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US Session: The Dollar Bites Back
October 20, 2009 6:13 PM CEST
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G10 Advancers and Decliners vs USD |
 | GBP | -0.30 | | | JPY | -0.34 | | | CHF | -0.37 | | | EUR | -0.46 | | | DKK | -0.47 | | | SEK | -0.72 | | | AUD | -0.98 | | | NOK | -1.11 | | | NZD | -1.49 | | | CAD | -2.04 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'243.40 | - 0.72 | | DAX Index | 5'811.77 | - 0.70 | | SMI Index | 6'427.29 | - 0.14 | | S&P 500 Index | 1'088.43 | - 0.86 | | DJIA Index | 10'011.02 | - 0.80 | | Nikkei 225 Futures | 10'280.00 | + 0.29 | | Hang Seng Futures | 22'335.00 | + 0.89 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'054.88 | - 0.88 | | Silver | 17.47 | - 2.05 | | VIX | 21.48 | - 0.05 | | Crude wti | 78.40 | - 1.52 | | USD Index | 75.74 | + 0.30 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Wed 21 Oct | - | - | - | | BoE MPC minutes Oct, vote | 9-0 | 9-0 | GBP/08:30 | | CBI industrial trends, net balance Oct | -40 | -54 | GBP/10:00 | | Release of Fed Beige Book | - | - | USD/18:00 |
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Currency Tech |
EURUSD
R 2: 1.5346
R 1: 1.5000
CURRENT: 1.4895
S 1: 1.4876
S 2: 1.4842
GBPUSD
R 2: 1. 6570
R 1: 1.6489
CURRENT: 1.6360
S 1: 1.6221
S 2: 1.6127
USDJPY
R 2: 92.50
R 1: 91.80
CURRENT: 90.85
S 1: 89.70
S 2: 88.59
AUDUSD
R 2: 0.9475
R 1: 0.9345
CURRENT: 0.9200
S 1: 0.9115
S 2: 0.8985
USDCAD
R 2: 1.0650
R 1: 1.0560
CURRENT: 1.0500
S 1: 1.0240
S 2: 1.0129
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Market Brief |
The USD has recovered slightly throughout the day, with the DXY managing to grind back to 75.40 as equity markets erased early gains. Much of the morning data was ignored by FX markets, German Producer Prices for Sep were much lower than expected (-0.5% MoM vs. -0.1% expected), and UK public finance data showed borrowing hit a record high last month. Nevertheless, the USD found itself under pressure as earnings releases continued to beat estimates, edging European equity markets and US stock futures higher. EURUSD has twice pushed above 1.4990 today but failed to break the psychologically important 1.5000 levels, and it was noticeable that the effect of good earnings releases had significantly less impact on sentiment this time around.
As we moved into the US morning, it was clear that the USD sell-off was losing its tenacity, and this was followed by very poor economic releases from the US which dented risk appetite somewhat. PPI data for Sep showed a -0.6% change MoM vs. expectations of 0.0%, whilst both Housing Starts (590k vs. 610k exp.) and Building Permits (573k vs. 595k exp.) also disappointed. The reaction was muted at first, but after the BoC rate announcement (unchanged at 0.25%) and accompanying dovish statement, USDCAD rallied sharply and led a USD resurgence against the other major currencies. The key takeaway statement from the BoC was a reiteration that rates were expected to stay at 0.25% throughout 2010 as inflation risks continued to lie to the downside. The statement completely shut the door on recent speculation that they might bring forward their schedule of monetary tightening to Q1 next year, a theory that had helped CAD strengthen markedly in the last fortnight. The ensuing unwind took out resistance at 1.0440 with ease and set off stops all the way to1.0500. It has since broken through to 1.0520 (at the time of writing), targeting 1.0560 next resistance. The aggressive move along with a downturn in equity markets has dragged all other majors along with it; forcing EURUSD to lows at 1.4885 (last) and AUDUSD back below 0.9200 to 0.9187 lows. Both gold and silver have tracked EURUSD’s tumble and after taking out stops through $1059 and $17.80 respectively, gold is now down a percent on the day at $1054 and silver down over 2% at $17.50.
