DAILY MARKET COMMENTARY
4 May 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH A break below 1.3058 would trigger further weakness towards 1.2995. Resistance is at 1.3241.
USDJPY BEARISH Significant support area is at 79.64/53. Resistance is at 80.71, the mid-point of recent sell-off.
GBPUSD BULLISH A move above 1.6248 would reinforce the bullish conditions and open the way to 1.6302. Near-term support lies at 1.6112 ahead of 1.6054.
USDCHF BULLISH Key resistance is at 0.9252, while support lies at 0.9043.
AUDUSD BEARISH The pair is currently testing the critical support area at 1.0260/26, a break through which would open 1.0119. Resistance is at 1.0355.
USDCAD BEARISH Support is at 0.9829, a break here would expose 0.9800. Resistance is at 0.9927.
EURCHF NEUTRAL Resistance is at 1.2070, while support lies at 1.2000.
EURGBP BEARISH Trend and momentum tools are pointing south; there is scope for a move towards 0.8068. Near-term resistance is at 0.8163.
EURJPY BEARISH Initial support is at 104.61; a decline through the level would reinforce the bearish conditions and open 104.24. Resistance is at 106.55.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
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Friday, May 04, 2012
4th of May 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
4 May 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The RBA's quarterly Statement on Monetary Policy provided further colour on the decision to cut the cash rate by 50 bp on Tuesday. End-2012 forecasts for both core inflation and GDP were modestly downgraded. This came as a minor relief to FX investors, some of whom had feared such a large rate reduction might need substantial forecast downgrades in order to justify it. AUDUSD climbed 20 pips afterwards but eventually gave back all gains. Our analysts team note though that the bank's assessment of domestic growth now appears to be much less upbeat. They also expect next week's budget to confirm suspicions that a very significant amount of fiscal drag is in the pipeline over the coming 12 months. Consequently they now expect another 50 bp of RBA by Q3, up from 25 bp previously. They also lower their year-end forecast for AUDUSD to 1.00 from 1.05.
USDJPY came off its highs on the weaker than anticipated 53.5 April ISM non-manufacturing print, which reflected declines in the key new orders (to 53.5 from 58.8) and employment (to 54.2 from 56.7) sub-indices. Cable shrugged off the soggy services PMI for April of 53.3, as the forward-looking components improved - reinforcing our view that there will be no further QE from the BoE this month. The stage is now set for today's US employment data for April. Here, we would stress that the below-consensus ADP figure of 119k has not altered the above-consensus 170k payrolls forecast of our US economics team. Risks, however, would appear to be skewed to the downside, given the tendency for below-trend April readings in the BLS series with four-week sample periods like this year. Any undershoot on April payrolls compared to the 160k market consensus (89k-210k range), in the context of the weak March results, would certainly put the dollar on the back foot.
EUR
The ECB left rates unchanged as expected. Draghi did not meet dovish market expectations in his press conference and the euro gained as he said the ECB "did not discuss any specific move in interest rates". He said that despite the recent weakness in economic data, ECB's baseline scenario has not changed and it continues to foresee a "gradual recovery in the course of the year".
Draghi stressed that the impact of the LTROs is not fading away yet, noting that the positive effects on credit supply, deposit bases at banks and key stress indicators in the financial markets are still evident.
Regarding Spain, Draghi said that the ECB has "full confidence" that "action will be taken" by Spanish authorities to shore up the banking system and reduce the fiscal deficit. Draghi also stated that Italy has achieved "remarkable fiscal consolidation" and the "government should be encouraged for its efforts".
Spain sold a total EUR2.51 bn in Thursday's auction. Yields were understandably higher than previous auctions, but bid-covers were reasonable, and the event passed with little impact on the FX markets. France sold EUR7.4 bn of bonds, at the top of its target range, amid solid demand. The successful auction led to a rally in OATs and 10-year yields subsequently dropped by 5 bp.
GBP
Nationwide house prices fell in April by 0.2% m/m (consensus: 0.5%, prior: -1.0%) mainly due to the end of the tax break for first-time home buyers. In y/y terms, house prices fell 0.9% (consensus: -0.3%, prior: -0.9%).
The services PMI slipped to 53.3 in April from 55.3 in March, below market expectations of 54.2. Though worse than anticipated, some of the forward-looking indicators such as business expectations and outstanding business improved, suggesting that the growth moderation could be short-lived.
AUD
Our analysts team now expect the RBA's cash rate to trough at 3.25%, down from 3.5% previously. They anticipate next week's budget will introduce a considerable fiscal drag, and this makes it more likely that the RBA will supply more easing to compensate.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
4 May 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The RBA's quarterly Statement on Monetary Policy provided further colour on the decision to cut the cash rate by 50 bp on Tuesday. End-2012 forecasts for both core inflation and GDP were modestly downgraded. This came as a minor relief to FX investors, some of whom had feared such a large rate reduction might need substantial forecast downgrades in order to justify it. AUDUSD climbed 20 pips afterwards but eventually gave back all gains. Our analysts team note though that the bank's assessment of domestic growth now appears to be much less upbeat. They also expect next week's budget to confirm suspicions that a very significant amount of fiscal drag is in the pipeline over the coming 12 months. Consequently they now expect another 50 bp of RBA by Q3, up from 25 bp previously. They also lower their year-end forecast for AUDUSD to 1.00 from 1.05.
USDJPY came off its highs on the weaker than anticipated 53.5 April ISM non-manufacturing print, which reflected declines in the key new orders (to 53.5 from 58.8) and employment (to 54.2 from 56.7) sub-indices. Cable shrugged off the soggy services PMI for April of 53.3, as the forward-looking components improved - reinforcing our view that there will be no further QE from the BoE this month. The stage is now set for today's US employment data for April. Here, we would stress that the below-consensus ADP figure of 119k has not altered the above-consensus 170k payrolls forecast of our US economics team. Risks, however, would appear to be skewed to the downside, given the tendency for below-trend April readings in the BLS series with four-week sample periods like this year. Any undershoot on April payrolls compared to the 160k market consensus (89k-210k range), in the context of the weak March results, would certainly put the dollar on the back foot.
EUR
The ECB left rates unchanged as expected. Draghi did not meet dovish market expectations in his press conference and the euro gained as he said the ECB "did not discuss any specific move in interest rates". He said that despite the recent weakness in economic data, ECB's baseline scenario has not changed and it continues to foresee a "gradual recovery in the course of the year".
Draghi stressed that the impact of the LTROs is not fading away yet, noting that the positive effects on credit supply, deposit bases at banks and key stress indicators in the financial markets are still evident.
Regarding Spain, Draghi said that the ECB has "full confidence" that "action will be taken" by Spanish authorities to shore up the banking system and reduce the fiscal deficit. Draghi also stated that Italy has achieved "remarkable fiscal consolidation" and the "government should be encouraged for its efforts".
Spain sold a total EUR2.51 bn in Thursday's auction. Yields were understandably higher than previous auctions, but bid-covers were reasonable, and the event passed with little impact on the FX markets. France sold EUR7.4 bn of bonds, at the top of its target range, amid solid demand. The successful auction led to a rally in OATs and 10-year yields subsequently dropped by 5 bp.
GBP
Nationwide house prices fell in April by 0.2% m/m (consensus: 0.5%, prior: -1.0%) mainly due to the end of the tax break for first-time home buyers. In y/y terms, house prices fell 0.9% (consensus: -0.3%, prior: -0.9%).
The services PMI slipped to 53.3 in April from 55.3 in March, below market expectations of 54.2. Though worse than anticipated, some of the forward-looking indicators such as business expectations and outstanding business improved, suggesting that the growth moderation could be short-lived.
AUD
Our analysts team now expect the RBA's cash rate to trough at 3.25%, down from 3.5% previously. They anticipate next week's budget will introduce a considerable fiscal drag, and this makes it more likely that the RBA will supply more easing to compensate.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Thursday, May 03, 2012
3rd of May 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
3 May 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH The first target support is at 1.3105, a break below this level would open 1.3058. Near-term resistance is at 1.3241.
USDJPY BEARISH Support is offered by the significant area at 79.64/53, a break below would expose 79.14. Resistance is at 80.71.
GBPUSD BULLISH Resistance is at 1.6248; a break above would reinforce the bull trend and expose 1.6302. Near-term support lies at 1.6112 ahead of 1.6054.
USDCHF NEUTRAL Key resistance is at 0.9252, while support lies at 0.9043 ahead of 0.9002.
AUDUSD BEARISH The pair is approaching the important support area at 1.0260/26. Resistance is at 1.0430.
USDCAD BEARISH Near-term support lies at 0.9800; a break here would be an important bearish event and extend weakness towards 0.9766. Resistance is at 0.9905.
