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US Session: Dollar Consolidates As Risk Appetite Tempers
October 22, 2009 6:06 PM CEST
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G10 Advancers and Decliners vs USD |
| | NOK | 0.22 |  |  | DKK | -0.05 | | | EUR | -0.07 | | | CHF | -0.09 | | | GBP | -0.10 | | | SEK | -0.15 | | | CAD | -0.46 | | | JPY | -0.47 | | | AUD | -0.69 | | | NZD | -0.89 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'213.82 | - 0.84 | | DAX Index | 5'770.54 | - 1.08 | | SMI Index | 6'407.42 | - 0.42 | | S&P 500 Index | 1'082.04 | + 0.06 | | DJIA Index | 10'003.77 | + 0.55 | | Nikkei 225 Futures | 10'250.00 | - 0.19 | | Hang Seng Futures | 22'175.00 | - 0.51 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'059.50 | + 0.05 | | Silver | 17.60 | - 0.55 | | VIX | 22.08 | - 0.63 | | Crude wti | 80.70 | - 0.82 | | USD Index | 75.26 | + 0.20 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Fri 23 Oct | - | - | - | | Export prices % q/q Q3 | -4.7 | -20.6 | AUD/00:30 | | Import prices % q/q Q3 | -2.8 | -6.4 | AUD/00:30 | | Germany: "Flash" manufacturing PMI, index Oct | 50.1 | 49.6 | EUR/07:28 | | Germany: "Flash" services PMI, index Oct | 52.5 | 52.1 | EUR/07:28 | | PMI manufacturing, index Oct | 50.0 | 49.3 | EUR/07:58 | | PMI services, index Oct | 51.3 | 50.9 | EUR/07:58 | | Germany: IFO business climate, index Oct | 92.0 | 91.3 | EUR/08:00 | | Germany: IFO current assessment, index Oct | 88.0 | 87.0 | EUR/08:00 | | Germany: IFO business expectations, index Oct | 96.2 | 95.7 | EUR/08:00 | | Preliminary Q3 GDP, % q/q (y/y) Q3 | 0.2 (-4.6) | -0.6 (-5.5 | GBP/08:30 | | Industrial orders SA, % m/m Aug | 1.2 | 2.6 | EUR/09:00 | | Existing home sales, % m/m Sep | 4.9 | -2.7 | USD/14:00 |
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Currency Tech |
EURUSD
R 2: 1.5346
R 1: 1.5046
CURRENT: 1.5000
S 1: 1.4905
S 2: 1.4876
GBPUSD
R 2: 1. 6800
R 1: 1.6740
CURRENT: 1.6590
S 1: 1.6488
S 2: 1.6320
USDJPY
R 2: 92.50
R 1: 91.80
CURRENT: 91.45
S 1: 89.70
S 2: 88.59
AUDUSD
R 2: 0.9475
R 1: 0.9345
CURRENT: 0.9225
S 1: 0.9115
S 2: 0.8985
USDCAD
R 2: 1.0650
R 1: 1.0560
CURRENT: 1.0490
S 1: 1.0240
S 2: 1.0129
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Market Brief |
The morning session kicked off with the Riksbank Rate Announcement where rates were left unchanged at 0.25%, but the accompanying statement struck a distinctly dovish tone with the markets. It reiterated that rates would remain on hold until autumn 2010, and affirmed that a further SEK100bn would be offered to banks, disappointing those who hoped the financial system may have recovered sufficiently to negate the need for further liquidity injections. USDSEK rallied sharply to a high of 6.9396 (aided somewhat by a recovery in the USD), but has since pared back gains to 6.8800 - around 0.5% higher on the day.
As European equity markets extended their losses into mid-morning, the USD climbed higher; DXY touching briefly up to a high of 75.51. GBPUSD was one of the worst hit after BoE’s Paul Tucker was quoted as saying the MPC could increase QE “if necessary”, interpreted by markets as increasing the likelihood that the Nov meeting may yet signal an expansion of the stimulus programme. GBPUSD slid through 1.6575 support, and the tumble continued as UK Retail Sales for Sep revealed a second straight month of 0.0% MoM data, in stark contrast to the expectations for a 0.5% gain on the month. GBPUSD slumped to a low of 1.6488 but has since reclaimed some ground to test the supply now coming in at previous 1.6575 support. Of key importance will be the UK GDP figures due tomorrow to help tilt the balance for either bulls or bears as we head into the crucial Nov rate meeting; consensus is for a 0.2% expansion in Q3 – which if realized would signal the UK’s exit from the recession (after -0.6% print in Q2).
US data has been somewhat mixed; Initial Claims higher, Continuing Claims lower, Leading Indicators better than expected (at 1.0% vs. 0.8% expected), but House Price Index disappointing (-0.3% vs. +0.3% forecast). More influential on FX markets has been the uptick in equity indices since the US open, with both the S&P and Dow higher on the day helping boost sentiment and reduce the day’s gains for the USD.
