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US Session: The Dollar Recoups Losses On Fed-Speak And Mediocre Equity Market Performance
November 17, 2009 5:44 PM CET
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G10 Advancers and Decliners vs USD |
 | GBP | -0.24 | | | JPY | -0.41 | | | DKK | -0.89 | | | EUR | -0.90 | | | NZD | -0.91 | | | CHF | -1.08 | | | NOK | -1.22 | | | AUD | -1.23 | | | CAD | -1.23 | | | SEK | -1.47 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'339.02 | - 0.81 | | DAX Index | 5'771.26 | - 0.58 | | SMI Index | 6'371.48 | - 0.80 | | S&P 500 Index | 1'103.72 | - 0.50 | | DJIA Index | 10'379.91 | - 0.26 | | Nikkei 225 Futures | 9'720.00 | - 0.82 | | Hang Seng Futures | 22'876.00 | + 0.13 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'136.03 | - 0.28 | | Silver | 18.36 | - 0.16 | | VIX | 23.19 | + 1.31 | | Crude wti | 78.43 | - 0.60 | | USD Index | 75.53 | + 0.85 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| NAHB housing index Nov | 19 | 18 | USD/18:00 | | Current account, € bn (sa) Sep | --- | -1.3 | EUR/09:00 | | BoE MPC minutes, vote Nov | 8-1 | 9-0 | GBP/09:30 | | CPI, % m/m (y/y) Oct | 0.0 (0.1) | 0.0 (-0.9) | CAD/12:00 | | CPI, % m/m (y/y) Oct | 0.2 (-0.3) | 0.2 (-1.3) | USD/13:30 | | Housing starts, thous Oct | 600 | 590 | USD/13:30 | | Building Permits, thous Oct | 580 | 575 | USD/13:30 |
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Currency Tech |
EURUSD
R 2: 1.5060
R 1: 1.5045
CURRENT: 1.4835
S 1: 1.4815
S 2: 1.4785
GBPUSD
R 2: 1.6845
R 1: 1.6795
CURRENT: 1.6775
S 1: 1.6515
S 2: 1.6400
USDJPY
R 2: 90.85
R 1: 90.60
CURRENT: 89.40
S 1: 88.75
S 2: 87.10
AUDUSD
R 2: 0.9475
R 1: 0.9405
CURRENT: 0.9255
S 1: 0.9210
S 2: 0.9190
USDCAD
R 2: 1.0800
R 1: 1.0660
CURRENT: 1.0605
S 1. 1.0410
S 2: 1.0380
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Market Brief |
The USD has recouped some of its recent losses today as equity markets failed to sustain the positive momentum of yesterday’s strong rally. EURUSD has sold off markedly from its early visit to 1.4999 highs to touch a low of 1.4826; dangerously close to confirming a break of the 12-month uptrend, and just above 1.4815 key support. Tomorrow’s Eurozone data is unlikely to be market-moving with just Current Account and Construction Output due, but key to the fate of EURUSD from here will be the resilience of risk appetite and performance of equity markets in the coming sessions. Underlining the breakdown of the past correlation with EURUSD, gold is holding up much better in the face of the USD rally; consolidating around $1135 levels within a $1128-1141 trading range, but still comfortably above the $1125 pivot level.
One of the better performers of the day has been GBP, after UK CPI data beat estimates at 0.2% MoM, 1.5% YoY (forecast: 0.1% MoM, 1.4% YoY); but the figure is perhaps not that surprising given the recent BoE Inflation Report which predicted a sharp rise in UK inflation in the short term. Tomorrow’s release of the BoE Minutes remains the significant risk event for GBP this week, where once again, the particulars of MPC members’ opinions on the continuation of QE will be under scrutiny. We feel that the bias of risks lends itself to further GBP upside (especially if there is serious consideration of an end to the stimulus programme), and furthermore, given the seasonal pattern of GBP demand as banks start hedging the payment of City bonuses for December/January, we believe GBPUSD will remain well-bid.
This afternoon’s US data had a muted effect on FX markets; PPI came in lower than estimates (0.3% MoM vs. 0.5% expected) and Industrial Production also disappointed at 0.1% in October (against consensus for 0.4%), however TIC data highlighted a massive surge in foreign investment in US securities in September. Nevertheless, it was commentary from Fed speakers throughout the day that had the greater impact on the USD, most notably Yellen’s comments that higher rates can help stem “damaging” leverage. The CPI figures due tomorrow should confirm that inflation remains subdued, with forecasts looking for a -0.3% reading YoY, up from -1.3% last month.