EURCHF NEUTRAL Resistance is at 1.2070, while support lies at 1.2000.
EURGBP BEARISH Trend conditions remain bearish, support focus is on 0.8068. Resistance is at 0.8163.
EURJPY BEARISH The cross is under pressure, targets the key support offered at 104.61/24. Resistance is at 106.55.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
3 May 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH The first target support is at 1.3105, a break below this level would open 1.3058. Near-term resistance is at 1.3241.
USDJPY BEARISH Support is offered by the significant area at 79.64/53, a break below would expose 79.14. Resistance is at 80.71.
GBPUSD BULLISH Resistance is at 1.6248; a break above would reinforce the bull trend and expose 1.6302. Near-term support lies at 1.6112 ahead of 1.6054.
USDCHF NEUTRAL Key resistance is at 0.9252, while support lies at 0.9043 ahead of 0.9002.
AUDUSD BEARISH The pair is approaching the important support area at 1.0260/26. Resistance is at 1.0430.
USDCAD BEARISH Near-term support lies at 0.9800; a break here would be an important bearish event and extend weakness towards 0.9766. Resistance is at 0.9905.
EURCHF NEUTRAL Resistance is at 1.2070, while support lies at 1.2000.
EURGBP BEARISH Trend conditions remain bearish, support focus is on 0.8068. Resistance is at 0.8163.
EURJPY BEARISH The cross is under pressure, targets the key support offered at 104.61/24. Resistance is at 106.55.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
3rd of May 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
3 May 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Expectations are building that today's ECB press conference could see the central bank turn significantly more dovish., with euro negative consequences. Wednesday's series of worrisome Eurozone data prints would certainly seem to warrant a rhetorical shift. It has also not gone unnoticed that President Draghi endorsed the concept of a "growth compact" in parliamentary testimony last week for the first time. Investors have also remarked on the meeting's location - in Barcelona for a change - in the expectation that this will somehow concentrate minds on the gravity of the situation facing the periphery, thus provoking a more dovish outcome.
These observations are not without merit, but market speculation of a possible rate cut - either to the deposit rate or to the refi rate itself - does seem to be wide of the mark. Our European economics team think it is unlikely that any rate adjustments will be made, and economists surveyed by Bloomberg are unanimous in their expectation that the refi rate will remain at 1%. However, we also note that collective bargaining negotiations over unionized pay are still ongoing in Germany, and these could ultimately yield wage increases of well above the prevailing inflation rate. Awareness of this on the Governing Council could help push the rhetoric needle out of the "deeply dovish" zone, and back towards "merely dovish". Given that a rate adjustment is so unlikely investors will be particularly alert for any hint of an upcoming policy response, whether that would come via a rate adjustment or by means of further 3y LTROs.
Before the ECB meeting, the focus will temporarily come to rest on Spain where an auction of bonos is scheduled. Our analysts note that this auction coincides with heavy Spanish redemptions and coupon payments, freeing up plenty cash that could be ploughed back in to help absorb today's supply. In the US, the ADP estimate of private sector payrolls disappointed at only +119k (cons. +170k). USDJPY dropped 20 pips on that. Our analysts note though that ADP has been an unreliable indicator of the official change in private payrolls as reported by the Bureau of Labour Statistics (BLS). They have also noticed that, for April data in particular over the past two years, ADP has significantly underestimated the official BLS reading. So, our economists stick to their BLS nonfarm payrolls forecast of +180k (cons. +167k). After three weeks of higher initial jobless claims, Thursday's update will be even more closely watched than usual - although the ECB press conference which begins at the same time will provide some distraction.
EUR
The euro came under pressure on Wednesday after a series of poor data prints out of the Eurozone. Eurozone manufacturing PMI fell to 45.9 (cons. 46.0), a 34-month low. Readings in the periphery were more concerning however: Spanish manufacturing PMI fell to 43.6 from 44.5, while the output sub-component dropped to 41.7. Italian PMI was well below expectations at 43.8, down from 47.9 in March. German and French numbers were also marked down - France to 46.9 and Germany to 46.2 - an indication that the economic weakness is not just affecting the periphery.
German unemployment increased by 19K (cons -10K), pushing the unemployment rate to 6.8%, still close to all-time lows. The Italian unemployment rate increased for the fifth consecutive month, jumping to 9.8% from 9.4% in March (it was 8.3% in July). As a consequence, euro area unemployment nudged up to 10.9% from 10.8 in February, the 9th consecutive increase.
GBP
Manufacturing PMI fell to 50.5 after a downwardly-revised 51.9 in March. Most of the components of the report were weak with new orders at the lowest levels since November and exports at the lowest level since May 2009. The all-important Services PMI is due on Thursday.
Governor King said that inflation in the UK is too high and that the recovery is proving slower than hoped. Somewhat ominously he added that the crisis is "far from over" and that an escalation of the sovereign debt crisis inside the Eurozone may endanger UK banks.
NZD
New Zealand's unemployment rate unexpectedly jumped to 6.7% (cons. 6.3%, prev. 6.4%) prompting a sharp kiwi selloff. A closer look at the data showed a large jump in the participation rate too, which went some way towards explaining the higher unemployment rate, and NZDUSD eventually steadied.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
3 May 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Expectations are building that today's ECB press conference could see the central bank turn significantly more dovish., with euro negative consequences. Wednesday's series of worrisome Eurozone data prints would certainly seem to warrant a rhetorical shift. It has also not gone unnoticed that President Draghi endorsed the concept of a "growth compact" in parliamentary testimony last week for the first time. Investors have also remarked on the meeting's location - in Barcelona for a change - in the expectation that this will somehow concentrate minds on the gravity of the situation facing the periphery, thus provoking a more dovish outcome.
These observations are not without merit, but market speculation of a possible rate cut - either to the deposit rate or to the refi rate itself - does seem to be wide of the mark. Our European economics team think it is unlikely that any rate adjustments will be made, and economists surveyed by Bloomberg are unanimous in their expectation that the refi rate will remain at 1%. However, we also note that collective bargaining negotiations over unionized pay are still ongoing in Germany, and these could ultimately yield wage increases of well above the prevailing inflation rate. Awareness of this on the Governing Council could help push the rhetoric needle out of the "deeply dovish" zone, and back towards "merely dovish". Given that a rate adjustment is so unlikely investors will be particularly alert for any hint of an upcoming policy response, whether that would come via a rate adjustment or by means of further 3y LTROs.
Before the ECB meeting, the focus will temporarily come to rest on Spain where an auction of bonos is scheduled. Our analysts note that this auction coincides with heavy Spanish redemptions and coupon payments, freeing up plenty cash that could be ploughed back in to help absorb today's supply. In the US, the ADP estimate of private sector payrolls disappointed at only +119k (cons. +170k). USDJPY dropped 20 pips on that. Our analysts note though that ADP has been an unreliable indicator of the official change in private payrolls as reported by the Bureau of Labour Statistics (BLS). They have also noticed that, for April data in particular over the past two years, ADP has significantly underestimated the official BLS reading. So, our economists stick to their BLS nonfarm payrolls forecast of +180k (cons. +167k). After three weeks of higher initial jobless claims, Thursday's update will be even more closely watched than usual - although the ECB press conference which begins at the same time will provide some distraction.
EUR
The euro came under pressure on Wednesday after a series of poor data prints out of the Eurozone. Eurozone manufacturing PMI fell to 45.9 (cons. 46.0), a 34-month low. Readings in the periphery were more concerning however: Spanish manufacturing PMI fell to 43.6 from 44.5, while the output sub-component dropped to 41.7. Italian PMI was well below expectations at 43.8, down from 47.9 in March. German and French numbers were also marked down - France to 46.9 and Germany to 46.2 - an indication that the economic weakness is not just affecting the periphery.
German unemployment increased by 19K (cons -10K), pushing the unemployment rate to 6.8%, still close to all-time lows. The Italian unemployment rate increased for the fifth consecutive month, jumping to 9.8% from 9.4% in March (it was 8.3% in July). As a consequence, euro area unemployment nudged up to 10.9% from 10.8 in February, the 9th consecutive increase.
GBP
Manufacturing PMI fell to 50.5 after a downwardly-revised 51.9 in March. Most of the components of the report were weak with new orders at the lowest levels since November and exports at the lowest level since May 2009. The all-important Services PMI is due on Thursday.
Governor King said that inflation in the UK is too high and that the recovery is proving slower than hoped. Somewhat ominously he added that the crisis is "far from over" and that an escalation of the sovereign debt crisis inside the Eurozone may endanger UK banks.
