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US Session: BoE, ECB, and RBNZ Cut Rates as Expected, Dollar Strength Continues
December 04, 2008 11:48 PM CET
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G10 Advancers and Decliners vs USD |
| | Jpy | 0.79 |  | | | Nzd | 0.23 | |  | Chf | -0.19 | | | Eur | -0.32 | | | Dkk | -0.32 | | | Aud | -0.37 | | | Nok | -0.68 | | | Gbp | -1.00 | | | Cad | -1.15 | | | Sek | -1.71 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,535.00 | - 0.51 | | S&P future | 864.00 | - 0.52 | | Nasdaq futures | 1,150.00 | - 0.52 | | FTSE futures | 4,163.00 | - 0.30 | | CAC futures | 3,152.00 | - 0.46 | | DAX futures | 4,573.50 | - 0.21 | | SMI Futures | 5,628.00 | + 0.38 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 46.39 | - 0.86 | | Gold | 772.19 | - 0.23 | | Silver | 9.48 | - 2.17 | | USD Index | 86.96 | - 0.08 | | VIX | 61.42 | + 1.15 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 3: 0.6696
R 2: 0.6618
R 1: 0.6544
CURRENT: 0.6435
S 1: 0.6333
S 2: 0.6232
S 3: 0.6077
EURJPY
R 3: 123.67
R 2: 121.54
R 1: 119.45
CURRENT: 116.99
S 1: 116.43
S 2: 114.41
S 3: 113.64
USDSGD
R 3: 1.5529
R 2: 1.5436
R 1: 1.5345
CURRENT: 1.5281
S 1: 1.5265
S 2: 1.5109
S 3: 1.5052
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Market Brief |
The dollar was strong during the early part of the trading session, but has since lost steam against most of the majors. The EurUsd rose 75pips to the high range of 1.27, while the UsdJpy fell 73pips to the mid 92 price area. The GbpUsd is off its lows for the day at the mid 1.47 price level, following central bank activity in the region. Equity markets are negative in the US and Europe with the Dow down .80% or 69pts, while the FTSE and DAX closed marginally lower than the previous session. Bond yields are tightened across the curve with the 10 and 30 yr in significantly down to their lowest levels in 50 years. Commodities declined with the oil down 6.5% to $43bbl, and gold off nearly 1% to $766oz.
The ECB followed through with the 75bp cut, bringing rates to 2.50%. Eurodollar trading was choppy, mostly in sync with price trends on the equity side. Eurozone GDP came in negative and in line with expectations at ‐0.2%, growth risk will persists to be an issue going into 2009. In the UK the BoE slashed rates 100bps to 2.00% from 3.00%, acknowledging severe downside risks to growth. Both banks expressed a strong concern regarding the financial crisis, and a willingness to do what is necessary to weather the recession.
The big 3 (Ford, GM, and Chrysler) begged for $34bln in credit and loans from the US govt. They testified before a Senate committee today, but the outcome looks very unclear as the executive management has yet to prove that their failure would pose a systemic risk to the economy. Non‐Farm payrolls are set to be released tomorrow morning, and are expected fall over 300k. The dollar is likely to rally on this news, as investors and traders duck for cover through purchasing Usd denominated assets like treasuries.
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Asian Session: Mixed feelings in Asia - stocks decline after initial gains - on continued recession fears, possible GM bankruptcy and further central bank rate cuts.
December 04, 2008 10:22 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.1962 | | | | CHF | 0.1569 | | | EUR | -0.0394 | | | DKK | -0.0423 | | | NOK | -0.1689 | | | NZD | -0.2161 | | | CAD | -0.2829 | | | GBP | -0.4120 | | | SEK | -0.4748 | | | AUD | -0.5347 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 7924.24 | - 1.00 | | Hang Seng Index | 13611.49 | + 0.17 | | Shanghai Index | 2001.504 | + 1.84 | | FTSE futures | 4146 | + 1.38 | | DAX futures | 4587 | - 0.50 | | DJIA futures | 8464 | - 1.05 | | Nasdaq futures | 1158.25 | + 2.03 |
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World Markets |
Current Level |
% Change |
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| Gold | 765.26 | - 1.12 | | Silver | 9.5 | - 1.96 | | VIX | 60.72 | - 3.59 | | Crude wti | 45.83 | - 2.05 | | USD Index | 87.051 | + 0.02 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| EURO ZONE GDP | -0.2% | -0.2% | EUR / 10:00 | | Bank of England Rate Decision | 2.00% | 3.00% | GBP / 12:00 | | ECB rate decision | 2.75% | 3.25% | EUR / 12:45 | | US Initial Jobless claims | 540K | 529K | US / 13:30 | | US Fed Chairman Bernanke Speaks | - | - | US / 16:15 |
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Currency Tech |
AUDUSD
R 3: 0.6696
R 2: 0.6618
R 1: 0.6544
CURRENT: 0.6435
S 1: 0.6333
S 2: 0.6232
S 3: 0.6077
EURJPY
R 3: 123.67
R 2: 121.54
R 1: 119.45
CURRENT: 116.99
S 1: 116.43
S 2: 114.41
S 3: 113.64
USDSGD
R 3: 1.5529
R 2: 1.5436
R 1: 1.5345
CURRENT: 1.5281
S 1: 1.5265
S 2: 1.5109
S 3: 1.5052
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Market Brief |
Risk aversion remains strong as doom and gloom rules the markets. The announced rate cuts by the BoE and ECB today only exacerbates the feeling that Central banks are increasingly helpless in the face of recession. Asian stocks decline slightly after a strong start to the trading session on Thursday. Shanghai and HangSeng stocks were positive as Beijing announced it was ready to inject further stimuli to offset the downward pressure on the economy. While risk appetite has somewhat returned to the trading floors of the world, continued repatriation of funds leads the Yen and Dollar higher.
Thailand resumes air-traffic from it’s two main Airports as PAD demonstrators revel in their victory in obtaining a dissolution of the countries three main parties and political disbandment of it’s ephemeral prime-minister Somchai. The Thai central bank slashed rates as it predicted a greatly reduced growth outlook for 2009. The same action was taken by the monetary authorities in Wellington, NZ – cutting by a massive 1.5% to a 5 year low of 5%.
The EURUSD traded a volatile session yesterday which saw the dollar rise, led on by the robustness of the U.S Stock markets – which closed higher despite a plethora of negative economic data. The dollar gave back it’s gains in early Asian trading, from 1.2660 level to 1.2690 only to continue it’s bullish run against the majors into the European trading session.
The Yen has bucked the trend lately, near zero interest rates and unwinding of the carry trade pushing the USDJPY into 92.60 territory – levels not seen since June 1995.
The continuing debacle on Capitol hill over the “Big Three” U.S Automakers has the whole industry in panic as they ask for a cumulated $34Bn - $9Bn more than what was initially discussed. Sources say that GM and co. could accept a pre-ordained bankruptcy to be able to benefit from TARP funds. In any case, it is now evident that the whole U.S Car industry will have to be drastically revamped and re-designed – large job cuts are certainly on tap in the near future, a situation which can only be detrimental to an already weak US and global economy.
Commodity prices continue to slide, Crude down 2% yesterday to $45/bbl, while gold follows suit – trading at $765 levels. The immensely strong dollar crippling the prospects of mining and resource stocks.
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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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