Current Yesterday
USD 0.29063 0.28750
GBP 0.60000 0.60125
EUR 0.87375 0.87625
JPY 0.19250 0.19375
CHF 0.12000 0.12000
AUD 3.46250 3.40000
CAD 0.50000 0.50000
NZD 2.96250 2.82500
Thursday, March 26, 2009
German Consumer Confidence Falters as Outlook for Growth and Inflation Deteriorates
Consumer confidence in Germany fell for the first time in seven-months as households face fading demands for employment paired with fears of a deepening recession. The GfK index slipped to 2.4 in April from a revised reading of 2.5 in the previous month, and the data reinforces a weakening outlook for the region as households and businesses turn increasingly pessimistic towards the economy.
Fundamental Headlines• Geithner Wants New Rules to Check Risks – Wall Street Journal• AIG Fights a Fire at Its Paris Unit – Wall Street Journal• IBM set to lay off 5,000 in North America– Financial Times• U.S. Will Block China Reserves Plan, Former IMF Economists Say – Bloomberg• Citigroup May Manage Distribution of U.S. Aid to Auto Suppliers – BloombergEURUSD – Consumer confidence in Germany fell for the first time in seven-months as households face fading demands for employment paired with fears of a deepening recession. The GfK index slipped to 2.4 in April from a revised reading of 2.5 in the previous month, and the data reinforces a weakening outlook for the region as households and businesses turn increasingly pessimistic towards the economy. As Europe’s largest economy heads into a deepening recession, the European Central Bank is expected to ease policy further as the outlook for growth and inflation falters. Discuss the topic and your trade ideas in the EUR/USD Forum.GBPUSD – Retail spending in U.K. dropped 1.9% in February, after rising 0.8% in the previous month, which lowered the annualized rate to only 0.4% from a revised reading of 3.8% in January, which is the lowest level of sale growth in more than 13 years. The data suggested that economic conditions are deteriorating at an increased pace as households face a weakening labor market, and conditions are likely to get worse as trade conditions falter. Moreover, the sales deflator showed a 0.3% annual increase versus a 0.9% drop in January, which suggests that retailers are cutting back on discounts as growth prospects deteriorate at a record pace. Meanwhile, a separate report showed that business investments in the fourth quarter fell 1.5% despite an initial forecast for a 3.9%, which raised the annual rate to -4.5% from an advanced reading of 7.7%. Discuss the topic and your trade ideas in the GBP/USD Forum.
Fundamental Headlines• Geithner Wants New Rules to Check Risks – Wall Street Journal• AIG Fights a Fire at Its Paris Unit – Wall Street Journal• IBM set to lay off 5,000 in North America– Financial Times• U.S. Will Block China Reserves Plan, Former IMF Economists Say – Bloomberg• Citigroup May Manage Distribution of U.S. Aid to Auto Suppliers – BloombergEURUSD – Consumer confidence in Germany fell for the first time in seven-months as households face fading demands for employment paired with fears of a deepening recession. The GfK index slipped to 2.4 in April from a revised reading of 2.5 in the previous month, and the data reinforces a weakening outlook for the region as households and businesses turn increasingly pessimistic towards the economy. As Europe’s largest economy heads into a deepening recession, the European Central Bank is expected to ease policy further as the outlook for growth and inflation falters. Discuss the topic and your trade ideas in the EUR/USD Forum.GBPUSD – Retail spending in U.K. dropped 1.9% in February, after rising 0.8% in the previous month, which lowered the annualized rate to only 0.4% from a revised reading of 3.8% in January, which is the lowest level of sale growth in more than 13 years. The data suggested that economic conditions are deteriorating at an increased pace as households face a weakening labor market, and conditions are likely to get worse as trade conditions falter. Moreover, the sales deflator showed a 0.3% annual increase versus a 0.9% drop in January, which suggests that retailers are cutting back on discounts as growth prospects deteriorate at a record pace. Meanwhile, a separate report showed that business investments in the fourth quarter fell 1.5% despite an initial forecast for a 3.9%, which raised the annual rate to -4.5% from an advanced reading of 7.7%. Discuss the topic and your trade ideas in the GBP/USD Forum.GLOBAL MARKETS: European Stocks To Rise; Buoyed By Wall St
