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High Beta Currencies Follow Equity Markets Lower
November 26, 2009 5:58 PM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.91 |  |  | CHF | -0.88 | | | EUR | -0.96 | | | DKK | -0.98 | | | GBP | -1.29 | | | CAD | -1.48 | | | NOK | -1.72 | | | SEK | -2.18 | | | AUD | -2.22 | | | NZD | -2.50 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'198.46 | - 3.10 | | DAX Index | 5'623.78 | - 3.09 | | SMI Index | 6'283.38 | - 2.16 | | S&P future | 1'084.90 | - 2.16 | | DJIA futures | 10'263.00 | - 1.71 | | Nikkei 225 Futures | 9'350.00 | - 1.06 | | Hang Seng Futures | 22'177.00 | - 1.87 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'184.18 | - 0.64 | | Silver | 18.49 | - 1.91 | | VIX | 20.48 | + 0.05 | | Crude wti | 76.16 | - 2.31 | | USD Index | 74.93 | + 0.89 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Fri 27 Nov | --- | --- | --- | | GDP, % q/q Q3 | 0.6 | 0.2 | SEK/08:30 | | Retail sales, % m/m Oct | 0.5 | 0.2 | SEK/08:30 | | Consumer confidence, index Nov | 88.0 | 86.2 | EUR/10:00 | | Industrial confidence, index Nov | -19 | -21 | EUR/10:00 | | KoF leading indicator Nov | 1.78 | 1.45 | CHF/10:30 | | Banxico rate decision, % Nov | 4.50 | 4.50 | MXN/14:00 |
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Currency Tech |
EURUSD
R 2: 1.5200
R 1: 1.5100
CURRENT: 1.4990
S 1: 1.4800
S 2: 1.4626
GBPUSD
R 2: 1.7040
R 1: 1.6845
CURRENT: 1.6495
S 1: 1.6459
S 2: 1.6272
USDJPY
R 2: 90.60
R 1: 88.20
CURRENT: 86.50
S 1: 86.30
S 2: 83.60
AUDUSD
R 2: 0.9406
R 1: 0.9335
CURRENT: 0.9115
S 1: 0.9090
S 2: 0.9060
USDCAD
R 2: 1.0735
R 1: 1.0645
CURRENT: 1.0605
S 1: 1.0450
S 2: 1.0370
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Market Brief |
Despite a meager data schedule, the FX markets have experienced relatively large moves over the course of the day as the unwind of positions ahead of year end were exaggerated by thin liquidity conditions. Equities are sharply lower across Europe and Latin America, and even gold has sold-off markedly from its $1195 highs to trade at $1184 levels.
After the excitement of the moves in the Asian session that saw major technical barriers breached, the USD has made a recovery against virtually all of its major and EM peers; with the exception of the JPY, where selling pressure has kept the pair subdued around 86.50 levels. The hardest hit currencies have been the high-yielding AUD and NZD which are both down around 2.5% on the day, and much has been attributed to the unwind of cross-JPY positions ahead of the year end.
Patchy liquidity is likely to persist tomorrow as most US desks stay home for the long weekend, but there will at least be some interesting economic data releases. Sweden publishes its Q3 GDP reading and Retail Sales figures which are both expected to show improvements from prior figures, followed by Eurozone Consumer and Industrial Confidence data. Again the consensus is looking for an increase from October levels, but the readings are firmly within negative territory at -18 and 1-21 respectively so improvements are only likely to be modest. Also expected will be the Swiss KOF Leading Indicator and Mexico central bank rate decision.