NZD
New Zealand's unemployment rate unexpectedly jumped to 6.7% (cons. 6.3%, prev. 6.4%) prompting a sharp kiwi selloff. A closer look at the data showed a large jump in the participation rate too, which went some way towards explaining the higher unemployment rate, and NZDUSD eventually steadied.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Friday, April 20, 2012
20th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
20 April 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Initial support lies at 1.3058, a move below would signal resumption of weakness towards 1.2974/54 area. Resistance is at 1.3213.
USDJPY NEUTRAL A clear break through 81.78 would be a bullish development signalling scope for further gains towards 82.24. Support is at 80.84.
GBPUSD BULLISH Key resistance is at 1.6090, a break above would open the doors for a move towards 1.6167. Support lies at 1.5950.
USDCHF NEUTRAL Initial resistance is at 0.9252, a move above would open 0.9335. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH Trend conditions are bearish; there is scope for a move towards 1.0226. Resistance is at 1.0471.
USDCAD BEARISH Key support lies at 0.9842, a break here would be a bearish development. Next support is at 0.9766. Resistance is at 1.0053.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH Focus is on support at 0.8142; a break here would extend weakness towards 0.8068. Resistance is at 0.8222.
EURJPY NEUTRAL The cross pressures 107.47, a break above would resume strength and opens 108.04. Support is at 106.11 ahead of 105.29.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
20th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
20 April 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
USDJPY consolidated overnight with FOMC and BoJ policy meetings drawing closer. Our analysts are not concerned about yesterday's higher-than-expected initial jobless claims data. Instead, they point to distortions associated with Easter holidays and the cross over to a new quarter, which led to volatility and an upside bias. Economic data elsewhere also disappointed: existing home sales fell to an annual rate of 4.48 mn and April Philly Fed manufacturing index down to 8.5.
Meanwhile, Bank of Japan remains under intense political pressure to ease again. Economy Minister Furukawa urged the BoJ to take steps to achieve its 1% price goal for the second day in a row. He explicitly pointed to the option of buying JGBs with longer maturities, a possible policy outcome that could be particularly yen-negative. The key deciding factor could well be the growing political pressure on BoJ for more concessions as Noda administration battles to get the consumption tax hike passed in the Diet. Implicit here is the gradual Fed-BoJ policy divergence that should keep USDJPY risks tilted upwards to 85 in a three-month horizon amid a fading 'home currency bias' among Japanese investors.
While the Fed will be in no rush to categorically rule out QE3, we maintain the case for further easing is less convincing in the US than Japan. Ahead today, the focus will be on the IFO numbers in Germany and the G-20 meeting of finance ministers and central bank governors in the US. Canadian CPI numbers will be particularly noteworthy after the bank adopted an explicit tightening bias earlier this week.
EUR
The much anticipated Spanish auctions were largely uneventful. The Treasury managed to sell EUR1.2 bn of the 2014's and 1.42bn of the 2022's - at the upper end of targets. The bid-to-covers were also reasonable, coming in at 2.42x on the 10-year bond. The euro rallied after the results were released, but soon ran out of steam after breaking through 1.3150.
Japan's Finance Minister Azumi said there is a high chance the IMF will succeed in raising nearly $400 bn in funding pledges by the time the Spring meetings of the IMF and World Bank come to an end over the weekend.
JPY
Japan's Economy Minister Furukawa - for the second day in a row - said that the BoJ has the option of buying JGBs with longer maturities, and he expressed the hope that the bank will consider taking steps to achieve its 1% price goal. As such, political pressure on the central bank remains fierce and we would expect no respite ahead of next week's policy decision.
Though the tally was rather modest at JPY116 bn, the fact that the Japanese were net foreign bond buyers to the tune of JPY116 bn from April 8-14 reinforces our view that the large net sales (JPY1.9 trn) recorded in the first week of April reflected profit taking rather than the start of a sustained retreat from overseas markets. Bear in mind that Japanese investors have been better buyers in 12 of the past 15 weeks, chalking up cumulative net purchases of over JPY6 trn in the January-March quarter alone - defying seasonal fears of repatriation ahead of the fiscal year-end. Fed-BoJ policy divergence aside, our stronger USDJPY call hinges on our assumption that the strong 'home currency bias' evident in 2011 will gradually fade this year, as Japanese retail and institutional investors search for better returns abroad - complemented by increased direct investment flows overseas.
GBP
In a letter published in The Independent ("Why I changed my vote"), the BoE's Posen argued that his vote for no change at the latest MPC meeting "really should not have" surprised anyone, highlighting his belief that "the risks are largely balanced around inflation being below but close to target over the forecast horizon". Posen noted that he "never was an automatic vote for more QE" and "the latest data convinced me that for now an additional ?25 billion could be unnecessary". Posen concluded by saying "neither the MPC nor markets should overreact to one month's number, nor even to one vote. We will make a forecast that makes best sense of current conditions, and vote accordingly, whether that is for more QE or not".
Posen went on to echo a sentiment often expressed by Fed officials. He said that the degree of accommodation at a given moment depends on the stock of accumulated bond purchases to date, rather than on the flow of additional purchases. His point is that Bank of England policy settings will remain extremely accommodative even if fresh asset purchases do not continue beyond the end of April - when the existing asset purchase target is expected to be reached.
AUD
Australian export prices fell more sharply in Q1 than the consensus expected. They dropped -7% q/q in Australian dollar terms.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Thursday, April 19, 2012
19th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
19 April 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURJPY 107.47 resistance
EURUSD BEARISH Focus on support at 1.2974/54 area, a break through which would signal extension of weakness. Resistance is at 1.3213.
USDJPY NEUTRAL A move above 81.78 would open the way to 82.24. Key support area is at 80.30/10.
GBPUSD NEUTRAL Resistance area is marked at 1.6063/90, while support lies at 1.5895.
USDCHF NEUTRAL Initial resistance is at 0.9252, a move above would open 0.9335. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH Trend conditions are bearish; a break below 1.0305 would extend the downtrend towards 1.0226. Resistance is at 1.0471.
USDCAD BEARISH Key support lies at 0.9842, a break here would be a bearish development and open the way towards 0.9766. Resistance is at 1.0053.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH Support now lies at 0.8142; a break here would extend weakness towards 0.8068. Resistance is at 0.8279.
EURJPY NEUTRAL The recovery targets resistance at 107.47, a move above would open 108.04. Support is at 104.63/24 area.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
19 April 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURJPY 107.47 resistance
EURUSD BEARISH Focus on support at 1.2974/54 area, a break through which would signal extension of weakness. Resistance is at 1.3213.
USDJPY NEUTRAL A move above 81.78 would open the way to 82.24. Key support area is at 80.30/10.
GBPUSD NEUTRAL Resistance area is marked at 1.6063/90, while support lies at 1.5895.
USDCHF NEUTRAL Initial resistance is at 0.9252, a move above would open 0.9335. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH Trend conditions are bearish; a break below 1.0305 would extend the downtrend towards 1.0226. Resistance is at 1.0471.
USDCAD BEARISH Key support lies at 0.9842, a break here would be a bearish development and open the way towards 0.9766. Resistance is at 1.0053.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH Support now lies at 0.8142; a break here would extend weakness towards 0.8068. Resistance is at 0.8279.
EURJPY NEUTRAL The recovery targets resistance at 107.47, a move above would open 108.04. Support is at 104.63/24 area.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
19th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
19 April 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Trading was subdued in Asia overnight given a light economic data calendar, but investor attention is noticeably turning to what next week's two policy meetings will bring. The FOMC and the BoJ policy decisions are likely to set the tone for USDJPY for months to come, and USDJPY is already creeping higher in anticipation. BoJ Governor Shirakawa fanned expectations overnight by saying he is 'committed' to continued monetary easing in order to meet the 1% inflation goal. He also sounded quite downbeat about the general economic outlook, noting Japan has "stagnated" and that growth in developed economies elsewhere is "anemic". There was nothing in these remarks to dampen our expectations of further easing at the next policy meeting on April 27.
The Bank of Canada has other intentions - it backed up Tuesday's warning that "some modest withdrawal of the present considerable monetary policy stimulus may become appropriate" with an upgraded 2012 GDP forecast of 2.4% (versus 2.0% previously) in its Monetary Policy Report. This underpins our generally bullish Canadian dollar view and three-month USDCAD target of 0.98. Together with the Bank of England turning considerably less dovish while the RBA signals a possible upcoming rate cut, central bank opinion has not been so diverse in quite some time.
Today, the euro is likely to be highly sensitive to any surprise emerging from today's sovereign bond auction in Spain. Our rates strategy colleagues think the small amount (EUR 1.5 bn-2.5 bn) of bonds being sold is likely to be comfortably absorbed by the market.
