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Dollar Holds Firm Despite Equity Market Gains
December 02, 2009 6:05 PM CET
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G10 Advancers and Decliners vs USD |
| | SEK | 0.40 |  | | | GBP | 0.16 | | | | NOK | 0.15 | | | | AUD | 0.09 | |  | DKK | -0.15 | | | CAD | -0.16 | | | EUR | -0.19 | | | CHF | -0.19 | | | NZD | -0.29 | | | JPY | -0.58 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'327.39 | + 0.29 | | DAX Index | 5'781.68 | + 0.09 | | SMI Index | 6'386.54 | + 0.23 | | S&P 500 Index | 1'109.02 | + 0.01 | | DJIA Index | 10'456.16 | - 0.15 | | Nikkei 225 Futures | 9'660.00 | + 0.31 | | Hang Seng Futures | 22'420.00 | + 0.70 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'209.80 | + 1.10 | | Silver | 19.21 | + 0.58 | | VIX | 21.48 | - 2.01 | | Crude wti | 76.89 | - 1.89 | | USD Index | 74.54 | + 0.13 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Thu 3 Dec | --- | --- | --- | | Retail sales % m/m Oct | 0.3 | -0.2 | AUD/00:30 | | Final Services PMI, index Nov | 53.2 | 53.2 | EUR/09:00 | | Final Composite PMI, index Nov | 53.7 | 53.7 | EUR/09:00 | | Services PMI, index Nov | 57.0 | 56.9 | GBP/09:30 | | Retail sales, % m/m (y/y) Oct | 0.2 (-2.4) | -0.7(-3.6) | EUR/10:00 | | Preliminary GDP, % q/q Q3 | 0.4 | 0.4 | EUR/10:00 | | Unit labour costs, % q/q Q3 f | -4.2 | -5.2 | USD/13:30 | | ISM non-manufacturing index Nov | 51.5 | 50.6 | USD/15:00 |
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Currency Tech |
EURUSD
R 2: 1.5200
R 1: 1.5150
CURRENT: 1.5055
S 1: 1.4950
S 2: 1.4800
GBPUSD
R 2: 1.6880
R 1: 1.6696
CURRENT: 1.6640
S 1: 1.6380
S 2: 1.6272
USDJPY
R 2: 88.20
R 1: 87.53
CURRENT: 87.15
S 1: 85.87
S 2: 84.40
AUDUSD
R 2: 0.9406
R 1: 0.9323
CURRENT: 0.9260
S 1: 0.9056
S 2: 0.8947
USDCAD
R 2: 1.0781
R 1: 1.0749
CURRENT: 1.0465
S 1: 1.0400
S 2: 1.0207
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Market Brief |
There has been a divergence in the pattern of risk appetite and USD flows today; as equities have stayed in mildly positive territory, but the USD has made gains on the day with the DXY +0.20%. Gold has pared back from early $1217.25 highs to current $1209 levels, and EURUSD has receded to 1.5050 after failing to entice further bids up through 1.5100 levels. It feels much like the market is slightly over-crowded, and large positioning (especially in EURUSD) is limiting further USD weakness. Today’s minor correction will have helped to clear the market of some of these trades, but a further decline down towards 1.4950 support would be a healthy development before a further continuation of the trend higher.
This morning’s UK Construction PMI was the main market-mover; as the upside surprise helped spur GBPUSD higher after yesterday’s disappointing PMI Manufacturing. The pair has also been supported by strong selling interest in EURGBP throughout the day which has resulted in a break below 0.9050 levels. From a technical perspective, it looks like EURGBP has a short-term head-and-shoulders chart pattern with a neckline at 0.9060 which has been playing out over the last 5 days, and if genuine, would indicate that further selling is to be expected towards 0.8950 levels below.
US ADP Employment figures in the afternoon were lower than expectations; with a -169k print against consensus estimates of -150k. The decline in payrolls figures is still less severe than the -203k witnessed last month, but the slight miss has almost certainly ensured that predictions for Friday’s Non Farm Payrolls will now be adjusted lower. Official median estimates for Friday’s NFP are still listed as -123k after last month’s -190k; but we feel most investors will now lean towards a more negative figure of 130k-140k.
