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US Session: Rate Cut Euphoria Wearing Off Dollar Strength Crawling Back
December 19, 2008 12:31 AM CET
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G10 Advancers and Decliners vs USD |
| | Chf | 0.23 |  | | | Eur | 0.22 | | | | Sek | 0.19 | | | | Gbp | 0.16 | | | | Dkk | 0.15 | | | | Nok | 0.12 | |  | Nzd | -0.06 | | | Aud | -0.07 | | | Cad | -0.10 | | | Jpy | -0.12 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,699.00 | - 0.44 | | S&P future | 888.90 | - 0.40 | | Nasdaq futures | 1,218.50 | - 0.57 | | FTSE futures | 4,325.50 | + 0.44 | | CAC futures | 3,233.00 | - 0.31 | | DAX futures | 4,755.50 | + 1.03 | | SMI Futures | 5,526.00 | - 1.23 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 36.22 | - 9.59 | | Gold | 853.10 | + 0.02 | | Silver | 10.97 | - 0.09 | | USD Index | 79.47 | + 0.71 | | VIX | 47.34 | - 5.02 |
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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: 0.7519
R 2: 0.7231
R 1: 0.7145
CURRENT: 0.7082
S 1: 0.6990
S 2: 0.6895
S 3: 0.6818
EURJPY
R 3: 148.79
R 2: 142.10
R 1: 135.40
CURRENT: 129.15
S 1: 126.85
S 2: 125.42
S 3: 122.22
USDSGD
R 3: 1.5353
R 2: 1.4675
R 1: 1.4409
CURRENT: 1.4350
S 1: 1.4430
S 2: 1.4182
S 3: 1.4084
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Market Brief |
The dollar seems to be finding a level of support after a sharp decline against most of the majors earlier this week. The EurUsd dropped 145 pips to the high 1.42 price area, while the UsdJpy sky‐rocketed 233pips to the mid 89 level. The GbpUsd collapsed 500pips to the low range of 1.50, speculation is swirling around the extent the BoE will cut rates in the UK. Equity markets were mixed in Europe, and lower in the US. The Dow gave up 2.5% or 219pts, while the SPX also lost ground down roughly 2% or 19pts. Bonds yields failed to deviate from extremely low levels, with the 2yr at .676%, the 10 and 30yr are only 500bps well below average levels. Commodities were negative across the board with oil down nearly 10% at 36bbl, and gold also weaker at $851oz.
The Euro continued to surge against the dollar in the early part of the session, but the rally lost steam later in the day. German Ifo came in worst than expected at 82.6 vs. the consensus figure of 84. This is a significant data point of the Eurozone, and its low level may prompt the ECB to cut rates 50bps in Q12009. In the UK, retail sales were better than expected at 0.3% vs. the negative estimate of ‐0.6%. This data could not lift the Sterling, due to a statement released by Deputy Governor Charles Bean. “We have to recognize that it’s a possibility (cutting rates to 0%). The Bank rate, is still at 2%, so we have some margin to go yet, but of course we may find ourselves getting them all the way to near zero,” Charles Bean told the FT (Financial Times). Traders reacted aggressively to this statement and clearly the market felt the currency was overvalued pushing it drastically lower. We should remain cognizant of rate activity and further reform by the govt. to stimulate the economy as the FX market is returning to fundamentals.
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Asian Session: Yen declines and Oil drops below $40 despite Opec cutting by 2.2mbd.
December 18, 2008 11:21 AM CET
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G10 Advancers and Decliners vs USD |
| | NZD | 0.9851 | | | | CHF | 0.564 | | | | AUD | 0.472 | | | | CAD | 0.438 | | | | EUR | 0.366 | | | | DKK | 0.297 | | | JPY | -0.056 | | | NOK | -0.278 | | | GBP | -0.371 | | | SEK | -0.541 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 8667.23 | + 0.64 | | Hang Seng Index | 15413.13 | - 0.31 | | Shanghai Index | 2015.7 | + 1.97 | | FTSE 100 Index | 4324.19 | + 0.35 | | DAX Index | 4708.38 | - 0.46 | | Nasdaq futures | 1228.5 | - 1.01 | | DJIA futures | 8805 | + 0.27 |
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World Markets |
Current Level |
% Change |
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| Gold | 866.42 | - 0.17 | | Silver | 11.33 | - 0.61 | | VIX | 49.84 | - 4.83 | | Crude wti | 40.17 | + 0.28 | | USD Index | 78.858 | - 0.06 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| CAD Retail Sales | -1.1% | 1.1% | CAD / 13:30 | | CAD Leading indicators | -0.4% | -0.4% | CAD / 13:30 | | US Philly Fed | -40.5 | .39.3 | US / 15:00 |
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Currency Tech |
AUDUSD
R 3: 0.7519
R 2: 0.7231
R 1: 0.7145
CURRENT: 0.7082
S 1: 0.6990
S 2: 0.6895
S 3: 0.6818
EURJPY
R 3: 148.79
R 2: 142.10
R 1: 135.40
CURRENT: 129.15
S 1: 126.85
S 2: 125.42
S 3: 122.22
USDSGD
R 3: 1.5353
R 2: 1.4675
R 1: 1.4409
CURRENT: 1.4350
S 1: 1.4430
S 2: 1.4182
S 3: 1.4084
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Market Brief |
The yen retreats this morning against the majors – USDJPY trading at 87.84 after a low of 87.20 – a level not seen since 1995. Analysts continue to mull over how and what the BoJ can deploy in terms monetary policy to calm the Yen’s rise of late. The BoJ meets today for two days to discuss steps it can take – a further rate cut is definitely possible but economists remain skeptical on the impact such a cut would have. However, with the US and Switzerland lowering their rates drastically close to 0%, Japan is no longer the major economy with the lowest interest rates. The government also announced that it is considering expansion of public works projects, which could have a higher multiplier effect than the fixed-sum tax cuts previously announced as an economy booster.
The Dollar fought back in Asian trading – EURUSD trading to an intraday low of 1.4347 before gaining again as spill off from the largely better than expected Swiss retail sales – the Swissy gaining 150pips on the back of that news. German IFO number was lower than consensus and the lowest since 1982 – highlighting the seriousness of the current recession.
Crude slid below the $40, this despite OPEC announced a cut of 2.2mbd in it’s output on weaker demand. This has a profound effect on industrial stocks in Asia – “the world’s workshop”. Stocks rose as excepted further cuts in interest rates and lower crude prices are positive signs for the difficult 2009 session ahead. These factors will prove crucial to stimulate the ailing manufacturing economies.
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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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