EUR
IMF Managing Director Lagarde said that member countries have so far committed $316 bn in additional lending capacity to the fund. We expect further news over the coming days as the Spring meetings of the IMF and World Bank come to an end.
Italy has followed Spain in pushing back its balanced budget goal, as it now expects a deficit of 0.5% for 2013 against a previous estimate of 0.1%. Prime Minister Monti announced that the economy is likely to shrink by 1.2% in 2012, far more than government's earlier forecast of -0.4%.
In its Global Financial Stability Report, IMF noted that European banks could shrink their balance sheets by $2.6 trn over the next 18 months, with the bulk of the deleveraging happening through the sale of non-core assets while credit supply drops by 1.7%. This will likely reawaken investor discussion about how repatriation flows from the sale of overseas subsidiaries could lend the euro some support, or at least result in a more gradual decline than would otherwise be the case.
Non-performing loans as a proportion of total lending in Spain jumped to 8.16% in February - the highest level since 1994, and up from 7.91% in January and less than 1% in 2007.
JPY
BoJ Governor Shirakawa said he is 'committed' to continued monetary easing to meet the 1% inflation goal. He also sounded quite downbeat about the general economic outlook, noting Japan has "stagnated" and that growth in developed economies elsewhere is "anemic". There was nothing in these remarks to dampen our expectations of further easing at the next policy meeting on April 27.
Japan's trade deficit continued into March. Imports grew faster than exports. Interestingly, exports to the US rose +23.9% y/y while exports bound for Europe fell -9.7% y/y. This is further evidence of a strengthening US recovery while Europe struggles under the weight of fiscal consolidation, and it supports our 1.25 3m forecast on EURUSD.
GBP
The April BoE minutes revealed that the MPC voted 8-1 to keep QE unchanged and 9-0 for an unchanged policy rate. Adam Posen , the staunch dove, changed his vote and voted in line with the majority. The sole voter for further QE was David Miles, who said that his was a "fine decision". This marks an important turnaround inside the BoE, with Posen having hinted about his change in stance yesterday. The initial market reaction was to buy GBPUSD and sell EURGBP - we would favour playing this change by selling EURGBP further.
The recent uptick in UK CPI was one of the main drivers behind the change in stance. In Q1, inflation averaged at 3.5% instead of the MPC forecast of 3.35%, and it is clear that the hawks inside the BoE are now having an increasing influence. Our UK economics team notes that the underlying drivers of inflation, such as money growth and wages, are expanding at a modest rate and inflation has very frequently overshot the BoE's forecast in the past. Overall, the minutes support our view that the BOE will not expand the QE programme in May.
In a separate interview, the BoE's Tucker suggested that the Bank is getting worried about inflation, a theme which was also clearly reflected in the meeting minutes.
AUD
Prime Minister Gillard looked ahead to the upcoming budget, noting that fiscal restraint on the part of the government would make room for the RBA to cut rates. AUD did not react.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
19 April 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Trading was subdued in Asia overnight given a light economic data calendar, but investor attention is noticeably turning to what next week's two policy meetings will bring. The FOMC and the BoJ policy decisions are likely to set the tone for USDJPY for months to come, and USDJPY is already creeping higher in anticipation. BoJ Governor Shirakawa fanned expectations overnight by saying he is 'committed' to continued monetary easing in order to meet the 1% inflation goal. He also sounded quite downbeat about the general economic outlook, noting Japan has "stagnated" and that growth in developed economies elsewhere is "anemic". There was nothing in these remarks to dampen our expectations of further easing at the next policy meeting on April 27.
The Bank of Canada has other intentions - it backed up Tuesday's warning that "some modest withdrawal of the present considerable monetary policy stimulus may become appropriate" with an upgraded 2012 GDP forecast of 2.4% (versus 2.0% previously) in its Monetary Policy Report. This underpins our generally bullish Canadian dollar view and three-month USDCAD target of 0.98. Together with the Bank of England turning considerably less dovish while the RBA signals a possible upcoming rate cut, central bank opinion has not been so diverse in quite some time.
Today, the euro is likely to be highly sensitive to any surprise emerging from today's sovereign bond auction in Spain. Our rates strategy colleagues think the small amount (EUR 1.5 bn-2.5 bn) of bonds being sold is likely to be comfortably absorbed by the market.
EUR
IMF Managing Director Lagarde said that member countries have so far committed $316 bn in additional lending capacity to the fund. We expect further news over the coming days as the Spring meetings of the IMF and World Bank come to an end.
Italy has followed Spain in pushing back its balanced budget goal, as it now expects a deficit of 0.5% for 2013 against a previous estimate of 0.1%. Prime Minister Monti announced that the economy is likely to shrink by 1.2% in 2012, far more than government's earlier forecast of -0.4%.
In its Global Financial Stability Report, IMF noted that European banks could shrink their balance sheets by $2.6 trn over the next 18 months, with the bulk of the deleveraging happening through the sale of non-core assets while credit supply drops by 1.7%. This will likely reawaken investor discussion about how repatriation flows from the sale of overseas subsidiaries could lend the euro some support, or at least result in a more gradual decline than would otherwise be the case.
Non-performing loans as a proportion of total lending in Spain jumped to 8.16% in February - the highest level since 1994, and up from 7.91% in January and less than 1% in 2007.
JPY
BoJ Governor Shirakawa said he is 'committed' to continued monetary easing to meet the 1% inflation goal. He also sounded quite downbeat about the general economic outlook, noting Japan has "stagnated" and that growth in developed economies elsewhere is "anemic". There was nothing in these remarks to dampen our expectations of further easing at the next policy meeting on April 27.
Japan's trade deficit continued into March. Imports grew faster than exports. Interestingly, exports to the US rose +23.9% y/y while exports bound for Europe fell -9.7% y/y. This is further evidence of a strengthening US recovery while Europe struggles under the weight of fiscal consolidation, and it supports our 1.25 3m forecast on EURUSD.
GBP
The April BoE minutes revealed that the MPC voted 8-1 to keep QE unchanged and 9-0 for an unchanged policy rate. Adam Posen , the staunch dove, changed his vote and voted in line with the majority. The sole voter for further QE was David Miles, who said that his was a "fine decision". This marks an important turnaround inside the BoE, with Posen having hinted about his change in stance yesterday. The initial market reaction was to buy GBPUSD and sell EURGBP - we would favour playing this change by selling EURGBP further.
The recent uptick in UK CPI was one of the main drivers behind the change in stance. In Q1, inflation averaged at 3.5% instead of the MPC forecast of 3.35%, and it is clear that the hawks inside the BoE are now having an increasing influence. Our UK economics team notes that the underlying drivers of inflation, such as money growth and wages, are expanding at a modest rate and inflation has very frequently overshot the BoE's forecast in the past. Overall, the minutes support our view that the BOE will not expand the QE programme in May.
In a separate interview, the BoE's Tucker suggested that the Bank is getting worried about inflation, a theme which was also clearly reflected in the meeting minutes.
AUD
Prime Minister Gillard looked ahead to the upcoming budget, noting that fiscal restraint on the part of the government would make room for the RBA to cut rates. AUD did not react.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Wednesday, April 18, 2012
18th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
18 April 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support is at 1.2974/54 area, a break through which would signal extension of weakness. Resistance is at 1.3213.
USDJPY NEUTRAL The recovery targets resistance at 81.78, a break above would open 82.24. Key support area is at 80.30/10.
GBPUSD NEUTRAL Resistance is at 1.5986 ahead of 1.6063, while a pull back through 1.5801 would resume weakness.
USDCHF NEUTRAL Initial resistance is at 0.9252, a move above would open 0.9335. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH Resistance at 1.0471 is intact. Near-term support lies at 1.0299 ahead of 1.0226.
USDCAD BEARISH Focus is back on support at 0.9842, a break here would be a bearish development and open the way towards 0.9766. Resistance is at 1.0053.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH Support focus is on 0.8210, a break below would open 0.8142. Resistance is at 0.8279.
EURJPY NEUTRAL The cross has resistance at 107.47 ahead of 108.04. Support is at 104.63/24 area.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
18 April 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support is at 1.2974/54 area, a break through which would signal extension of weakness. Resistance is at 1.3213.
USDJPY NEUTRAL The recovery targets resistance at 81.78, a break above would open 82.24. Key support area is at 80.30/10.
GBPUSD NEUTRAL Resistance is at 1.5986 ahead of 1.6063, while a pull back through 1.5801 would resume weakness.
USDCHF NEUTRAL Initial resistance is at 0.9252, a move above would open 0.9335. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH Resistance at 1.0471 is intact. Near-term support lies at 1.0299 ahead of 1.0226.
