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US Session: Eroded Risk Appetite and Weak Equity Markets Boost the Dollar; G8 Makes No Comment on the Dollar Reserve Status
July 10, 2009 11:02 PM CEST
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G10 Advancers and Decliners vs USD |
| | Jpy | 0.65 |  |  | Cad | -0.13 | | | Nzd | -0.39 | | | Aud | -0.43 | | | Dkk | -0.45 | | | Eur | -0.47 | | | Chf | -0.54 | | | Nok | -0.57 | | | Gbp | -0.72 | | | Sek | -1.26 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 8,127.09 | - 0.69 | | S&P 500 Index | 877.58 | - 0.58 | | NASDAQ 100 Index | 1,752.87 | + 0.02 | | Nikkei 225 Futures | 9,130.00 | + 1.31 | | Hang Seng Futures | 17,725.00 | + 0.21 | | FTSE futures | 4,104.50 | - 0.28 | | SMI Futures | 5,227.00 | - 1.04 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 59.83 | - 0.96 | | Gold | 912.37 | + 0.00 | | Silver | 12.66 | - 1.67 | | USD Index | 80.25 | + 0.45 | | VIX | 29.24 | - 1.81 |
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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 2: 0.8155
R 1: 0.8039
CURRENT: 0.7762
S 1: 0.7725
S 2: 0.7630
EURJPY
R 2: 134.80
R 1: 132.80
CURRENT: 128.99
S 1: 126.98
S 2: 124.40
USDCAD
R 2: 1.1815
R 1: 1.1725
CURRENT: 1.1640
S 1: 1.1545
S 2: 1.1420
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Market Brief |
The dollar rose across the board on a return in risk aversion as equity markets dipped lower in the US and Europe, with the Dow off 39ppts or 0.48% and the DAX fell 5ppts or 0.09%. The EurUsd dropped 100pips to 1.39 as the dollar advanced on eroded risk appetite, a completely reversed trend from the last session. The GbpUsd tumbled 160pips to 1.62 and trending downward. The UsdJpy edged down 50pips and consolidated around the 92.3 level. Commodity prices were lower across the board with oil under continued pressure and trading at $59bbl, down $1 or 1.66%, and gold off $6 or 0.73% to $909oz compared to $934oz from the week open. 10yr yields rose to 3.41% on the back of the flight-to-quality play.
Market sentiment is at a delicate state as traders seek confirmation of the economy is bottoming out. The dollar and yen strengthened across the board on muted risk appetite, as equity markets in Europe the US weakened. The ebbing risk appetite was buoyed the Michigan Consumer Sentiment Index, which declined to 64.6 vs 70.5 forecasted, signaling expectations toward a recovery is flattering. Traders remained focus on risk sentiment and the dollar reserve status. The G8 meeting on Thursday did not announce any specific statement addressed the dollar after China’s President Hu Jintao left Italy early to address domestic unrest. Officials from China called for stability of major reserve currencies without referring to the dollar specifically, tempering concerns about the expected discussion on the dollar reserve status and lending support to the dollar.
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Asain Session: China Comments on Reserve System
July 10, 2009 1:05 PM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 0.37 | | | CAD | -0.25 | | | GBP | -0.42 | | | NZD | -0.63 | | | AUD | -0.73 | | | SEK | -0.90 | | | NOK | -0.96 | | | DKK | -1.00 | | | EUR | -1.03 | | | CHF | -1.18 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 9,287.28 | - 0.04 | | Hang Seng Index | 17,706.44 | - 0.47 | | Shanghai Index | 3,113.93 | - 0.29 | | FTSE 100 Index | 4,136.78 | - 0.52 | | DAX Index | 4,611.62 | - 0.39 | | SMI Index | 5,279.84 | - 0.48 | | DJIA futures | 8,101.00 | - 0.40 |
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World Markets |
Current Level |
% Change |
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| Gold | 910.88 | - 0.16 | | Silver | 12.84 | - 0.23 | | VIX | 29.78 | - 4.85 | | Crude wti | 59.73 | - 1.12 | | USD Index | 80.33 | + 0.54 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Global: G8 meeting to be held in Italy (final day) | -- | -- | -- | | Producer input prices, % m/m (y/y) Jun | 0.8, -12.3 | 0.4 ,-9.4 | GBP / 08.30 | | Producer core output prices, % m/m (y/y) Jun | 0.2 (1.1) | 0.2 (1.2) | GBP / 08.30 | | Producer output prices, % m/m (y/y) Jun | 0.3 (-0.7) | 0.4 (-0.3) | GBP / 08.30 | | Trade balance, $ bn May | -30.0 | -29.2 | USD / 12.30 | | Import prices, % m/m (y/y) Jun | 2.2 ,-18.3 | 1.3,-17.6 | USD / 12.30 | | Non-petroleum import prices, % m/m (y/y) Jun | -- | 0.2 (-5.8) | USD / 12.30 | | Michigan consumer sentiment Jul-P | 71.0 | 70.8 | USD / 13.55 |
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Currency Tech |
AUDUSD
R 2: 0.8155
R 1: 0.8039
CURRENT: 0.7762
S 1: 0.7725
S 2: 0.7630
EURJPY
R 2: 134.80
R 1: 132.80
CURRENT: 128.99
S 1: 126.98
S 2: 124.40
USDCAD
R 2: 1.1815
R 1: 1.1725
CURRENT: 1.1640
S 1: 1.1545
S 2: 1.1420
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Market Brief |
The wave like pattern in risk appetite is a testament to the lack of constant drivers and summer trading. Yesterday saw a recovery in risky assets and today risk sentiment is on the decline. Asian equity markets closed lower and European markets are red across the board. Commodity and commodity currencies are trending lower with crude prices slipping below $60bll (first time since may) and AUDUSD trading down to 0.7765. As stated yesterday we are carefully monitoring both the EURCHF and USDJPY since both are at levels that will make there respective officials very uncomfortable. In fact, comments by SNB's Roth yesterday suggest that the central bank is still steadfast to its FX intervention strategy and the subsequent spike in EURCHF implies traders are extremely jumpy. The BoE unexpectedly kept its asset purchase program unchanged opting instead to finish current allocation while monitoring economic and credit market indicators. We believe that at the next monetary policy meeting an increase in the QE program is very likely and is setting the stage for a sterling fall. The G8 program ended today with no real fireworks. Chinese representative State Councelor Dai Bingguo provided the only noteworthy comment saying "we should have a better system for reserve currency issuance and regulation so that we can maintain relative stability of major reserve currencies." However these words were caution since it failed to mention the USD by name and failed to register a response in the markets. We expect the USD to continue to rally and with a light calendar and thin trading volumes will keep overall FX trading choppy.
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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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