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US Session: Market Cringes over Bailout Bill that Comes Up Short
February 10, 2009 7:27 PM CET
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G10 Advancers and Decliners vs USD |
| | Jpy | 0.93 |  | | | Chf | 0.62 | |  | Eur | -0.58 | | | Dkk | -0.58 | | | Nok | -1.05 | | | Cad | -1.36 | | | Sek | -1.96 | | | Gbp | -2.21 | | | Nzd | -2.25 | | | Aud | -3.27 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 7,965.00 | - 3.08 | | S&P future | 838.70 | - 3.05 | | NASDAQ 100 Index | 1,244.50 | - 2.45 | | FTSE futures | 4,181.50 | - 2.63 | | CAC futures | 3,012.50 | - 3.89 | | DAX futures | 4,499.00 | - 3.79 | | SMI Futures | 5,085.00 | - 0.22 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 38.86 | - 1.74 | | Gold | 910.32 | + 1.76 | | Silver | 13.12 | + 2.18 | | USD Index | 85.29 | + 0.59 | | VIX | 46.80 | + 7.24 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 3: 0.7028
R 2: 0.6879
R 1: 0.6850
CURRENT: 0.6645
S 1: 0.6629
S 2: 0.6476
S 3: 0.6355
EURJPY
R 3: 122.17
R 2: 121.57
R 1: 120.01
CURRENT: 117.44
S 1: 115.71
S 2: 114.22
S 3: 113.15
USDSGD
R 3: 1.5112
R 2: 1.5065
R 1: 1.5017
CURRENT: 1.5000
S 1: 1.4904
S 2: 1.4809
S 3: 1.4793
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Market Brief |
The Usd gained strength on heightened risk aversion following widespread disappointment in the Geithner’s Bank Rescue plan. The EurUsd fell 80pips placing the pair below 1.30 at a new level of support, while the UsdJpy followed in line off 80 pips at the mid range of 90. The GbpUsd collapsed on a resurgence of FX Traders bearish on risk, the pair sunk 340pips to mid 1.45 level. Equity markets posed a major selloff expressing investor’s dismay with the new bank rescue portion of the plan. The Dow decreased as much as 360pts or 4.3% back below 8000. Bond yields dropped across the curve in the US and Europe adding to the bearish sentiment in the financial markets. The 10yr slid 13bps and the 30yr gave up 8bps keeping rates at historical lows. Commodities were mixed, with a strong rally in gold at $911oz up 1.9%, and a decline in oil prices to $39bbl down less than 1%.
During the European session, ECB Member Axel Weber highlighted his thoughts that the ECB should not refrain from more aggressive monetary policy. Liquidity remains an issue many institutions face, an example of this is recent commentary from a Eurogroup company called Alumnia, who highlighted there is not enough credit available. Altogether, our expectation that the ECB will continue cutting rates aggressively in the month ahead causing the EurUsd to persists in a broad downtrend. After declining to a support level of 1.2810, the EurUsd should encounter resistance at 1.3070. We see the support at 1.2658, if it breaks this level that would undermine the developing recovery prospects. In the UK, the RICS House Price Balance deteriorated to -76.3%, worst than expectations of -70%. The figures issued a bleak outlook for the housing market from our perspective. Meanwhile, the trade balance improved to GBP -7.6bln vs. GBP -8.1bn previously this is due in part to a drop in imports. We expect that the cable was pressured by some profit taking and the risk aversion may return. A growing consensus of the market believes investors are overly optimistic about the much anticipated stimulus plan. From a technical perspective we are looking for near-term key support to fall to 1.4480.
In the US, the focus today is still undoubtedly on the Obama stimulus package and Geithner bank rescue plan. The press reports suggest the plan will not include a “bad bank” option and will consist of further capital injections for banks, financing for consumer and business loans through an increased Term Asset-Backed Securities Loan Facility (TALF) and public financing for private investors willing to buy distressed assets. Inventories at U.S. wholesalers in December came out -1.4% vs. -0.9% previously, fell twice as much as forecast, as businesses tried to keep up with plummeting sales.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off‐exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMNY makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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Asian Session – Waiting on Treasury Secretary Geithner
February 10, 2009 10:35 AM CET
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G10 Advancers and Decliners vs USD |
| | JPY | 0.51 | | | CHF | -0.37 | | | GBP | -1.08 | | | EUR | -1.11 | | | DKK | -1.18 | | | CAD | -1.32 | | | NOK | -1.40 | | | NZD | -1.68 | | | SEK | -1.96 | | | AUD | -2.63 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 7,945.94 | - 0.29 | | Hang Seng Index | 13,880.64 | + 0.81 | | Shanghai Index | 2^,265.16 | + 1.81 | | FTSE 100 Index | 4,237.63 | - 1.62 | | DAX Index | 4,580.65 | - 1.84 | | SMI Index | 5,123.49 | - 0.67 | | DJIA futures | 8,135.00 | - 1.01 |
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World Markets |
Current Level |
% Change |
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| Gold | 892.85 | - 0.91 | | Silver | 12.81 | - 0.27 | | VIX | 43.64 | + 0.62 | | Crude wti | 39.54 | - 0.51 | | USD Index | 85.39 | + 0.70 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Sweden: Industrial production, % m/m Dec | -1.0,-10.7 | -2.2,-10.9 | SZ / 8.30 | | Norway: CPI, % m/m Jan | -0.6,1.9Y | -0.2,2.1Y | NO / 9.00 | | Norway: PPI, % m/m Jan | -- | -5.1,6.0Y | NO / 9.00 | | Trade balance, £ bn Dec | -£8.1bn | -£8.3bn | UK / 9.30 |
