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US Session: Stocks Close Out Week Strong, Dollar Rallies Against the Majors
October 31, 2008 10:17 PM CET
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G10 Advancers and Decliners vs USD |
| | Sek | 2.18 |  | | | Aud | 2.12 | | | | Chf | 1.90 | | | | Nok | 1.56 | | | | Nzd | 1.53 | | | | Dkk | 1.41 | | | | Cad | 0.99 | |  | Jpy | -0.11 | | | Eur | -1.46 | | | Gbp | -2.28 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 9,298.00 | + 0.78 | | S&P future | 967.30 | + 0.60 | | Nasdaq futures | 1,324.75 | - 1.51 | | FTSE futures | 4,378.50 | + 2.51 | | CAC futures | 3,469.50 | + 2.33 | | DAX futures | 5,079.00 | + 3.64 | | SMI Futures | 6,143.00 | + 4.54 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 68.03 | + 3.14 | | Gold | 724.55 | - 1.84 | | Silver | 9.85 | + 0.61 | | USD Index | 85.63 | + 1.27 | | VIX | 59.89 | - 4.79 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 3: 0.7355
R 2: 0.7239
R 1: 0.7065
CURRENT: 0.6584
S 1: 0.6555
S 2: 0.6339
S 3: 0.6009
EURJPY
R 3: 136.39
R 2: 131.49
R 1: 131.04
CURRENT: 123.04
S 1: 122.30
S 2: 121.40
S 3: 120.23
USDSGD
R 3: 1.5189
R 2: 1.5044
R 1: 1.4951
CURRENT: 1.4836
S 1: 1.4579
S 2: 1.4551
S 3: 1.4489
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Market Brief |
The dollar resurged in intraday trading posting strong gains against the majors as the risk aversion trend continues influence market movements. The EurUsd sunk 200 pips to the low range of 1.27, while the UsdJpy declined roughly 60 pips finding support at 98. The GbpUsd collapsed 360 pips to the high 1.60 price area on higher volatility. The equity markets rallied in the US and Europe with the Dow strengthening by 1.5%, while the FTSE picked up 2.00%. Commodities were mixed oil rising 3% to $67bbl and gold sliding 2% to $724oz. Bond yields were slightly tighter at the shorter end of the curve, while the latter end of widened 4bps.
Growth projections for the Eurozone declined amongst the major banks due to the deterioration in the current economic environment. We expect the ECB to lower rates 50bps to 3.25%, which is in line with the recent cut by the Fed. One component of relief was the Eurozone CPI reading which met expectations at 3.2%. A relief in inflationary pressure is conducive to generating consumer growth, which should become a global trend due to lower commodity prices. Fundamental and technical analysis is displaced from FX trading as the financial markets are being influenced by fluctuations in risk appetite. In the UK, consumer confidence fell to -36 vs. the previous reading of -32. This does not come as a surprise as the UK economy has struggled along with the rest of its peers in the G10. Wed hold a bearish position on the sterling looking for levels closer to 1.50 by year-end.
Fed Chairman Bernanke called for a govt. back stop on mortgage backed securities which gave investors in capital markets a bit of relief. On the economic front, personal income rose slightly better than expected to 0.2%, however personal spending declined -0.3% which is a severely low level. It is likely that monetary policy will ease below 1.00% as the central bank focuses on downside risks.
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.
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Asian Session – The Bank of Japan reluctantly slashes rates by 20bps to 0.3%, Yen up, Nikkei down.
October 31, 2008 10:04 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 1.29 | | | CAD | -0.82 | | | CHF | -0.88 | | | GBP | -1.29 | | | NOK | -1.39 | | | SEK | -1.65 | | | NZD | -1.67 | | | DKK | -1.71 | | | EUR | -1.76 | | | AUD | -1.88 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 8576.98 | - 5.01 | | Hang Seng Index | 13968.18 | - 2.52 | | Shanghai Index | 1728.78 | - 1.97 | | FTSE futures | 4271.5 | + 1.45 | | DAX futures | 4861 | - 0.81 | | DJIA futures | 9101 | - 1.36 | | Nasdaq futures | 1324.25 | - 1.54 |
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World Markets |
Current Level |
% Change |
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| Gold | 730.43 | - 1.04 | | Silver | 9.43 | - 3.67 | | VIX | 62.9 | - 10.09 | | Crude wti | 64.13 | - 2.77 | | USD Index | 85.87 | + 1.55 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| EURO Zone CPI | 3.3% | 3.6% | EUR / 10:00 | | EURO Zone Un-employment Rate | - | 7.5% | EUR / 10:00 | | CAD GDP | -0.3% | 0.7% | CAD / 10:30 | | US Personal Consumpion Expenditure - Deflator | 4.2% | 4.5% | US / 12:30 | | US Personal Spending | -0.2% | 0.0% | US / 12:30 | | US U. Of Michigan Confidence | 58 | 57.5 | US / 13:45 |
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Currency Tech |
AUDUSD
R 3: 0.7355
R 2: 0.7239
R 1: 0.7065
CURRENT: 0.6584
S 1: 0.6555
S 2: 0.6339
S 3: 0.6009
EURJPY
R 3: 136.39
R 2: 131.49
R 1: 131.04
CURRENT: 123.04
S 1: 122.30
S 2: 121.40
S 3: 120.23
USDSGD
R 3: 1.5189
R 2: 1.5044
R 1: 1.4951
CURRENT: 1.4836
S 1: 1.4579
S 2: 1.4551
S 3: 1.4489
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Market Brief |
The Nikkei 225 is down 5% this morning as the BoJ reluctantly cuts it’s interest rate for the first time in 7 years. The Yen reacted violently, gaining 1.3% against the dollar (dropping from 98.6 to 96.4 after the rate decision) and 2.0% against the Euro. The Yen then weakened after Japanese close, retracing to the 38.2% Fibonacci level. The Nikkei had risen 26% this week, the largest rise in almost 40 years on easing worries and repatriation, the losing 300 points in the last 10 minutes of trading before the 3 day weekend.