GLOBAL MARKETS: European Stocks To Rise; Buoyed By Wall St
By Andrea Tryphonides
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--European stocks are expected to open a little higher Thursday, with the late rally on Wall Street and a turnaround in Asia likely to give a boost to equity markets. Matt Buckland, a dealer at CMC Markets said: "A late rally on Wall Street should also help consolidate positive sentiment across the board." Buckland called London's FTSE 100 up 24 points, or 0.6%, at 3924.0, Frankfurt's DAX up 10.7 points or, 0.3%, at 4234.0 and Paris's CAC-40 9.5 points, or 0.3%, higher at 2903.0. However, there were indications from other traders that the recent rallies may have run their course. Ben Potter, research analyst at IG Markets, said: "There's no doubting this global rally is getting long in the tooth. The question is not how high we rally, but how far we fall when the bears regain control. This will help determine if we are near a bottom." Asian share markets were mostly a little higher, helped by the gains on Wall Street and a surge in mainland China financial stocks, which sent the Hang Seng Index up 3.1%. Japan's Nikkei 225 was up 1.8%, with Australia's S&P/ASX 200 up 1.0%, South Korea's Kospi Composite up 1.2% and Taiwan shares 0.8% higher. But overall activity in Asia was low, with some fatigue setting in after recent sharp gains for many bourses. "In the short term I can understand this bullishness, but we haven't seen the full impact of the recession. I know markets look through all that, but it's going to cause further pain," said ABN Amro director David Iron. U.S. stocks closed higher Wednesday, with a late surge for financial stocks such as JPMorgan Chase and home builders such as Toll Brothers, amid more signs of stabilization in the housing market. Stocks had dipped into negative territory mid-session after weak demand at a U.S. Treasury five-year note auction and a difficult sale of U.K. debt suggested that investors are balking at governments' spending. The Dow Jones Industrial Average closed up 89.8 points at 7749.8, recouping the bulk of Tuesday's losses, though it was up by more than 200 points before the Treasury auction. The broad Standard & Poor's 500 index added 7.6 points to 813.9 and the Nasdaq Composite rose 12.4 to 1529.0. The decline in U.S. Treasurys weighed on Japanese government bonds and is expected to continue to weigh on the European bond market Thursday. In the foreign exchanges, the dollar and euro were up a little against the Japanese yen, after an initial drop in the dollar in New York following comments by U.S. Treasury Secretary Timothy Geithner. Geithner initially appeared open to the Chinese proposal that an international currency supplant the U.S. dollar as the key global reserve currency, but later added "the dollar remains the world's dominant reserve currency." The dollar was trading at Y98.08 at 0725 GMT, up from Y97.54 late in New York, and the euro was quoted at Y133.26, up from Y132.51. The euro was at $1.3570, down from $1.3583. Elsewhere, spot gold was down 93 cents from New York at $933.10 per troy ounce, with Barclays Capital forecasting a $916-$967 range for the metal. May Nymex crude was up 48 cents at $53.25 per barrel, having fallen $1.21 in New York. The economic calendar is rather quiet Thursday. H&M and Kingfisher's results will be in focus, along with a trading statement from Man Group. -By Andrea Tryphonides, Dow Jones Newswires; +44-20-7842-9281; andrea.tryphonides@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Ia%2B9%2FwQde7iSgF%2FbgehNXw%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones NewswiresMarch 26, 2009 03:30 ET (07:30 GMT)
By Andrea Tryphonides
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--European stocks are expected to open a little higher Thursday, with the late rally on Wall Street and a turnaround in Asia likely to give a boost to equity markets. Matt Buckland, a dealer at CMC Markets said: "A late rally on Wall Street should also help consolidate positive sentiment across the board." Buckland called London's FTSE 100 up 24 points, or 0.6%, at 3924.0, Frankfurt's DAX up 10.7 points or, 0.3%, at 4234.0 and Paris's CAC-40 9.5 points, or 0.3%, higher at 2903.0. However, there were indications from other traders that the recent rallies may have run their course. Ben Potter, research analyst at IG Markets, said: "There's no doubting this global rally is getting long in the tooth. The question is not how high we rally, but how far we fall when the bears regain control. This will help determine if we