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US Session - Dollar Manages to Hold Strength
June 10, 2008 3:34 PM CEST
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G10 Advancers and Decliners vs USD |
| | CAD | 0.06 |  | | | AUD | 0.45 | |  | JPY | -0.59 | | | NZD | -0.79 | | | GBP | -0.93 | | | SEK | -0.98 | | | CHF | -1.09 | | | DKK | -1.12 | | | EUR | -1.13 | | | NOK | -1.57 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 14,021.17 | - 1.13 | | FTSE 100 Index | 5,849.50 | - 0.63 | | CAC 40 Index | 4,756.00 | - 0.87 | | DAX Index | 6,732.54 | - 1.23 | | SMI Index | 7,244.98 | - 1.21 | | DJIA futures | 12,198.00 | - 0.78 | | S&P future | 1,350.10 | - 0.98 |
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World Markets |
Current Level |
% Change |
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| Gold | 979.32 | - 1.59 | | Silver | 17.02 | - 0.52 | | VIX | 23.12 | - 1.86 | | Crude wti | 136.36 | + 1.45 | | USD Index | 73.40 | + 0.74 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 3: 0.9700
R 2: 0.9655
R 1: 0.9649
CURRENT: 0.9464
S 1: 0.9465
S 2: 0.9430
S 3: 0.9290
EURJPY
R 3: 167.75
R 2: 167.65
R 1: 167.10
CURRENT: 165.62
S 1: 164.90
S 2: 162.29
S 3: 161.70
USDSGD
R 3: 1.3775
R 2: 1.3730
R 1: 1.3710
CURRENT: 1.3717
S 1: 1.3580
S 2: 1.3555
S 3: 1.3470
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Market Brief |
The Usd sustained strength in the European session, spurred mostly by hawkish commentary by Fed Chairman Bernanke. Investors are increasing bets that the Fed will raise rates before the end of the year. US Equity futures are trading lower across the board with oil moving higher to 137 solidifying the inflationary worries cited both the Fed and ECB. Bonds fell to the lowest levels in over a decade. 2yr treasury yields widened by 36bps and 2yr UK govt. bonds widened 33bps. Bond Traders have essentially priced in a rate hike, which could be a signal that the market expects a degree of appreciation in both the Usd and the Euro.
The Usd traded to 106.80 vs. the Jpy and 1.55 against the Eur. The actions which may be taken by Paulson and the G8 members who meet this weekend may give further clarity as to what may be done to stabilize the Usd. While the possibility of dollar weakness remains a concern in the near term, the beginning of a long term rally may be in the works considering the US economy continues to recover.
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Asian Session - Paulsons Comments Support Usd
June 10, 2008 10:02 AM CEST
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G10 Advancers and Decliners vs USD |
| AUD | -0.08 | | | GBP | -0.22 | | | SEK | -0.23 | | | NZD | -0.36 | | | CAD | -0.39 | | | CHF | -0.40 | | | NOK | -0.41 | | | JPY | -0.42 | | | EUR | -0.44 | | | DKK | -0.45 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 14,021.17 | - 1.13 | | Hang Seng Index | 23,404.96 | - 4.08 | | Shanghai Index | 3,072.28 | - 7.73 | | FTSE futures | 5,887.00 | - 0.53 | | DAX futures | 6,768.00 | - 0.80 | | SMI Futures | 7,338.00 | - 0.56 | | DJIA futures | 12,228.00 | - 0.54 |
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World Markets |
Current Level |
% Change |
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| Gold | 890.08 | - 0.31 | | Silver | 17.08 | - 0.17 | | VIX | 23.12 | - 1.88 | | Crude wti | 134.94 | + 0.43 | | USD Index | 73.16 | + 0.42 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Manufacturing Output (Apr) | 0.0%(0.0%) | -0.5%(+0.6 | UK / 9.30 | | Industrial Production (Apr) | 0.0%(+0.1% | -0.4%(+0.3 | UK / 9.30 | | CLG House Prices (Apr) | 3.4% | 5.2% | UK / 9.30 | | Trade Balance (Apr) | -$59.9bn | -$58.2bn | US / 13.30 | | Bank of Canada Rate Announcement | 2.75% | 3.00% | CA / 13.30 | | Int'l Merchandise Trade (Apr) | c$5.7 | c$5.5 | CA / 13.30 |
