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EURUSD Heavy As Confidence In Greece Falters
January 28, 2010 5:55 PM CET
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G10 Advancers and Decliners vs USD |
| | CAD | 0.33 |  | | | NZD | 0.06 | |  | AUD | -0.08 | | | JPY | -0.29 | | | GBP | -0.29 | | | CHF | -0.51 | | | DKK | -0.58 | | | NOK | -0.59 | | | EUR | -0.61 | | | SEK | -0.72 | |
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Global Indexes |
Current Level |
% Change |
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| FTSE 100 Index | 5'161.63 | - 1.07 | | DAX Index | 5'557.10 | - 1.53 | | SMI Index | 6'445.38 | - 0.43 | | S&P 500 Index | 1'079.41 | - 1.65 | | DJIA Index | 10'071.18 | - 1.61 |
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World Markets |
Current Level |
% Change |
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| Gold | 1'083.03 | - 0.45 | | Silver | 16.25 | - 1.89 | | VIX | 24.07 | + 4.02 | | Crude wti | 73.23 | - 0.60 | | USD Index | 78.92 | + 0.31 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Fri 29 Jan | --- | --- | --- | | BoJ minutes published | --- | --- | JPY/AM | | Retail sales, m/m Dec | 0.4 | -1.2 | NOK/09:00 | | M3, % y/y Dec | -0.5 | -0.2 | EUR/09:00 | | Unemployment rate, % Dec | 10.1 | 10.0 | EUR/10:00 | | "Flash" HICP, % y/y Jan | 1.2 | 0.9 | EUR/10:00 | | KoF leading indicator Jan | 1.70 | 1.68 | CHF/10:30 | | GDP, %m/m Nov | 0.2 | 0.2 | CAD/13:30 | | GDP, % q/q saar (y/y) Q4 adv | 4.6 | 2.2 | USD/13:30 | | Chicago Purchasing Managers Index Jan | 57.4 | 58.7 | USD/14:45 | | U/M consumer sentiment index Jan | 73.0 | 72.8 | USD/14:55 |
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Currency Tech |
EURUSD
R 2: 1.4090
R 1: 1.4000
CURRENT: 1.3980
S 1: 1.3938
S 2: 1.3900
USDJPY
R 2: 91.90
R 1: 90.75
CURRENT: 89.35
S 1: 89.00
S 2: 88.00
GBPUSD
R 2: 1.6450
R 1: 1.6300
CURRENT: 1.6140
S 1: 1.6090
S 2: 1.6060
AUDUSD
R 2: 0.9145
R 1: 0.9090
CURRENT: 0.8965
S 1: 0.8910
S 2: 0.8900
USDCAD
R 2: 1.0747
R 1: 1.0697
CURRENT: 1.0640
S 1: 1.0535
S 2: 1.0465
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Market Brief |
EURUSD has ground lower throughout the European session as investors have used the post-FOMC bounce to re-enter short positions amid continuing headlines about the challenges facing Greece. An article in the Economist suggested that it was not a question of ‘if’ Greece would need to be bailed out, but ‘when’ and how it would occur. Both French and German government spokespeople were on the wires subsequently to clarify that they were not involved in any bailout plans, while Greece PM Papandreou stated that the success of Monday’s debt auction was a vote of confidence from the market. Nevertheless, markets seemed unconvinced; causing the 2 year CDS on Greek government bonds to hit a record high of 404bp, and catalyzing EURUSD’s sell-off to lows of 1.3938. Adding to EURUSD’s woes were headlines that Moody’s sees risks that Eurozone interest rates may rise faster than appropriate for Portugal, and that it would take a transparent, credible deficit reduction plan to stabilize Portugal’s rating where it is.
European data had been broadly neutral on risk sentiment; the unemployment rate in Germany rose to 8.2% from 8.1% last month but this was exactly in line with expectations, German CPI (EU harmonized) was much lower than expected at -0.7% MoM against expectations for -0.4%, but Eurozone economic sentiment came out at a much stronger 95.7 print (92.4 expected) and there was an upward revision to last month’s reading (from 91.3 to 94.1).
In the afternoon session, GBPUSD also came under selling pressure after it was reported that ratings agency S&P has stopped classifying the UK among the most stable, low-risk banking systems. The pair quickly plunged from 1.6240 levels down to a low of 1.6122, but for now the 1 month uptrend line is providing support. USDJPY also dropped below 90.00 on the release of US durable goods orders which came out at 0.3% MoM, much lower than the 2.0% consensus expectation.
