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US Session: Stocks Fail to Recover Globally and Dollar Maintains Strength
January 21, 2009 11:47 PM CET
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G10 Advancers and Decliners vs USD |
| | Nok | 2.25 |  | | | Sek | 1.98 | | | | Jpy | 1.58 | | | | Nzd | 0.52 | | | | Aud | 0.52 | | | | Cad | 0.16 | |  | Eur | -0.10 | | | Dkk | -0.15 | | | Chf | -0.94 | | | Gbp | -1.14 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,005.00 | + 0.76 | | S&P future | 814.30 | + 1.03 | | Nasdaq futures | 1,154.75 | + 0.63 | | FTSE futures | 4,042.00 | + 0.25 | | CAC futures | 2,920.00 | - 0.21 | | DAX futures | 4,291.00 | + 1.19 | | SMI Futures | 5,265.00 | + 0.36 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 42.41 | + 3.82 | | Gold | 853.19 | - 0.47 | | Silver | 11.31 | + 1.16 | | USD Index | 86.18 | - 0.04 | | VIX | 50.57 | - 10.73 |
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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: 0.7048
R 2: 0.6841
R 1: 0.6684
CURRENT: 0.6527
S 1: 0.6457
S 2: 0.6294
S 3: 0.6077
EURJPY
R 3: 125.28
R 2: 122.17
R 1: 118.82
CURRENT: 116.41
S 1: 115.30
S 2: 114.41
S 3: 113.64
USDSGD
R 3: 1.5339
R 2: 1.5265
R 1: 1.5120
CURRENT: 1.5041
S 1. 1.4956
S 2: 1.4805
S 3: 1.4759
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Market Brief |
The dollar loss steam at the end of the session as risk appetite shifted substantially in intraday trading. The EurUsd recovered nearly 130pips to the low range of 1.30, while the UsdJpy dropped 50pips finding support near 89. The GbpUsd gained 40 pips finding resistance near 1.40, slowly crawling back to stable levels after a landslide over the last several days. Equities started slow but amassed triple digit gain of 279pts in the Dow by the end of the session, a much needed lift after lack luster performance in the previous session. Bond yields rose in the US at the latter part of the session, but rates have plenty of room to go before they return to historical averages. Commodities were mixed with positive momentum in the energy sector, oil rose 8% to $44bbl while precious metals gave up light ground settling around $854oz.
The “Crisis-Response” plan mentioned by the Obama administration was enough to trigger a strong swing in risk appetite to the upside boosting the Euro and Sterling. Despite news that S&P proceeded to lower its ratings on Portugal’s long-term debt, the risk aversion trade held strong and buttressed major currency pairs against the dollar. A bit of light optimism regarding the economic outlook in the US, was enough to spark some bullish activity in the markets. Insider trades at Bank of America and JP Morgan, show a bit of confidence by senior management that the govt. plans will work. Watch the VIX and equity futures to gauge what the climate will be like tomorrow in the FX market, these are good barometers for fear (risk appetite).
