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US Session: USD Rallies Back on Weaker Equities
October 30, 2009 5:43 PM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.92 |  |  | GBP | -0.39 | | | EUR | -0.68 | | | DKK | -0.70 | | | CHF | -0.83 | | | NOK | -0.86 | | | SEK | -1.11 | | | AUD | -1.35 | | | CAD | -1.43 | | | NZD | -1.69 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5,116.92 | - 0.40 | | DAX Index | 5,526.42 | - 1.14 | | SMI Index | 6,357.32 | + 0.09 | | S&P 500 Index | 1,055.63 | - 0.98 | | NASDAQ 100 Index | 2,083.27 | - 0.68 | | DJIA Index | 9,872.80 | - 0.90 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,039.46 | - 0.71 | | Silver | 16.37 | - 1.88 | | VIX | 25.67 | + 3.67 | | Crude wti | 78.37 | - 1.87 | | USD Index | 76.28 | + 0.46 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Additional Releases | -- | -- | -- |
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Currency Tech |
EURUSD
R 2: 1.4927
R 1: 1.4859
CURRENT: 1.4732
S 1: 1.4683
S 2. 1.4646
GBPUSD
R 2: 1.6693
R 1: 1.6604
CURRENT: 1.6486
S 1: 1.6339
S 2: 1.6252
USDJPY
R 2: 92.530
R 1: 91.820
CURRENT: 90.69
S 1: 90.250
S 2: 90.080
AUDUSD
R 2: 0.9329
R 1: 0.9218
CURRENT: 0.9051
S 1: 0.8944
S 2: 0.8866
USDCAD
R 2: 1.0959
R 1: 1.0821
CURRENT: 1.0828
S 1: 1.0628
S 2: 1.0502
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Market Brief |
The lack of follow through in risk correlated trades has definitely raised some concerns over the sustainability of this risk rally. In particular, the better than expected Chicago PMI and U. of Michigan Confidence failed to translate USD weakness as the EURUSD collapsed to 1.4720. Intresetingly, the sell-off was almost exactly to our expectations of central bank tightening, with currencies such as AUD & NOK leading the losers. Markets have been debating whether these forward-looking indicators are increasingly pointing to a Fed that will need to adjust their monetary policy sooner rather than later (also supported by yesterdays GDP surprise). Measuring the price action in the FX markets it seems to suggest that interest rate differential over a pure risk appetite trade might be gaining traction. However, we are still in the camp that traders are overzealous and expect next week the the Fed (FOMC meeting) & labor data (NFP) will temper any gossip over the Fed early exit from its ultra loose monetary policy. In regards to weekend event risk , there has been plently of speculation that CIT will have to seek bankruptcy protection. A move that will have particpants rushing into the safehaven USD.
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European Session: BoJ Announces Withdrawal Of Stimulus
October 30, 2009 8:54 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.34 | | | | CHF | 0.06 | | | | GBP | 0.02 | | | | EUR | 0.01 | | | | DKK | 0.00 | | | NOK | -0.11 | | | CAD | -0.23 | | | SEK | -0.37 | | | AUD | -0.42 | | | NZD | -0.91 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10'034.74 | + 1.45 | | Hang Seng Index | 21'797.34 | + 2.50 | | Shanghai Index | 2'995.85 | + 1.20 | | FTSE 100 Index | 5'137.72 | + 1.13 | | DAX Index | 5'587.45 | + 1.66 | | SMI Index | 6'351.27 | + 1.14 | | S&P future | 1'059.30 | - 0.22 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'046.30 | - 0.07 | | Silver | 16.62 | - 0.42 | | VIX | 24.76 | - 11.29 | | Crude wti | 79.83 | - 0.05 | | USD Index | 75.95 | + 0.02 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| CPI, % y/y Oct | -0.1 | -0.3 | EUR/10:00 | | Unemployment rate, % Sep | 9.7 | 9.6 | EUR/10:00 | | KoF Leading Indicator Oct | 1.16 | 0.85 | CHF/10:30 | | GDP, % m/m Aug | 0.1 | 0.0 | CAD/12:30 | | PCE price index, % m/m (y/y) Sep | 0.1 (-0.5) | 0.3 (-0.5) | USD/12:30 | | Core PCE price index, % m/m (y/y) Sep | 0.2 (1.3) | 0.1 (1.3) | USD/12:30 | | Chicago Purchasing Managers Index Oct | 49.0 | 46.1 | USD/13:45 | | U/M consumer sentiment index Oct F | 70.0 | 69.4 | USD/14:00 |
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Currency Tech |
AUDUSD
R 2: 0.9330
R 1: 0.9220
CURRENT: 0.9120
S 1: 0.8940
S 2: 0.8900
USDCAD
R 2: 1.0965
R 1: 1.0830
CURRENT: 1.0685
S 1: 1.0620
S 2: 1.0500
EURJPY
R 2: 138.50
R 1: 137.37
CURRENT: 135.00
S 1: 133.30
S 2: 132.75
USDMXN
R 2: 13.455
R 1: 13.386
CURRENT: 13.049
S 1: 13.025
S 2: 12.855
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Market Brief |
Yesterday’s better than expected US Q3 GDP has revitalized risk appetite; sending equity markets higher across Europe and the US yesterday, and providing positive momentum through to Asian indices overnight. The 3.5% annualized Q3 figures exceeded forecasts for 3.2% and indicated the first expansion in the US since Q2 2008. In turn, EURUSD has rallied to test resistance around 1.4860 and gold has rebounded from its lows to settle above $1047. We feel this will continue to fuel risk correlated trades higher until officials indicate a shift in monetary policy stance; something which seems unlikely just yet with the labour market in such a dreadful state and growth having not yet proved itself without the aid of stimulus measures.
Overnight the BoJ voted to keep rates at 0.1% as expected, but they also announced their asset purchase programmes would be allowed to expire in December, a first stage in the withdrawal of stimulus. An unexpected drop in the Jobless Rate to 5.3% (5.6% expected, 5.5% prior) was also a key factor in the JPY strengthening against the USD from 91.60 to 90.80. Nevertheless, inflation figures indicated national CPI running at -2.2% YoY in Sep, which makes it unlikely the BoJ will be any closer to raising rates or tolerating a strong JPY any time soon.
Today’s key events from Europe will be the October HICP and Unemployment Rate. Currently the ECB are resolute that current rates are appropriate and inflation expectations remain ‘firmly anchored’. Consequently any unexpected increase in CPI (-0.1% YoY exp, -0.3% prior) would likely be a catalyst for speculation about a shift in ECB stance and be favourable to EURUSD climbing higher. However, the deflationary pressure of rising unemployment will also be an important factor to consider for the governing council, today’s reading is forecast to show a moderate uptick to 9.7% from 9.6% last month.
The US Session will provide Canadian Q3 GDP along with US PCE price index, Chicago PMI and U.Mich Consumer Confidence. The current mood of the markets will likely result in positive surprises fuelling USD selling, while downside misses (unless extreme) will have limited effect.
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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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