are near a bottom." Asian share markets were mostly a little higher, helped by the gains on Wall Street and a surge in mainland China financial stocks, which sent the Hang Seng Index up 3.1%. Japan's Nikkei 225 was up 1.8%, with Australia's S&P/ASX 200 up 1.0%, South Korea's Kospi Composite up 1.2% and Taiwan shares 0.8% higher. But overall activity in Asia was low, with some fatigue setting in after recent sharp gains for many bourses. "In the short term I can understand this bullishness, but we haven't seen the full impact of the recession. I know markets look through all that, but it's going to cause further pain," said ABN Amro director David Iron. U.S. stocks closed higher Wednesday, with a late surge for financial stocks such as JPMorgan Chase and home builders such as Toll Brothers, amid more signs of stabilization in the housing market. Stocks had dipped into negative territory mid-session after weak demand at a U.S. Treasury five-year note auction and a difficult sale of U.K. debt suggested that investors are balking at governments' spending. The Dow Jones Industrial Average closed up 89.8 points at 7749.8, recouping the bulk of Tuesday's losses, though it was up by more than 200 points before the Treasury auction. The broad Standard & Poor's 500 index added 7.6 points to 813.9 and the Nasdaq Composite rose 12.4 to 1529.0. The decline in U.S. Treasurys weighed on Japanese government bonds and is expected to continue to weigh on the European bond market Thursday. In the foreign exchanges, the dollar and euro were up a little against the Japanese yen, after an initial drop in the dollar in New York following comments by U.S. Treasury Secretary Timothy Geithner. Geithner initially appeared open to the Chinese proposal that an international currency supplant the U.S. dollar as the key global reserve currency, but later added "the dollar remains the world's dominant reserve currency." The dollar was trading at Y98.08 at 0725 GMT, up from Y97.54 late in New York, and the euro was quoted at Y133.26, up from Y132.51. The euro was at $1.3570, down from $1.3583. Elsewhere, spot gold was down 93 cents from New York at $933.10 per troy ounce, with Barclays Capital forecasting a $916-$967 range for the metal. May Nymex crude was up 48 cents at $53.25 per barrel, having fallen $1.21 in New York. The economic calendar is rather quiet Thursday. H&M and Kingfisher's results will be in focus, along with a trading statement from Man Group. -By Andrea Tryphonides, Dow Jones Newswires; +44-20-7842-9281; andrea.tryphonides@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=Ia%2B9%2FwQde7iSgF%2FbgehNXw%3D%3D. You can use this link on the day this article is published and the following day. (END) Dow Jones NewswiresMarch 26, 2009 03:30 ET (07:30 GMT)
USD/JPY: Dollar breaks 98.00 resistance level: 98.40 on sight
FXstreet.com (Barcelona) – After having hit 97.10 low o yesterday’s late U.S. session, the Dollar has strengthened, returning to levels above 98.00 ahead of the European trading session.If the USD holds above 98.00, next resistance level comes at 98.40 (Mar 24 high). Once above there, 98.85/99 (Mar 17 high), and swinging over 99.00, mar 5 high at 99.70 would be the last6 resistance level before 100.00 psychological level.A downward reaction below 98.00 would set 97.45 intra-day low as the closest support level, and below there the 97.00/96.85. Once below here, next support lies at 96.55.EUR/JPY has just broken 133.30 resistance level on its upmove form 1.30755 support level (Mar 25 low). Above here, 134.50 (Mar 24 high). If the Euro breaks that level, it will set a new 10-week high.
Wednesday, February 4, 2009
London Session
Published: February 3, 2009 7:48 AM
Published: February 3, 2009 7:48 AM
The price action was relatively calm in London trading as markets continue to look forward to the ECB rate meeting and US nonfarm payrolls into the latter part of the week. European equities were flat pretty much across the board and the FX space was rather calm. EUR/USD managed to eke out a modest 10 pip rally and was sitting near 1.2870/80 just ahead of the NY session. This was despite another poor batch of economic data across the pond.
German retail sales declined -0.2% in December while the market was looking for an improvement to +0.5% from -0.1% the prior month. Meanwhile, eurozone producer prices fell -1.3% and this was also steeper than expected and took the annual run-rate to just 1.8% from 3.3% previously. Thus the ECB will remain hard-pressed to argue that inflation remains a problem near-term.
