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ZEW Survey Misses Expectations
November 10, 2009 6:07 PM CET
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G10 Advancers and Decliners vs USD |
| | CAD | 0.33 |  | | | JPY | 0.14 | |  | SEK | -0.01 | | | CHF | -0.15 | | | AUD | -0.22 | | | NOK | -0.28 | | | EUR | -0.29 | | | NZD | -0.30 | | | DKK | -0.31 | | | GBP | -0.47 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'230.55 | - 0.09 | | DAX Index | 5'613.20 | - 0.12 | | SMI Index | 6'369.10 | - 0.25 | | S&P 500 Index | 1'090.77 | - 0.21 | | DJIA Index | 10'224.67 | - 0.02 | | Nikkei 225 Futures | 9'900.00 | + 1.02 | | Hang Seng Futures | 22'255.00 | + 0.55 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'101.24 | - 0.23 | | Silver | 17.25 | - 1.93 | | VIX | 23.33 | + 0.78 | | Crude wti | 79.53 | + 0.13 | | USD Index | 75.13 | + 0.12 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Wed 11 Nov | --- | --- | --- | | Sweden: AMV unemployment rate, % Oct | 5.3 | 5.3 | SEK/09:00 | | Claimant count rate, % Oct | 5.1 | 5.0 | GBP/09:30 | | ILO unemployment rate, % Sep | 8.0 | 7.9 | GBP/09:30 |
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Currency Tech |
EURUSD
R 2: 1.5100
R 1: 1.5063
CURRENT: 1.4955
S 1: 1.4810
S 2: 1.4700
GBPUSD
R 2: 1.7041
R 1: 1.6843
CURRENT: 1.6680
S 1: 1.6405
S 2: 1.6240
USDJPY
R 2: 92.50
R 1: 90.75
CURRENT: 89.85
S 1: 89.60
S 2: 89.20
AUDUSD
R 2: 0.9475
R 1: 0.9330
CURRENT: 0.9270
S 1: 0.9090
S 2: 0.9025
USDCAD
R 2: 1.0870
R 1: 1.0800
CURRENT: 1.0525
S 1: 1.0500
S 2: 1.0380
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Market Brief |
It has been a day of consolidation for most asset classes as risk appetite has lacked new stimulus to propel it higher, and the meagre few risk events on the calendar have had very little directional influence on FX. The morning schedule included Swedish Industrial Production which was slightly lower than anticipated (0.2% MoM vs. 0.5% expected ) and Norwegian CPI which also missed estimates at -0.2% MoM (vs. 0.0% expected, 0.8% last) – but EURNOK is virtually flat on the day and EURSEK modestly lower.
The main item on the agenda was the ZEW survey out of Europe which showed economic sentiment in both Germany and the Eurozone was far less than estimates, and both readings were lower than in the prior month. EURUSD slipped from 1.5000 down to 1.4980 levels after the news, but the effect was extremely short-lived and the pair soon regained territory back above 1.5000.
Since then the main focus has been on the lacklustre performance of European and US equity markets, and a slew of speakers from the US and Europe. On the whole the oratory has been rather dovish from both camps, with the Fed’s Lockhart stating the economy was being ‘supported’ by government programmes, and that it was ‘important’ that ‘extended period’ language was kept – referring to the timeline of the exceptionally low levels of the Fed Funds rate. San Francisco Fed President Janet Yellen echoed his sentiments, saying there is still ‘enormous slack’ in the US economy pushing inflation down, and that both this slack and elevated unemployment levels could persist ‘for years to come’. The balance of rhetoric seems to support the idea that accommodative policy will remain in place for the long-run (to the benefit of risky assets), but with equities looking flat or lower in the afternoon session, we saw profit-taking drag EURUSD down to 1.4939 lows and gold dip below $1100 briefly.
With the Veteran’s Day holiday in the US tomorrow, it seems most currencies and gold are likely to be range-bound. The only events on the data calendar will be Swedish AMV Unemployment, and UK ILO Unemployment.