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Asian Session - President Obama Fails to Inspire Markets
January 21, 2009 10:11 AM CET
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G10 Advancers and Decliners vs USD |
| | SEK | 0.37 | | | | JPY | 0.30 | | | NOK | -0.05 | | | CHF | -0.10 | | | EUR | -0.15 | | | DKK | -0.17 | | | CAD | -0.23 | | | NZD | -0.62 | | | AUD | -1.08 | | | GBP | -1.78 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 7,901.64 | - 2.03 | | Hang Seng Index | 12,726.10 | - 1.80 | | Shanghai Index | 1,975.68 | - 0.94 | | FTSE 100 Index | 4,091.40 | - 0.41 | | CAC 40 Index | 2,925.28 | - 2.15 | | SMI Index | 5,321.00 | - 1.12 | | DJIA futures | 7,992.00 | + 0.59 |
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World Markets |
Current Level |
% Change |
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| Gold | 851.31 | - 0.69 | | Silver | 11.21 | + 0.26 | | VIX | 56.65 | + 22.85 | | Crude wti | 40.58 | - 0.63 | | USD Index | 85.98 | - 0.27 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| ECB President Trichet speaks before the Committee | -- | -- | EZ / 9.30 | | BoE MPC minutes, vote | 9-0 | 9-0 | UK / 9.30 | | SNB Vice-Chairman Hildebrand speaks | -- | -- | SW / 17.30 | | PPI, % m/m | -1.0,4.3Y | -1.5,5.3Y | GE / 7.00 | | Average earnings, % 3m/y | 3.4 | 3.3 | UK / 9.30 | | Core average earnings, % 3m/y | 3.6 | 3.6 | UK / 9.30 | | Claimant count unemployment | 80.0 | 75.7 | UK / 9.30 | | PSNB, £ bn | 10.5 | 16.0 | UK / 9.30 | | NAHB housing market index | 9 | 9 | US / 18.00 | | Trade balance, ¥ bn | -278.0 | -223.4 | JP / 23.50 |
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Currency Tech |
AUDUSD
R 3: 0.7048
R 2: 0.6841
R 1: 0.6684
CURRENT: 0.6527
S 1: 0.6457
S 2: 0.6294
S 3: 0.6077
EURJPY
R 3: 125.28
R 2: 122.17
R 1: 118.82
CURRENT: 116.41
S 1: 115.30
S 2: 114.41
S 3: 113.64
USDSGD
R 3: 1.5339
R 2: 1.5265
R 1: 1.5120
CURRENT: 1.5041
S 1. 1.4956
S 2: 1.4805
S 3: 1.4759
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Market Brief |
The Usd corrected slightly in the Asian Session from yesterday's strong rally on risk aversion. The EurUsd traded up from 1.2850 to 1.3019, while the UsdJpy traded down to a low of 89.69. Markets remain highly volatile and developments are coming fast and furious. The Sterling was punished yesterday, as the governments bailouts continued and rumors swirled regarding S&P downgrading of UK country debt, trading from 1.4512 down to 1.38915 (8-year low). In addition, there newswire reports of potential nationalizations of Irish and UK banks. Not even the positive sentiment from President Obama inauguration could offset the negative tone across markets. US equity markets fell sharply, with the S&P closing down by -5.28% (worst performance ever for an Inauguration Day) as concerns over the banking system spilled over. The gloomy feel has carried over to today's trading, with Asian regional indexes all lower and European stock futures pointing to a lower opening. In this context, we expect safe haven trades, such as the Usd, Jpy and Chf to outperform.
Yesterday, the BoC cut its interest rates by 50bp to a 50-year low of 1.00%, as was expected. The central bank signaled that additional easing was highly probable, but stated that events would be monitored attentively "to what extent further monetary stimulus may be required". We expect CAD to remain under pressure and forecast a move to 1.30 mid- term.
Tuesday releases showed a slight rise in German ZEW index in January, with the headline economic expectations index rising from -45.2 to -31.0. This tick up suggests that the newly announced fiscal support has provided a glimmer of hope. However, we need to take this figure with a bit of skepticism since the ZEW expectations index has failed to be a reliable gauge of German GDP growth in the past. The more accurate indicator, the IFO index, has continued to collapse.
Today, New Zealand retail sales came out better than market expectations. The headline retail sales were flat in November, while ex-auto retail sales were higher 0.3% m/m. We expect the RBNZ will slash rates by 100bp at their meeting next week, since the slight bounce in core retail sales was due to rising food prices and not the result of stronger demand.
In Asia, Singapore's 2009 GDP growth forecast revised to a scary -5% to -2% after +1.7% growth in 2008.
In this light calendar day, European trading will be focused on the UK November's unemployment and public sector net borrowing data. Unemployment is starting to mount at a worrisome pace, but all indications are that the worst is yet to come. With claimant count jumping by 75k in Nov and GDP falling to 1% in Q4 there is little doubt deterioration in the labor markets will continue. Public finances have gone from bad to terrible and that's not what debt holders want to hear right now. We expect the Sterling to continue to come under significant selling pressure.
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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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