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US Session: Economic Fundamentals Crumble Globally Markets Take Their Own Course
November 25, 2008 4:19 PM CET
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G10 Advancers and Decliners vs USD |
| | Sek | 1.67 |  | | | Jpy | 1.63 | | | | Cad | 1.04 | | | | Gbp | 0.86 | | | | Dkk | 0.73 | | | | Eur | 0.71 | | | | Chf | 0.57 | | | | Nzd | 0.36 | |  | Aud | -0.17 | | | Nok | -0.24 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 8,603.24 | + 1.89 | | S&P 500 Index | 868.94 | + 2.00 | | NASDAQ 100 Index | 1,472.45 | + 0.03 | | FTSE 100 Index | 4,196.14 | + 1.04 | | CAC 40 Index | 3,219.19 | + 1.48 | | DAX Index | 4,601.37 | + 1.03 | | SMI Index | 5,521.22 | + 1.00 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 52.49 | - 3.69 | | Gold | 820.10 | - 0.19 | | Silver | 10.44 | - 1.09 | | USD Index | 84.99 | - 1.27 | | VIX | 62.35 | - 3.63 |
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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: 0.6758
R 2: 0.6696
R 1: 0.6596
CURRENT: 0.6426
S 1: 0.6298
S 2: 0.6232
S 3: 0.6076
EURJPY
R 3: 131.04
R 2: 128.43
R 1: 126.21
CURRENT: 124.33
S 1: 119.54
S 2: 116.44
S 3: 115.00
USDSGD
R 3: 1.5684
R 2: 1.5436
R 1: 1.5345
CURRENT: 1.5153
S 1: 1.5055
S 2: 1.4965
S 3: 1.4875
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Market Brief |
Dollar weakness continues against most of the majors after yesterday’s sharp losses. The EurUsd gained 82pips to the low 1.30 price area, while the UsdJpy dropped 126pips to 96. The GbpUsd built strong momentum to the upside as the pair increased 100 pips approaching 1.53. Equities opened higher following a strong close on both European and US stock indexes in the previous trading session. Commodities experienced a light decrease from prior levels, with oil at $53bbl and gold at $826oz. Bond yields declined drastically with the 10 and 30yr tighter by 18bps, this has been atypical from the recent trends in risk aversion.
German GDP came in line with expectations at ‐0.5%, a negative reading confirming the current recession
has further longevity. In addition German Gfk consumer sentiment was higher than projected at 2.2 vs. 1.5. The recent data serves as evidence that inflation risks is far less a threat than further downside to growth. With that said, the ECB will be very cautious in easing rates too quickly to prevent their policy making tools from losing their impact, while exploring other options to stimulate the economy. The Eurodollar should carry out its rally as long as equities hold up in the US session, this correlation has clearly trumped all economic data releases. Once the trade breaks, we may be in store for a strong correction in the prices in major currency pairs.
In the US, GDP growth retracted ‐0.5%, which consistent with the market consensus. Outside of negative growth, the Case and Schiller Housing Index dropped to 161 from 164, adding more pressure to the consumer. Consumer confidence jumped to 44.9 beating estimates of 38, but still below a stable reading of 50. The US govt. bailout expanded into purchasing Asset Backed and Mortgage Backed Securities to relieve pressure from deteriorating balance sheets. Investors and Traders are still looking for a bottom, but the market sentiment has taken precedent from hard fact regarding the economy. Commentary from Paulson will have an effect on price behavior, as the market has become accustomed to public sector intervention to quell the financial crisis.