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European Session: Bernankes Comments Linger
November 17, 2009 10:10 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.47 |  | | | GBP | 0.29 | | | | CHF | 0.03 | | | | EUR | 0.02 | | | | DKK | 0.01 | | | NZD | -0.01 | | | CAD | -0.04 | | | NOK | -0.28 | | | SEK | -0.30 | | | AUD | -0.48 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10,354.00 | - 0.61 | | Hang Seng Index | 22,891.69 | - 0.22 | | Shanghai Index | 3,282.89 | + 0.23 | | FTSE futures | 5,364.00 | + 1.62 | | DAX futures | 5,785.00 | - 0.30 | | SMI Futures | 6,395.00 | - 0.46 | | S&P future | 1,104.20 | - 0.18 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,136.80 | - 0.21 | | Silver | 18.27 | - 0.62 | | VIX | 22.89 | - 2.01 | | Crude wti | 78.71 | - 0.24 | | USD Index | 74.93 | + 0.04 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| SARB Rate Announcement, % | 7.00 | 7.00 | ZAR / -- | | San Francisco Fed President Yellen (FOMC voter) sp | -- | -- | USD / 10.30 | | ECB Executive Board member Stark speaks | -- | --- | EUR / 14.30 | | Richmond Fed President Lacker (FOMC voter) speaks | -- | -- | USD / 15.15 | | Cleveland Fed President Pianalto (FOMC non-voter) | -- | -- | USD / 17.30 | | Adjusted real retail sales, % y/y | -- | -1.0 | CHF / 08.15 | | CPI, % m/m (y/y)Oct | 0.1 (1.5) | 0.0 (1.1) | GBP / 09.30 | | RPI, % m/m ((y/y) | 0.1 (-1.0) | 0.4 (-1.4) | GBP / 09.30 | | Trade balance, € bn (sa) | -- | 1.0 | EUR / 10.00 | | PPI, % m/m (y/y) | 0.5 (-1.7) | 0.6 (-4.8) | USD / 13.30 | | Core PPI, % m/m (y/y) | 0.1 (1.4) | -0.1 (1.8) | USD / 13.30 | | Net long-term TIC flows, $bn | -- | 28.6 | USD / 14.00 | | Industrial production, % m/m (y/y) | 0.4 (-6.9) | 0.7 (-6.1) | USD / 14.15 | | Capacity utilization, % | 70.8 | 70.5 | USD / 14.15 | | NAHB housing index | 19 | 18 | USD / 18.00 |
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Currency Tech |
AUDUSD
R 2: 0.9475
R 1: 0.9405
CURRENT: 0.9318
S 1: 0.9317
S 2: 0.9210
USDCAD
R 2: 1.0609
R 1: 1.0575
CURRENT: 1.0484
S 1. 1.0418
S 2: 1.0380
EURJPY
R 2: 135.05
R 1: 134.45
CURRENT: 132.95
S 1: 132.86
S 2: 132.50
USDMXN
R 2: 13.265
R 1: 13.062
CURRENT: 12.995
S 1: 12.950
S 2. 12.855
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Market Brief |
Yesterday comments by Fed Chairman Bernanke disrupted FX markets, when he mentioned the USD in his speech at an event at the Economic Club of New York. Since the US treasury is the usual voice of US dollar policy, it caught the market fully off guard. In a knee-jerk reaction, USD buyers hit the market pushing EURUSD down to 1.4880 from 1.4970. The lingering effects of the Chairman’s comments weighed slightly on Asian risk appetite, with regional equity markets broadly lower today. We saw a similar reaction to Bernanke's strong USD comments in the Summer of 2008 and expect a comparable counter reaction (USD selling). While conditions / environment were different in 2008, his comments contained no change in the critical “lower for longer” scheme, investors should move back into risk correlated fx trades today.
The RBA minutes released today had a slightly dovish tone, which surprised the markets. The AUDUSD was well bid, trading down to 0.9325 as the minutes stated that a "further gradual adjustment in the cash rate would most likely be appropriate over time, though the pace of the adjustment remains open to question”. We are not reading too much into the statement and still expect a 25bp hike in December, followed by an increase until April.
In the European Session, Eurozone trade data probably will confirm that the external sector gave the domestic economy a reasonable boost in Q3. Nonetheless, it should highlight the effect that the stronger EUR has had on exports and we expected the rhetoric from policy makers to increase, as the EURUSD approached 1.5000 and above. And in the UK, October CPI should increase to 1.40% y/y, but RPI is likely to remain soft on a y/y basis. External member of the BoE Sentence recently voiced concerns that QE would take longer to filter through the economy and the Inflation Report highlighted the risk of staying ultra loose for too long.
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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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