Economic releases expected in the coming sessions include Australian Retail Sales which are expected to grow 0.3% MoM in October, up from September’s -0.2% print. AUD has been rather subdued in rallying lately; the reaction of AUDUSD after the recent rate hike suggests that there may be significant headwinds to AUD appreciation from here, and after the dovish Mitchell article yesterday we do not believe that an upside surprise will be potent enough to initiate a break up through the 0.9400 highs. Tomorrow’s European session will be a key period for EURUSD as the market awaits Services and Composite PMI Retail, Retail Sales and preliminary Q3 GDP.
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Gold Strikes New Highs Above $1215
December 02, 2009 8:43 AM CET
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G10 Advancers and Decliners vs USD |
| | NOK | 0.06 | | | | NZD | 0.06 | | | | AUD | 0.02 | | | | CAD | 0.01 | | | DKK | -0.05 | | | EUR | -0.05 | | | CHF | -0.08 | | | SEK | -0.11 | | | GBP | -0.28 | | | JPY | -0.61 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9'608.94 | + 0.38 | | Hang Seng Index | 22'377.85 | + 1.20 | | Shanghai Index | 3'269.75 | + 1.06 | | FTSE 100 Index | 5'312.17 | + 2.34 | | DAX Index | 5'776.61 | + 2.68 | | SMI Index | 6'372.08 | + 1.77 | | S&P future | 1'107.50 | - 0.08 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'211.61 | + 1.25 | | Silver | 19.23 | + 0.68 | | VIX | 21.92 | - 10.57 | | Crude wti | 78.17 | - 0.26 | | USD Index | 74.55 | + 0.14 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Manufacturing PMI, index Nov | 47.5 | 45.8 | NOK/08:00 | | Construction PMI, index Nov | 46.9 | 46.2 | GBP/09:30 | | PPI, % m/m (y/y) Oct | 0.0 (-6.8) | -0.4(-7.7) | EUR/10:00 | | Change in ADP private payrolls, thous Nov | -150 | -203 | USD/13:15 |
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Currency Tech |
AUDUSD
R 2: 0.9406
R 1: 0.9323
CURRENT: 0.9255
S 1: 0.9056
S 2: 0.8947
USDCAD
R 2: 1.0781
R 1: 1.0749
CURRENT: 1.0465
S 1: 1.0400
S 2: 1.0207
EURJPY
R 2: 133.61
R 1: 132.69
CURRENT: 131.50
S 1: 129.00
S 2: 126.91
USDMXN
R 2: 13.133
R 1: 13.089
CURRENT: 12.859
S 1: 12.790
S 2: 12.767
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Market Brief |
Asian equities have gained for a third straight day as worries over Dubai’s debt crisis have dissipated and the global recovery remains on track. The corresponding USD weakness has led EURUSD to retest 1.5100 levels, and most notably, pushed gold emphatically through the $1200 psychological barrier to touch highs of $1215.75.
Yesterday’s European PMI data was broadly better than expected, whilst the US ISM Manufacturing disappointed; however the most significant drivers for FX markets were policy-maker comments from both sides of the Atlantic. EU President Juncker reassured markets that the likely knock-on effect of Dubai’s debt problems on the Eurozone were minimal, whilst the Fed’s Plosser remarked that the USD’s recent depreciation was not a concern; explaining that it was in part a reversal of the USD inflows seen during the financial crisis. Both sets of data and rhetoric reaffirm in our minds the case for further EURUSD appreciation in the weeks to come, and it seems highly plausible that we see 1.5200 by year end.
Meanwhile the speculation about JPY intervention seems to have cooled marginally from this time yesterday after USDJPY’s reversion back above 87.00. Markets are still absorbing the implications of the new liquidity facility, but we remain vigilant for any new headlines concerning the currency specifically to take our cue on JPY direction from here.
Looking ahead to today, the morning highlights include Norwegian PMI, UK PMI Construction and Eurozone PPI. Of the three, the most likely to have any impact on the FX markets is likely to be UK PMI; as GBP has been under pressure recently amid speculation that UK banks may be heavy exposed to Dubai debt. The large miss in UK PMI Manufacturing yesterday did little to improve the prospects for GBP, and another miss today could be severely negative on GBP sentiment. The afternoon’s schedule is light, but we look to the ADP Employment Report out of the US to provide an early insight into the more significant Non Farm Payroll numbers on Friday.
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