|
|
Dollar Rangebound Based on Weakness in Financials
July 14, 2008 9:11 PM CEST
|
|
G10 Advancers and Decliners vs USD |
| | Aud | .63 |  | | | Cad | .41 | | | | Nzd | .40 | | | | Gbp | .29 | | | | Jpy | .16 | |  | Nok | -0.07 | | | Chf | -0.08 | | | Eur | -.15 | | | Dkk | -.14 | | | Sek | -.24 | |
|
|
Global Indexes |
Current Level |
% Change |
|
| Nikkei 225 Index | 13,010.16 | - 0.23 | | Hang Seng Index | 22,014.46 | - 0.77 | | Shanghai Index | 2,878.26 | + 0.76 | | FTSE futures | 5,296.00 | + 0.43 | | CAC futures | 4,126.00 | + 0.62 | | DAX futures | 6,218.00 | + 0.13 | | SMI Index | 6,682.00 | + 0.63 |
|
|
World Markets |
Current Level |
% Change |
|
| Gold | 971.93 | + 0.80 | | Silver | 19.10 | + 1.52 | | VIX | 28.68 | + 4.33 | | Crude wti | 144.71 | - 0.26 | | USD Index | 71.96 | - 0.19 |
|
|
Todays Calender |
Estimates |
Previous |
Country / GMT |
|
| Industrial Production | -1.9% | -2.3% | EUR/5:00 |
|
|
|
Currency Tech |
AUDUSD
R 3: 0.9923
R 2: 0.9792
R 1: 0.9718
CURRENT: 0.9678
S 1: 0.9597
S 2: 0.9546
S 3: 0.9477
EURJPY
R 3: 171.88
R 2: 170.00
R 1: 169.63
CURRENT: 169.28
S 2: 167.83
S 2: 167.13
S 3: 166.09
USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3729
CURRENT: 1.3554
S 1: 1.3553
S 2: 1.3506
S 3: 1.3470
|
|
Market Brief |
The Usd opened higher, but started to retract its gains later in the European session. The EurUsd is trading slightly lower than its previous close at 1.59. The UsdJpy is also a bit lower at 106.15, while the GbpUsd gained strength trading higher at 1.99. Equity markets closed higher in Europe across the board, based primarily on takeover activity and the recent decline in the stock markets abroad which left shares at its cheapest levels in several years. US markets opened higher, but fell soon after commodity prices rallied with oil rising to 145, and speculation that Merrill Lynch will have to sell additional assets ahead of earnings scheduled to be reported this week. Bond yields contracted, as traders started picking up treasuries amid concerns that the US financial markets may experience additional weakness.
Eurozone industrial production came in better than expected at -1.9% vs. -2.3%, but the reading remained negative which is representative of slowing economic growth. This data point lends to the notion that German GDP will be marginally positive. Considering rising inflation, the ECB will most likely raise rates once more before year-end, despite deteriorating economic conditions. Hawkish commentary by Trichet, combined with the likelihood that ECB will tighten, should keep the EurUsd rangebound at current levels between 1.57-1.60. In the UK, PPI rose 2.1% which is less than expectations, but still evidence that inflation persist to be an issue for the economy. It is most likely that the increased inflationary cost will passed to the consumer further inhibiting future spending. Although the cable made significant gains against the Usd in recent trading, the fundamentals point to a decline in Gbp over the long-term to a support level of 1.94.
The US markets remain under significant stress based on instability in the financial sector and rising commodity prices. The govt. agreed to support Freddie and Fannie, but speculation ahead of earnings for Merrill Lynch and Citigroup pushed the equities lower. The dollar responded negatively to the uncertainty ahead of retail sales and Core CPI scheduled to be reported tomorrow. The dollar found support around 1.59 in today’s trading, and will probably remain in at this level leading up to economic data announcements in the remainder of the week.