The yen crosses were likewise little changed as risk trades remained without direction. USD/JPY slipped a modest -18 pips towards 89.50/60 while EUR/JPY was just -15 points lower into the 115.20/30 zone. USD/CAD managed a 30 pip rally to 1.2450/60 as oil prices came off a touch towards $40.20/bbl. The $40 level for crude looks pivotal here and we briefly tried below it yesterday. We would expect a good break to the downside would see USD/CAD approach 1.2500/10 with relative ease.
Upcoming Economic Data Releases (NY Session) prev est
2/3 15:00 GMT US Pending Home Sales MoM DEC -4.00% 0.00%
2/3 22:00 GMT US ABC Consumer Confidence 1-Feb -54 - -
2/3 US Total Vehicle Sales JAN 10.3M 10.2M
2/3 US Domestic Vehicle Sales JAN 7.8M 7.7M
New York Session
Published: February 3, 2009 5:11 PM
Published: February 3, 2009 5:11 PM
Risk taking was back in vogue in NY trading as earnings from the healthcare space and better than expected pending home sales put a bid under stocks. The S&P 500 rallied more than +1.5% as US pending home sales jumped 6.3% in November after a -3.7% pullback the prior month. Pending sales lead existing sales by about two months and this suggests at least some improvement in January sales.
With the number of vacant homes in the US reaching a record 19 million for 2008, however, any modest move higher in sales is likely to provide little relief to the inventory overhang. US Treasuries sold off in good size as well and the 2-year yield jumped 7bps to 0.96% while the 10-year rate was more than 16bps higher at 2.88%. Gold remained pretty resilient, closing down just -$5 near the $900/oz mark and somewhat defying the overall flight from safety.
Risk trades in FX land headed higher on the follow. EUR/USD added more than 180 pips into the 1.3030/40 zone on a good rally from 1.2950 in the latter part of the session. EUR/JPY was bid about 140 points towards 116.50/60 and this left USD/JPY a touch weaker near the 89.40/50 area. GBP/USD rocketed more than 200 pips towards 1.4450 as risk appetites drove cable higher. USD/CAD meanwhile slipped more than -180 pips as crude oil prices rose a little less than $1 but held on to $40/bbl support nicely.
Upcoming Economic Data Releases (Asia Session) prev est
2/3 22:30 GMT AU AiG Performance of Service Index JAN 39.3 - -
2/4 0:01 GMT UK Nationwide Consumer Confidence JAN 47 45
2/4 0:30 GMT AU Retail Sales Trend (MoM) DEC 0.10% 0.30%
2/4 0:30 GMT AU Retail Sales s.a. (MoM) DEC 0.40% 1.00%
2/4 0:30 GMT AU Building Approvals (MoM) DEC -12.80% 2.00%
2/4 0:30 GMT AU Building Approvals (YoY) DEC -34.70% -29.70%
2/4 2:00 GMT NZ ANZ Commodity Price JAN -7.40% - -
Upcoming Economic Data Releases (
| 2/4/2009 | 8:50 | FR | PMI Services | JAN F | 42.9 | 42.9 |
| 2/4/2009 | 8:55 | GE | PMI Services | JAN F | 45.4 | 45.4 |
| 2/4/2009 | 9:00 | EC | PMI Services | JAN F | 42.5 | 42.5 |
| 2/4/2009 | 9:00 | EC | PMI Composite | JAN F | 38.5 | 38.5 |
| 2/4/2009 | 9:30 | | PMI Services | JAN | 40.2 | 40.3 |
| 2/4/2009 | 10:00 | EC | Euro-Zone Retail Sales (MoM) | DEC | 0.60% | -0.20% |
| 2/4/2009 | 10:00 | EC | Euro-Zone Retail Sales (YoY) | DEC | -1.50% | -1.40% |
| 2/4/2009 | 10:30 | | BRC January Shop Price Index (Table) | 4-Feb | |
Today's Market Update
Asia SessionPublished: February 4, 2009 1:20 AM
The US Dollar made some modest gains in
USD/JPY grinded higher in a tedious fashion, but nonetheless gained ground from near 89.31 to highs just over 89.60. The Dollar was boosted by surprisingly better than expected housing data, and although many are looking with a weary eye toward US employment data at the end of the week. Down under, AUD/USD hit a low of 64.57 before bouncing back to .6500, and NZD/USD bottomed out at 0.5079 before getting back to just over 0.5125.
