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US Session: BoE Minutes Boost The Dollar Temporarily; Equities Rebound On Investor Optimism
August 19, 2009 10:52 PM CEST
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G10 Advancers and Decliners vs USD |
| | Chf | 0.94 |  | | | Sek | 0.87 | | | | Nok | 0.76 | | | | Jpy | 0.67 | | | | Dkk | 0.66 | | | | Eur | 0.64 | | | | Cad | 0.53 | | | | Aud | 0.22 | |  | Nzd | -0.03 | | | Gbp | -0.18 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 9,279.16 | + 0.66 | | S&P 500 Index | 996.46 | + 0.69 | | NASDAQ 100 Index | 1,969.24 | + 0.68 | | Nikkei 225 Futures | 10,110.00 | + 0.99 | | Hang Seng Futures | 19,999.00 | + 1.11 | | FTSE futures | 4,676.50 | + 0.41 | | SMI Futures | 5,976.00 | + 0.34 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 72.17 | + 4.31 | | Gold | 942.65 | + 0.43 | | Silver | 13.83 | - 1.25 | | USD Index | 78.51 | - 0.58 | | VIX | 26.26 | + 0.31 |
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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: 0.8520
R 1: 0.8475
CURRENT: 0.8211
S 1: 0.8125
S 2: 0.7925
USDCAD
R 2: 1.1347
R 1: 1.1225
CURRENT: 1.1063
S 1: 1.0980
S 2: 1.0795
EURJPY
R 2: 137.85
R 1: 135.15
CURRENT: 133.10
S 1: 132.15
S 2: 131.60
USDMXN
R 2: 13.2245
R 1: 13.115
CURRENT: 12.982
S 1: 12.789
S 2: 12.620
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Market Brief |
Worrisome notes from the BoE’s August 6th meeting and negative stock futures sent investors scrambling into the dollar before the bell, but investor optimism returned as equities retraced losses. The EurUsd rose 116pips, finding support at 1.42, while the UsdJpy fell 81pips to the upper-range of 93. The GbpUsd depreciated 6pips, bringing the cable to the mid-range of 1.65. Equity markets rose in the U.S. and Europe, with the Dow higher by .89% or 82pts and the FTSE up by .251% or 11.74pts. The yield curve was mostly unchanged, with 10 and 30 year bonds lower by just 2bps; its overall shape remains normal. Commodities were higher across the board with oil up by $2.90bbl at $73.97bbl and gold higher by $6.2oz to the middle of $945oz.
Early session trading was characterized by bearish price action, with the pound plummeting 300pips against the yen after the release of minutes from the BoE’s last meeting. Minutes revealed BoE governor Mervyn King was overruled in an attempt to expand the central bank’s bond-purchase program to 200bln pounds. The Monetary Policy Committee agreed in a 6-3 vote to raise the total to the recently announced 175bln. The central premise behind the bank’s expansion decision was their view that current policy was insufficient to secure a recovery; startling news of the bank’s lack of confidence in the economy sent the pound dropping over 160pips against the dollar. Despite the cable’s decline early on, the pair retraced losses to trade flat after optimism returned to global equity markets, raising demand for higher risk currencies such as sterling. Disappointing economic data out of the euro zone began with a lower July PPI number out of Germany at -1.5% versus expectations of -0.2%. Additionally, reports revealed the euro zone current account deficit deepened during the month of June to -5.3 from -1.2 in May. Nevertheless, the euro took most of its direction from global equities which initially pointed downward, but then rebounded on increased investor optimism, supporting the 16-nation currency on a 120pip rally above 1.425.
US stock indices fluctuated after risk-averse investors initially pushed the dow index 75pts lower, supporting a .1% rise in the dollar index. As a result, the Canadian dollar came under pressure, falling 70pips. Though July CPI fell -0.3% compared with economists’ expectations of -0.2%, the loonie later turned positive as equities erased losses and NYMEX crude futures for September delivery rose by $3.18bbl to just over $72bbl.