The BoJ came under harsh criticism in recent weeks as they failed to address the global and domestic economic slowdown by cutting rates. Their reluctance was all the more apparent in this morning’s rate decision as the policy board was split 4 – 4 on the need for easing. Eventually Governor Shirikawa cast the tie-breaking vote, opting for a 20bp cut.
The BoJ has been hesitant to join the global push to ease monetary policy as it has deemed it’s rates low enough. The decade high 0.5% rate was cut as a $51Bn Stimulus package (the second in a month) was announced – clearly indicating the severity of Japan’s situation. The government also – bearishly - reviewed it’s economic assessment outlook, stating the sluggish economy was here to stay for the next several quarters.
Japan’s situation is not isolated in the region. The MSCI Asia Pacific Index retreating 2.1% to 86.36. The Australian stock market was the only one to buck the asian trend this morning, rising 0.4% - the Aussie falling against all currencies. It’s interesting to note that the largest economy in the region was the last to cut rates after China, Hong-Kong and Taiwan cut rates this week. Australia and Europe expected to follow suit next week.
Japan is closed on monday,Tuesday being the day of the U.S Presidential Election. Will be interesting to see how markets will react on the run up to the election date, on the day and the aftermath.
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US Session: Equity Rally Continues While Dollar Mixed Against the Majors
October 31, 2008 12:34 AM CET
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G10 Advancers and Decliners vs USD |
| Jpy | -0.09 | | | Cad | -0.09 | | | Nok | -0.32 | | | Eur | -0.34 | | | Sek | -0.36 | | | Dkk | -0.36 | | | Nzd | -0.40 | | | Gbp | -0.40 | | | Chf | -0.41 | | | Aud | -0.88 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 9,201.00 | - 0.27 | | S&P future | 958.30 | - 0.33 | | Nasdaq futures | 1,340.25 | - 0.35 | | FTSE futures | 4,271.50 | + 1.43 | | CAC futures | 3,390.50 | + 0.04 | | DAX futures | 4,900.50 | + 2.08 | | SMI Futures | 5,876.00 | - 0.24 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 65.96 | - 2.28 | | Gold | 738.85 | + 0.10 | | Silver | 9.77 | - 0.26 | | USD Index | 84.56 | - 0.61 | | VIX | 62.90 | - 10.09 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 3: 0.7355
R 2: 0.7239
R 1: 0.7065
CURRENT: 0.6849
S 1: 0.6625
S 2: 0.6339
S 3: 0.6009
EURJPY
R 3: 136.39
R 2: 131.49
R 1: 131.04
CURRENT: 130.09
S 1: 125.88
S 2: 121.40
S 3: 120.23
USDSGD
R 3: 1.5189
R 2: 1.5044
R 1: 1.4951
CURRENT: 1.4678
S 1: 1.4579
S 2: 1.4551
S 3: 1.4489
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Market Brief |
The dollar mostly flat behind another surge in equities as the recent trend trading based on extreme risk aversion may be starting to diverge. The EurUsd fell 48 pips to the mid-range of 1.28, while the UsdJpy rose over 100 pips to 98.60. The GbpUsd experienced losses putting the pair back below 1.64 at the mid 1.63 level. Equity markets soared nearly 200 pts on the Dow adding to an exceptionally strong week of trading. European stocks held ground with both the DAX and the FTSE higher by 1%. Bond yields increased 4bps on the 2yr and 11bps on the 10yr, which is common when risk appetite rises. Commodities were mixed with oil at $65bbl and gold at $739oz, which is evidence that risk aversion trade may be breaking apart considering the gains in equities.
Eurozone consumer confidence came in worst than expected at -24 vs. the consensus figure of -20. In addition, the business climate indicator deteriorated to -1.34 vs. the prior reading of -0.79. This data is consistent with weakening economic growth as producers and consumers alike are bracing for a serious slowdown. Data out of the UK was light, but the Sterling will probably fall further if Gfk consumer confidence declines more than estimated. US GDP dropped to -0.3%, which was better than projected but still negative. The appreciation in the dollar had an adverse effect on exports, and thus lowered overall GDP. Despite negative growth, the US financial markets were resilient in today’s session as investors and Traders continue to evaluate their risk tolerance.
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.
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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.
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