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Currency Tech |
AUDUSD
R 3: 0.7028
R 2: 0.6879
R 1: 0.6850
CURRENT: 0.6645
S 1: 0.6629
S 2: 0.6476
S 3: 0.6355
EURJPY
R 3: 122.17
R 2: 121.57
R 1: 120.01
CURRENT: 117.44
S 1: 115.71
S 2: 114.22
S 3: 113.15
USDSGD
R 3: 1.5112
R 2: 1.5065
R 1: 1.5017
CURRENT: 1.5000
S 1: 1.4904
S 2: 1.4809
S 3: 1.4793
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Market Brief |
The Usd was stronger in the Asian session, as news from Russian regional banks weighed on risk sentiment. The EurUsd traded from 1.3026 to 1.2810, while the UsdJpy jumped around the 91.70 to 91.00 levels. The early buzz surrounded Russia's regional banks and their request to postpone a repayment on up to $400bn of its private sector debt to European banks. The rumor was downplayed by the senior Kremlin aide, Arkady Dvorkovich, "there have been no proposals coming to the government about the debt restructuring. The information that such talks are taking place is not true". However, the head of the regional banks association Aksakov stated that a corporate debt restructuring plan was only an "idea" and not a formal plan. On a side note, this weekends G7 meeting in Rome will focus on how to avoid protectionism and discuss actions to support global financial system, according to a senior MoF official. The highlight of today will be Treasury Secretary Geithner announcement at 16:00 GMT where he will layout the details of the US financial recue plan.
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US Session: Dollar a Victim of Increased Risk Appetite
February 10, 2009 12:52 AM CET
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G10 Advancers and Decliners vs USD |
| | Nok | 1.73 | | | | Nzd | 1.30 | | | | Gbp | 0.79 | | | | Sek | 0.59 | | | | Aud | 0.56 | | | | Eur | 0.55 | | | | Dkk | 0.53 | | | | Jpy | 0.50 | | | | Cad | 0.18 | | | Chf | -0.32 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA futures | 8,209.00 | - 0.11 | | S&P future | 863.70 | - 0.16 | | Nasdaq futures | 1,275.50 | - 0.02 | | FTSE futures | 4,294.50 | + 0.77 | | CAC futures | 3,134.50 | + 0.48 | | DAX futures | 4,676.00 | + 0.99 | | DJIA Index | 5,096.00 | + 0.67 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 39.86 | - 0.77 | | Gold | 895.95 | - 1.71 | | Silver | 12.85 | - 2.06 | | USD Index | 84.79 | - 0.65 | | VIX | 43.64 | + 0.62 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| No Major Events Scheduled | | | |
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Currency Tech |
AUDUSD
R 3: 0.7269
R 2: 0.6844
R 1: 0.6803
CURRENT: 0.6686
S 1: 0.6476
S 2: 0.6403
S 3: 0.6355
EURJPY
R 3: 125.28
R 2: 122.17
R 1: 119.98
CURRENT: 117.89
S 1: 115.71
S 2: 114.22
S 3: 113.15
USDSGD
R 3: 1.5178
R 2: 1.5115
R 1: 1.5066
CURRENT: 1.4989
S 1: 1.4809
S 2: 1.4755
S 3: 1.4675
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Market Brief |
The Usd incurred further losses as risk appetite continued to rally supporting the financial markets. The EurUsd added 65bps to breakthrough 1.30, while the UsdJpy fell roughly 46pips to the mid range of 91. Equity markets were volatile in the US but closed flat with the Dow off less than 1% or 9pts. Stock indexes in Europe finished marginally higher with the FTSE, DAX, and CAC all higher by less than 1%. Bond yields remain mixed surprisingly, with the 2yr holding ground above 1%, while the 10 and 30yr stay compressed below historical averages. Commodities declined, with oil below $40bbl and gold taking a nose dive to $894oz.
In the UK, Barclays the third-largest bank by assets in the region reported better than expected earnings from the second half of 2008. Net income for the bank surged 49% rising above Analysts estimates suggesting financials may be finally on track to profitably again. The sterling reacted positively to this news, considering Barclays was downgraded by Moody’s less than a month ago. In regards to the Eurozone, German FSO announced that the trade surplus amounted to Eur 6.9B vs Eur 8.5B, down from Eur 9.9B in December 2007. The FSO figure caused Germany's trade surplus to fall 8.7% in 2008. An export slowdown will have strong consequences for the Germany and the greater Eurozone economy. Despite the deteriorating economic picture the EurUsd climbed back above of 1.30 focusing on the trend of risk aversion from a macro perspective. Traders are focused on the fate of the Obama stimulus package in the Senate, and the details of the Geithner bank rescue plan tomorrow. The changes in reform create a degree of optimism, if investors react positively to the financial rescue plan and economic stimulus package we will see a rise in risk appetite and drive the EurUsd higher. There are no major data releases scheduled today.
Risk Disclaimer:
Although every investment involves some degree of risk, the risk of loss in trading off‐exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make an informed decision prior to investing. The material presented here is not to be construed as trading advice or strategy. ACMNY makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change.
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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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