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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European Session: FX Markets Directionless
August 19, 2009 11:28 AM CEST
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G10 Advancers and Decliners vs USD |
| | JPY | 0.43 | | | CHF | -0.08 | | | EUR | -0.12 | | | DKK | -0.13 | | | CAD | -0.18 | | | AUD | -0.37 | | | NZD | -0.56 | | | SEK | -0.62 | | | NOK | -0.64 | | | GBP | -0.89 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10,204.00 | - 0.78 | | Hang Seng Index | 19,954.23 | - 1.73 | | Shanghai Index | 2,785.58 | - 4.30 | | FTSE 100 Index | 4,641.25 | - 0.95 | | DAX Index | 5,180.27 | - 1.34 | | SMI Index | 5,916.97 | - 0.61 | | DJIA futures | 9,128.00 | - 0.85 |
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World Markets |
Current Level |
% Change |
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| Gold | 935.70 | - 0.30 | | Silver | 13.63 | - 2.64 | | VIX | 26.18 | - 6.13 | | Crude wti | 68.87 | - 0.46 | | USD Index | 79.20 | + 0.27 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Mainland GDP, % q/q (y/y) Q2 | -0.4 | -1.0 (-1.4 | NOK / 08.00 | | Current account, € bn (sa) Jun | -- | -1.2 | EUR / 08.00 | | BoE MPC minutes, vote Aug | -- | 9-0 | GBP / 08.30 | | Construction output, % m/m (y/y wda) Jun | -- | -2 (-8.0) | EUR / 09.00 | | CBI industrial trends survey, total orders, net ba | -- | -59 | GBP / 10.00 | | CPI, % y/y Jul | -0.8 | -0.3 | CAD / 11.00 | | Bank of Canada core CPI, % y/y Jul | 1.9 | 1.9 | CAD / 11.00 |
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Currency Tech |
AUDUSD
R 2: 0.8520
R 1: 0.8475
CURRENT: 0.8211
S 1: 0.8125
S 2: 0.7925
USDCAD
R 2: 1.1347
R 1: 1.1225
CURRENT: 1.1063
S 1: 1.0980
S 2: 1.0795
EURJPY
R 2: 137.85
R 1: 135.15
CURRENT: 133.10
S 1: 132.15
S 2: 131.60
USDMXN
R 2: 13.2245
R 1: 13.115
CURRENT: 12.982
S 1: 12.789
S 2: 12.620
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Market Brief |
Dollar weakened as risk appetite made its return to the markets after positive data from the UK and the European Union boosted the majors against the US Dollar. UK released its inflation report which showed that it remained flat for the month of July whereas a negative CPI data was expected while the yearly CPI data showed a reading of 1.8% but still below the Bank of England’s inflation target of 2%. The Retail Price Index too showed a better than expected figures which shows that consumers are spending in the markets thereby boosting the economy and adding to recovery measures.
The ZEW Survey which shows the economic confidence among consumers in the Euro Zone and Germany posted higher than expected reading of 54.9 and 56.1 respectively, the highest confidence data in 3 years. The pound moved up to a high of 1.6587 while the Euro moved up to 1.4154 after these economic releases on sentiments that recovery is returning in the European markets and consumers have started to start spending and shown confidence in the economy.
Economic releases from the US showed that the Housing starts dropped in the month of July to 581,000 lower than the 599,000 expected figure while the construction permits for new houses too fell to 560,000 down 1.8%. also released were the Producer Price Index which showed that the wholesale prices dropped 0.9% while the PPI except for food and energy component dropped unexpectedly by 0.1% due to lower energy costs and high inventory of goods in warehouses and that inflation levels would not be a cause of concern for the FOMC.
US stocks rose as better than expected earnings data were released for Home Depot and Target which also led to increase in oil prices. The Dow Jones Index rose 83 points to close at 9218 while the S&P 500 Index rose 10 points to close at 989 points. European stocks too rose for the day on the ZEW Confidence figures ending the day in the green.
Today the important data to be seen would be the Producer Prices from Germany while UK would be releasing the Bank of England Minutes which could describe the additional 50 Billion Pound of stimulus added in the last rate decision meeting while giving further ideas on the economy and the rate decision in upcoming meetings. Also released would be the Leading indicators from the US.
