|
|
Euro and Sterling Continue to Collapse
October 22, 2008 11:56 PM CEST
|
|
G10 Advancers and Decliners vs USD |
| | Nzd | 0.28 |  |  | Cad | -0.12 | | | Gbp | -0.14 | | | Chf | -0.17 | | | Eur | -0.21 | | | Jpy | -0.21 | | | Dkk | -0.22 | | | Aud | -0.25 | | | Sek | -0.28 | | | nok | -0.29 | |
|
|
Global Indexes |
Current Level |
% Change |
|
| DJIA futures | 8,620.00 | + 0.74 | | S&P future | 908.10 | + 0.59 | | Nasdaq futures | 1,249.50 | + 0.12 | | FTSE 100 Index | 4,033.50 | - 4.31 | | CAC futures | 3,295.50 | - 5.03 | | DAX futures | 4,571.00 | - 4.62 | | SMI Futures | 5,948.00 | - 4.17 |
|
|
World Markets |
Current Level |
% Change |
|
| Crude wti | 66.75 | - 7.52 | | Gold | 729.70 | - 0.10 | | Silver | 9.57 | + 0.16 | | USD Index | 85.37 | + 1.64 | | VIX | 69.65 | + 31.14 |
|
|
Todays Calender |
Estimates |
Previous |
Country / GMT |
|
| No Major Events Scheduled | | | |
|
|
|
Currency Tech |
AUDUSD
R 3: 0.7355
R 2: 0.7239
R 1: 0.7076
CURRENT: 0.6674
S 1: 0.6540
S 2: 0.6496
S 3: 0.6331
EURJPY
R 3: 138.57
R 2: 136.39
R 1: 131.48
CURRENT: 127.40
S 1: 127.01
S 2: 126.43
S 3: 125.83
USDSGD
R 3: 1.5189
R 2: 1.5086
R 1: 1.4993
CURRENT: 1.4997
S 1: 1.4667
S 2: 1.4551
S 3: 1.4489
|
|
Market Brief |
The Usd extended yesterday’s rally into the current trading session, with unprecedented gains across the G10. The EurUsd fell over 200 pips to the high range of 1.28, while the UsdJpy slipped below the 100 level to 98 as risk aversion overtook the marketplace. The GbpUsd was the key story in the FX trading, as the pair declined nearly 850 pips over the last 2 days, putting the sterling at levels seen in September of 2003. The equity markets sank with the Dow down over 500pts at the close, which was consistent with performance overseas in the European indexes. Bond yields tightened substantially, with the 2yr in by 12bps and the 10yr in by 14bps, a pattern very apparent when Traders look for secure assets in volatile markets. The commodities sector experienced losses with oil down 7% to $67bbl, while gold slipped 5.7% to $729oz.
Monetary policy expectations and the recognition for a recession in Europe sparked a major sell off in the Euro as well as the Sterling. BoE Governor Mervyn King stated that “the UK was probably in a recession.” Further Interest rate cuts are expected which would put immense pressure on the currency. Our target for the cable has shifted to 1.55 against the dollar by year-end, our projection shifted further to the downside from previous expectations based on the fundamental economic conditions in the region. Further repatriation to US assets will strengthen the Usd, a recovery in the credit markets will be essential to stabilization in the financial system.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMUSA makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
|
|
Asian Session - Global Recession Fears Hit FX
October 22, 2008 9:57 AM CEST
|
|
G10 Advancers and Decliners vs USD |
| | JPY | 1.14 | | | CHF | -1.03 | | | CAD | -1.26 | | | DKK | -1.88 | | | EUR | -1.90 | | | AUD | -1.92 | | | NOK | -2.18 | | | NZD | -2.43 | | | SEK | -2.60 | | | GBP | -3.59 | |
|
|
Global Indexes |
Current Level |
% Change |
|
| Nikkei 225 Index | 8,674.69 | - 6.78 | | Hang Seng Index | 14,156.89 | - 5.87 | | Shanghai Index | 1,895.82 | - 3.20 | | FTSE 100 Index | 4,141.41 | - 2.08 | | CAC 40 Index | 3,379.79 | - 2.75 | | SMI Index | 6,079.75 | - 1.70 | | DJIA futures | 8,952.00 | - 0.91 |
|
|
World Markets |
Current Level |
% Change |
|
| Gold | 759.86 | - 1.58 | | Silver | 9.95 | - 1.52 | | VIX | 53.11 | + 0.26 | | Crude wti | 69.46 | - 3.74 | | USD Index | 85.60 | + 1.92 |
|
|
Todays Calender |
Estimates |
Previous |
Country / GMT |
|
| BoE Mins. (hold-cut 25bps-cut 50bps-cut 75bps) | -- | -- | UK / 8.30 | | Budget Balance, % of GDP (2007) | -0.6 | -0.6p | EZ / 9.00 |
|
|
|
Currency Tech |
AUDUSD
R 3: 0.7355
R 2: 0.7239
R 1: 0.7076
CURRENT: 0.6674
S 1: 0.6540
S 2: 0.6496
S 3: 0.6331
EURJPY
R 3: 138.57
R 2: 136.39
R 1: 131.48
CURRENT: 127.40
S 1: 127.01
S 2: 126.43
S 3: 125.83
USDSGD
R 3: 1.5189
R 2: 1.5086
R 1: 1.4993
CURRENT: 1.4997
