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US Session: Dollar Gains On Equity Losses But Remains In Ranges
November 19, 2009 6:03 PM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.41 |  |  | DKK | -0.55 | | | EUR | -0.55 | | | GBP | -0.62 | | | CHF | -0.68 | | | CAD | -1.08 | | | NOK | -1.06 | | | SEK | -1.17 | | | AUD | -1.39 | | | NZD | -2.32 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'261.65 | - 1.51 | | DAX Index | 5'702.75 | - 1.47 | | SMI Index | 6'283.87 | - 1.34 | | S&P 500 Index | 1'090.51 | - 1.74 | | DJIA Index | 10'274.55 | - 1.46 | | Nikkei 225 Futures | 9'490.00 | - 1.86 | | Hang Seng Futures | 22'543.00 | - 0.98 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'135.30 | - 0.89 | | Silver | 18.29 | - 1.50 | | VIX | 23.85 | + 10.26 | | Crude wti | 77.64 | - 2.44 | | USD Index | 75.45 | + 0.52 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Fri 20 Nov | --- | --- | --- | | BoJ Rate Announcement, % 20-Nov | 0.10 | 0.10 | JPY/AM |
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Currency Tech |
EURUSD
R 2: 1.5060
R 1: 1.5045
CURRENT: 1.4885
S 1: 1.4815
S 2: 1.4785
GBPUSD
R 2: 1.7040
R 1: 1.6845
CURRENT: 1.6650
S 1: 1.6510
S 2: 1.6400
USDJPY
R 2: 90.85
R 1: 90.60
CURRENT: 88.95
S 1: 88.65
S 2: 87.10
AUDUSD
R 2: 0.9475
R 1: 0.9405
CURRENT: 0.9170
S 1: 0.9110
S 2: 0.9025
USDCAD
R 2: 1.0800
R 1: 1.0690
CURRENT: 1.0645
S 1. 1.0410
S 2: 1.0380
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Market Brief |
The USD has remained bid throughout the day as poor equity market performances have moderated risk appetite. Commodities including gold and silver have retraced markedly from their highs, with gold dipping as low as $1133.16 from yesterday’s $1153 levels, and oil slipping 2.5% to trade at $77.50. The strength of the USD in today’s session has ensured that EURUSD remains comfortably within its trading band after yesterday’s rally, selling off to touch a low of 1.4843 so far. Rumours persist about the existence of a large option-structure in the market (expiring tomorrow) being responsible for the range-bound price action between 1.4800 and 1.5100; which if genuine, would suggest a termination of the barriers at those levels would come tomorrow afternoon.
The morning data out of Europe was largely focused on the UK, where Retail Sales posted a 0.4% MoM gain in Oct (vs. 0.5% expected) and there were upward revisions to last month’s figure from 0.0% to 0.4%. M4 Money Supply data were also more positive than expected, growing 1.8% MoM in October (11.0% YoY). GBPUSD however only enjoyed a brief respite from its sell-off after the data, climbing from 1.6675 to 1.6700 before continuing its move lower on the day to 1.6607 lows.
The afternoon’s events have passed without much impact on FX markets; US claims data were slightly worse (higher) than expected, and Leading Indicators for October also missed forecasts at 0.3% (vs. 0.4% expected). The testimony from Treasury Secretary Timothy Geithner did not produce any comments to shake up the trend of USD buying either, and with a light calendar on Friday, we feel that range-bound trading is likely to persist into the week’s close.
The impending BoJ meeting overnight is expected to maintain rates at ultra-low 0.10% levels. No surprises have come out of these meetings for a while, but focus should be on any official statement or rhetoric regarding JPY strength; especially considering JPY’s rally over the past 3 weeks, and the downtrend in USDJPY looking to threaten sub 88.00 levels once more.
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European Session: Fed Rhetoric Continues To Stir Up Markets
November 19, 2009 9:05 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.44 | | | GBP | -0.44 | | | DKK | -0.50 | | | EUR | -0.51 | | | CAD | -0.51 | | | CHF | -0.56 | | | AUD | -0.79 | | | NOK | -0.80 | | | SEK | -0.94 | | | NZD | -1.59 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9'549.47 | - 1.32 | | Hang Seng Index | 22'692.17 | - 0.65 | | Shanghai Index | 3'320.61 | + 0.53 | | FTSE 100 Index | 5'342.13 | - 0.07 | | DAX Index | 5'787.61 | + 0.16 | | SMI Index | 6'368.97 | - 0.12 | | S&P future | 1'105.30 | - 0.29 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'141.95 | - 0.31 | | Silver | 18.50 | - 0.37 | | VIX | 21.63 | - 3.48 | | Crude wti | 79.66 | + 0.10 | | USD Index | 75.19 | + 0.18 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Retail sales, % m/m (y/y) Oct | 0.5 (2.9) | 0.0 (2.4) | GBP/09:30 | | PSNB (PSNCR), £ bn Oct | 4.0 | 19.4 | GBP/09:30 | | M4 money supply, % m/m (y/y) Oct | 1.0 (0.8) | 9.9 (11.6) | GBP/09:30 | | Wholesale sales, % m/m Sep | 1.0 | -1.4 | CAD/13:30 | | Leading indicators, % m/m Oct | 0.7 | 1.1 | CAD/13:30 | | Initial jobless claims, thous 14-Nov | 504 | 502 | USD/13:30 | | Continuing claims, thous 7-Nov | 5598 | 5631 | USD/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 |
AUDUSD
R 2: 0.9475
R 1: 0.9405
CURRENT: 0.9210
S 1: 0.9210
S 2: 0.9190
USDCAD
R 2: 1.0800
R 1: 1.0660
CURRENT: 1.0610
S 1. 1.0410
S 2: 1.0380
EURJPY
R 2: 135.05
R 1: 134.45
CURRENT: 132.10
S 1: 131.75
S 2: 131.00
USDMXN
R 2: 13.265
R 1: 13.062
CURRENT: 13.051
S 1: 12.950
S 2. 12.855
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Market Brief |
Gold has once again outshone other assets classes by powering to new highs above $1153, 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 put in a rather mediocre performance on the whole.
Yesterday’s major news event 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 subsequent strong demand for EURGBP throughout the day put GBPUSD under pressure, dropping to a low of 1.6686. Today 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 at either 1.6840 upside resistance or 1.6650 downside support.
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. However, confusingly he also added that the memory of the housing bubble may push the Fed to start hiking rates sooner than in past recessions. On balance, his remarks have been interpreted as mildly USD positive, but range bound price action is still stubbornly ensconced and it seems unlikely that any scheduled data event in the remainder of the week will be sufficient to break defined ranges. This afternoon’s session looks unpromising with only weekly claims data, US Leading Indicators and the Philadelphia Fed survey – but given the last three days’ most salient moves have been triggered by Fed rhetoric (Bernanke, Yellen, Bullard), we remain conscious of speeches expected later from US speakers Geithner and Fisher, ECB’s Trichet and Gonzalez-Paramo, and Canada’s Carney.
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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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