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Sterling Struggles On Risk Of Fitch Downgrade
November 10, 2009 8:57 AM CET
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G10 Advancers and Decliners vs USD |
| | NZD | 2.01 | | | | SEK | 1.76 | | | | NOK | 1.71 | | | | CAD | 1.58 | | | | AUD | 0.91 | | | | DKK | 0.90 | | | | EUR | 0.88 | | | | CHF | 0.79 | | | | GBP | 0.30 | | | JPY | -0.04 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9'870.73 | + 0.63 | | Hang Seng Index | 22'236.42 | + 0.13 | | Shanghai Index | 3'178.61 | + 0.10 | | FTSE 100 Index | 5'235.18 | + 1.80 | | DAX Index | 5'619.72 | + 2.40 | | SMI Index | 6'385.14 | + 1.45 | | S&P future | 1'088.20 | - 0.32 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'098.69 | - 0.46 | | Silver | 17.33 | - 1.48 | | VIX | 23.15 | - 4.30 | | Crude wti | 78.95 | - 0.60 | | USD Index | 75.16 | + 0.15 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Industrial production, % m/m Sep | 0.5 | -2.9 | SEK/08:30 | | Norway: CPI, % m/m (y/y) Oct | 0.0 (0.8) | 0.8 (1.2) | NOK/09:00 | | Trade balance, £ bn Sep | -6.1 | -6.24 | GBP/09:30 | | Germany: ZEW economic sentiment index Nov | 55.0 | 56.0 | EUR/10:00 | | ZEW economic sentiment index Nov | 58.0 | 56.9 | EUR/10:00 |
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Currency Tech |
AUDUSD
R 2: 0.9475
R 1: 0.9330
CURRENT: 0.9265
S 1: 0.9090
S 2: 0.9025
USDCAD
R 2: 1.0870
R 1: 1.0800
CURRENT: 1.0600
S 1: 1.0500
S 2: 1.0380
EURJPY
R 2: 135.90
R 1: 135.70
CURRENT: 134.55
S 1: 133.25
S 2: 132.50
USDMXN
R 2: 13.535
R 1: 13.455
CURRENT: 13.280
S 1: 13.205
S 2: 13.065
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Market Brief |
Most major and EM currencies remain at elevated levels vs. the USD as Asian equity markets continue to make gains and highlight that risk appetite is alive and well. EURUSD remains well supported above 1.4940-50, but is still yet to make its next move to resistance at 1.5063 (26 Oct high), and thereafter 1.5100 resistance. Today’s German CPI (EU harmonized) figures were slightly subdued at 0.1% MoM against forecasts for a 0.2% gain, bringing the YoY figures back down to -0.1% from 0.0% prior. EURUSD has slid back slightly to 1.4980 levels after the release, but good bids are keeping the pair buoyed and the main focus will be the German and Eurozone ZEW survey results due later in the session. We expect modest improvements across the board, and anticipate EURUSD will rally strongly on any better-than-expected readings.
The notable exception amongst the majors in the past day has been GBP which suffered a setback yesterday on the announcement of Kraft’s latest bid for Cadbury Plc; there was no increase in the price per share offered as some had anticipated, and the hostile bid was once again rejected. GBPUSD topped out at 1.6843 and spent the rest of the session edging lower to 1.6700-50 levels. Early this morning GBPUSD took another sharp hit when Fitch’s David Riley was quoted as saying the UK is most at risk of losing its AAA sovereign status due to the fact it will need “the largest budget adjustment”; so far the pair has dipped back to 1.6602 lows, and EURGBP surged back above 0.9000 after yesterday’s false break of 0.8900 on the downside.
The other key events of the session will be Swedish Industrial Production and Norwegian CPI. EURNOK has regained most of its ground since the unwind of risk-assets last week (trading at 8.3800 at the time of writing,) but 8.3500 remains a significant support between here and 8.2500 lows. The consensus reading for MoM inflation is 0.0% (0.8% YoY); look out for higher than expected readings which might push EURNOK and USDNOK lower through their key levels.
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