Be aware of Euro Zone Retail Sales later at 10:00GMT.
Wednesday, January 28, 2009
Canadian Dollar Rises as Oil Shows Strength
The Canadian dollar rose against the 3 other major currencies today, completely reversing the daily trend, as the oil and commodity markets become more attractive after the holidays.
Today the loonie (another name for the Canadian currency) is growing for the third day against the Japanese yen and the Euro and for the second day against the U.S. dollar. The Canada’s currency gained an additional momentum after the crude oil gained more than 1.3 percent in New York today.
The commodity economies that rely heavily on the export of the oil and some other raw supplies, such as metals, will experience an uprise in their currencies’ demand as the analysts believe that the oil bottom has been already reached. On the other hand, if the oil loses its bullish trend, the Canadian dollar will return to the levels significantly below its current rates.
USD/CAD declined from 1.2054 to 1.1916 as of 17:54 GMT today. CAD/JPY rose from 76.36 to 78.33 and EUR/CAD fell from 1.6736 to 1.6159 today.
AUD, NZD Down on Aroused Risk Aversion
The Australian and New Zealand dollars both showed a second day of decline today on the Forex market as the stocks, commodities and the confidence in the fast recovery from the recession fell world-wide.
Both currencies have been showing a nice daily rally against the U.S. dollar and the Japanese yen until they began to go down yesterday, almost paring the gains of the previews 3-5 days. The carry trade wave, which started in the last decade of December didn’t live for too long and the risk-averting mood now dominates over the Forex market again.
The fundamentals from the Australia are continuing to come out worse than the traders expect — the housing and the employment markets are still highly depressed. Commodities are the large part of the Australian exports and they aren’t very popular these days with the price on many types are already at the levels of 2004/2005.
AUD/USD fell from 0.7132 to 0.6998 as of 8:16 GMT today. AUD/JPY declined from 65.98 to 64.23. NZD/USD went down from 0.5914 to 0.5862, while NZD/JPY slid from 54.70 to 53.77 today.
Dollar Weakens before Important Reports
The U.S. dollar declined today against the other major currencies, except yen, after rallying for three days, as the investors sought a technical correction before some important macroeconomic reports to be released today in United States.
Federal Reserve Chairman Ben Bernanke said yesterday that the new fiscal policies wont’ produce a long-term recovery effect on the whole economy, hinting that the additional monetary measures will be used to ease the financial conditions. But those measures may also press on the dollar. Traders already started to include this information into their bets against the greenback.
Although many analysts believe that the first-in-first-out rule will work when the current crisis will be over — meaning that the U.S., which entered the recession first, will be out of it before Europe or Japan, some point out that the bad news are still coming out mostly from United States. Some even say that the consequences for U.S. will be much more serious than for any other developed country.
EUR/USD rose from 1.3178 to 1.3206 as of 9:05 GMT today after reaching as high as 1.3336 earlier. GBP/USD went up from 1.4507 to 1.4605, while the daily high was reached at 1.4706; USD/JPY rose from 89.35 to 89.57.
Pound Gains against Euro
The British pound rose against the euro today along with some other major currencies as the euro suffers from the trade balance deficit, while the traders long for some high-yielding European currency, which the pound still is.
Eurostat agency reported that the November 2008 trade balance deficit of the European Union countries was at €7 billion compared to €2.3 billion surplus in November 2007. That statistics hurt the euro as the market paritcipants expected that the trade balance would have a surplus of about €1 billion this November.
While the Eurozone’s stats aren’t impressive, the traders a feeling very risk-hungry today after the growth in the U.S. and Asian stock markets during the latest sessions. The Great Britain pound is one of the currencies that can allow the traders to gain their «safe risk». That’s why the pound is currently showing 3rd day of growth against the euro.
EUR/GBP fell from 0.8967 to 0.8895 as of 11:23 GMT today. GBP/USD went up from 1.4651 to 1.4930, while GBP/JPY advanced from 131.62 to 135.18 today.