|
|
Asian Session - Paulson to the Resue
July 14, 2008 10:50 AM CEST
|
|
G10 Advancers and Decliners vs USD |
| | AUD | 0.11 | | | SEK | -0.08 | | | NOK | -0.08 | | | DKK | -0.12 | | | EUR | -0.13 | | | NZD | -0.14 | | | CAD | -0.18 | | | GBP | -0.20 | | | JPY | -0.45 | | | CHF | -0.50 | |
|
|
Global Indexes |
Current Level |
% Change |
|
| Nikkei 225 Index | 13,010.16 | - 0.22 | | Hang Seng Index | 21,983.15 | - 0.90 | | Shanghai Index | 2,878.26 | + 0.75 | | FTSE futures | 5,333.00 | + 1.12 | | CAC futures | 4,143.50 | + 1.04 | | SMI Futures | 6,693.00 | + 0.79 | | DJIA futures | 11,189.00 | + 0.83 |
|
|
World Markets |
Current Level |
% Change |
|
| Gold | 962.96 | - 0.12 | | Silver | 18.77 | - 0.26 | | VIX | 27.49 | + 7.42 | | Crude wti | 144.46 | - 0.42 | | USD Index | 72.12 | + 0.03 |
|
|
Todays Calender |
Estimates |
Previous |
Country / GMT |
|
| Producer Prices (Jun) Input | +2.6%(+29. | +3.8%(+27. | UK / 8.30 | | Producer Prices (Jun) Output | +1.2%(+6.5 | +1.6%(+8.9 | UK / 8.30 | | Producer Prices (Jun) Core | +0.8%(6.5% | +1.2%(5.9% | UK / 8.30 | | Industrial Production (May) s.a. | -2.3%(+0.3 | +0.9%(+3.9 | EZ / 9.00 | | CPI, % q/q | 1.4 (3.8 y | 0.7 (3.4 y | NZ / 22.45 | | RICS house prices, balance | -93.8 | -92.9 | UK / 23.01 |
|
|
|
Currency Tech |
AUDUSD
R 3: 0.9923
R 2: 0.9792
R 1: 0.9718
CURRENT: 0.9678
S 1: 0.9597
S 2: 0.9546
S 3: 0.9477
EURJPY
R 3: 171.88
R 2: 170.00
R 1: 169.63
CURRENT: 169.28
S 2: 167.83
S 2: 167.13
S 3: 166.09
USDSGD
R 3: 1.3850
R 2: 1.3827
R 1: 1.3729
CURRENT: 1.3554
S 1: 1.3553
S 2: 1.3506
S 3: 1.3470
|
|
Market Brief |
The Usd continued to come under significant selling pressure in Asian session as the bearish dollar sentiment carried over the weekend. EurUsd gapped at the open, quickly trading to 1.5971, however Gbp/Usd which rallied at the open was unable to sustain the upwards momentum and traded lower from 1.9914 to 1.9823. Commodity currencies traded basically sideways with Aud/Usd jumping between 0.9670 to 0.9711 and Usd/Cad moving slightly upward from 1.0070 to 1.0118. Jpy fueled carry trades performed slightly better as the Jpy had a weak tone. Aud/Jpy traded up to 103.21 and Try/Jpy moved to 87.624.
In a massive move to restore the markets confidence in Fannie and Freddie Trsy Sec. Paulson said that the US Federal government would buy or finance almost half of the $12 trillion of U.S mortgage market. Specifically, Pauslon stated, he would ask the Fed to increase credit lines extended to GSEs, seek Congressional approval to buy equity in the GSE's and expand the Feds role in defining the regulatory structure for the GSEs (specifically their future capital requirements). While the markets are still digesting the statement, a change of policy towards clear “bailout” by the government should help the equity market, risk appetite andUsd intraday
The BoJ began is two day monetary policy meeting today and are expect to hold rates at 0.50%.
New Zealand reported a dismal retail sales figure (m/m) at -1.2% vs. -0.1% exp. but grew Ex Autos 0.7% vs. 0.5% exp (likely lifted by food price inflation). Clearly higher energy cost, deteriorating economic expectations and weak labor market has wrecked consumer confidence and this downward trend doesn’t seem to be ending near term. Today’s poor growth figure will now place the emphasis on tomorrow CPI figure as a key factor to when the RBNZ begins cutting rates. Should the figure come in softer than the q/q 1.4% expected reading, we could see a decline unwinding of long NZD positions.
In a light calendar day markets will be watching UK Junes producer prices. It will be interesting to see if the decline in business activity has halted producer’s ability to pass on their increased costs. We don’t think so however, especially given the fact that energy has continued to move up and sustained these elevated levels for an extended period of time. Most likely, producers price increases are being pass to the consumer which the MPC won’t be happy about.
|
|
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.
|
| |
|
|
| |
| |
|