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US Session-Dollar Slide Gives Way to a Rally in Oil
August 21, 2008 6:59 PM CEST
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G10 Advancers and Decliners vs USD |
| | Cad | 1.41 |  | | | Jpy | 1.36 | | | | Chf | 1.15 | | | | Nok | 1.15 | | | | Sek | 1.08 | | | | Eur | 0.85 | | | | Dkk | 0.85 | | | | Nzd | 0.79 | | | | Gbp | 0.68 | | | | Aud | 0.55 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 11,360.00 | - 0.40 | | S&P 500 Index | 1,270.50 | - 0.26 | | NASDAQ 100 Index | 1,896.25 | - 1.03 | | FTSE 100 Index | 5,384.00 | - 0.12 | | CAC 40 Index | 4,317.50 | - 1.28 | | DAX Index | 6,268.50 | - 1.19 | | SMI Index | 7,007.00 | - 1.32 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 120.65 | + 4.41 | | Gold | 833.06 | + 2.38 | | Silver | 13.75 | + 3.89 | | VIX | 20.20 | - 1.08 | | USD Index | 76.17 | - 1.03 |
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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: 0.8750
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: 161.04
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: 1.4102
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819
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Market Brief |
The Usd declined in the early trading session due increased concerns regarding major institutions in the financial sector. The EurUsd rose 44 pips to the high 1.47 level, while the UsdJpy dropped substantially to the mid 108 price. The GbpUsd increased over 80 pips to trade with 1.87 handle based on dollar weakness. Equity markets opened lower in the US, and continue to trade down in Europe. Investors are migrating back into more secure assets in the form of US treasuries or other govt. securities as a form of risk aversion. Commodities rallied strong with oil trading higher at 120 and gold at 838 both are up 3% based on uncertainty on the situation in Russia, as well as a retraction in dollar momentum.
Eurozone PMI rose to 48.2 vs. the consensus figure of 48.0, and while the reading was better than expected it is still below 50.0, which implies that businesses are in a mode of contraction. The German Finance Ministry stated that the recent string of weak economic data infers that the “economy is likely to lose vitality.” With decreasing inflationary expectations and weaker growth projections, the market sentiment towards the Euro should remain bearish in the near-term. UK retail sales came in better than expected at 0.8% vs. the estimated figure of 0.2%. The cable gained over 100 pips following the data release, but with the severe deterioration in the housing sector, consumer spending is likely to remain depressed for the next several months. UK GDP is scheduled to be released on Friday, the reading is projected to marginally higher at 1.6%, a disappointing result will be devastating for the cable, and Traders will be watching this number closely.
The recent trend of weaker commodities and dollar strength has seen a dramatic shift. Despite higher than expected gas inventories, and relatively light hurricane season thus far, oil advanced back to the 120 level. There is a growing sect of the market that is becoming increasingly bearish on the Usd. Investors are shaken by speculation that Lehman is on the brink of collapse, and that the Fed will have to bailout Fannie and Freddie. Leading economic indicators fell -0.7% vs. -0.2% solidifying the notion that the down cycle may persists longer than expected. Stabilization in the credit markets and stronger economic data will be needed to support a long-term rally.
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Asian Session - JPY Gains As Worries Grow
August 21, 2008 9:26 AM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 1.00 | | | | EUR | 0.87 | | | | NOK | 0.86 | | | | SEK | 0.86 | | | | DKK | 0.83 | | | | NZD | 0.80 | | | | CHF | 0.80 | | | | CAD | 0.65 | | | | GBP | 0.55 | | | | AUD | 0.45 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 12,752.21 | - 0.77 | | Hang Seng Index | 20,558.73 | - 1.78 | | Shanghai Index | 2,458.51 | - 2.56 | | FTSE futures | 5,390.50 | + 1.08 | | CAC futures | 4,349.50 | - 0.59 | | SMI Futures | 7,101.00 | - 0.15 | | DJIA futures | 11,360.00 | - 0.40 |
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World Markets |
Current Level |
% Change |
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| Gold | 821.28 | + 0.93 | | Silver | 13.33 | + 0.74 | | VIX | 20.42 | - 4.01 | | Crude wti | 116.83 | + 1.09 | | USD Index | 76.64 | - 0.41 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| PMI Services (Aug Prov.) | 48.0 | 48.3 | EZ / 8.00 | | PMI Manufacturing (Aug Prov.) | 47.0 | 47.4 | EZ / 8.00 | | PMI Composite (Aug Prov.) | 47.7 | 47.8 | EZ / 8.00 | | GDP (Q2) (q/q) | +0.4% | +0.2%(+3.7 | NO / 8.00 | | Retail Sales (Jul) | -0.2%(+1.8 | -3.9%(+2.2 | UK / 8.30 | | Business Investment (Q2 Prov.) | -0.7%(+3.1 | -1.8%(+4.5 | UK / 8.30 | | CPI y/y | 3.4% | 3.1% | CA / 11.00 | | BoC core CPI (Jul) | 1.6% | 1.5% | CA / 11.00 | | Initial Jobless Claims (Aug 16th) | 440K | 450K | US / 12.30 | | Philly Fed Index (Aug) | -12.6 | -16.3 | US / 15.00 | | Index of Leading Indicators (Jul.) | -0.2% | -0.1% | US / 15.00 |
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Currency Tech |
AUDUSD
R 3: 0.8846
R 2: 0.8797
R 1: 0.8757
CURRENT: 0.8750
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: 161.04
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: 1.4102
S 1: 1.4025
S 2: 1.3891
S 3: 1.3819
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Market Brief |
The Usd was weaker across the board in the Asian session, as continued concerns over Fannie and Freddie weight on sentiment. The EurUsd climbed from 1.4741 to 1.4812, while the UsdJpy fell sharply from 109.90 to 108.79. The GbpUsd traded in a 1.8620 to 1.8669 range, before breaking out in late session trading. The Jpy fueled carry trades continued to come under selling pressure, as risk aversion has crept back, with the EurJpy trading down to 161.07 and the AudJpy to 95.06. Wall Street closed in the black, but Asian regional indexes have been unable to hold on to the positive momentum, with loses across the board. European stock indexes are all pointing to a lower opening, with the exception of the FTSE. Crude & Gold continued to gain ground (pressuring Usd) with wti trading at $116.83bll and gold up 0.93% to $821.28oz.
The Japanese trade balance was only 91.1bn vs. 234.9bn exp, as import value grew (18.2% y/y) driven by oil related-price increases. It's interesting to note that exports to Asia grew, while US and Europe destined exports remained weak. Machine Tool Orders dropped -8.9% vs.
-8.9% prior reading.
On the continent, the market will be watching Eurozone's PMI surveys for continued evidence of deteriorating business activity. Should the figures come in line with market expectations, this will suggest that the region is in the midst of a technical recession. Sharp declines were printed in July for both manufacturing and service PMI for the second consecutive month.
In the UK, the market will be focused on Retail Sales. With CBI's falling off the map to lows not seen since 1983 and with the BRC's measure that also fell, we expected retail sales to follow…however not to dire levels.
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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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