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Strong Economic Data out of the US Reverses Losses
July 25, 2008 8:29 PM CEST
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G10 Advancers and Decliners vs USD |
| | Nok | 0.33 |  | | | Gbp | 0.20 | | | | Sek | 0.21 | | | | Eur | 0.12 | | | | Dkk | 0.11 | | | | Chf | 0.11 | |  | Nzd | -0.06 | | | Aud | -0.14 | | | Cad | -0.41 | | | Jpy | -0.51 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 11,370.86 | + 0.19 | | S&P 500 Index | 1,257.14 | + 0.37 | | NASDAQ 100 Index | 2,303.59 | + 1.03 | | FTSE 100 Index | 5,352.60 | - 0.18 | | CAC 40 Index | 4,377.18 | + 0.67 | | DAX Index | 6,436.71 | - 0.06 | | SMI Index | 7,015.03 | - 0.59 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 123.39 | - 1.67 | | Gold | 928.45 | + 0.04 | | Silver | 17.39 | - 0.23 | | VIX | 22.62 | - 3.50 | | USD Index | 72.88 | - 0.07 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| New Home Sales | 503k | 512k | US/22:00 |
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Currency Tech |
AUDUSD
R 3: 0.9818
R 2: 0.9794
R 1: 0.9738
CURRENT: 0.9577
S 1: 0.9597
S 2: 0.9565
S 3: 0.9477
EURJPY
R 3: 171.81
R 2: 171.07
R 1: 169.97
CURRENT: 167.67
S 1: 168.25
S 2: 166.01
S 3: 165.33
USDSGD
R 3: 1.3826
R 2: 1.3717
R 1: 1.3661
CURRENT: 1.3591
S 1: 1.3452
S 2: 1.3399
S 3: 1.3300
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Market Brief |
The Usd traded lower early in the European session, but regained its losses on better than expected economic data. The EurUsd declined to the 1.56 price, while the UsdJpy rose to the high 107 level testing 108 as a point of resistance. The GbpUsd saw a strong rally early on, but most of the gains were erased after the dollar picked up strength, nevertheless the cable is still up slightly from yesterday’s close at 1.98. The Equity markets are positive in both the US and Europe based on a shift in market sentiment to the upside. Commodity markets are down, with oil at 123 and gold at 925, which relieves a degree of inflationary pressure from the global economy.
UK GDP came in line with expectations at 0.2%, which was the catalyst for the cable to rise in early trading. Considering the recent weakness in the UK economy, the market was surprised that GDP remained positive q/q. In commentary from the MPC meeting, the BoE expressed great concern regarding growth. The growth concerns seem to trump inflation for now, and we should look for a move to the downside in the cable. Our target for the GbpUsd is 1.94 by year-end, however will most likely to trade in a range of 1.98-2.00 in the near-term. Money supply growth contracted in the Eurozone to 9.5% vs. the consensus figure 10.3%. Loans to the private sector also declined to an all time low, with this data it will be very difficult for the ECB to hike rates again without doing further damage to the growth side of the Eurozone economy. We project the EurUsd to trade between 1.56-1.58 in the near-term, and expect the pair to fall near 1.50 closer to year-end.
The US financial markets saw a major turnaround based on several better than expected economic data points. Durable Goods orders came in at 0.8% vs. -0.3% exp, which gave a slight breadth of optimism in terms of production. In addition, U. of Michigan consumer confidence index rose to 61.2 vs. the prior reading of 56.6, showing that inflationary pressure faced by the consumer hasn’t fully eroded their financial outlook on the US economy. New Home Sales rose 27k to 530k which was a major relief for investors concerned about further deterioration in the housing market. Although foreclosures and delinquencies continue to rise, any bit of positive news in the housing sector provides more room for the dollar to pick up momentum.
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Asian Session - Usd Under Slight Pressure
July 25, 2008 10:17 AM CEST
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G10 Advancers and Decliners vs USD |
| | CHF | 0.42 | | | | JPY | 0.40 | | | | GBP | 0.23 | | | | EUR | 0.21 | | | | NOK | 0.20 | | | | SKK | 0.18 | | | | DKK | 0.16 | | | | CAD | 0.06 | | | AUD | -0.05 | | | NZD | -0.06 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 13,334.76 | - 1.93 | | Hang Seng Index | 22,640.15 | - 1.87 | | Shanghai Index | 2,939.20 | - 1.34 | | FTSE 100 Index | 5,326.00 | - 0.68 | | DAX Index | 6,389.42 | - 0.80 | | SMI Index | 7,001.75 | - 0.78 | | DJIA Index | 11,314.00 | - 0.34 |
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World Markets |
Current Level |
% Change |
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| Gold | 932.80 | + 1.14 | | Silver | 17.59 | + 0.70 | | Crude wti | 124.74 | + 0.24 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| GDP (q2 estimate) | 0.2%(1.6%) | 0.3%(2.3%) | UK / 8.30 | | Index of Services (may) | 0.3% | 0.3% | UK / 8.30 | | Durable Goods Order (jun) | -0.3% | 0.0% | US / 12.30 | | Core Durable Goods | -0.2% | -0.8% | US / 12.30 | | New Home Sales (jun) | 503k | 512k | US / 14.00 | | Univ. of Michigan Conf. Index | 56.4 | 56.6 | US / 14.00 |
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Currency Tech |
AUDUSD
R 3: 0.9818
R 2: 0.9794
R 1: 0.9738
CURRENT: 0.9577
S 1: 0.9597
S 2: 0.9565
S 3: 0.9477
EURJPY
R 3: 171.81
R 2: 171.07
R 1: 169.97
CURRENT: 167.67
S 1: 168.25
S 2: 166.01
S 3: 165.33
USDSGD
R 3: 1.3826
R 2: 1.3717
R 1: 1.3661
CURRENT: 1.3591
S 1: 1.3452
S 2: 1.3399
S 3: 1.3300
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Market Brief |
The Usd was slightly weaker in Asian session, as sell off in the equity markets and higher oil price put pressure on the greenback. The EurUsd traded in a 1.5640 – 1.5750 range while the UsdJpy traded from 107.98 down to 107.40. US economic data came in worse than expected, sending yields lower, S&P -2.3% and halting the growing sense of optimism surrounding the US. In addition, deterioration in the Eurozone, lead by a decline in the German IFO, increased speculation that the ECB has room to raise rate in the coming month. Crude prices rose to $124.75bll.
In Japan, CPI was broadly inline with expectations. Nationwide CPI increased by 2.0% vs. 1.9% exp and core rose by 0.1% vs. 0.0% y/y exp. While the rise on inflation will catch the BoJ attention, BoJ’s Mizuno warned yesterday that the government might say that Japan is in a recession and that the BoJ is more concerned with risk to growth than inflation.
In the UK, provisional estimate of GDP q2 will capture the market’s attention. We expect that the UK economy has come to a stand still and possible ground to a halt. With dismal reports for the critical services sector and recent drop in retail sales, the risk is to the downside. We should see continued selling pressure on the Gbp.
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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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