Looking ahead to tomorrow’s session, there is a very light data calendar, but considering the recent GBP strength there will be a lot of focus on BoE Minutes and UK CBI Industrial Trends. The US has no headline data but we will see the release of the latest Fed Beige Book.
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European Session: Apples Earnings Keep Risk Appetite High
October 20, 2009 8:54 AM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 0.53 |  | | | NOK | 0.22 | | | | CHF | 0.21 | | | | DKK | 0.20 | | | | EUR | 0.19 | | | | SEK | 0.15 | | | | GBP | 0.12 | | | | CAD | 0.11 | | | | AUD | 0.06 | | | | NZD | 0.02 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10.336.84 | + 0.98 | | Hang Seng Index | 22,376.58 | + 0.79 | | Shanghai Index | 3,073.28 | + 1.15 | | FTSE futures | 5,249.00 | + 1.39 | | DAX futures | 5,886.50 | + 0.19 | | SMI Futures | 6,450.00 | + 0.27 | | S&P future | 1,096.30 | + 0.47 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,067.19 | + 0.28 | | Silver | 17.80 | - 0.18 | | VIX | 21.49 | + 0.27 | | Crude wti | 79.94 | + 0.41 | | USD Index | 75.13 | - 0.15 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| PSNB/PSNCR, £ bn Sep | -- | 16.1/10.4 | GBP / 08.30 | | BoE releases provisional estimates of M4 Sep | -- | -- | GBP / 08.30 | | Construction output, % m/m (y/y wda) Aug | 15.3 | -2.0 (-10. | EUR / 09.00 | | ing starts, thous Sep | 607 | 598 | USD / 12.30 | | Building permits, thous Sep | 590 | 580 | USD / 12.30 | | PPI, % m/m (y/y) Sep | 0.1 (-4.3) | 1.7 (-4.3) | USD / 12.30 | | Core PPI, % m/m (y/y) Sep | 0.1 (2.0) | 0.2 (2.3) | USD / 12.30 | | BoC policy interest rate annoucement Oct | 0.25 | 0.25 | CAD / 13.00 | | Fed Governor Warsh (FOMC voter) | -- | -- | USD / 15.00 | | BoE Governor Mervyn King speaks in Edinburgh | -- | -- | GBP / 19.15 |
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Currency Tech |
AUDUSD
R 2: 0.9475
R 1: 0.9345
CURRENT: 0.9269
S 1: 0.9115
S 2: 0.8985
USDCAD
R 2: 1.0650
R 1: 1.0435
CURRENT: 1.0286
S 1: 1.0207
S 2: 1.0129
EURJPY
R 2: 137.87
R 1: 136.10
CURRENT: 134.90
S 1: 133.33
S 2: 132.25
USDMXN
R 2: 13.330
R 1: 13.175
CURRENT: 12.925
S 1: 12.767
S 2: 12.620
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Market Brief |
USD was on the back footing again, as Wall Street’s rally spilt over to Asian regional indexes. Risk correlated FX trades are moving lock in step with risk appetite. The positive risk sentiment was also helped by better than expected corporate earning from Apple and Komatsu Ltd. Perhaps the one barrier to continued USD weakness was the meeting of Eurozone finance ministers in Luxembourg. Yet, with no mention of the euro strength, traders are refocusing on 1.5000. The EURUSD traded in the range of 1.4829-1.4981, reaching a new 14-month high. In his second speech overnight, Fed’s Bernanke said that policy exit strategy is vitally important in maintaining confidence in the US economy and in the greenback. These comments follow on the heels of NY fed comments that reverse repos, which here actively being tested (and root of many tightening rumours), should not be viewed as impending change in monetary policy.
In Australia today, the RBA October meeting minutes (commenced the tightening cycle with a 25bp rate hike to 3.25%) showed a hawkish central bank, who was concerned over the rate of inflation. Exactly what the AUD bulls wanted to hear. The minutes stated that “the expected trough in inflation was significantly higher than earlier thought” and therefore heightening the importance of next Wednesday’s Q3 CPI report for future policy decisions. The other major event scheduled for today will be the BoC rate announcement. However, after Friday’s weak CPI figure, markets are expecting no shift in policy or in their comments to the exiting policy framework. Later this week, the Canadian October Monetary Policy reports might provide some indication of when exit strategies would begin and if there was any change in the Q2 2010 tightening target.
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