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US Session: Bullard Sets Base Timeline For Fed Hike At Early 2012
November 18, 2009 5:52 PM CET
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G10 Advancers and Decliners vs USD |
| | CHF | 0.70 |  | | | DKK | 0.70 | | | | EUR | 0.66 | | | | SEK | 0.58 | | | | NOK | 0.45 | | | | CAD | 0.08 | | | | NZD | 0.05 | |  | AUD | -0.13 | | | JPY | -0.16 | | | GBP | -0.35 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'348.90 | + 0.06 | | DAX Index | 5'795.97 | + 0.30 | | SMI Index | 6'377.12 | + 0.01 | | S&P 500 Index | 1'106.59 | - 0.34 | | DJIA Index | 10'394.64 | - 0.41 | | Nikkei 225 Futures | 9'690.00 | - 0.51 | | Hang Seng Futures | 22'767.00 | - 0.48 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'147.50 | + 0.54 | | Silver | 18.67 | + 1.33 | | VIX | 22.38 | - 0.13 | | Crude wti | 80.05 | + 1.15 | | USD Index | 74.94 | - 0.51 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Thu 19 Nov | --- | --- | --- | | Trade balance, CHF bn (nsa) Oct | 1.50 | 1.91 | CHF/07:15 | | Unemployment rate, % Oct | 8.4 | 8.3 | SEK/08:30 | | PSNB (PSNCR), £ bn Oct | 4.0 | 19.4 | GBP/09:30 | | Retail sales, % m/m (y/y) Oct | 0.5 (2.9) | 0.0 (2.4) | GBP/09:30 | | M4 money supply, % m/m (y/y) Oct | 1.0 (9.9) | 0.8 (11.6) | GBP/09:30 | | Initial jobless claims, thous 14-Nov | 504 | 502 | USD/13:30 | | Continuing claims, thous 7-Nov | 5595 | 5631 | USD/13:30 | | Wholesale sales,% m/m (Sep) | 1.0 | -1.4 | CAD/13:30 | | Leading indicators, % m/m Oct | 0.7 | 1.1 | CAD/13:30 | | Philadelphia Fed manufacturing index Nov | 12.2 | 11.5 | USD/15:00 | | Leading indicators, % m/m Oct | 0.4 | 1.0 | USD/15:00 |
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Currency Tech |
EURUSD
R 2: 1.5060
R 1: 1.5045
CURRENT: 1.4880
S 1: 1.4815
S 2: 1.4785
GBPUSD
R 2: 1.7040
R 1: 1.6845
CURRENT: 1.6755
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: 0.9300
S 1: 0.9210
S 2: 0.9190
USDCAD
R 2: 1.0800
R 1: 1.0660
CURRENT: 1.0500
S 1. 1.0410
S 2: 1.0380
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Market Brief |
Gold has once again outshone other assets classes by powering to new highs above $1152, bringing the gains month-to-date to an astounding +10.2%. The move has been paralleled by rallies in most major and EM currencies against the USD (albeit to a less impressive extent), however underlining the disintegration of recent correlations, equity markets have put in a rather mediocre performance on the whole.
The major news event of the morning was the publication of the Bank of England Minutes; revealing the recent decision to expand QE by GBP25bn was in fact determined by a 3-way split vote. Seven members were united in agreeing to the headline 25bn figure, but MPC member Dale voted for no further expansion to the existing 175bn asset purchase target, whilst David Miles wanted a larger increase of 40bn to bring the total to 215bn. While the latter figure may seem peculiar, it seems MPC member Miles was trying to propose a figure that would ensure the rate of asset purchases would remain constant going forward; indeed one of the explanations for the sharp GBP rally following the original meeting was the calculation that 25bn signified a slower pace of purchases and possible sign of an end to the stimulus programme. GBPUSD dropped 50 pips from 1.6825 to 1.6775 on a knee-jerk reaction to the vote details, and also to the mention that lowering the bank deposit rate may be useful in the future. The pair quickly returned to pre-announcement levels, but strong demand for EURGBP throughout the afternoon has ensured GBP has struggled in the subsequent part of the session, and is one of the few currencies lower against the USD on the day at 1.6750.