USDCAD BEARISH Focus is back on support at 0.9842, a break here would be a bearish development and open the way towards 0.9766. Resistance is at 1.0053.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH Support focus is on 0.8210, a break below would open 0.8142. Resistance is at 0.8279.
EURJPY NEUTRAL The cross has resistance at 107.47 ahead of 108.04. Support is at 104.63/24 area.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
18th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
18 April 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The yen weakened overnight despite a press report indicating that the Bank of Japan's inflation forecasts may be raised. It seems some FX investors are already positioning themselves for USDJPY upside ahead of next week's FOMC and BoJ meetings - both of which are likely to push the pair higher towards our 3m forecast of 85.
Elsewhere, our bullish call on the Canadian dollar was supported by the more hawkish posture of the Bank of Canada, which warned that "in light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate". This anticipated shift was the key driver of our USDCAD forecast revision last week (to 0.98 from 1.03 on a three-month horizon). Note that we are also long a CADCHF call spread.
The statement tees up a possible upgrade to the GDP forecast in the Bank's quarterly Monetary Policy Report due later today. The more hawkish stance of the Bank of Canada certainly stands out at a time when most other major central banks are retaining an easing bias.
Later today, the BoE minutes will be closely monitored for any fresh insight. While a unanimous decision is expected on rates, we expect a 7-2 vote split on QE, portending a close decision at the May MPC meeting. For the record, our UK economics team believes the MPC will not expand the QE programme next month in the face of inflation figures that continue to exceed the BoE's forecast, but the upcoming Q1 GDP data and Eurozone developments could still have a significant bearing on the debate. The Riksbank meets today and we expect the repo rate to be left unchanged, though the policy statement will likely be fairly dovish, with little inflationary pressure inside Sweden.
EUR
French Socialist candidate and the front-runner in the presidential elections, Francois Hollande, called on the ECB to lend directly to member states with debt troubles. Earlier, Hollande said he wanted the ECB to have a dual mandate of growth and inflation.
The IMF upgraded its Eurozone growth projections for 2012 (to -0.3% from -0.5%) and 2013 (to 0.9% from 0.8%), but asserted that "the ECB should lower its policy rate while continuing to use unconventional policies to address banks' funding and liquidity problems".
Spain's bill auction went reasonably well and more than the target size was sold. Though the yields were higher than those seen previously, spreads versus Germany tightened.
The German April ZEW survey was solid, with the current situation index rising to 40.7 from 37.6 and the economic sentiment index advancing to 23.4 from 22.3. This is the fifth consecutive rise. Eurozone CPI for March was revised up to 2.7% y/y versus the 2.6% preliminary figure.
Efforts continue behind the scenes to increase the IMF's crisis-fighting firepower ahead of this week's IMF and World Bank meetings. Denmark, Norway and Sweden pledged a total contribution of $26 bn. Japan has already announced that it will increase its contribution by $60 bn, while Eurozone central banks have already promised about $200 bn. The US so far has refused to chip in more money and the intentions of BRIC countries are still unclear.
JPY
The Nikkei newspaper reported that the Bank of Japan is poised to raise its inflation forecast as part of its quarterly outlook review at its next policy meeting on April 27. According to the article, the new 2012 forecast will be in the range 0-0.5% y/y (prev. 0.1%) and the new 2013 forecast will rise to "somewhere between" 0.5% and 1% y/y. We note that this would still most likely leave inflation below the BoJ's new medium term inflation goal of 1% and still providing ample justification for additional easing.
BoJ Deputy Governor Nishimura said the BoJ's actual future steps would depend on the outlook for the economy, for prices and other risk factors.
GBP
UK March CPI surprised to the upside, rising 0.3% m/m and 3.5% y/y . The ultra-dovish Adam Posen said it is important not to judge inflationary pressures on one month's print, but noted that the Bank is watching inflation closely. This marks somewhat of a turnaround from Posen, who has in the past spoken more about deflationary risks to the UK.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
18 April 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The yen weakened overnight despite a press report indicating that the Bank of Japan's inflation forecasts may be raised. It seems some FX investors are already positioning themselves for USDJPY upside ahead of next week's FOMC and BoJ meetings - both of which are likely to push the pair higher towards our 3m forecast of 85.
Elsewhere, our bullish call on the Canadian dollar was supported by the more hawkish posture of the Bank of Canada, which warned that "in light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate". This anticipated shift was the key driver of our USDCAD forecast revision last week (to 0.98 from 1.03 on a three-month horizon). Note that we are also long a CADCHF call spread.
The statement tees up a possible upgrade to the GDP forecast in the Bank's quarterly Monetary Policy Report due later today. The more hawkish stance of the Bank of Canada certainly stands out at a time when most other major central banks are retaining an easing bias.
Later today, the BoE minutes will be closely monitored for any fresh insight. While a unanimous decision is expected on rates, we expect a 7-2 vote split on QE, portending a close decision at the May MPC meeting. For the record, our UK economics team believes the MPC will not expand the QE programme next month in the face of inflation figures that continue to exceed the BoE's forecast, but the upcoming Q1 GDP data and Eurozone developments could still have a significant bearing on the debate. The Riksbank meets today and we expect the repo rate to be left unchanged, though the policy statement will likely be fairly dovish, with little inflationary pressure inside Sweden.
EUR
French Socialist candidate and the front-runner in the presidential elections, Francois Hollande, called on the ECB to lend directly to member states with debt troubles. Earlier, Hollande said he wanted the ECB to have a dual mandate of growth and inflation.
The IMF upgraded its Eurozone growth projections for 2012 (to -0.3% from -0.5%) and 2013 (to 0.9% from 0.8%), but asserted that "the ECB should lower its policy rate while continuing to use unconventional policies to address banks' funding and liquidity problems".
Spain's bill auction went reasonably well and more than the target size was sold. Though the yields were higher than those seen previously, spreads versus Germany tightened.
The German April ZEW survey was solid, with the current situation index rising to 40.7 from 37.6 and the economic sentiment index advancing to 23.4 from 22.3. This is the fifth consecutive rise. Eurozone CPI for March was revised up to 2.7% y/y versus the 2.6% preliminary figure.
Efforts continue behind the scenes to increase the IMF's crisis-fighting firepower ahead of this week's IMF and World Bank meetings. Denmark, Norway and Sweden pledged a total contribution of $26 bn. Japan has already announced that it will increase its contribution by $60 bn, while Eurozone central banks have already promised about $200 bn. The US so far has refused to chip in more money and the intentions of BRIC countries are still unclear.
JPY
The Nikkei newspaper reported that the Bank of Japan is poised to raise its inflation forecast as part of its quarterly outlook review at its next policy meeting on April 27. According to the article, the new 2012 forecast will be in the range 0-0.5% y/y (prev. 0.1%) and the new 2013 forecast will rise to "somewhere between" 0.5% and 1% y/y. We note that this would still most likely leave inflation below the BoJ's new medium term inflation goal of 1% and still providing ample justification for additional easing.
BoJ Deputy Governor Nishimura said the BoJ's actual future steps would depend on the outlook for the economy, for prices and other risk factors.
GBP
UK March CPI surprised to the upside, rising 0.3% m/m and 3.5% y/y . The ultra-dovish Adam Posen said it is important not to judge inflationary pressures on one month's print, but noted that the Bank is watching inflation closely. This marks somewhat of a turnaround from Posen, who has in the past spoken more about deflationary risks to the UK.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Tuesday, April 17, 2012
17th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
17 April 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support is at 1.2974/54 area, a break through which would signal extension of weakness. Resistance is at 1.3213.
USDJPY BEARISH Our support focus is on 80.10, a break here would open 79.53. Resistance is at 81.20 ahead of 81.87.
GBPUSD BEARISH The pair targets 1.5801; a break here would expose 1.5779. Resistance is at 1.5986.
USDCHF NEUTRAL Initial resistance is at 0.9252, a move above would open 0.9335. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH Near-term support is at 1.0226, a clearance of which would signal resumption of weakness towards 1.0119. Resistance is at 1.0471.
USDCAD NEUTRAL The range extending from 1.0052 to 0.9834 is intact. Initial support lies at 0.9888.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH A clear break below 0.8222 would be an important bearish development. Next support comes in at 0.8201 ahead of 0.8142. Resistance is at 0.8279.
EURJPY BEARISH Key support is at 104.24, a break here would signal scope for extension of weakness. Resistance is at 107.47.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
17 April 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support is at 1.2974/54 area, a break through which would signal extension of weakness. Resistance is at 1.3213.
