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US Session: FX Markets Rangebound After 50bps Cut by ECB
January 16, 2009 12:18 AM CET
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G10 Advancers and Decliners vs USD |
| | Cad | 0.91 |  | | | Aud | 0.80 | | | | Eur | 0.18 | | | | Dkk | 0.18 | | | | Gbp | 0.13 | | | | Chf | 0.12 | | | | Sek | 0.02 | | | | Nok | 0.02 | |  | Jpy | -0.08 | | | Cad | -0.08 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,183.00 | + 0.26 | | S&P future | 841.30 | + 0.24 | | Nasdaq futures | 1,181.50 | + 0.36 | | FTSE futures | 4,070.50 | - 1.45 | | CAC futures | 2,998.50 | - 1.79 | | DAX futures | 4,343.00 | - 2.37 | | SMI Futures | 5,320.00 | + 0.28 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 35.40 | - 5.04 | | Gold | 817.60 | - 0.02 | | Silver | 10.61 | + 0.01 | | USD Index | 84.44 | + 0.03 | | VIX | 51.00 | + 3.79 |
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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: 0.7142
R 2: 0.7042
R 1: 0.6820
CURRENT: 0.6587
S 1: 0.6562
S 2: 0.6490
S 3: 0.6294
EURJPY
R 3: 125.28
R 2: 121.86
R 1: 119.74
CURRENT: 116.17
S 1: 115.88
S 2: 114.41
S 3: 113.64
USDSGD
R 3: 1.5114
R 2: 1.5010
R 1: 1.4977
CURRENT: 1.4982
S 1: 1.4755
S 2: 1.4675
S 3: 1.4502
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Market Brief |
The trend of dollar strength persists due to the resurgence of the risk aversion trade. The EurUsd slipped 50pips to the low range of 1.31, while the UsdJpy rose a bit over 80pips testing 90 as a resistance level. The GbpUsd moved slightly lower at the mid range of 1.46, up only 38 pips in light trading. Equity markets were flat in the US, and marginally negative in Europe with both the Dow and SPX up less than 1%. Commodities were very active in today’s session, gold tested $800oz as a support level but has since recovered. Bond yields were mixed, but the 2yr may breach 0.7% putting the interest rate at an extremely low level.
The ECB lowered rates 50bps to 2.00%, which is the lowest rates have been on record. President Trichet stated that they are satisfied that inflation levels are below their target of 2.00%, but he also hinted that their next meeting should be uneventful. This may be a grave mistake as the ECB seems to be way behind the curve in terms of increasing systemic risk within the Eurozone economy. Swift aggressive action is needed to thwart a prolonged recession, or even a depression. With sovereign credit on watch on two EU countries, one which was downgraded, the pressure will mount for a coordinated bailout to stabilize the crisis. We expect to see further weakness in the Euro against the majors, particularly the Usd, Gbp, and Jpy.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off‐exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMUSA makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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Asian Session – ECB Rate Decision on the Docket
January 15, 2009 11:17 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.39 | | | | GBP | 0.24 | | | | SEK | 0.04 | | | CAD | -0.04 | | | EUR | -0.06 | | | DKK | -0.10 | | | NOK | -0.12 | | | CHF | -0.15 | | | AUD | -0.57 | | | NZD | -1.41 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 8,023.31 | - 4.92 | | Hang Seng Index | 13,242.96 | - 3.36 | | Shanghai Index | 1,920.21 | - 0.44 | | FTSE 100 Index | 4,148.56 | - 0.76 | | CAC 40 Index | 3,028.76 | - 3.34 | | DAX Index | 4,387.31 | - 0.79 | | DJIA futures | 8,136.00 | - 0.79 |
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World Markets |
Current Level |
% Change |
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| Gold | 811,75 | + 0.01 | | Silver | 10.48 | - 0.99 | | VIX | 49.14 | + 13.56 | | Crude wti | 36.65 | - 1.69 | | USD Index | 84.17 | - 0.30 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| ECB rate announcement, % | 2.00 | 2.50 | EZ / 12.45 | | PPI, % m/m | -2.0,-1.3Y | -2.2,0.4Y | US / 13.30 | | Core PPI, % m/m | 0.1,4.2Y | 0.1,4.2Y | US / 13.30 | | Initial jobless claims, thous (4wk mvg avg) | -- | 467 | US / 13.30 | | Empire manufacturing, index | -24.5 | -25.8 | US / 13.30 | | Philadelphia Fed index | -35.0 | -32.9 | US / 13.30 | | SNB Governing Board member Jordan speaks | -- | -- | SW / 16.00 | | FRB of Chicago President Evans (FOMC voter) speaks | -- | -- | US / 18.40 | | FRB of Atlanta President Lockhart (FOMC voter) spe | -- | -- | US / 18.40 | | FRB of San Francisco Yellen (FOMC voter) speaks | -- | -- | US / 19.30 |
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Currency Tech |
AUDUSD
R 3: 0.7142
R 2: 0.7042
R 1: 0.6820
CURRENT: 0.6587
S 1: 0.6562
S 2: 0.6490
S 3: 0.6294
EURJPY
R 3: 125.28
R 2: 121.86
R 1: 119.74
CURRENT: 116.17
S 1: 115.88
S 2: 114.41
S 3: 113.64
USDSGD
R 3: 1.5114
R 2: 1.5010
R 1: 1.4977
CURRENT: 1.4982
S 1: 1.4755
S 2: 1.4675
S 3: 1.4502
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Market Brief |
The Usd was range bound in the Asian session, as traders position themselves ahead of today's ECB rate announcement. The EurUsd bounced around the 1.3220 to 1.3140 levels, while the UsdJpy traded lower from 89.26 to 88.49. The AudJpy also slipped in choppy trading from 59.37 to 58.20. After a rough day on Wall Street, with the S&P closing down 3.34%, Asian regional indexes are all trading lower and Europe is not fairing much better. The much anticipated popping of the bond bubble seems to have been delayed. In yesterday's trading in the US, Trsy 10yrs yield plunged as US retail sales for December fell off a cliff. The smartest trade of 2009 will have to wait, as we expect 10yrs yield to fall around 1.5% by mid year.