S 1: 1.4667
S 2: 1.4551
S 3: 1.4489
|
|
Market Brief |
The Usd was significantly stronger in the Asian session, as Mervin King comments highlighted the markets fear of a global recession. The Usd and Jpy benefited from the panic stricken trading, while the rest of the G10 suffered. The EurUsd completely collapsed, trading from 1.3140 to 1.2750 session lows, while UsdJpy traded from 100.60 to 99.42. The cable came under extreme selling pressure, as GbpUsd traded from 1.6949 to 1.6203 (a whopping 7 big figure move). As to be expected, carry trades continued to be unwound as deleveraging carried into FX. Yesterday, Wall Street saw another volatile day, but ended up in the red with S&P -3.08%. Asian regional indexes are following the US lead, with the Nikkei -6.78%. Crude continued to sell-off and gold dropped right along side.
It was the dramatic statement by the Bank of England Governor King which triggered the recession feared selling.. He stated that the UK economy would enter its first recession in 16 years (“it now seems likely that the UK economy is entering recession”) and that the UK banking system was closer to failing than at any time since World War I.. In addition, he said the recapitalization of the financial sector would create stability, but there would be economic ramifications further down the line. In regard to the cable, King's words were unmistakably pessimistic: "unless the falls in capital flows are replaced by other forms of external finance, the adjustments in the trade deficit and exchange rate will need to be larger and faster than would otherwise have occurred." The Gbp dropped sharply on the back of these comments and we expect the Sterling to continue to come under pressure near term.
In Australia, CPI q3 headline was higher than expected at 5.0%% vs. 4.6% y/y. While this should prove to be the peak for inflation, as slowing growth (domestic and global) and lower commodity prices should keep inflation in check, the RBA will still have to keep their eye on price pressures. We currently are still expecting a 50bp cut in November.
In the European session, the MPC minutes will hold the markets' attention. These minutes encapsulate October’s meeting, which was bumped up a day and saw the MPC cut rates by 50bps in a coordinated move with the other central banks. Given the scenario, we expect the vote was unanimous (with perhaps Blanchflower voting for 75bps instead). In statement t flanking the rate decision was ardently dovish stressing the “decisive shift” from inflation to the “marked deterioration” in credit markets and the “substantial deterioration” in the domestic economic outlook As stated above, as markets adjusted to greater than expected cuts by central banks, we should see the Usd continued to strengthen with the Gbp & Eur coming under pressure.
|
|
ACM Advanced Currency Markets SA (hereinafter referred as ACM) is a professional financial intermediary, directly regulated by the Swiss Federal Department of Finance, Anti Money Laundering Control Authority. As forex specialist, ACM provides only currency trading via highly professional forex trading software. All customers are aware that this information or any part thereof has been prepared without taking account of your objectives, financial situation and/or needs. This information is not intended as personalized investment advice and does not constitute a recommendation. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. The analysis is based on the information which ACM finds reliable and accurate, but ACM does not assume any responsibility for any material nor for the transactions made on the basis of the information or the estimates of the analysis. ACM cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct, indirect and/or consequential loss arising from any use of this information, document or its content. All opinions and estimates constitute ACM analysis as of the data and are subject to change without notice. ACM does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions. Past performance is not a reliable indicator of future performance.
|
| |
|
|
| |
| |
|