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US Session: Corporate Earnings Growth and Positive Economic Data Lift Markets
August 19, 2009 2:01 AM CEST
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G10 Advancers and Decliners vs USD |
| | Aud | 0.35 | | | | Nzd | 0.27 | | | | Gbp | 0.17 | | | | Sek | 0.17 | | | | Chf | 0.16 | | | | Dkk | 0.15 | | | | Eur | 0.15 | | | | Nok | 0.09 | | | | Cad | 0.05 | | | Jpy | -0.26 | |
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Global Indexes |
Current Level |
% Change |
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| DJIA Index | 9,193.00 | - 0.15 | | S&P 500 Index | 988.00 | - 0.16 | | NASDAQ 100 Index | 1,583.00 | - 0.25 | | Nikkei 225 Futures | 10,290.00 | - 0.10 | | Hang Seng Futures | 20,220.00 | + 0.00 | | FTSE futures | 4,657.50 | + 0.48 | | SMI Futures | 5,956.00 | + 1.31 |
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World Markets |
Current Level |
% Change |
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| Crude wti | 70.27 | + 1.56 | | Gold | 939.18 | + 0.06 | | Silver | 14.03 | + 0.21 | | USD Index | 78.98 | - 0.43 | | VIX | 26.18 | - 6.13 |
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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: 0.8520
R 1: 0.8475
CURRENT: 0.8255
S 1: 0.8125
S 2: 0.7925
USDCAD
R 2: 1.1347
R 1: 1.1225
CURRENT: 1.1046
S 1: 1.0793
S 2: 1.0633
EURJPY
R 2: 137.85
R 1: 135.15
CURRENT: 134.36
S 1: 132.10
S 2: 131.00
USDMXN
R 2: 13.224
R 1: 13.146
CURRENT: 12.97
S 1: 12.790
S 2: 12.620
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Market Brief |
Better-than-expected economic data overseas managed to revive investor optimism during intraday trading as safe havens sold off in favor of higher risk pairs such as the cable and euro. The EurUsd rose 29pips, finding support at 1.408, while the UsdJpy fell 26pips to the upper range of 94. The GbpUsd appreciated 182pips, bringing the cable slightly above 1.65. Equity markets rose in the U.S. and in Europe, with the Dow up by .24% or 21.61pts and the FTSE lower by .419% or 19.45pts. The yield curve was subjected to slight steepening, with 10 and 30 year bonds up 18bp and 14bps, but its overall shape remains normal. Commodities were mostly positive with oil up by $.58bbl at $69.37bbl and gold down $3.0oz to the upside of $938oz.
Pointing to more signs of a V shaped recovery, today’s price action was characterized by the return of risk appetite. The pound rallied by as much as 200pips against the dollar after the Office for National Statistics in the U.K. said the nation’s inflation rate remained unchanged in July from its 1.8% level in June; economists were expecting a decline to 1.5%. Although U.K. CPI has managed to hold steady, the current inflation rate still remains below the BoE’s 2% annual target level. More positive data sent the euro appreciating against the dollar for the first time in three days, trading just below 1.41 after a report showed German investor confidence reached its highest level in over three years. The German ZEW sentiment index rose to 56.1 in August from 39.5 in July; investors anticipated a moderate increase to 45. The record setting confidence number adds credence to the theory of an economic recovery.
The Dollar index traded sideways after dropping by .18% to 79.205 following the release of mixed US economic data, beginning with July Housing Starts. Less drastic than analysts predicted, housing starts dropped 1.0% to 581k versus forecasts of a decline to 600k. Although US housing data managed to surpass expectations, the US PPI fell to -0.9 in July versus expectations of a -0.3 decline. Adding to bullish sentiment was an expectations-beating earnings report from economic bellwether Home Depot, which supported the dow and S&P’s rallies over .6%, helping equity correlated currencies like the Canadian dollar which appreciated 50pips to the low range of C$1.102.
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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