The clear highlight of the day will be the ECB rate announcement. Currently, the markets have fully priced in a 50bp cut to 2.00%. Markets have recently noted ECB member’s cautious tone and we expect will be echoed in today's accompanying press conference. The Euro Zone industrial production figures (-1.6%) just cement our feeling that the ECB is underestimating the need to move lower quickly and we are concerned that the region will be one of the last to start the road to recovery. In our view, at the end of the day the ECB will have to embrace the terrible economic data and follow the Fed down to very close to zero.
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Us Session: Dollar Strengh Continues to Dominate Majors Ahead of ECB Monetary Policy Meeting
January 15, 2009 12:39 AM CET
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G10 Advancers and Decliners vs USD |
| | Jpy | 0.17 | | | | Cad | 0.10 | | | Nok | -0.06 | | | Gbp | -0.06 | | | Chf | -0.07 | | | Sek | -0.09 | | | Dkk | -0.10 | | | Eur | -0.11 | | | Aud | -0.11 | | | Nzd | -0.19 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,119.00 | - 0.49 | | S&P future | 832.50 | - 0.87 | | Nasdaq futures | 1,147.25 | - 1.57 | | FTSE futures | 4,130.50 | - 4.90 | | CAC futures | 3,053.00 | - 4.53 | | DAX futures | 4,448.50 | - 4.41 | | SMI Futures | 5,305.00 | - 3.03 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 37.28 | - 1.32 | | Gold | 812.00 | + 0.04 | | Silver | 10.62 | + 0.33 | | USD Index | 84.42 | + 0.18 | | VIX | 49.14 | + 13.57 |
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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: 0.7142
R 2: 0.7042
R 1: 0.6820
CURRENT: 0.6751
S 1: 0.6576
S 2: 0.6490
S 3: 0.6294
EURJPY
R 3: 126.52
R 2: 125.28
R 1: 121.86
CURRENT: 118.65
S 1: 115.88
S 2: 114.41
S 3: 113.64
USDSGD
R 3: 1.5114
R 2: 1.5010
R 1: 1.4942
CURRENT: 1.4853
S 1: 1.4755
S 2: 1.4675
S 3: 1.4502
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Market Brief |
The Usd held strong against major currency pairs ahead of the ECB rate decision scheduled to be announced tomorrow. The EurUsd ended flat trading near yesterday’s close of 1.31, while the UsdJpy was slightly lower at the high range of 88. The GbpUsd gained a bit over 100 pips to the low 1.46 level, and was the most active among the major currencies. Equity markets dropped substantially in the US and Europe with the Dow off as much as 248pts or 2.94%, and the FTSE lower by 218pts or 4.97%. Bond yields dropped further on increased buying at the earlier portion of the curve, 2yr fell to .70%. Commodities also dropped which was consistent with the trend of dollar strength and waning risk appetite. Oil fell 1.32% to $37bbl and gold also declined to $811oz which is in tandem with the overall trend of risk aversion.
The ECB is faced with a critical decision tomorrow which will have significant impact on Euro. FX Traders have already priced in a 50bps cut, but with the recent turn of events with S&P placing Spain and Portugal’s long term debt on credit watch and downgrading Greek sovereign debt, a deeper cut is necessary. Actual price action was sideways not seeing any serious momentum in either direction, but his typical ahead of any major monetary policy action. The global economic story continues to deteriorate placing increased pressure for aggressive govt. action through fiscal and monetary policy tools. Investors maintain a bearish stance on risk, and dollar strength should be resilient in this environment.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off‐exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMUSA makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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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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