Pound Hits New Record Low vs. Yen
The British pound fell to the record low level against the Japanese yen and declined significantly against the other major currencies today as the market participants are concerned that the U.K. recession will continue deepening and the Bank of England will have to reduce the rates further.
The pound declined to the lowest level against the U.S. dollar since June 2001 and posted its fourth negative daily result against the European currency. The yen gained against the all high-yielding currencies and renewed its 8-year high against the New Zealand dollar today, while reaching a new absolute maximum against the pound.
Analysts believe that the Bank of England minutes for the last Monetary Policy Committee meeting, that are going to be released today, will show that the bearish sentiments are still very strong in BoE. Traders should be careful though, the the pound will likely to get to a strong support level against the U.S. dollar soon.
GBP/USD fell from 1.3870 to 1.3775 as of 8:53 GMT today. GBP/JPY declined from 124.39 to 123.74, while the daily low was at 122.94 — its new all-time minimum. EUR/GBP rose from 0.9273 to 0.9368 today.
Rupee Opens Higher Today on Stocks Revival
The Indian rupee advanced against the U.S. dollar during the Forex trading session opening today as the stock markets showed some strength world-wide and the investors used the short-term opportunity to enter the high-risk assets.
Almost 3 percent growth of the Bombay Stock Exchange Sensitive Index (SENSEX) was accompanied by the news from the Reserve Bank of India Governor Duvvuri Subbarao — the interest rate was left unchanged today after four cuts in a row during the last three months. The rupee bulls now have the cumulative advantage, while the investors seek the chance to buy the now-cheap Indian businesses.
Some analysts share the optimism of the markets and believe that rupee’s growth from 7-week bottom may be one of the last, if not the last, support level before a considerably long trend. Others focus on the coincidence of the decision to leave the rates unchanged and the growth of the global stock markets — they believe that when the world’s optimism is over (the next few days) the India’s currency won’t stand a chance.
USD/INR opened at 48.43 today after closing at 48.50 on January 25th and remaining unchanged during the holiday on January 26th. During today’s trading session the currency pair rose to 48.75 as of 8:14 GMT.
Tuesday, January 27, 2009
Depression Beckons?
This morning’s psychologically accepted number will be -700k for NFP. Below this, the USD will rally and a large sigh of relief, at least for another 4-weeks anyways and anything greater than -700k, then goodbye ‘mighty greenback’. We know it’s bad when President elect Obama uses campaign style techniques to sell his policy changes. Many feel that this month’s figure will be the ‘watershed’, I expect next months to be worse!
The US$ is stronger in the O/N trading session. Currently it is higher against 14 of the 16 most actively traded currencies, in another ‘whippy’ trading range ahead of employment data.
Analysts are asking the question, are yesterday’s US employment claims the calm for today’s storm? It’s highly anticipated that this morning’s numbers will be bad but probably not as bad as next month’s data. Due to last week’s 4-day stat week, we once again saw claims fall to +467k on a seasonally adjusted basis. The market had been expecting a figure close to +545k. But, on a non-seasonally adjusted basis, claims increased to +726k. More of a concern was that continuing claims pushed through the +4.6m benchmark, and is now encroaching on the all time high of just over +4.7m continuing claims that was achieved 26-years ago in Nov.1982. This is the component that is the engine for the unemployment rate and the trend is now pointing towards an 8% unemployment rate for the 1st Q of 2009.
Preliminary December same-store sales from the International Council of Shopping Centers (ICSC) fell -1.7% in Dec. over Nov. The combined Nov/Dec holiday season was down -2.2% which is the largest decline on record back to 1970. Analysts foresee the distribution of sales is becoming much more skewed toward discounters and sharply away from high-end retailers. Sales ex-Wal-Mart was down by -4.3%. Expect over the coming month a higher percentage of Retailers going out of business.