USDJPY BEARISH Our support focus is on 80.10, a break here would open 79.53. Resistance is at 81.20 ahead of 81.87.
GBPUSD BEARISH The pair targets 1.5801; a break here would expose 1.5779. Resistance is at 1.5986.
USDCHF NEUTRAL Initial resistance is at 0.9252, a move above would open 0.9335. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH Near-term support is at 1.0226, a clearance of which would signal resumption of weakness towards 1.0119. Resistance is at 1.0471.
USDCAD NEUTRAL The range extending from 1.0052 to 0.9834 is intact. Initial support lies at 0.9888.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH A clear break below 0.8222 would be an important bearish development. Next support comes in at 0.8201 ahead of 0.8142. Resistance is at 0.8279.
EURJPY BEARISH Key support is at 104.24, a break here would signal scope for extension of weakness. Resistance is at 107.47.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
17th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
17 April 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Asian equity markets slipped into negative territory overnight, helping set the scene for a modest dollar recovery after Monday's weakness. The minutes from the RBA's April 3 policy meeting sounded slightly more dovish than the policy statement itself, and more overtly signaled the possibility of a future rate cut - inflationary pressures permitting. Investor focus is likely to shift quickly back to Europe now, and to Eurozone bond markets in particular.
Spain auctions bills today, but fears for Thursday's bond auction have receded somewhat after Spain's Tesoro announced its intention to issue a smaller-than-expected amount of only EUR1.5bn-2.5bn. Meanwhile the ECB's Securities Markets Program has been dormant now for five consecutive weeks, as yesterday's data confirmed, but we note it can in principle be activated at any time to lower sovereign bond yields. Germany's ZEW survey, Eurozone CPI, and a speech by ECB President Draghi will vie for investor attention today.
Also in the spotlight will be the Bank of Canada, which is expected to remain on hold, though the recent strength of the employment data has raised the prospect of a shift towards an explicit tightening bias. At the very least we would expect the policy statement to sound somewhat more hawkish, consistent with a possible upgrade to the GDP forecast in the quarterly monetary policy report due on Wednesday. This reasoning figured prominently in our recent decision to lower our three-month USDCAD forecast to 0.98 from 1.03.
EUR
Efforts continue behind the scenes to increase the IMF's crisis-fighting firepower ahead of this week's IMF and World Bank meetings. Although any monies raised would in theory be available to provide financial assistance worldwide, the key objective seems to be to use the funds to deal with a potential escalation of the Eurozone sovereign debt crisis. Japan's Finance Minister Azumi announced overnight that Japan would increase its IMF contribution by $60 bn. Although IMF Managing Director Lagarde expressed the hope that other countries would follow suit, it remains to be seen if Eurozone countries have done enough to satisfy the demands of BRIC countries in particular who would prefer to see European nations first put more of their own money on the line via an enhanced EFSF/ESM. Issues around voting power also remain to be resolved.
ECB's Nowotny said he doesn't see an "immediate need" for a third LTRO even as the peripheral spreads continued to widen on Monday and the Spanish 5-year CDS made a new record high at 520 bp. Nowotny also conceded that divergences within the Eurozone are substantial and convergence will need "probably much more time than expected".
Spanish Prime Minister Rajoy said "the fundamental objective at the moment is to reduce the deficit", warning "if we don't achieve this, the rest won't matter - we won't be able to fund our debt, we won't be able to meet our commitments".
JPY
The latest Asahi Shimbun survey (conducted on April 14-15) served reminder of the considerable headwinds facing the Noda administration. Indeed, the Prime Minister's approval ratings slipped 2pp from March to just 25%, while the disapproval rating rose 4pp to 52%. Furthermore, 51% of the respondents voiced their opposition to the planned consumption tax hike, with 55% against the restart of certain nuclear reactors.
AUD
RBA minutes from the April 3 policy meeting were consistent with the dovish policy statement, repeating that growth is 'somewhat below trend'. However the minutes tilted even further towards the dovish side of the spectrum, noting that 'a case could be made for a further easing of monetary policy' provided slower growth leads to 'a more moderate inflation outcome'. Our Australian economics team sees this as an attempt to flag a modest downgrade to the RBA's inflation forecast into year end, and the team still expects a cut to the cash rate on May 1 provided underlying Q1 CPI (due next week) is less than 0.7% y/y.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
17 April 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Asian equity markets slipped into negative territory overnight, helping set the scene for a modest dollar recovery after Monday's weakness. The minutes from the RBA's April 3 policy meeting sounded slightly more dovish than the policy statement itself, and more overtly signaled the possibility of a future rate cut - inflationary pressures permitting. Investor focus is likely to shift quickly back to Europe now, and to Eurozone bond markets in particular.
Spain auctions bills today, but fears for Thursday's bond auction have receded somewhat after Spain's Tesoro announced its intention to issue a smaller-than-expected amount of only EUR1.5bn-2.5bn. Meanwhile the ECB's Securities Markets Program has been dormant now for five consecutive weeks, as yesterday's data confirmed, but we note it can in principle be activated at any time to lower sovereign bond yields. Germany's ZEW survey, Eurozone CPI, and a speech by ECB President Draghi will vie for investor attention today.
Also in the spotlight will be the Bank of Canada, which is expected to remain on hold, though the recent strength of the employment data has raised the prospect of a shift towards an explicit tightening bias. At the very least we would expect the policy statement to sound somewhat more hawkish, consistent with a possible upgrade to the GDP forecast in the quarterly monetary policy report due on Wednesday. This reasoning figured prominently in our recent decision to lower our three-month USDCAD forecast to 0.98 from 1.03.
EUR
Efforts continue behind the scenes to increase the IMF's crisis-fighting firepower ahead of this week's IMF and World Bank meetings. Although any monies raised would in theory be available to provide financial assistance worldwide, the key objective seems to be to use the funds to deal with a potential escalation of the Eurozone sovereign debt crisis. Japan's Finance Minister Azumi announced overnight that Japan would increase its IMF contribution by $60 bn. Although IMF Managing Director Lagarde expressed the hope that other countries would follow suit, it remains to be seen if Eurozone countries have done enough to satisfy the demands of BRIC countries in particular who would prefer to see European nations first put more of their own money on the line via an enhanced EFSF/ESM. Issues around voting power also remain to be resolved.
ECB's Nowotny said he doesn't see an "immediate need" for a third LTRO even as the peripheral spreads continued to widen on Monday and the Spanish 5-year CDS made a new record high at 520 bp. Nowotny also conceded that divergences within the Eurozone are substantial and convergence will need "probably much more time than expected".
Spanish Prime Minister Rajoy said "the fundamental objective at the moment is to reduce the deficit", warning "if we don't achieve this, the rest won't matter - we won't be able to fund our debt, we won't be able to meet our commitments".
JPY
The latest Asahi Shimbun survey (conducted on April 14-15) served reminder of the considerable headwinds facing the Noda administration. Indeed, the Prime Minister's approval ratings slipped 2pp from March to just 25%, while the disapproval rating rose 4pp to 52%. Furthermore, 51% of the respondents voiced their opposition to the planned consumption tax hike, with 55% against the restart of certain nuclear reactors.
AUD
RBA minutes from the April 3 policy meeting were consistent with the dovish policy statement, repeating that growth is 'somewhat below trend'. However the minutes tilted even further towards the dovish side of the spectrum, noting that 'a case could be made for a further easing of monetary policy' provided slower growth leads to 'a more moderate inflation outcome'. Our Australian economics team sees this as an attempt to flag a modest downgrade to the RBA's inflation forecast into year end, and the team still expects a cut to the cash rate on May 1 provided underlying Q1 CPI (due next week) is less than 0.7% y/y.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Monday, April 16, 2012
16th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
16 April 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH The pair tests 1.3004, a clear break here would open the way to significant support area at 1.2974/54. Resistance is at 1.3213.
USDJPY NEUTRAL Key support lies at 80.57, a break below would open 80.10. Initial resistance is at 81.20 ahead of 81.87.
GBPUSD NEUTRAL Support lies at 1.5801 ahead of 1.5779. Resistance is at 1.5986.
USDCHF NEUTRAL The recovery targets 0.9335, a break here would be an important bullish signal. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH The pair resumes weakness, our support focus is on 1.0226. A breach here would open 1.0119. Resistance is at 1.0381 ahead of 1.0471.
USDCAD NEUTRAL The range extending from 1.0052 to 0.9834 is intact. Initial support lies at 0.9888.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH The cross remains under pressure, testing the initial support at 0.8222; a clear break below would open 0.8201. Resistance is at 0.8279.