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Rumours Of SNB Intervention To Weaken CHF, And Rising Concerns On Strength Of JPY
November 26, 2009 8:55 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.66 | | | EUR | -0.32 | | | DKK | -0.34 | | | CHF | -0.55 | | | CAD | -0.57 | | | GBP | -0.65 | | | NOK | -0.72 | | | SEK | -1.03 | | | AUD | -1.08 | | | NZD | -1.31 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9'383.24 | - 0.62 | | Hang Seng Index | 22'163.47 | - 1.98 | | Shanghai Index | 3'170.98 | - 3.62 | | FTSE 100 Index | 5'364.81 | + 0.77 | | DAX Index | 5'803.02 | + 0.58 | | SMI Index | 6'422.20 | + 0.39 | | S&P future | 1'102.70 | - 0.56 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'187.95 | - 0.32 | | Silver | 18.66 | - 1.01 | | VIX | 20.48 | + 0.05 | | Crude wti | 77.00 | - 1.23 | | USD Index | 74.50 | + 0.31 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Germany: Preliminary CPI, % m/m (y/y) Nov | 0.0 (0.5) | 0.1 (0.0) | EUR/AM | | M3, % y/y Oct | 0.8 | 1.8 | EUR/09:00 | | Unemployment Rate, % Nov | 2.6 | 2.6 | NOK/09:00 |
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Currency Tech |
AUDUSD
R 2: 0.9406
R 1: 0.9335
CURRENT: 0.9230
S 1: 0.9110
S 2: 0.9060
USDCAD
R 2: 1.0735
R 1: 1.0645
CURRENT: 1.0500
S 1: 1.0450
S 2: 1.0370
EURJPY
R 2: 134.02
R 1: 132.95
CURRENT: 131.00
S 1: 130.40
S 2: 129.00
USDMXN
R 2: 13.265
R 1: 13.120
CURRENT: 12.852
S 1: 12.797
S 2: 12.767
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Market Brief |
Final confirmation of the break out in currency ranges came late in the US session yesterday; as EURUSD ensured a daily close through the key 1.5100 technical level, after a quick thrust through final resistance triggered stops all the way up to 1.5140 levels. USDCHF similarly pushed decisively down through 1.0000 to touch lows of 0.9918; and the momentum was powerful enough to force EURCHF to finally breach downside support at 1.5080, touching lows of 1.5012. However despite the break down, the start of the European session today has seen an aggressive move all the way from the lows to 1.5133 highs. Rumours circulate of Swiss banks behind the buying, and it seems to bear the hallmarks of another round of SNB intervention.
Yesterday’s plethora of US data was generally positive; although this month’s Durable Goods Orders markedly missed forecasts with a -0.6% reading (+0.5% expected), the September numbers were revised up sharply from 1.0% to 2.0%. PCE measures were broadly in line or higher than forecast, both initial and continuing jobless claims fell further than estimates, and U.Mich Consumer Confidence came out at 67.4 (higher than the 67.0 forecast). Following the impressive Existing Home Sales on Monday, New Home Sales also smashed estimates at 6.2% MoM, and there were upward revisions to last month’s data. The USD gleaned a little support from the lows, but arguably little about the fundamental backdrop has or will change on better second tier data; and the mild USD rebound during the afternoon could very easily have been frustration at the lack of follow-through on currency moves after technical break-outs.
Overnight, Asian equities have given back a lot of yesterday’s gains, and most currencies have pared back from their highs against the USD. Gold has also retraced from new $1195 highs to $1190 levels, but of all the major asset classes, it seems to be the most likely to threaten another surge higher. The BoJ Minutes focused on deflationary concern; a problem that will be exacerbated by the overnight fall in USDJPY to 86.30 new lows. Officials have hit the newswires in earnest to try and stem the declines; with Finance Minister Fujii saying he is watching FX moves closely, and government spokesman Hirano saying Japan may take ‘appropriate’ action on the rising JPY. Earlier, while USDJPY was trading around 78.20 levels, Deputy Finance Minister Noda had stated “we are not considering intervention right now”, but since then, Senior Vice Minister for the Economy Furukawa has weighed in to add that the government would be concerned if the JPY rose too rapidly.
With sparse data expected this morning (German regional and national CPI readings, Eurozone M3, Norway Unemployment), and the US Thanksgiving holiday likely to affect the afternoon session, we expect FX markets to be largely driven by technical factors and positioning; it is likely stop-hunters will be keen to take advantage of the patchy liquidity as the day goes on.
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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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