There were no surprises yesterday when the BOE cut their main borrowing rate by 50bp to 1.5%. This is the lowest rate since the inception of the Cbank in 1694. Governor King is trying to prevent the credit squeeze from deepening. Next week we have Trichet and the ECB. Historically they are tight lipped but market consensus is leaning towards a 25bp ease. Next stop quantitative easing
The US$ currently is higher against the EUR -0.62%, GBP -0.42%, CHF -0.32% and lower JPY -0.09%. The commodity currencies are weaker this morning, CAD -0.84% and AUD -0.93%. The loonies’ rapid rise came to a halt this week as both crude oil inventory reports and a weaker than expected US job data knocked the loonie from its 2-month high printed earlier in the week. The currency is guilty by its association and proximity to its largest trading partner, the US. 50% of all Canadian exports are commodity based, technically on a cross related basis it’s aggressively underperforming and rightly so, but it’s holding in rather well vs. the USD. Traders are waiting for this morning North American employment, where it’s expected to show that Canadian unemployment rate edged 2/10’s higher to 6.5%. With oil paring close to 3% yesterday, traders continue to favor selling of the loonie on any USD pull backs. Consensus has the loonie trading under pressure for the remainder of this quarter and backing up towards the 1.2800 level again. Politically Canada has not been proactive in protecting itself from a deepening global meltdown. If anything its reactive, unlike the US. Eventually the true value of the currency will catch up and things fundamentally and technically point to a weakening CAD. Let see what Canadian employment numbers has in store for us this morning.
The AUD is heading for its 1st weekly loss in a month as investors once again shy away from higher yielding asset classes. O/N the AUD$ had comfortably pared all of last weeks gains as the price of commodities continue to trade under pressure. Commodity exports account for 40% of the countries total exports (0.7038).
Crude is higher O/N ($42.08 up +38c). A fear of a much deeper recession continues to undermine crude prices. A weakening equity market and rising number of jobless workers have intensified concerns that the recession will cut fuel usage. Demand destruction remains the order of the day. Oil has been unable to retain the week’s earlier gains after this week’s EIA report took the market by surprise. The black stuff managed to lose another 3% yesterday as the weekly data showed a bigger than expected increase across the board for crude oil, gas and distillate fuel. Inventories of oil rose +6.68m barrels to +325.4m last week, that’s the highest level in 8-months (the market had anticipated an increase of +800k barrels). It’s all about contango trading, which encourages companies to increase stockpiles if they have available storage (hence the demand for supertankers to be used as a mobile storage facility). Dealers are encouraged to do so as the price of oil for delivery in 11-months time is 33% more than for next month. Gas stocks rose +3.33m barrels to +211.4m barrels vs. an expected +1m barrels. Finally distillate supplies (heat oil and diesel) jumped +1.79m barrels to +137.8m. Yesterday’s US economic numbers will impede future fuel demand as it provides stronger evidence that a deepening recession is occurring globally. The geo-political issues like the violence in Gaza and natural gas crisis, is no match for demand destruction caused by weakening economies. Gold prices rallied the most in a week as the greenback eased vs. the EUR, thus boosting demand for the ‘yellow’ metal as an alternative investment ($854) in the O/N session it remains little changed.
The Nikkei closed 8,836 down -39. The DAX index in Europe was at 4,874 down -5; the FTSE (UK) currently is 4,490 down -15. The early call for the open of key US indices is lower. The 10-year Treasury yields eased 2bp yesterday (2.47%) and have backed up 4bp in the O/N session ahead of this morning’s data (2.43%). Dealers had been pushing yields close to their highest levels in 3-weeks despite global equities coming under pressure once again. FI prices are being weighed down by the sheer size of President-elect Obama’s stimulus plan. This morning NFP number could once again be another eye opener that may lead to FI to experience another rampant rally.
The US$ is stronger in the O/N trading session. Currently it is higher against 14 of the 16 most actively traded currencies, in another ‘whippy’ trading range ahead of employment data.
Analysts are asking the question, are yesterday’s US employment claims the calm for today’s storm? It’s highly anticipated that this morning’s numbers will be bad but probably not as bad as next month’s data. Due to last week’s 4-day stat week, we once again saw claims fall to +467k on a seasonally adjusted basis. The market had been expecting a figure close to +545k. But, on a non-seasonally adjusted basis, claims increased to +726k. More of a concern was that continuing claims pushed through the +4.6m benchmark, and is now encroaching on the all time high of just over +4.7m continuing claims that was achieved 26-years ago in Nov.1982. This is the component that is the engine for the unemployment rate and the trend is now pointing towards an 8% unemployment rate for the 1st Q of 2009.