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Currency Tech |
AUDUSD
R 3: 0.9700
R 2: 0.9655
R 1: 0.9649
CURRENT: 0.9499
S 1: 0.9465
S 2: 0.9430
S 3: 0.9290
EURJPY
R 3: 167.75
R 2: 167.65
R 1: 167.10
CURRENT: 166.34
S 1: 164.90
S 2: 162.29
S 3: 161.70
USDSGD
R 3: 1.3775
R 2: 1.3730
R 1: 1.3710
CURRENT: 1.3671
S 1: 1.3580
S 2: 1.3555
S 3: 1.3470
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Market Brief |
Usd was stronger in Asian session as US policy makers increased their verbal intervention on the greenback behalf. EurUsd fell to 1.5559 from 1.5660 while UsdJpy rose to 106.80 from 106.20. Carry trade continued to perform well despite market uncertainly with EurJpy reach 166.50 and TryJpy climbed back towards 86.60 channel resistance. Commodity currencies fell with UsdCad rising to 1.0200 and the resilient AudUsd in heavy selling drop below the 22-MA to 0.9468.
After last weeks Bernanke bombshell US Treasury Secretary Paulson in a CNBC interview yesterday said that he " would never take intervention off the table or any policy tool off the table”. In addition NY Fed President Geithner stated the Fed paid “very close attention” to the Usd. The perception that the US officials have shifted their policy regarding the foreign exchange markets, moving from a relaxed attitude to orderly steering, help the Usd to appreciate offseting the effects of inflationary pressures. This shift unsettled the FX market and gave the Usd a temporary boost.
US markets ended the day in mixed fashion on Monday, following a volatile day of trading. Sector performance was marked on the day, with five sectors up and five down. Energy (+2.7%) experienced a strong bounce, despite crude succumbing to profit-taking on the day, taking it to roughly $134. Asian stocks were lower this morning, with the Nikkei down 1.2%, the Hang Seng down 3.6% and the MSCI A-P down 2.0%. China's market fell to a 14-month low, as the central bank told lenders to set aside record levels of reserves, to curb rampant growth and inflation. Japan's 5-year bond fell the most in nearly two months on more comments from Fed speakers regarding the need for tighter global monetary conditions
During a prescheduled speech in early Asia, Bernanke sounded very hawkish stating the Fed would resist long term price erosion. As to the commodity boom and specifically the price of oil, he underlined that it had caused an increase awarenesss among the Bank's management on inflation expectations. However he also noted that higher commodity prices spillover into broader prices had been limited so far. Perhaps the biggest market moving comment was his statement that the rise in unemployment rate has not significantly changed th economic condition in the US.
Japan's machine orders m/m rose 5.5% vs 3.0% exp, signaling an increase in capital spending after 2 consecutive negative months. However, the manufacturing sector still looks flat and is facing severe headwinds in slowing global demand and higher commodity prices. FX markets shrugged off the slightly encouraging news and continued to sell Jpy.
Despite wide expectations for a gloomy figure the UK BRC Retail Sales Monitor y/y rose 4.6% vs. -1.0% exp. In addition RIC House Prices also bet the street coming in at -92.9% vs. -97.0% exp. However the good figures did little to support the falling Gbp.
In the UK we will be watching the pending home sales which rebounded m/m 6.3% in April. Data for May will help clarify if the prior reading was a one off or if perhaps we are closer to the bottom than the market had originally anticipated. Either way we expect the Gbp to continue to come under pressure.
12.00gmt - MPC’s King Speaks
13.00gmt - Fed's Fisher speaks
13.30gmt - Fed's Mishkins speaks
15.00gmt - Us Trsy Paulson speaks
17.00gmt - ECB's Orphanides speaks
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