In the coming sessions we expect to get the minutes of the latest BoJ meeting, Norway Retail Sales, Eurozone Unemployment and Swiss KoF leading indicators – but the major focus will be on the afternoon’s events; US Q4 GDP, Chicago PMI, U.Mich Consumer Confidence and Canadian GDP.
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Lots of Events... Little Price Movement
January 28, 2010 10:20 AM CET
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G10 Advancers and Decliners vs USD |
| | NZD | 0.78 | | | | CAD | 0.70 | | | | AUD | 0.65 | | | | NOK | 0.29 | | | | GBP | 0.25 | | | | SEK | 0.20 | | | EUR | -0.11 | | | DKK | -0.12 | | | CHF | -0.17 | | | JPY | -1.00 | |
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Global Indexes |
Current Level |
% Change |
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| Nikkei 225 Index | 10,414.29 | + 1.58 | | Hang Seng Index | 20,301.77 | + 1.34 | | Shanghai Index | 2,994.14 | + 0.25 | | FTSE futures | 5,176.50 | - 1.08 | | DAX futures | 5,643.20 | - 0.45 | | SMI Futures | 6,474.00 | + 0.93 | | S&P future | 1,099.10 | + 0.41 |
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World Markets |
Current Level |
% Change |
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| Gold | 1,088.80 | + 0.08 | | Silver | 16.55 | - 0.12 | | VIX | 23.14 | - 5.74 | | Crude wti | 73.88 | + 0.28 | | USD Index | 78.68 | + 0.01 |
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Todays Calender |
Estimates |
Previous |
Country / GMT |
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| Manufacturing confidence, index | -- | -9 | SEK / 08.15 | | Retail sales, % m/m (y/y) | -- | -0.6 (3.6) | SEK / 08.15 | | Unemployment rate, % | -- | 8.0 | SEK / 08.15 | | German Unemployment change | -- | -3 (8.1) | EUR / 08.55 | | unemployment rate, % | -- | 2.7 | NOK / 08.55 | | Consumer confidence, index | -- | -16 | EUR / 10.00 | | Industrial confidence, index | -- | -16 | EUR / 10.00 | | Durable goods orders, % m/m | 1.6 | 0.2 | USD / 13.30 | | Core capital goods orders, % m/m | -- | 1.1 | USD / 13.30 | | Initial jobless claims, thous | -- | 482 | USD / 13.30 | | Tokyo CPI, % y/y | -- | -2.3 | JPY / 23.30 | | Unemployment rate, % | -- | 5.2 | JPY / 23.30 | | Industrial p production, % m/m | -- | 2.2 | JPY / 23.30 |
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Currency Tech |
AUDUSD
R 2: 0.9145
R 1: 0.9090
CURRENT: 0.9017
S 1: 0.8910
S 2: 0.8900
USDCAD
R 2: 1.0747
R 1: 1.0697
CURRENT: 1.0598
S 1: 1.0535
S 2: 1.0465
EURJPY
R 2: 128.35
R 1: 127.40
CURRENT: 126.70
S 1: 125.25
S 2: 125.00
USDMXN
R 2: 13.105
R 1: 13.015
CURRENT: 12.905
S 1: 12.800
S 2: 12.795
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Market Brief |
FX markets are basically unchanged from where we left them in the NY session. The FOMC rate decision went as markets had expected (perhaps a very light hawkish tone), with the Fed fund rate remaining unchanged and language containing 'exceptionally low' and "extended period" untouched, with only Kansas City Fed President Hoenig dissenting vote (first since January 2009), to revoke the “extended period” wording, providing any point of interest. The USD was able to take advantage of the lone dissenter's view, that tightening is just around the corner and risk correlated trades quickly sold off. The EUR had already been hurt, as Greek 10 yr yields bonds climbed over 50bp higher.
Confidence in Greece bonds has been seriously eroded yesterday, amid the FT report that Greece was trying to to pawn off EUR25bn debt to China and then a following report that China had rejected the offer. And what just added to worries was Eurogroup's Chariman Juncker continued comments that potential Greek exit from the Eurozone is an "absurd theory". Separately, we expect Mr. Bernanke's nomination for another term as Fed Chairman to be approved as a Senate vote is expected today. Asia was full of mentionables but none has a lasting effect on overall FX pricing. North Korea continues to bait S.Korea into a fist fight by firing more artillery south but the inaccuracy caused S.Korea not even to bother retaliating. In New Zealand RBNZ kept OCR unchanged at 2.50% as was widely expected, while the statement pointed to December's economic data projections, which puts the first rate hikes in line for mid year. Today's very light economic calendar will keep FX markets to their own devices. We will be watching the ranges and expect a small rally in risk correlated trades.
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