Preliminary December same-store sales from the International Council of Shopping Centers (ICSC) fell -1.7% in Dec. over Nov. The combined Nov/Dec holiday season was down -2.2% which is the largest decline on record back to 1970. Analysts foresee the distribution of sales is becoming much more skewed toward discounters and sharply away from high-end retailers. Sales ex-Wal-Mart was down by -4.3%. Expect over the coming month a higher percentage of Retailers going out of business.
There were no surprises yesterday when the BOE cut their main borrowing rate by 50bp to 1.5%. This is the lowest rate since the inception of the Cbank in 1694. Governor King is trying to prevent the credit squeeze from deepening. Next week we have Trichet and the ECB. Historically they are tight lipped but market consensus is leaning towards a 25bp ease. Next stop quantitative easing
The US$ currently is higher against the EUR -0.62%, GBP -0.42%, CHF -0.32% and lower JPY -0.09%. The commodity currencies are weaker this morning, CAD -0.84% and AUD -0.93%. The loonies’ rapid rise came to a halt this week as both crude oil inventory reports and a weaker than expected US job data knocked the loonie from its 2-month high printed earlier in the week. The currency is guilty by its association and proximity to its largest trading partner, the US. 50% of all Canadian exports are commodity based, technically on a cross related basis it’s aggressively underperforming and rightly so, but it’s holding in rather well vs. the USD. Traders are waiting for this morning North American employment, where it’s expected to show that Canadian unemployment rate edged 2/10’s higher to 6.5%. With oil paring close to 3% yesterday, traders continue to favor selling of the loonie on any USD pull backs. Consensus has the loonie trading under pressure for the remainder of this quarter and backing up towards the 1.2800 level again. Politically Canada has not been proactive in protecting itself from a deepening global meltdown. If anything its reactive, unlike the US. Eventually the true value of the currency will catch up and things fundamentally and technically point to a weakening CAD. Let see what Canadian employment numbers has in store for us this morning.
The AUD is heading for its 1st weekly loss in a month as investors once again shy away from higher yielding asset classes. O/N the AUD$ had comfortably pared all of last weeks gains as the price of commodities continue to trade under pressure. Commodity exports account for 40% of the countries total exports (0.7038).
Crude is higher O/N ($42.08 up +38c). A fear of a much deeper recession continues to undermine crude prices. A weakening equity market and rising number of jobless workers have intensified concerns that the recession will cut fuel usage. Demand destruction remains the order of the day. Oil has been unable to retain the week’s earlier gains after this week’s EIA report took the market by surprise. The black stuff managed to lose another 3% yesterday as the weekly data showed a bigger than expected increase across the board for crude oil, gas and distillate fuel. Inventories of oil rose +6.68m barrels to +325.4m last week, that’s the highest level in 8-months (the market had anticipated an increase of +800k barrels). It’s all about contango trading, which encourages companies to increase stockpiles if they have available storage (hence the demand for supertankers to be used as a mobile storage facility). Dealers are encouraged to do so as the price of oil for delivery in 11-months time is 33% more than for next month. Gas stocks rose +3.33m barrels to +211.4m barrels vs. an expected +1m barrels. Finally distillate supplies (heat oil and diesel) jumped +1.79m barrels to +137.8m. Yesterday’s US economic numbers will impede future fuel demand as it provides stronger evidence that a deepening recession is occurring globally. The geo-political issues like the violence in Gaza and natural gas crisis, is no match for demand destruction caused by weakening economies. Gold prices rallied the most in a week as the greenback eased vs. the EUR, thus boosting demand for the ‘yellow’ metal as an alternative investment ($854) in the O/N session it remains little changed.
The Nikkei closed 8,836 down -39. The DAX index in Europe was at 4,874 down -5; the FTSE (UK) currently is 4,490 down -15. The early call for the open of key US indices is lower. The 10-year Treasury yields eased 2bp yesterday (2.47%) and have backed up 4bp in the O/N session ahead of this morning’s data (2.43%). Dealers had been pushing yields close to their highest levels in 3-weeks despite global equities coming under pressure once again. FI prices are being weighed down by the sheer size of President-elect Obama’s stimulus plan. This morning NFP number could once again be another eye opener that may lead to FI to experience another rampant rally.
Subscribe to:
Posts (Atom)