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Asian Session - Sentiment Improves on US Initiatives
November 25, 2008 9:45 AM CET
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G10 Advancers and Decliners vs USD |
| | SEK | 0.38 | | | | NOK | 0.16 | | | | DKK | 0.03 | | | EUR | -0.01 | | | JPY | -0.03 | | | CHF | -0.21 | | | GBP | -0.20 | | | CAD | -0.21 | | | NZD | -0.40 | | | AUD | -0.45 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 8,323.93 | + 5.22 | | Hang Seng Index | 12,779.65 | + 2.58 | | Shanghai Index | 1,888.72 | - 0.44 | | FTSE futures | 4,159.50 | + 1.41 | | DAX futures | 4,538.50 | - 0.87 | | SMI Futures | 5,455.00 | + 5.92 | | DJIA futures | 8,352.00 | - 0.93 |
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World Markets |
Current Level |
% Change |
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| Gold | 812.60 | - 1.10 | | Silver | 10.39 | - 1.61 | | VIX | 64.70 | - 10.96 | | Crude wti | 53.27 | + 10.05 | | USD Index | 86.10 | + 0.01 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| GDP (Q3 Final) q/q(y/y) | -0.5%,+0.8 | -0.5,+0.8p | UK / 6.00 | | GfK Consumer Confidence (Dec) | 1.5 | 1.9 | UK / 6.00 | | ECB’s Bini Smaghi on ECB’s view of Europe’s Econom | -- | -- | EZ / 7.45 | | GDP (Q3) q/q | 0.0% | +0.6% | NO / 8.00 | | Business Investment (Q3 Prov) | -1.9%(-2.2 | -1.0%(+1.2 | UK / 8.30 | | MPC Testifies to TSC on Inflation Report | -- | -- | UK / 8.45 | | GDP (Q3 2nd Est.) (q/q Ann.) | -0.5% | -0.3%p | US / 12.30 | | Case-Shiller National House Price Index (Q3) | -17.1% | -15.4% | US / 13.00 | | Conference Board Consumer Conf. Index (Nov) | 38.0 | 38.0 | US / 14.00 | | ECB’s Bini Smaghi in panel discussion on markets | -- | -- | EZ / 16.00 |
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Currency Tech |
AUDUSD
R 3: 0.6758
R 2: 0.6696
R 1: 0.6596
CURRENT: 0.6426
S 1: 0.6298
S 2: 0.6232
S 3: 0.6076
EURJPY
R 3: 131.04
R 2: 128.43
R 1: 126.21
CURRENT: 124.33
S 1: 119.54
S 2: 116.44
S 3: 115.00
USDSGD
R 3: 1.5684
R 2: 1.5436
R 1: 1.5345
CURRENT: 1.5153
S 1: 1.5055
S 2: 1.4965
S 3: 1.4875
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Market Brief |
The Usd was weaker in the Asian session, as risk appetite increased on the back of US initiatives. Wall Street's strong rally (lead by financials) carried over into Asia, as heavy risk buying is now driving down safe haven fx trades (Jpy, Chf, Usd). Yesterday's decision by the US Treasury, Fed and FDIC to support Citibank.. and the growing prospect of a second and more sizable fiscal stimulus being launched near term. was unmistakably being embraced by investors. In addition, President-elect Obama named his economic team, with NY Fed President Geithner as Treasury Secretary, Larry Summers will lead the National Economic Council and Christina Romer will run the Council of Economic Advisers, appointment which also has the markets support. Given the recent price action across asset classes, we see a positive trend in risk sentiment and traders should adjust strategies accordingly. The EurUsd traded to a high of 1.2959, while UsdJpy climbed to 97.43. Carry Trades initially rallied but failed to hold their positive momentum, as AudJpy traded up to 63.72 and then dropped to 61.51. Asian regional indexes are broadly higher, with the Nikkei up 5.22%, but European stock futures are pointing to a mixed open. Commodities are down slightly from yesterdayʼs strong rally, with crude wti trading at $53.27bll and spot gold $812.60oz. FX trading will be dominated by evolving global initiatives, which has been driving risk sentiment.
In European trading, markets we'll be watching out for the detailed release of German GDP (q3). While q2 was partly weather related, we expect todayʼs report (contraction of 0.5%) to be driven completely by deteriorating fundamentals. However, with Euro trading on more macro factors we donʼt expect this realization to have a significant effect of recent momentum.
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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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