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US Session: Risk appetite returns as CIT receives $3bln pillar from bondholders
July 20, 2009 9:15 PM CEST
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G10 Advancers and Decliners vs USD |
| | Nzd | 1.85 |  | | | Aud | 1.65 | | | | Nok | 1.31 | | | | Gbp | 1.21 | | | | Eur | 0.84 | | | | Dkk | 0.82 | | | | Sek | 0.74 | | | | Chf | 0.69 | | | | Cad | 0.57 | |  | Jpy | -0.01 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 8,812.86 | + 0.79 | | S&P 500 Index | 946.68 | + 0.67 | | NASDAQ 100 Index | 1,898.33 | + 0.62 | | Nikkei 225 Futures | 9,420.00 | + 0.01 | | Hang Seng Futures | 19,585.00 | + 3.52 | | FTSE futures | 4,416.50 | + 1.25 | | SMI Futures | 5,620.00 | + 0.68 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 63.92 | + 0.57 | | Gold | 949.83 | + 1.32 | | Silver | 13.65 | + 1.70 | | USD Index | 78.85 | - 0.81 | | VIX | 24.52 | + 0.74 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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Currency Tech |
AUDUSD
R 2: 0.8238
R 1: 0.8155
CURRENT: 0.8112
S 1: 0.7815
S 2: 0.7700
EURJPY
R 2: 136.90
R 1: 134.80
CURRENT: 134.51
S 1: 131.60
S 2: 129.35
USDCAD
R 2: 1.1530
R 1: 1.1350
CURRENT: 1.1064
S 1: 1.0940
S 2: 1.0785
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Market Brief |
The dollar fell against majors as CIT Group obtained a $3 billion rescue loan from bondholders, tempering risk aversion in the market and sent the dollar lower across the board. The EurUsd rose 103pips and consolidated around the 1.42 level as the dollar stabilized. The GbpUsd surged 200pips and hovered around the low range of 1.65. The UsdJpy edged up 18pips to 94.2 as risk aversion wan. Equity markets rose in the US and the Europe, with the Dow up 73pts or 0.84% and the FTSE rising 26pts or 0.62%. Yields were lower across the curve, with the 10yr yield falling .056 to 3.59%. Commodity prices were mixed, with oil dropping marginally by $0.18 or 0.28% to $63bbl and gold jumping $11 or 1.23% to $949oz.
A rise in risk appetite drove investors to higher yielding equities and commodities as the dollar and yen fell in the early session. The U.S. conference board index of leading economic indicators rose 0.7% to 100.9 versus .5% expected. A survey of economists suggests that although the U.S. recession is easing, it is not over. Fed chairman Ben Bernanke will report to Congress tomorrow on the interest rate and his plan to depart from an expansionary monetary policy. Markets reacted positively to news that CIT reached a rescue-financing agreement with bondholders and will now be able to avoid bankruptcy and restructure outside court; the news sent the EURUSD to a six week high of 1.4247. Investors’ desire for risk also sent the Euro higher despite the German PPI index dropping 4.6% to -.1% in June versus .5% estimated. Sterling rose against the dollar as a residential property website, Rightmove Plc, reported that inflation has taken home prices up .6% this month after falling .4% in June. Commodity currencies rose as WTI crude climbed to $64.90bbl, sending the Canadian loonie up 1% to C$1.1020. The New Zealand kiwi and Australian dollar appreciated 1.4% and 1.1% respectively. Tomorrow the BoC will meet to discuss the overnight rate; it is expected to stay at .25%. Investors expect the Cad to be trading lower, near C$1.19, by the end of September.
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Asian Session: News from CIT Drives Optimism
July 20, 2009 11:36 AM CEST
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G10 Advancers and Decliners vs USD |
| | NZD | 1.30 | | | | AUD | 1.16 | | | | CAD | 0.99 | | | | GBP | 0.95 | | | | SEK | 0.76 | | | | NOK | 0.72 | | | | DKK | 0.60 | | | | EUR | 0.34 | | | | CHF | 0.32 | | | JPY | -0.59 | |
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Global Indexes |
Current Level |
% Change |
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| Hang Seng Index | 19,502.37 | + 3.70 | | Shanghai Index | 3,266.92 | + 2.42 | | FTSE 100 Index | 4,425.44 | + 0.83 | | DAX Index | 5,034.37 | + 1.12 | | SMI Index | 5,638.39 | + 1.12 | | DJIA futures | 8,728.00 | + 0.35 | | S&P future | 939.90 | + 0.32 |
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World Markets |
Current Level |
% Change |
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| Gold | 946.80 | + 0.99 | | Silver | 13.67 | + 1.78 | | VIX | 24.34 | - 4.24 | | Crude wti | 64.62 | + 1.66 | | USD Index | 78.96 | - 0.67 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| US: FRB of Atlanta President Lockhart speaks on th | -- | -- | USD / 17.30 | | Leading indicators, % (y/y) Jun | 0.5 (-1.4) | 1.2 (-1.8) | USD / 14.00 | | BoJ minutes published | -- | -- | JPY / 23.50 |
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Currency Tech |
AUDUSD
R 2: 0.8238
R 1: 0.8155
CURRENT: 0.8112
S 1: 0.7815
S 2: 0.7700
EURJPY
R 2: 136.90
R 1: 134.80
CURRENT: 134.51
S 1: 131.60
S 2: 129.35
USDCAD
R 2: 1.1530
R 1: 1.1350
CURRENT: 1.1064
S 1: 1.0940
S 2: 1.0785
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Market Brief |
Risk correlated assets continued to improve in the Asian session. The optimism was sparked by the news that CIT Group may avoid bankruptcy or government bailout by accepting a $3bn loan from bondholders. The EURUSD broke above the 1.4190 horizontal resistance, trading to 1.4221, while the JPY was sold across the board, with the AUDJPY finding support on the 21d MA, trading up to 76.60. We are concerned about the rally in risk, as equity is beginning to feel stretched. In addition, with a rash of corporate earnings (big names such as Apple, Caterpillar, Texas Instruments and American Express) reporting, expectations are high but we are concerned that true consumer demand has not recovered and expect earnings to underperform. In the FX markets we believe that the sterling is especially vulnerable this week. While the GBP continues to trade alongside risk appetite, the MPC minutes published on Wednesday will also be a significant event for the currency. The markets celebrated the MPC statement as a signal the additional asset purchases might not happen. However, recent comments by MPC members such as Bean hints the optimism is overdone and we now expect no pause in the BoE purchases and additional fund to be allocated in August. Dovish minutes should lead to a sell off in GBP later in the week.
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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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