|
|
US Session - Central Bank Fights to Balance Inflation and Growth
June 17, 2008 5:34 PM CEST
|
|
G10 Advancers and Decliners vs USD |
| | AUD | 0.15 |  | | | SEK | 0.14 | | | | CAD | 0.10 | | | | EUR | 0.08 | | | | DKK | 0.08 | | | | NZD | 0.02 | |  | JPY | -0.02 | | | CHF | -0.16 | | | NOK | -0.33 | | | GBP | -0.62 | |
|
|
Global Indexes |
Current Level |
% Change |
|
| Nikkei 225 Index | 14,348.37 | - 0.04 | | Hang Seng Index | 23,057.99 | + 0.12 | | FTSE 100 Index | 2,794.75 | + 1.78 | | SMI Index | 7,269.17 | + 0.47 | | DJIA Index | 12,241.32 | - 0.22 | | S&P 500 Index | 1,359.67 | - 0.03 | | NASDAQ 100 Index | 2,475.76 | + 0.04 |
|
|
World Markets |
Current Level |
% Change |
|
| Gold | 886.18 | + 0.42 | | Silver | 17.13 | - 0.24 | | VIX | 20.66 | - 1.38 | | Crude wti | 134.66 | + 0.03 | | USD Index | 73.56 | - 0.05 |
|
|
Todays Calender |
Estimates |
Previous |
Country / GMT |
|
| Industrial Production (apr) y/y | 4.9% | -4.9% | MX / 20.30 |
|
|
|
Currency Tech |
AUDUSD
R 3: 0.9648
R 2: 0.7527
R 1: 0.9490
CURRENT: 0.9422
S 1: 0.9304
S 2: 0.9290
S 3: 0.9220
EURJPY
R 3: 170.00
R 2: 169.10
R 1: 167.83
CURRENT: 167.61
S 1: 167.08
S 2: 165.52
S 3: 164.98
USDMXN
R 3: 10.4695
R 2. 10.4690
R 1: 10.3880
CURRENT: 10.31
S 1: 10.3110
S 2: 10.2860
S 3: 10.2190
|
|
Market Brief |
The dollar showed weakness in the European session due to a shift in market expectations that the Fed will most likely not raise interest rates. The EurUsd traded near the 1.55 level, while the dollar gained strength against the Jpy at 108.21. The GbpUsd fell below 1.95 to what appears to be a support level at 1.94 for the near-term. Both the European and US equity markets are trading higher, with the FTSE and DAX showing significant gains. Oil moved slightly lower trading at 134, while gold rose to 884. The bond markets continue to rally signaling that Traders are anticipating the Fed to hold rates at current levels next meeting.
German June ZEW came in much lower than expected at -52.4 vs. -41.4, which is the worst reading since the recession of 1993. Weaker growth expectations and an anticipated rate hike by the ECB contributed to the negative ZEW results. The market shrugged off the numbers out of Germany, which was shown in the limited price movement in the Eur. ECB’s Bini Smaghi said overnight that inflation a 25 bps hike should be sufficient to stabilize inflation in the Eurozone. With that said, energy prices remain a major factor for both future growth and inflation expectations. CPI rose in the UK to 3.3% up from 3.2% exp, which caused Mervyn King to write a letter to the Chancellor explaining that wage growth was stagnant, while nominal spending was consistent with the average of the last decade, thus lending to an environment of stable inflation. The BoE is less likely to make any changes in the form of monetary policy, which will push the cable through the 1.94 support level to our target of 1.93 in the mid-term.