EURJPY BEARISH The break below 105.45 extends weakness towards 105.05 and then 104.24. Resistance is at 107.47.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
16 April 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH The pair tests 1.3004, a clear break here would open the way to significant support area at 1.2974/54. Resistance is at 1.3213.
USDJPY NEUTRAL Key support lies at 80.57, a break below would open 80.10. Initial resistance is at 81.20 ahead of 81.87.
GBPUSD NEUTRAL Support lies at 1.5801 ahead of 1.5779. Resistance is at 1.5986.
USDCHF NEUTRAL The recovery targets 0.9335, a break here would be an important bullish signal. Support lies at 0.9092 ahead of 0.9002.
AUDUSD BEARISH The pair resumes weakness, our support focus is on 1.0226. A breach here would open 1.0119. Resistance is at 1.0381 ahead of 1.0471.
USDCAD NEUTRAL The range extending from 1.0052 to 0.9834 is intact. Initial support lies at 0.9888.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH The cross remains under pressure, testing the initial support at 0.8222; a clear break below would open 0.8201. Resistance is at 0.8279.
EURJPY BEARISH The break below 105.45 extends weakness towards 105.05 and then 104.24. Resistance is at 107.47.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
16th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
16 April 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Risk appetite suffered overnight after the Wall Street Journal reminded investors that Moody's has the ratings of 114 European banks on review for a possible downgrade. We note that this review was announced in mid-February and that the article contained little new information. Elsewhere, China's weekend decision to widen the USDCNY trading band from ?0.5% to ?1%, effective today, had very little effect on G10 currencies.
Rather, the key message is that greater CNY volatility will be tolerated - one of the many anticipated steps towards the PBoC's long-term goal of full regime liberalisation. The move could benefit G10 commodity bloc currencies at the margin to the extent it signals confidence in China's economy, but China's broader macro performance will still be the greater driver. While Friday's 8.1% y/y Q1 GDP print undercut market expectations, our Chinese economics team has flagged signs of stabilisation and improvement ahead, noting that policy easing is already underway as is reflected in the monthly new lending data.
The wider trading band could also imply reduced intervention, reserve accumulation and hence currency diversification - a risk that could have the biggest negative effect on the euro. USDJPY should continue to find support from the dovish signals emanating from the monetary policy debate in Japan, where the constant political jawboning about the need for further easing has not prompted much overt resistance from the BoJ. All signs still point to further action on April 27, though recent press speculation about a JPY5-10 trn boost to the APP may have effectively raised the bar for the BoJ to surprise.
This should not detract from the prospect of gradual Fed-BoJ policy divergence that we maintain will keep risks tilted towards an upside USDJPY test of 85.00 on a three-month horizon. Today both US retail sales and the Empire State manufacturing survey are due, but neither are likely to significantly alter the Fed debate ahead of the pivotal FOMC meeting on April 24-25.
EUR
The ECB's Asmussen claimed Europe "has done its part" and said "now you would expect other IMF shareholders to come forward and make their contributions to increasing IMF resources". Press reports indicate that Japan may contribute roughly $60 bn to the IMF, while the UK is reportedly ready to offer GBP10 bn. We expect further details to emerge at the IMF/World-Bank Spring meetings on April 20-22.
Data released on Friday showed that Spanish banks borrowed EUR316.3 bn from the ECB in March - a sizeable leap from the EUR169.8 bn taken in February. Spanish 5-year CDS continued to widen, rising to a new record high of 492 bps.
ECB member Asmussen said that the Spanish government is "on track" to regain investor confidence adding that "what we're observing is a stabilisation in financial markets." Spanish 10-year yields closed at 5.94% on Friday, and the upcoming auction of 2014 and 2022 bonds on Thursday is likely to be a significant focus for investors.
ECB's Nowotny said that he sees risk for the European debt crisis in the Greek elections and is not sure that a majority will emerge in favour of continuing with the current economic programme.
French President Sarkozy said that "Europe must cut its debts, it has no choice, but between deflation and growth, it has no choice either. If it chooses deflation, it will disappear". Sarkozy argued that there "must be no taboos" in the policy debate, warning that France would "open the debate" on the question of "the ECB's role in boosting growth".
JPY
The minutes of the BoJ's Policy Board meeting on March 12-13 confirmed Ryuzo Miyao's view that "it was appropriate to increase the total size of the Program and earmark this increase for the purchase of JGBs, as was done at the previous meeting". Miyao's proposal for a JPY5 trn boost to the APP was defeated by an 8-1 vote and did not re-appear at the most recent Board gathering on 9-10 April. We would not read too much into this, however, especially given the mounting political pressure for further BoJ easing on April 27. One need only check the comments in the minutes from the MoF representative, who noted that the government "expected that the Bank - in order to overcome deflation - would continue to conduct monetary policy vigorously and decisively, in accordance with the policy stance clarified at the previous meeting, and make efforts such as appropriately communicating to the public while sufficiently exchanging views and keeping close contact with the government". The Cabinet Office representative voiced similar sentiments.
GBP
The minutes of the BoJ's Policy Board meeting on March 12-13 confirmed Ryuzo Miyao's view that "it was appropriate to increase the total size of the Program and earmark this increase for the purchase of JGBs, as was done at the previous meeting". Miyao's proposal for a JPY5 trn boost to the APP was defeated by an 8-1 vote and did not re-appear at the most recent Board gathering on 9-10 April. We would not read too much into this, however, especially given the mounting political pressure for further BoJ easing on April 27. One need only check the comments in the minutes from the MoF representative, who noted that the government "expected that the Bank - in order to overcome deflation - would continue to conduct monetary policy vigorously and decisively, in accordance with the policy stance clarified at the previous meeting, and make efforts such as appropriately communicating to the public while sufficiently exchanging views and keeping close contact with the government". The Cabinet Office representative voiced similar sentiments.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
16 April 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Risk appetite suffered overnight after the Wall Street Journal reminded investors that Moody's has the ratings of 114 European banks on review for a possible downgrade. We note that this review was announced in mid-February and that the article contained little new information. Elsewhere, China's weekend decision to widen the USDCNY trading band from ?0.5% to ?1%, effective today, had very little effect on G10 currencies.
Rather, the key message is that greater CNY volatility will be tolerated - one of the many anticipated steps towards the PBoC's long-term goal of full regime liberalisation. The move could benefit G10 commodity bloc currencies at the margin to the extent it signals confidence in China's economy, but China's broader macro performance will still be the greater driver. While Friday's 8.1% y/y Q1 GDP print undercut market expectations, our Chinese economics team has flagged signs of stabilisation and improvement ahead, noting that policy easing is already underway as is reflected in the monthly new lending data.
The wider trading band could also imply reduced intervention, reserve accumulation and hence currency diversification - a risk that could have the biggest negative effect on the euro. USDJPY should continue to find support from the dovish signals emanating from the monetary policy debate in Japan, where the constant political jawboning about the need for further easing has not prompted much overt resistance from the BoJ. All signs still point to further action on April 27, though recent press speculation about a JPY5-10 trn boost to the APP may have effectively raised the bar for the BoJ to surprise.
This should not detract from the prospect of gradual Fed-BoJ policy divergence that we maintain will keep risks tilted towards an upside USDJPY test of 85.00 on a three-month horizon. Today both US retail sales and the Empire State manufacturing survey are due, but neither are likely to significantly alter the Fed debate ahead of the pivotal FOMC meeting on April 24-25.
EUR
The ECB's Asmussen claimed Europe "has done its part" and said "now you would expect other IMF shareholders to come forward and make their contributions to increasing IMF resources". Press reports indicate that Japan may contribute roughly $60 bn to the IMF, while the UK is reportedly ready to offer GBP10 bn. We expect further details to emerge at the IMF/World-Bank Spring meetings on April 20-22.
Data released on Friday showed that Spanish banks borrowed EUR316.3 bn from the ECB in March - a sizeable leap from the EUR169.8 bn taken in February. Spanish 5-year CDS continued to widen, rising to a new record high of 492 bps.
ECB member Asmussen said that the Spanish government is "on track" to regain investor confidence adding that "what we're observing is a stabilisation in financial markets." Spanish 10-year yields closed at 5.94% on Friday, and the upcoming auction of 2014 and 2022 bonds on Thursday is likely to be a significant focus for investors.
ECB's Nowotny said that he sees risk for the European debt crisis in the Greek elections and is not sure that a majority will emerge in favour of continuing with the current economic programme.
French President Sarkozy said that "Europe must cut its debts, it has no choice, but between deflation and growth, it has no choice either. If it chooses deflation, it will disappear". Sarkozy argued that there "must be no taboos" in the policy debate, warning that France would "open the debate" on the question of "the ECB's role in boosting growth".
