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US Session-Usd Losing Momentum on Weak Economic Data
August 19, 2008 11:03 PM CEST
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G10 Advancers and Decliners vs USD |
| | Nok | 0.64 |  | | | Dkk | 0.57 | | | | Eur | 0.56 | | | | Chf | 0.50 | | | | Nzd | 0.42 | | | | Aud | 0.40 | | | | Jpy | 0.37 | | | | Cad | 0.30 | | | | Sek | 0.12 | | | | Gbp | 0.11 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 11,354.00 | - 0.02 | | S&P 500 Index | 1,268.30 | + 0.06 | | NASDAQ 100 Index | 1,920.00 | + 0.26 | | FTSE 100 Index | 5,332.50 | - 2.28 | | CAC futures | 4,340.00 | - 2.67 | | DAX Index | 6,306.00 | - 2.27 | | SMI Index | 7,112.00 | - 2.01 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 114.80 | + 1.71 | | Gold | 813.83 | + 1.72 | | Silver | 13.25 | + 1.49 | | USD Index | 76.84 | - 0.36 | | VIX | 21.28 | + 1.43 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 3: 0.8846
R 2: 0.8797
R 1: 0.8757
CURRENT: 0.8651
S 1: 0.8633
S 2: 0.8593
S 3: 0.8503
EURJPY
R 3: 164.41
R 2: 163.88
R 1: 163.10
CURRENT: 161.11
S 1: 161.01
S 2: 160.14
S 3: 158.61
USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4193
CURRENT: 1.4167
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819
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Market Brief |
The Usd declined in the US trading session based on increased credit concerns and lackluster economic data. The EurUsd rose nearly 100 pips to the high 1.47 level, while the UsdJpy slid 41 pips back to 109 on waning dollar strength. The GbpUsd made a slight move to the upside of roughly 23 pips, but could not trade through the 1.86 price. Equity markets declined in both Europe and the US as major banks are expected to incur further losses. Commodities added gains with oil at 114, and gold currently priced at 809. Bonds were mixed with the 2yr treasury tighter by 3bps and the latter end of the curve slightly wider with the 10 and 30yr yields up 2 and 3 bps respectively. The market is beginning to pullback bullish bets on the US economy, and the growing pessimism was reflected in dollar trading today.
German PPI rose 2.0% vs. 0.7% exp. which is evidentiary of rising inflationary pressure in the Eurozone. Price pressure is constraining consumer growth, which is in line with the recent trend of negative economic releases in the region. The ZEW Survey fell to -55.5 vs. the consensus figure of -62.0, this data supports the notion that weaker growth and rising prices of goods are likely to keep the Eurozone in a down cycle in the near-term. There were no economic releases scheduled for today, however the BoE is scheduled to meet tomorrow, and should offer more color as to what the central bank will do regarding the current financial situation in the region. We remain bearish on the cable going into the end of the year, as there is no indication that the UK economy will be able to pose a recovery in next few months.
US financial markets suffered as soft economic data was released in the housing sector, as well as inflation. Housing starts were marginally better than expected at 965k vs. an estimated figure of 960k. Housing starts fell to a 17 year low, which marks the continued deterioration that sector. PPI rose 0.7% vs. the consensus figure of 0.2%, which shows inflation at its highest level since 1981. Traders seem to be retreating from aggressive positions implying a sooner than expected recovery in the US. Looking at movements in treasuries, Bond Traders were building more bearish positions regarding the US economy for the last week. Traders should remain cautious as the trading environment is likely to remain volatile until the FOMC meeting in September. The willingness by the Fed to adjust monetary policy will provide more clarity as to when investors can look for a recovery in the US.
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Asian Session - BoJ Holds Steady
August 19, 2008 9:27 AM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 0.09 | |  | CAD | -0.32 | | | CHF | -0.39 | | | NOK | -0.51 | | | DKK | -0.53 | | | EUR | -0.54 | | | GBP | -0.61 | | | SEK | -0.62 | | | AUD | -0.79 | | | NZD | -1.00 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 12,865.05 | - 2.28 | | Hang Seng Index | 20,814.79 | - 0.54 | | Shanghai Index | 2,337.48 | + 0.75 | | FTSE futures | 5,457.00 | + 0.14 | | DAX futures | 6,390.00 | - 0.96 | | SMI Futures | 7,258.00 | + 0.26 | | DJIA futures | 11,485.00 | - 0.12 |
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World Markets |
Current Level |
% Change |
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| Gold | 785.75 | - 1.79 | | Silver | 12.60 | - 3.52 | | VIX | 20.98 | + 7.15 | | Crude wti | 111.87 | - 0.87 | | USD Index | 77.34 | + 0.28 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| ZEW Economic Sentiment Index (Aug) | -62.0 | -63.9 | GE / 9.00 | | Producer Price Index (Jul) | 0.6%(+9.3% | 1.8%(+9.2% | US / 12.30 | | Core Producer Price Index (Jul) | 0.2%(+3.2% | 0.2%(+3.0% | US / 12.30 | | Housing Starts (Jul) | 960K | 1,066K | US / 12.30 | | Index of all industry activity, % m/m | -0.5 | 0.4 | JP / 23.30 |
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Currency Tech |
AUDUSD
R 3: 0.8846
R 2: 0.8797
R 1: 0.8757
CURRENT: 0.8651
S 1: 0.8633
S 2: 0.8593
S 3: 0.8503
EURJPY
R 3: 164.41
R 2: 163.88
R 1: 163.10
CURRENT: 161.11
S 1: 161.01
S 2: 160.14
S 3: 158.61
USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4193
CURRENT: 1.4167
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819
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Market Brief |
The Usd was stronger in Asian session, as concerns over slowing growth persisted. The EurUsd traded lower from 1.4700 to 1.4651, the while UsdJpy rallied from mid day 109.69 lows to 110.24, as the day progressed. The AudUsd came under pressure, as RBA minutes showed the members did contemplate an "early reductions", which sent the pair from 0.8700 to 0.8635 and the NzdUsd followed falling, from 0.7172 to 0.7045. Concerns of a tropical storm directly impacting the gulf's oil production eased slightly overnight (although not completely clear just yet), while crude hovered around the $111.50bll mark, which was Usd supportive. Wall Street traded lower yesterday led by the financial sectors, as worries over Fannie and Freddie and larger then expected q3 losses scared investors. Asian stock markets are currently trading lower and European stock futures are pointing to a lower opening.
As was universally expected, the Bank of Japan decided to hold rates steady at 0.5%. The BoJ stated domestic demand could soften further and both downside risks to growth and upside risk to inflation remain intact. In addition, the assessment of the domestic economy was lowered again, as concerns growth hat weakness in the US (and weakness in general exports) will send Japan into a fully blown recession.
In Australia, the RBA minutes showed that members did consider an "early reduction" in rates. However, the concerns that elevated inflation could lead to rising wages kept the bank on hold. We believe that the overall tone of the minutes supports a September cut, but a stronger case can be made for 25bp then 50bp (roughly 70bp of cuts have already been price in this year).
European activity will be centered on the German ZEW. We are expecting continued deterioration and a surprise to the downside. Investors sentiment did tick up in August from a very low level, while current conditions are certainly under-pressure. However, from a macro perspective, ZEW has not been tightly correlated with GDP growth in the past, so any market reaction will be short lived.
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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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