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US Session: Volatile Economic Data and BoE Comments Roil FX Markets
August 17, 2009 9:00 PM CEST
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G10 Advancers and Decliners vs USD |
| | Jpy | 0.54 |  |  | Chf | -0.51 | | | Cad | -0.64 | | | Dkk | -0.79 | | | Eur | -0.79 | | | Aud | -0.80 | | | Gbp | -1.18 | | | Nzd | -1.19 | | | Sek | -1.25 | | | Nok | -1.38 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 9,130.00 | - 2.05 | | S&P 500 Index | 979.80 | - 2.59 | | NASDAQ 100 Index | 1,569.50 | - 2.82 | | Nikkei 225 Futures | 10,190.00 | + 0.59 | | Hang Seng Futures | 20,067.00 | + 4.34 | | FTSE futures | 4,637.00 | - 1.20 | | SMI Futures | 5,879.00 | - 1.74 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 66.16 | - 2.00 | | Gold | 935.88 | - 1.34 | | Silver | 14.08 | - 4.38 | | USD Index | 79.26 | + 0.48 | | VIX | 27.50 | + 13.31 |
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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: 0.8695
R 1: 0.8520
CURRENT: 0.8179
S 1: 0.8180
S 2: 0.8125
USDCAD
R 2: 1.1225
R 1: 1.1075
CURRENT: 1.1103
S 1: 1.0757
S 2: 1.0635
EURJPY
R 2: 138.72
R 1: 137.85
CURRENT: 133.36
S 1: 132.80
S 2: 132.10
USDMXN
R 2: 13.225
R 1: 13.145
CURRENT: 12.975
S 1: 12.789
S 2: 12.6
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Market Brief |
Echoes following Friday’s poor consumer confidence number grew louder today as downbeat economic data in the Asian session spilled over into intraday trading and weighed on global equity markets. The EurUsd fell 124pips, falling back to support at 1.406, while the UsdJpy fell 21pips to the upper range of 94. The GbpUsd fell 200pips, bringing the cable slightly below 1.63. Equity markets fell in the U.S. and in Europe, with the Dow lower by 2.17% or -201.33pts and the FTSE by -0.87% or -41.49pts. The yield curve was subjected to slight flattening, with 10 and 30 year bonds lower by 10bp and 8bps, but its overall shape remains normal. Commodities were negative across the board with oil lower by $1.74bbl at $67.86bbl and gold down $16.2oz to the lower end of $932oz.
A concerning report out of the U.K. showed home prices fell at faster rate in August than all of 2009, sending the cable down over 200 pips to a two month low of 1.6727. The risk-averse tone was then amplified by BoE governor Mervyn King who said that inflation would probably fall below the BoE’s target level of 2.0%; the Central bank is planning to buy 1.4bln pounds of gilts today as part of its ongoing program. In the Euro zone, trade balance was 1.0bln versus expectations of 3.0bln, fueling the euro’s dive against the dollar by over 120pips to a low of 1.404.
US stock market indices fell significantly after opening as economic bellwether Lowes Inc. reported that earnings had fallen 19% to $759mln; coupled with general economic worries, the dollar index was driven up .6% to a two week high of 79.50. The Canadian dollar fell 137pips to an intraday low of 1.112 on bearish performance in the equity market and lower crude. September WTI crude futures have fallen $1.53bbl to $66bbl, hurt in part by Friday’s consumer confidence data.