The US Market is showing hints of recovery with higher than expected earnings from Goldman Sachs, but continued weakness in the macro-economy particularly the housing market. Housing starts were lower at 980k vs. 990k expected, while PPI rose to 1.40% as opposed to the consensus figure of 1.00%. While inflationary pressure remains issue in the US, the likelihood of a rate hike is becoming less and less realistic with little improvement in growth. Traders should be looking for the Fed to pause as the threat of a deep recession may be behind us, but several months of consecutive growth will be needed before we see the beginning of a true tightening cycle
|
|
Asian Session - Inflation Story Gains Traction
June 17, 2008 9:39 AM CEST
|
|
G10 Advancers and Decliners vs USD |
| | SEK | 0.56 | | | | NZD | 0.36 | | | | CHF | 0.31 | | | | EUR | 0.29 | | | | DKK | 0.26 | | | | GBP | 0.24 | | | | JPY | 0.23 | | | | NOK | 0.16 | | | | AUD | 0.14 | | | CAD | -0.04 | |
|
|
Global Indexes |
Current Level |
% Change |
|
| Nikkei 225 Index | 14,348.37 | - 0.04 | | Hang Seng Index | 23,028.55 | - 0.01 | | Shanghai Index | 2,797.48 | - 2.66 | | FTSE futures | 5,790.50 | - 0.33 | | DAX futures | 6,758.00 | + 0.46 | | SMI Futures | 7,242.00 | - 0.28 | | DJIA futures | 12,274.00 | + 0.12 |
|
|
World Markets |
Current Level |
% Change |
|
| Gold | 885.61 | + 0.36 | | Silver | 17.22 | + 0.35 | | VIX | 20.95 | - 1.27 | | Crude wti | 134.13 | + 0.12 | | USD Index | 73.44 | - 0.23 |
|
|
Todays Calender |
Estimates |
Previous |
Country / GMT |
|
| Consumer Prices (May) CPI | 0.4%(+3.2% | 0.8%(+3.0% | UK / 9.30 | | Consumer Prices (May) Core CPI | 1.5% | 1.4% | UK / 9.30 | | Consumer Prices (May) RPI | 0.4%(+4.2% | 0.9%(+4.2% | UK / 9.30 | | ZEW Economic Sentiment Index (Jun) | -42.5 | -41.4 | GE / 10.00 | | Trade Balance (Apr) s.a. | -0.5bn | -2.4bn | EZ / 10.00 | | Inst'l Securities Transactions (apr) | c$4.00 | c$5.296 | CA / 13.30 | | Current Account (Q1) | -$173.7bn | $172.9bn | US / 13.30 | | Producer Price Index (May) | 1.0%(+6.8% | 0.2%(+6.5% | US / 13.30 | | Core Producer Price Index (May) | 0.2%(+3.0% | 0.4%(+3.0% | US / 13.30 | | Housing Starts (May) | 980K | 1,032K | US / 13.30 | | Industrial Production (May) | 0.1% | -0.7% | US / 14.15 | | Industrial Production (apr) y/y | 4.9% | -4.9% | MX / 20.30 |
|
|
|
Currency Tech |
AUDUSD
R 3: 0.9648
R 2: 0.7527
R 1: 0.9490
CURRENT: 0.9421
S 1: 0.9304
S 2: 0.9210
S 3: 0.9220
EURJPY
R 3: 170.00
R 2: 169.10
R 1: 167.80
CURRENT: 167.54
S 1: 165.52
S 2: 164.95
S 3: 162.27
USDSGD
R 3: 1.3940
R 2: 1.3889
R 1: 1.3850
CURRENT: 1.3681
S 1: 1.3702
S 2: 1.3580
S 3: 1.3555
|
|
Market Brief |
USD was weaker across the board in the Asian session as elevated inflation figures, as per the E15 report, and lower housing data had markets concerned about US growth. EurUsd traded up sharply to 1.5460 from 1.5540 while UsdJpy slid lower to 107.80 from 108.28. Strong Yen buying put pressure on trades in turn Jpy carry trading dropped. AudJpy sold off to 101.50 from 102.05 and EurJpy dropped but was able to rally up to 167.60 on the back of Eur strength. EM Asia continues to perform well as UsdSgd traded down to a session (and 5 day) low of 1.3662.
Monday saw the US equity markets close in mixed fashion, as the NASDAQ moved higher, while the S&P500 ended flat and DJIA closed lower. Crude price action dominated headlines and sentiment, to some extent, as the price of crude first rose, then fell, closing at $134. Asian markets are near the unchanged mark this morning, with the Nikkei flat, as is the Hang Seng and the MSCI A-P (yes the markets are open!).
In late US session the US NAHB housing market index fell to 18 versus an expected number of 19 (following 19 in May). The market reacted by selling Usd as the Fed’s ability to fight inflation came into question. In addition, non-voting Fed member Lacker sounded less hawkish stating "Inflation expectations are higher than I would like, but they are stable,” however "the apparent stability of inflation does not justify complacency.” We are starting to get the feeling that the market has over reacted to the US inflation story and has increasingly expected EurUsd to trend upwards especially considering the fact that the ECB all but announced a hike in July to 4.25% in the June 5th press conference. In addition, the x factor oil, seems to be regaining forward momentum which will halt any real Usd gains (rumor of a production stoppage in the North Sea didn’t help and optimism around next weekends international summit on oil wanes).
In Australia, RBA minutes from the June meeting (hold at 7.25%) was consistent with previous communications, i.e. rates on hold with a tightening bias. The RBA’s current position is that demand growth is slowing which they hope will control inflation. The Central Bank will look to tighten further if there is an increase in wages or inflation expectations and pricing behavior increases. The market should be paying particular attention to near term data (May and June data was mixed) because it will direct the RBA higher which in turn will keep the Aud supported. However, the Aud will be highly sensitive to Usd sentiment.
German ZEW survey is expect to see a further erosion of investors sentiment partially caused by the highly probable ECB hike, a strong euro and slowing German exports. A significant deviation from the expected -41.5 figure should cause some Eur selling.
The UK market will be watching CPI inflation. The April reading jumped sharply to 3.0% from 2.5% so a move higher (3.1%) is highly probable. This would trigger another letter penned by BoE King to the Chancellor and keep MPC members hawkish. Overall the evolving inflation story should it stay consistent to our base of trending higher will keep the Gbp supportive near term.
|
|
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.
|
| |
|
|
| |
| |
|