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US Session: Dollar Makes Early Gains On Fragile Risk Sentiment But Reverses On US Data
November 03, 2009 6:00 PM CET
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G10 Advancers and Decliners vs USD |
| | CAD | 0.47 |  |  | JPY | -0.04 | | | GBP | -0.19 | | | NZD | -0.29 | | | AUD | -0.76 | | | DKK | -0.91 | | | EUR | -0.95 | | | NOK | -1.04 | | | CHF | -1.01 | | | SEK | -1.36 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'044.50 | - 1.18 | | DAX Index | 5'364.46 | - 1.22 | | SMI Index | 6'222.66 | - 1.09 | | S&P 500 Index | 1'035.14 | - 0.74 | | DJIA Index | 9'705.48 | - 0.86 | | Nikkei 225 Futures | 9'830.00 | 0.00 | | Hang Seng Futures | 21'110.00 | - 1.29 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'077.30 | + 1.68 | | Silver | 16.86 | + 2.43 | | VIX | 30.41 | + 2.12 | | Crude wti | 78.12 | - 0.01 | | USD Index | 76.61 | + 0.51 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Wed 4 Nov | - | - | - | | Nationwide consumer confidence, index Oct | 73 | 71 | GBP/00:01 | | Retail Sales, % m/m Sep | 0.5 | 0.9 | AUD/00:30 | | Building Approvals, % m/m (y/y) Sep | 2.3 (8.2) | -0.1 (0.0) | AUD/00:30 | | Riksbank monetary policy meeting minutes Oct | - | - | SEK/08:30 | | Germany: Final Services PMI, index Oct | 50.9 | 50.9 | EUR/08:55 | | Final Services PMI, index Oct | 52.3 | 52.3 | EUR/09:00 | | Final Composite PMI, index Oct | 53.0 | 53.0 | EUR/09:00 | | Services PMI, index Oct | 55.5 | 55.3 | GBP/09:30 | | PPI, % m/m (y/y) Sep | -0.4(-7.7) | 0.4 (7.5) | EUR/10:00 | | ADP employment, chg thous Oct | -200 | -254 | USD/13:15 | | ISM non-manufacturing, index Oct | 51.5 | 50.9 | USD/15:00 | | FOMC rate decision, % 04-Nov | 0.25 | 0.25 | USD/19:15 |
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Currency Tech |
EURUSD
R 2: 1.4927
R 1: 1.4876
CURRENT: 1.4640
S 1: 1.4684
S 2. 1.4646
GBPUSD
R 2: 1.6604
R 1: 1.6421
CURRENT: 1.6385
S 1: 1.6252
S 2: 1.6120
USDJPY
R 2: 92.50
R 1: 91.20
CURRENT: 90.30
S 1: 89.60
S 2: 89.20
AUDUSD
R 2: 0.9330
R 1: 0.9220
CURRENT: 0.8975
S 1: 0.8865
S 2: 0.8760
USDCAD
R 2: 1.0959
R 1: 1.0870
CURRENT: 1.0720
S 1: 1.0627
S 2: 1.0505
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Market Brief |
The USD gained against most of its major counterparts in the European morning as equity markets traded heavy and a lack of significant data allowed risk sentiment to dwindle. Norwegian PMI data disappointed with a 45.8 print in Oct, much lower than forecasts for 47.2 and down on the Sep reading at 46.7. EURNOK rallied from 8.5150 to 8.5575 after the release but NOK has recovered strongly this afternoon on improved risk sentiment. Meanwhile UK PMI Construction figures were also below expectations at 46.2 (vs. 47.2 expected, 46.7 last), sending GBPUSD down to 1.6270 levels.
US equities slumped lower on the open, forcing EURUSD to re-test the lows around 1.4630 and pushed gold to $1055 on the day, but US Factory Orders then came to the salvation of risk-assets by posting a better-than-expected 0.9% gain MoM (0.8% expected, -0.8% last). The figures boosted US equity indices back into positive territory on the day, and in sympathy EURUSD rallied to 1.4697 (but failed to overcome supply around 1.4700), and gold smashed through $1070 technical levels, leaving no resistance in the way as it powered to new all-time highs at $1080.65. The rapid reversal in the USD’s fortunes was acutely demonstrated by the price action in GBPUSD today, as it did the round trip from 1.6421 highs this morning to 1.6263 lows post-US equity open, then snapped-back to 1.6420 after Factory Orders.