Meanwhile Canadian Retail Sales managed to convincingly beat expectations with a 0.8% gain in Aug (vs. 0.4% expected, -0.5% prior), but USDCAD seemed to shrug off the good news and continued to creep back above 1.0500. We also saw the release of the BoC Monetary Policy Report, but there were few surprises from Tuesday’s rate meeting statement; if anything, the subsequent sell-off in USDCAD to 1.0460 levels was more symptomatic of a widespread sell-off in the USD than anything CAD-specific. This was rapidly reversed on comments from the BoC’s Carney that there was still a tremendous amount of slack in the system and a strong CAD was ‘the major risk’ to the economy. His statement that currency intervention was ‘always an option’ caused a sharp spike to 1.0530 but the pair has since pared back to 1.0490.
Tomorrow’s main highlights (aside from the aforementioned UK GDP), will be a slew of European PMI data along with the IFO, whilst the US schedule features Existing Home Sales and speeches from the Fed’s Bernanke and Kohn.
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European Session: EURUSD Claims 1.5000 Landmark
October 22, 2009 9:38 AM CEST
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G10 Advancers and Decliners vs USD |
| | SEK | 1.64 | | | | GBP | 1.36 | | | NOK | -0.17 | | | DKK | -0.25 | | | EUR | -0.27 | | | CHF | -0.29 | | | JPY | -0.51 | | | CAD | -0.65 | | | AUD | -0.80 | | | NZD | -1.07 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10'267.17 | - 0.64 | | Hang Seng Index | 22'082.29 | - 1.06 | | Shanghai Index | 3'059.29 | - 0.37 | | FTSE 100 Index | 5'257.85 | + 0.28 | | DAX Index | 5'833.49 | + 0.37 | | SMI Index | 6'434.66 | + 0.11 | | S&P future | 1'077.40 | - 0.06 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'057.40 | - 0.15 | | Silver | 17.60 | - 0.51 | | VIX | 22.22 | + 6.32 | | Crude wti | 80.94 | - 0.53 | | USD Index | 75.30 | + 0.25 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Riksbank Interest Rate announcement Oct | 0.25 | 0.25 | SEK/07:30 | | Unemployment rate, % Sep | 8.3 | 8.0 | SEK/07:30 | | Current account, € bn (sa) Aug | 4.5 | 6.6 | EUR/08:00 | | Retail sales, % m/m (y/y) Sep | 0.5 (2.8) | 0.0 (2.1) | GBP/08:30 | | Government debt/GDP ratio, % 2008 | 69.3 | 69.3 | EUR/09:00 | | Canada: Retail sales, % m/m Aug | 0.4 | -0.6 | CAD/12:30 | | Initial jobless claims, thous 17-Oct | 515 | 514 | USD/12:30 | | Continuing Claims, thous 10-Oct | 5970 | 5992 | USD/12:30 | | Leading indicators, % m/m (y/y) Sep | 0.8 (2.7) | 0.6 (1.9) | USD/14:00 |
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Currency Tech |
AUDUSD
R 2: 0.9475
R 1: 0.9345
CURRENT: 0.9220
S 1: 0.9115
S 2: 0.8985
USDCAD
R 2: 1.0650
R 1: 1.0560
CURRENT: 1.0495
S 1: 1.0240
S 2: 1.0129
EURJPY
R 2: 137.87
R 1: 137.10
CURRENT: 136.95
S 1: 133.33
S 2: 132.25
USDMXN
R 2: 13.330
R 1: 13.175
CURRENT: 12.955
S 1: 12.767
S 2: 12.620
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Market Brief |
Three noteworthy events defined yesterday’s FX markets; first off the BoE indicated a unanimous 9-0 vote had supported the decision not to expand QE at the most recent meeting, sending GBP soaring higher amongst the majors (GBPUSD has hit a high of 1.6637 so far). The statement elaborated that the MPC saw no compelling reason to change the bond plan for now, but added the November meeting would provide an opportunity to assess more fully.
The second important driver of FX markets were earnings releases, notably Morgan Stanley and Wells Fargo who both trumped analyst forecasts, and sent equity markets surging higher. As usual, the positive gains in equity markets translated into an infectious sense of positive risk appetite which sent the USD spiralling lower to fresh lows (DXY as low as 74.94), and thus triggered the third key landmark, EURUSD finally breaking above the 1.5000 level. However far from being the explosive burst towards 1.5350 some bulls may have hoped for, EURUSD seemed to tread very tentatively in this new territory; it has thus far only pushed as high as 1.5046, and spent most of the remaining time consolidating in and around the 1.5000 level.
Overnight, equity markets are lower across Asia after China GDP showed the economy grew 8.9% YoY in Q3; slightly below the median estimates for 9.0%, but still at levels which seem compelling enough for stimulus measures to be soon withdrawn. China’s cabinet signalled they would still maintain stimulus measures for now, but noted that inflation concerns would be an increasing focus of policy-making going forward.
Today the economic calendar has a number of key focal points; the first will be the Riksbank rate announcement where it is widely anticipated rates will be kept on hold at 0.25%. Most focus will be on the likelihood of another 12-month fixed tender of SEK 100bn, but if this does not materialize it will likely be a positive for the currency. Swedish Unemployment Rate follows soon after, and later in the morning we get UK Retail Sales and Eurozone Current Account, before Canada Retail Sales and US Claims data round out the afternoon.
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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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