption that the labor force participation rate will show a temporary rebound next year. If an increase in the labor force participation rate fails to materialize, the unemployment rate would significantly undershoot the Fed’s NAIRU range by the spring.

The October FOMC statement was a reminder that a December Fed funds rate hike should not be dismissed. We continue to expect the first rate hike in January next year, primarily because of the weakness in the US manufacturing sector, which we think will keep the Fed in wait-and-see mode at the December FOMC meeting. We believe that the fast reduction in labor market slack next year will prompt the Fed to tighten monetary policy faster than currently priced in by markets.

Ø Our models suggest job growth in October of 170,000 – below the mid-year pace but still enough to put additional downward pressure on the unemployment rate.

Ø We estimate that the manufacturing sector shed 11,000 jobs in September, as the sector remains under pressure from a strong US dollar and the employment index in the ISM manufacturing survey dipped to a six-year low in October. We look for government employment to increase by 10,000 and construction employment to pick up pace again and add 30,000 jobs.

Ø In terms of the unemployment rate, we estimate the rate stayed unchanged at 5.1% in October but forecast it will head below 5% by year-end.

Ø The Q3 15 employment cost index showed a rebound in wage growth, which put the pace of wage gains in line with that of last year. So far, wage growth is not showing any clear signs of acceleration despite the substantial decline in labor market slack. The same is true for the employment reports’ measure of wages, the average hourly earnings index. A pick-up in wage inflation is important as it would help to reassure the doves of the FOMC that the labor market is indeed running tight.

Ø

XAU/USD Opportunity

We have been targeting goal to reach the 951.08 target for quite some time, this is soon going to become a reality. We expect the price to reach the target area latest in 2016.

We have already capped many winning trades here and the current success rate is sitting at the 92.4% level.

Advisable Investment

- Investment:$5,000+

- Risk:5% - 12%

- Target Reward:80% - 225%+

- Entry Date:Before November 30^th

We will not disclose further information regarding our investment policies and targets yet we do remain available to all current and potential investors who are interested to take part in EQ5’s Private Investment Club or gather more intelligence.

We invite you to contact us on the following information,

- Contact the Broker that has given you the brochure.

- EQ5’s Support on support@eq5fx.com or +41 435 08 6612 and they will connect you with the decision makers of the Private Investment Club

From everyone here at EQ5 and the Private Investment Club, we wish you to see sunshine where others see shadows and opportunities where others see obstacles.

Sincerely,

The EQ5 Team

Date: 2015-12-11; view: 932