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US Session-Usd Moderately Stronger on Economic Weakness in Europe
August 20, 2008 10:20 PM CEST
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G10 Advancers and Decliners vs USD |
| | Aud | 0.23 |  | | | Nzd | 0.00 | |  | Cad | -0.03 | | | Sek | -0.05 | | | Jpy | -0.09 | | | Dkk | -0.22 | | | Eur | -0.22 | | | Nok | -0.29 | | | Gbp | -0.31 | | | Chf | -0.66 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 11,410.00 | + 0.48 | | S&P 500 Index | 1,274.00 | + 0.44 | | NASDAQ 100 Index | 1,916.00 | - 0.17 | | FTSE 100 Index | 5,385.50 | + 0.99 | | CAC 40 Index | 4,367.50 | + 0.63 | | DAX Index | 6,331.50 | + 0.40 | | SMI Index | 7,101.00 | - 0.16 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 114.98 | + 0.39 | | Gold | 811.68 | - 0.31 | | Silver | 13.26 | + 0.19 | | USD Index | 76.96 | + 0.16 | | VIX | 20.42 | - 4.04 |
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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: 0.8703
S 1: 0.8626
S 2: 0.8593
S 3: 0.8503
EURJPY
R 3: 163.88
R 2: 163.10
R 1: 162.39
CURRENT: 162.28
S 1: 160.88
S 2: 160.14
S 3: 158.61
USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4201
CURRENT: 1.4108
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819
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Market Brief |
The Usd gained against most of the G10 in the today’s trading session. The EurUsd fell approximately 50 pips to the low 1.47 level, while the UsdJpy rose 9 pips to the high 109 price. The GbpUsd fell 55 pips to the low 1.86 area, on the heels of BoE minutes citing weaker economic growth in the region. Equity markets were negative to flat in the US, as Traders position themselves for further losses from the housing and financial sector. European shares closed positive on strength in commodity stocks, Rio Tinto was gained 7.4% and BHP Billiton rose 6.7%. Oil rose as high as 117 today, but fell to 114 as stockpiles climbed 9.39mm to 305.9mm barrels, which is the largest move to the upside since 2001. Supply projections pointed to an increase of 1mm barrels in inventories, so the actual figure was much stronger than expected. Bond yields declined across the curve, with 2yr treasuries lower by 6bps. Risk appetite has decreased among investors due to concerns of additional bank failures, specifically Fannie Mae and Freddie Mac, as well as challenges arising from inflation.
The BoE voted to keep rates on hold at 5.00%, which was in line with expectations. The central bank recognized inflationary risk, but expressed greater concern regarding growth. Considering the crash in the housing sector, compressed consumer demand, as well as a stronger divergence between wages and prices, the BoE is in a tough position to raise rates in the near-term. The cable reacted in tandem with the pessimistic outlook from the BoE, hence why we remain bearish looking for trading a trading range between 1.85 and 1.87 for the remainder of this week. There were no economic data releases out of the Eurozone today, but the EurUsd traded lower on the negative sentiment regarding the financial outlook in Germany, one of the largest economies in the region. The Euro is likely to stay rangebound between 1.46-1.48, going into the latter end of the week as there has been no evidence to stabilize the currency price.
US Financial markets were volatile in anticipation of the gas inventory reading with oil soared early in the trading day, but returned to previous levels. Speculation surrounding a govt. bailout of Freddie and Fannie was also a major factor in price volatility earlier. The likelihood that govt. will step in to prevent a collapse in the GSE’s would imply further weakness in US Financials, and also decrease the probability for the Fed to raise rates before year-end. Gary Stern of the Minneapolis Fed pointed out that inflation concerns may be subsiding with the recent drop in oil prices. The majority of the market is pricing is looking for rates to remain unchanged, and thus the recent gains in the dollar seems to be based on the weakness abroad in Europe and Asia.
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Asian Session- Commodities and Shanghai Bounce Back
August 20, 2008 9:29 AM CEST
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G10 Advancers and Decliners vs USD |
| CAD | -0.02 | | | NOK | -0.13 | | | SEK | -0.19 | | | NZD | -0.21 | | | EUR | -0.25 | | | JPY | -0.25 | | | AUD | -0.25 | | | DKK | -0.26 | | | GBP | -0.28 | | | CHF | -0.40 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 12,851.69 | - 0.10 | | Hang Seng Index | 20,910.70 | + 2.08 | | Shanghai Index | 2,521.61 | + 7.55 | | FTSE futures | 5,332.50 | - 2.28 | | CAC futures | 4,365.50 | + 0.58 | | SMI Futures | 7,112.00 | - 2.01 | | DJIA futures | 11,384.00 | + 0.24 |
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World Markets |
Current Level |
% Change |
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| Gold | 815.23 | + 0.12 | | Silver | 13.33 | + 0.71 | | VIX | 21.28 | + 1.43 | | Crude wti | 114.99 | + 0.40 | | USD Index | 76.91 | + 0.08 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| BoE MPC Minutes (6th/7th Aug) | (1-7-1)(1- | (1-7-1) | UK / 8.30 | | M4 Money Supply (Jul Prov.) | 0.5%(+10.7 | 1.8%(+11.4 | UK / 8.30 | | CBI Industrial Trends Survey (Aug) | -12 | -8 | UK / 11.00 | | Retail sales, % m/m | 0.4 | 0.4 | CA / 12.30 | | Retail sales less autors, % m/m | 0.6 | 0.4 | CA / 12.30 | | Trade balance, ¥ bn | -- | 139 | JP / 23.30 |
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Currency Tech |
AUDUSD
R 3: 0.8846
R 2: 0.8797
R 1: 0.8757
CURRENT: 0.8703
S 1: 0.8626
S 2: 0.8593
S 3: 0.8503
EURJPY
R 3: 163.88
R 2: 163.10
R 1: 162.39
CURRENT: 162.28
S 1: 160.88
S 2: 160.14
S 3: 158.61
USDSGD
R 3: 1.4265
R 2: 1.4219
R 1: 1.4201
CURRENT: 1.4108
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819
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Market Brief |
The Usd was stable in the Asian session, despite the upside surprise in US PPI and slightly better than expected housing data. The EurUsd remained range bound between 1.4806 and 1.4742, and the UsdJpy traded between 109.90 and 109.62. Wall Street was lower yesterday lead by the financial sector and worries over Fannie and Freddie. Commodities bounced back with crude trading to $115.00bll, while gold rebounded back above $815oz. Asian regional stock indexes are surging with Shanghai higher by 7.55% and European indexes are poised to open higher with, the exception of the FTSE, down -2.28%.
The highlight of the European session will be the UK MPC minutes and we will see how close the BoE really is to raising rates. Judging from the price action of the Gbp, the markets are clearly expecting very dovish minutes echoing the dovish Inflation report. We expect the August vote to be identical to July's surprise vote, ie,7-1-1 (Tim Besley voting to raise rates). However, it is a bit astonishing that given the concerns over near term inflation stated in last weeks Inflation Report that in the same report would seem to endorse a rate move lower. There is considerable risk that, in light of the dovish Inflation Report, the market will view another 7-1-1 vote as slightly hawkish.
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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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