Most assets have since pared back their gains against the USD slightly, as a more detailed look into the data revealed US manufacturers’ inventories dropped 1.0% in September – more than the drawdown assumed in the GDP estimate last week. There were also revisions lower to the August figures which will confer a downward revision to the next estimate of Q3 GDP. Nevertheless, with gold smashing through to all-time highs and the continued correlations between precious metals, equities and EURUSD, it is likely that the USD will remain on the back foot.
Tomorrow’s main event will of course be the US FOMC meeting where markets keenly await the Fed’s assessment of the economy in light of the most recent GDP and ISM data. Most significant will be whether there is any reassurance that current accommodative policy and stimulus will remain in place or whether the latest information may have prompted a shift in tone to a slightly less dovish stance. Other releases due in the earlier part of the day will include minutes from the most recent Riksbank meeting, Eurozone Final Composite PMI, UK Services PMI and US ADP Employment ahead of Friday’s NFP.
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European Session: RBA Hikes Rates Again But Moderates Hawkish Tone
November 03, 2009 8:43 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.17 | | | | NZD | 0.14 | | | | DKK | 0.00 | | | EUR | -0.03 | | | CHF | -0.09 | | | SEK | -0.16 | | | CAD | -0.20 | | | NOK | -0.23 | | | GBP | -0.36 | | | AUD | -0.59 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9'802.95 | - 2.31 | | Hang Seng Index | 21'300.73 | - 1.48 | | Shanghai Index | 3'114.23 | + 1.22 | | FTSE 100 Index | 5'104.50 | + 1.19 | | DAX Index | 5'430.82 | + 0.29 | | SMI Index | 6'291.22 | + 0.09 | | S&P future | 1'037.30 | - 0.17 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'061.80 | + 0.22 | | Silver | 16.55 | + 0.56 | | VIX | 29.78 | - 2.97 | | Crude wti | 77.99 | - 0.18 | | USD Index | 76.26 | + 0.05 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Japan Holiday | - | - | - | | Manufacturing PMI, index Oct | 49.0 | 47.4 | NOK/08:00 | | Construction PMI, index Oct | 47.2 | 46.7 | GBP/09:28 | | Factory orders, % m/m Sep | 0.8 | -0.8 | USD/15:00 |
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Currency Tech |
AUDUSD
R 2: 0.9330
R 1: 0.9220
CURRENT: 0.8985
S 1: 0.8865
S 2: 0.8760
USDCAD
R 2: 1.0959
R 1: 1.0870
CURRENT: 1.0780
S 1: 1.0627
S 2: 1.0505
EURJPY
R 2: 135.97
R 1: 134.75
CURRENT: 133.00
S 1: 131.90
S 2: 131.00
USDMXN
R 2: 13.454
R 1: 13.365
CURRENT: 13.213
S 1: 13.063
S 2: 12.986
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Market Brief |
The major news overnight has been the RBA meeting where rates were raised 25bps to 3.50% as expected. AUDUSD had ground gradually higher in anticipation of the announcement, but sold off from 0.9090 to 0.9007 after the release as the supplementary statement sounded a moderately less hawkish tone. The statement removed previous comments that the “very expansionary setting” of current rates was “possibly imprudent”, and inserted that the removal of accommodative monetary policy from here would happen “gradually”. Some speculators had hoped for a 50bps hike this month but it seems the RBA is comfortable that this steady pace of rate rises is appropriate for now, and even referred to the current strength of AUD as likely to “dampen price pressures”.
Today’s European data releases kick off with Norway PMI; expected to post an improved 49.0 after last month’s 47.4 reading. Considering the price action in EURNOK recently, it is clear that positioning is posing a headwind to NOK gains, even when risk appetite is surging. Given that most regional PMI figures yesterday tended to be in line with or better than expectations (and had no currency impact), it is unlikely that this will buck the trend, however it is possible a poor PMI figure today could prompt a round of stop-hunting. UK Construction PMI rounds off the morning but this will be a minor data point likely to be overshadowed by broader risk appetite themes today and the all-important MPC meeting on Thursday.
The US session is only due to include US Factory Orders (0.8% MoM expected, -0.8% previous); although a relatively volatile figure, we would expect a higher than consensus reading to induce a similar reaction to yesterday’s US data (i.e. a boost to equities and short-term support for risk appetite). Tomorrow will be the key event for the USD as we await the FOMC meeting statement.
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