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Asian session: Risk Appetite has a Shaky Start
August 17, 2009 10:33 AM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 0.33 | | | AUD | -1.84 | | | NZD | -1.74 | | | SEK | -1.35 | | | CAD | -1.28 | | | NOK | -1.24 | | | GBP | -1.23 | | | EUR | -0.85 | | | DKK | -0.84 | | | CHF | -0.76 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10,268.61 | - 3.10 | | Hang Seng Index | 20,145.04 | - 3.58 | | Shanghai Index | 2,870.63 | - 5.78 | | FTSE 100 Index | 4,669.62 | - 0.94 | | DAX Index | 5,234.89 | - 1.39 | | SMI Index | 5,925.51 | - 0.99 | | DJIA futures | 9,123.00 | - 2.02 |
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World Markets |
Current Level |
% Change |
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| Gold | 938.59 | - 1.05 | | Silver | 14.23 | - 3.32 | | VIX | 24.27 | - 1.78 | | Crude wti | 65.79 | - 2.54 | | USD Index | 79.19 | + 0.38 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Trade balance, NOK bn Jul | -- | 22.4 | NOK / 08.00 | | Trade balance, € bn (sa) Jun | -- | 0.8 | EUR / 09.00 | | Empire State manufacturing index Aug | 2.00 | -0.55 | USD / 12.30 | | Net long-term TIC flows, $bn Jun | -- | -19.8 | USD / 13.00 | | NAHB housing index Aug | 18 | 17 | USD / 17.00 |
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Currency Tech |
AUDUSD
R 2: 0.8695
R 1: 0.8520
CURRENT: 0.8179
S 1: 0.8180
S 2: 0.8125
USDCAD
R 2: 1.1225
R 1: 1.1075
CURRENT: 1.1103
S 1: 1.0757
S 2: 1.0635
EURJPY
R 2: 138.72
R 1: 137.85
CURRENT: 133.36
S 1: 132.80
S 2: 132.10
USDMXN
R 2: 13.225
R 1: 13.145
CURRENT: 12.975
S 1: 12.789
S 2: 12.620
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Market Brief |
The Greenback and Japanese Yen gained on Friday as US consumer confidence fell in August to 63.2 from a previous reading of 66.0 in July, which is the lowest reading since March. The Yen outperformed the US Dollar and rose against all major currencies as risk aversion increased. Despite recent data from the Euro Zone which surprised the markets with positive GDP from Germany and France, it seems other factors still concerning the investors that probably we have not come to an end for the worst recession since World War II.
The Fed meeting results last Wednesday came along with expectations, with interest rates unchanged at 0-0.25% and reiterated that rates will stay at its current for an extended period of time. The positive side from the Fed meeting was the outlook on economy which was little optimistic. The British pound was pressured after BoE announced that it is extending its asset purchase program by £50 B to £175 B as inflation is expected to remain below the BoE’s target at 2%. The Aussie was lifted to a new 2009 high at 0.8478 after a speech from RBA Governor Stevens’ indicating that the bank could raise interest by the beginning of 2010, but quickly fell as commodity prices went down.
The equity and commodity markets are probably giving a sign that prices have topped up at least for the near term, and we have seen a divergence in global stock markets and emerging stock markets as MSCI world index made a new high last week and MSCI Emerging market index kept below 864.7 prior high.
U.S. stocks fell for the first time in five weeks as the unexpected drop in consumer confidence raised concern the steepest rally since the 1930s isn’t justified by economic prospects. The Standard & Poor’s 500 Index fell 0.6 percent to 1,004.09. The Dow Jones Industrial Average dropped 48.67 points, or 0.5 percent, to 9,321.4. The Nasdaq retreated 0.7 percent to 1,985.52. From China the sharp fall in Shanghai Composite Index could be a major reason in sending commodity prices down.
Commodity prices fell last week with CRB index falling below 260 levels, and gold closing below 950, while crude old lost its momentum closing at 67.51, suggesting that investors are more cautious now and need a clear fundamental signs of economic recovery in order to continue in the bullish momentum.
This week upcoming data will give us a clearer image on how the economy is performing, which could either change the investor’s opinion and drive stocks, commodities, and high yielding currencies up or continue to in the risk aversion theme. Focus will be on US manufacturing index released earlier today; inflation data from Euro Zone, UK, and Canada; consumer confidence in Germany; and US home sales.
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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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