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US Session - Dollar Bulls Charge Forward
June 12, 2008 6:21 PM CEST
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G10 Advancers and Decliners vs USD |
 | CAD | -0.45 | | | NZD | -0.62 | | | EUR | -0.90 | | | DKK | -0.91 | | | GBP | -0.93 | | | JPY | -0.96 | | | SEK | -1.00 | | | CHF | -1.10 | | | NOK | -1.28 | | | AUD | -1.40 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 13,888.60 | - 2.07 | | FTSE 100 Index | 5,790.50 | + 1.17 | | CAC 40 Index | 4,672.30 | + 0.24 | | DAX Index | 6,714.52 | + 0.96 | | DJIA Index | 12,231.22 | + 1.22 | | S&P 500 Index | 1,348.19 | + 0.95 | | NASDAQ 100 Index | 2,422.83 | + 1.20 |
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World Markets |
Current Level |
% Change |
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| Gold | 861.78 | - 2.11 | | Silver | 16.40 | - 2.75 | | VIX | 22.82 | - 5.39 | | Crude wti | 132.71 | - 2.69 | | USD Index | 73.92 | + 0.96 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 3: 0.9655
R 2: 0.9648
R 1: 0.9527
CURRENT: 0.9341
S 1: 0.9304
S 2: 0.9290
S 3: 0.9220
EURJPY
R 3: 169.10
R 2: 167.65
R 1: 167.15
CURRENT: 166.43
S 1: 164.95
S 2: 162.30
S 3: 161.70
USDMXN
R 3: 10.5000
R 2: 10.4690
R 1: 10.4470
CURRENT: 10.3903
S 1: 10.3860
S 2: 10.3470
S 3: 10.2655
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Market Brief |
The Usd remained strong throughout the European session as the US market continues to show resilience with retail sales up more than expected at 1%. In addition, Business Inventories rose 0.5% in April, which was also better than expected. The Eurusd traded at $1.54 while UsdJpy continued to rise to 107.9. The GbpUsd is approaching our 1.93 target, currently trading at 1.94 as the dollar continues to push through previous support levels. Equity markets moved higher in Europe and the US, while volatility measured by the VIX is at its highest levels since April. Gold fell to 862 and oil dropped nearly $4.00 to $132.44. Bonds continue to sell off, as the spreads are widening across the curve from 2yr all the way to the 30yr treasuries signifying a positive shift in the US economy.
In the European session the BoE inflation attitudes survey rose to record levels at 4.3% up from 3.3%, and in the Eurozone industrial production came in higher than expected at 3.9% vs. 2.8% expected, allowing both the ECB and the BoE to stay on course to tighten rates next meeting.
US advanced retail sales was stronger then expected at 1.0% vs. 0.5% (less autos 1.25 vs. 0.7%) which increased speculation that the Fed now has some room to maneuver on growth. US weekly jobless claims jumped 25k to 384 a worse then expected figure which was ignored by the market.
Market speculation increased that the Fed is likely to raise rates in August giving investors further confidence in the Usd. The Fed continued to reiterate their hawkish stance on inflation as the Fed's Plosser stating that interest rates are supportive for growth and the Fed needed to stay watchful on the inflation front. This follows Vice Chairman Kohn hawkish tone stating that further patience is needed regarding oil prices, but a rise in long-term inflation expectations would be troublesome. With that said, there is some risk that the market may be overreacting to the recent rhetoric pertaining to the possibility for aggressive Fed tightening. As the dollar is likely to break the 1.50 level in the long term, we should look for consecutive quarters of economic growth to confirm that the dollar rally can be sustained. The G8 is scheduled to meet this weekend and Fed Chairman Bernanke is set to speak today at 10:30 EDT.