The release of US CPI figures confirmed an uptick in inflation from its depressed levels, posting a better than expected 0.2% MoM gain that dragged the annualized figure up to -0.2%. The event had limited effect in the currency markets; as yet again, policy-maker rhetoric stole the headlines. St Louis Fed President James Bullard (non-voter) was quoted on newswires as saying the Fed may not start to raise rates until early 2012. The comments were perceived as dovish from a member who is usually considered to be a centrist with hawkish tendencies. Although the end result of today’s events have put the USD back under pressure, most currency pairs have so far not threatened a break-out from defined trading ranges.
Tomorrow we await the release of yet another important piece of UK data, with Retail Sales for October estimated to have increased 0.5% MoM after last month’s disappointing 0.0% reading. With the week’s major data events winding down, this will be the last scheduled risk event capable of pushing GBP beyond technical levels towards either 1.7000 upside resistance or 1.6650 downside support, however the lessons of the last few days have shown that range bound price action is stubbornly ensconced, and the most market-moving events have been the unpredictable headlines from official speakers.
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Sterling Speculators Await Release Of BoE Minutes
November 18, 2009 9:39 AM CET
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G10 Advancers and Decliners vs USD |
| | NOK | 0.28 | | | | SEK | 0.22 | | | | DKK | 0.20 | | | | EUR | 0.20 | | | | CHF | 0.19 | | | | JPY | 0.14 | | | | NZD | 0.09 | | | | AUD | 0.06 | | | GBP | -0.01 | | | CAD | -0.06 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9'676.80 | - 0.55 | | Hang Seng Index | 22'840.33 | - 0.32 | | Shanghai Index | 3'303.23 | + 0.62 | | FTSE 100 Index | 5'362.65 | + 0.31 | | DAX Index | 5'809.09 | + 0.53 | | SMI Index | 6'405.75 | + 0.46 | | S&P future | 1'106.70 | - 0.06 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'141.43 | + 0.01 | | Silver | 18.45 | + 0.11 | | VIX | 22.41 | - 2.10 | | Crude wti | 79.54 | + 0.51 | | USD Index | 75.19 | - 0.19 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Current account, € bn (sa) Sep | --- | -1.3 | EUR/09:00 | | BoE MPC minutes, QE vote Nov | 7-2 | 9-0 | GBP/09:30 | | Construction output sa, % m/m Sep | --- | -0.4 | EUR/10:00 | | CBI industrial trends, net balance Nov | --- | -51 | GBP/11:00 | | CPI, % m/m (y/y) Oct | 0.1 (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 |
AUDUSD
R 2: 0.9475
R 1: 0.9405
CURRENT: 0.9320
S 1: 0.9210
S 2: 0.9190
USDCAD
R 2: 1.0800
R 1: 1.0660
CURRENT: 1.0505
S 1. 1.0410
S 2: 1.0380
EURJPY
R 2: 135.05
R 1: 134.45
CURRENT: 132.90
S 1: 132.50
S 2: 131.75
USDMXN
R 2: 13.265
R 1: 13.062
CURRENT: 13.022
S 1: 12.950
S 2. 12.855
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Market Brief |
There has been some consolidation in FX overnight after yesterday’s USD rally pushed EURUSD to threaten its 12 month uptrend and test major resistance at 1.4810. The catalyst appears to have been comments from the Fed’s Yellen that suggested higher rates could help stem “damaging” leverage; yet another piece of rhetoric that has unnerved short USD positions after Bernanke’s comments the day before – as such, this latest test of the downtrend comes without the pair having even come close to testing the upside resistance at 1.5060, a worrying factor for EURUSD bulls. European and US data from earlier in the session was mixed and had a muted impact on FX markets following their release. US 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. What was significant about this latest EURUSD sell-off was the simultaneous rally in gold to hit new highs at $1144; completely undermining the correlation that has existed between the two asset classes since March.
One of the better performing currencies yesterday was GBP; after UK CPI data beat estimates at 0.2% MoM, 1.5% YoY (forecast: 0.1% MoM, 1.4% YoY). The crucial event for GBPUSD direction from here will be today’s release of the BoE Minutes, 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 to 1.7000 levels (especially if there is serious consideration of an end to the stimulus programme), but obviously if the statement strikes a more dovish tone then a revisit of 1.6650downside support is possible.
Overnight equity markets across Asia have put in a variable performance, but gold remains elevated at $1139 levels, and silver too is holding up well at $18.40. From here we believe the rally in gold has further upside to $1180-1200 levels, but it seems unlikely that EURUSD will be able to follow suit with such vigour. The European data calendar is light today, expecting only Eurozone Construction Output, but the US session should be slightly more compelling with both Canadian and US CPI figures due. The US figures 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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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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