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Asian Session - Aud Employment Dips
June 12, 2008 9:20 AM CEST
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G10 Advancers and Decliners vs USD |
| NZD | -0.21 | | | CAD | -0.37 | | | JPY | -0.46 | | | GBP | -0.51 | | | CHF | -0.64 | | | EUR | -0.72 | | | DKK | -0.75 | | | SEK | -0.76 | | | NOK | -0.96 | | | AUD | -1.13 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 13,888.60 | - 2.07 | | Hang Seng Index | 22,771.34 | - 2.38 | | Shanghai Index | 2,960.58 | - 2.09 | | FTSE futures | 5,735.00 | - 1.94 | | CAC futures | 4,678.00 | + 0.35 | | SMI Futures | 7,176.00 | - 1.56 | | DJIA futures | 12,130.00 | + 0.25 |
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World Markets |
Current Level |
% Change |
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| Gold | 871.90 | - 0.96 | | Silver | 16.61 | - 1.51 | | VIX | 24.12 | + 4.05 | | Crude wti | 134.88 | - 1.10 | | USD Index | 73.66 | + 0.62 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| ECB Publishes Monthly Report (Jun) | -- | -- | EZ / 9.00 | | BoE/GfK NOP Inflation Attitudes Survey (May) | -- | 3.3% | UK / 9.30 | | Industrial Production (Apr) | 0.0%(+2.8% | -0.2%(+2.0 | EZ / 10.00 | | Import Price Index (May) | 2.5%(+17.2 | 1.8%(+15.4 | US / 13.30 | | Retail Sales (May) | 0.5% | -0.2% | US / 13.30 | | Core Retail Sales (May) | 0.7% | 0.5% | US / 13.30 | | Initial Jobless Claims (Jun 7th) | 370K | 357K | US / 13.30 | | Business Inventories (apr) | 0.3% | 0.1% | US / 15.00 |
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Currency Tech |
AUDUSD
R 3: 0.9655
R 2: 0.9648
R 1: 0.9527
CURRENT: 0.9369
S 1: 0.9304
S 2: 0.9291
S 3: 0.9221
EURJPY
R 3: 169.10
R 2: 167.65
R 1: 167.15
CURRENT: 165.84
S 1: 164.97
S 2: 162.27
S 3: 161.73
USDSGD
R 3: 1.3852
R 2: 1.3774
R 1: 1.3747
CURRENT: 1.3800
S 1: 1.3581
S 2: 1.3554
S 3: 1.3470
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Market Brief |
Usd was stronger in the Asian session as speculation grows that a stable US economy will allow the Fed to focus on containing inflation. The beige book reported yesterday that while US economic activity remains weak, there are patches of slow growth. EurUsd slipped to 1.5460 from 1.5560 and GbpUsd eased to 1.9560 from 1.9660. Jpy was mixed, with UsdJpy trading up to 107.38, while EurJpy sold off, falling to its intraday support of 165.90. Weak data from Australia caused a sharp fall, with AudUsd dropping quickly to 0.9380 from 0.9470.
Wednesday was a tough day for US equity markets, with the indices suffering concerted selling and nine of the ten sectors closing lower. Apart from Energy (+0.8%), 96% of stocks moved lower, as inflation concerns and further rises in commodity prices hammered stocks and sentiment alike. Crude rose over $5, to $137, as the inventory report showed a decline in stocks, while other commodities also jumped on supply concerns. Asian markets are unsurprisingly lower this morning, with the Nikkei down 2.1%, the Hang Seng down 2.2% and the MSCI A-P down 2.6%. Asian stocks followed their European and US counterparts, posting their biggest sell-off in three months.
US official policy makers continued with the hawkish rhetoric. The Fed's Vice Chair Kohn warned that a rise in long term inflation expectations would be a problem, while the Fed's Bullard commented that the FOMC need to get inflation under control this year. Both comments continued to give support to the Usd.
In Australia, employment fell by -19.7k vs. 13.5k exp (a significant departure from the first 4 months of the year). The softer reading dampened speculation that the RBA will increase rates near term, while erosion of the interest rate differential will continue to put pressure on the Aud (even while commodities prices stay supportive).
The BoJ started its two day monetary policy meeting despite still not having a full board. We expect the central bank to hold rates steady at 0.50% and believe they will continue to emphasize downward risk to growth over rising inflation fears. While risk aversion has picked up slightly, we don't believe any Jpy strength will be lasting, based on the rough macro conditions Japan is facing.
In the European session, markets will be watching euro-zone industrial production. A slight pickup is expected, however the increase should be short lived. Its becoming clearer that a strong Euro and global slowdown are beginning to take there toll on the sector. Both manufacturing PMI and Ec industrial sentiment indicators are at low levels, and a tight relationship with industrial products will weigh on the data.
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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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