JPY
The minutes of the BoJ's Policy Board meeting on March 12-13 confirmed Ryuzo Miyao's view that "it was appropriate to increase the total size of the Program and earmark this increase for the purchase of JGBs, as was done at the previous meeting". Miyao's proposal for a JPY5 trn boost to the APP was defeated by an 8-1 vote and did not re-appear at the most recent Board gathering on 9-10 April. We would not read too much into this, however, especially given the mounting political pressure for further BoJ easing on April 27. One need only check the comments in the minutes from the MoF representative, who noted that the government "expected that the Bank - in order to overcome deflation - would continue to conduct monetary policy vigorously and decisively, in accordance with the policy stance clarified at the previous meeting, and make efforts such as appropriately communicating to the public while sufficiently exchanging views and keeping close contact with the government". The Cabinet Office representative voiced similar sentiments.
GBP
The minutes of the BoJ's Policy Board meeting on March 12-13 confirmed Ryuzo Miyao's view that "it was appropriate to increase the total size of the Program and earmark this increase for the purchase of JGBs, as was done at the previous meeting". Miyao's proposal for a JPY5 trn boost to the APP was defeated by an 8-1 vote and did not re-appear at the most recent Board gathering on 9-10 April. We would not read too much into this, however, especially given the mounting political pressure for further BoJ easing on April 27. One need only check the comments in the minutes from the MoF representative, who noted that the government "expected that the Bank - in order to overcome deflation - would continue to conduct monetary policy vigorously and decisively, in accordance with the policy stance clarified at the previous meeting, and make efforts such as appropriately communicating to the public while sufficiently exchanging views and keeping close contact with the government". The Cabinet Office representative voiced similar sentiments.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Thursday, April 12, 2012
12th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
12 April 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL A break below 1.3004 would resume weakness towards important support area at 1.2976/54. Resistance is at 1.3210.
USDJPY NEUTRAL Initial support is at 80.57, a break here would open 80.10. Initial resistance is at 81.85.
GBPUSD BEARISH Support lies at 1.5805 ahead of 1.5779, the 62% retracement of the March rally. Resistance is at 1.5964 ahead of 1.6063.
USDCHF NEUTRAL The pair has found resistance at 0.9223, a clearance of this level would expose 0.9335, the March high. Support lies at 0.9094 ahead of 0.9002.
AUDUSD BEARISH Initial support is at 1.0226, a break here would open significant level at 1.0119, the 62% retracement of Nov/Feb rally. Initial resistance is at 1.0471.
USDCAD BULLISH The recovery continues to test the Feb high at 1.0052, watch for a clear break through this level to open the way to 1.0103. Support lies at 0.9945.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH Trend conditions are bearish, focus is on support at 0.8222; a clearance of this level would open 0.8201. Near-term resistance is at 0.8279.
EURJPY BEARISH A correction has materialised following the test of 105.65 support. Support lies at 105.05. Resistance is at 107.47.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12 April 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL A break below 1.3004 would resume weakness towards important support area at 1.2976/54. Resistance is at 1.3210.
USDJPY NEUTRAL Initial support is at 80.57, a break here would open 80.10. Initial resistance is at 81.85.
GBPUSD BEARISH Support lies at 1.5805 ahead of 1.5779, the 62% retracement of the March rally. Resistance is at 1.5964 ahead of 1.6063.
USDCHF NEUTRAL The pair has found resistance at 0.9223, a clearance of this level would expose 0.9335, the March high. Support lies at 0.9094 ahead of 0.9002.
AUDUSD BEARISH Initial support is at 1.0226, a break here would open significant level at 1.0119, the 62% retracement of Nov/Feb rally. Initial resistance is at 1.0471.
USDCAD BULLISH The recovery continues to test the Feb high at 1.0052, watch for a clear break through this level to open the way to 1.0103. Support lies at 0.9945.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH Trend conditions are bearish, focus is on support at 0.8222; a clearance of this level would open 0.8201. Near-term resistance is at 0.8279.
EURJPY BEARISH A correction has materialised following the test of 105.65 support. Support lies at 105.05. Resistance is at 107.47.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
12 April 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
A much stronger than expected Australian employment report gave AUDUSD 70 pips of upside overnight. 44k new jobs were created against expectations of only 6.5k, and the unemployment rate held steady at 5.2% despite fears it would tick higher. Our analysts team sound a note of caution though - they point out that when averaged across several months jobs growth is still relatively soft and not strong enough to keep the unemployment rate as low as it currently is. The team sticks to its view that the RBA will cut 25 bp at each of its May and June meetings, thanks to what is expected to be a low enough CPI reading for Q1.
Fed Vice-Chair Yellen's much anticipated speech provided a fairly balanced assessment of where Fed policy is headed. She noted that "further easing actions could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates." For a renowned FOMC dove, this shift to a more balanced stance is remarkable, although we note that the possibility of further easing has not been completely taken off the table.
USDJPY continues to look a little firmer, although the pair was largely indifferent to Yellen's remarks. Growing confidence that the BoJ will indeed deliver further easing at its next Board meeting on April 27 is behind the better tone. Political pressure is more visible than ever (witness the DPJ's request to meet four BoJ Board members for "an exchange of opinions", just days after the PM called for an anti-deflation panel to be set up), press speculation is intensifying, and the Nikkei's recent retreat will simply enhance the sense of urgency to act. We certainly see scope for BoJ action on April 27, but with various press reports already flagging a JPY5-10 trn boost for the APP, it may ultimately take JPY10 trn plus a removal of the maturity limit on JGB purchases and perhaps an extension of the APP to mid-2013 to really surprise markets. Our three-month target of 85 remains intact, with further BoJ easing superimposed upon what we expect to be a steady Fed policy stance. Today Fed officials Dudley, Lockhart, Plosser, Kocherlakota and Raskin are also due to make an appearance..
EUR
After the sell-off in Spanish bonds during the past week, the market consolidated on Wednesday. Spanish CDS traded to a record wide of 488/497 bp but spreads versus bunds tightened. The data flow remains weak, however, as February industrial output fell 5.1% y/y.
A German bund auction was technically uncovered, with just EUR4.109 bn of bids received versus the EUR 5 bn on offer. While the result was very poor, we view it as more a function of pricing, with bund yields close to record lows.
JPY
Political pressure on the BoJ for further easing remains highly visible, most recently in the form of the meeting requested by the ruling DPJ with four BoJ Board members (excluding the Governor and two Deputy Governors) for "an exchange of opinions" according to DPJ official Kouhei Ohtsuka, who asserted "in this economic climate, with continuing deflation, the responsibility that the BoJ Policy Board members have to shoulder is very heavy".
Vice Finance Minister for International Affairs Takehiko Nakao cautioned that "we are not thinking of using our reserves like a sovereign wealth fund", noting that there were limits on how Japan's FX reserves could be used after taking into account the portions earmarked for supporting rescue efforts for Europe and the Chiang Mai Initiative, a pool of funds used to shield Asian economies from shocks. Nakao also warned that advanced economies like Japan "cannot postpone fiscal consolidation efforts forever".
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12 April 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
A much stronger than expected Australian employment report gave AUDUSD 70 pips of upside overnight. 44k new jobs were created against expectations of only 6.5k, and the unemployment rate held steady at 5.2% despite fears it would tick higher. Our analysts team sound a note of caution though - they point out that when averaged across several months jobs growth is still relatively soft and not strong enough to keep the unemployment rate as low as it currently is. The team sticks to its view that the RBA will cut 25 bp at each of its May and June meetings, thanks to what is expected to be a low enough CPI reading for Q1.
Fed Vice-Chair Yellen's much anticipated speech provided a fairly balanced assessment of where Fed policy is headed. She noted that "further easing actions could be warranted if the recovery proceeds at a slower-than-expected pace, while a significant acceleration in the pace of recovery could call for an earlier beginning to the process of policy firming than the FOMC currently anticipates." For a renowned FOMC dove, this shift to a more balanced stance is remarkable, although we note that the possibility of further easing has not been completely taken off the table.
USDJPY continues to look a little firmer, although the pair was largely indifferent to Yellen's remarks. Growing confidence that the BoJ will indeed deliver further easing at its next Board meeting on April 27 is behind the better tone. Political pressure is more visible than ever (witness the DPJ's request to meet four BoJ Board members for "an exchange of opinions", just days after the PM called for an anti-deflation panel to be set up), press speculation is intensifying, and the Nikkei's recent retreat will simply enhance the sense of urgency to act. We certainly see scope for BoJ action on April 27, but with various press reports already flagging a JPY5-10 trn boost for the APP, it may ultimately take JPY10 trn plus a removal of the maturity limit on JGB purchases and perhaps an extension of the APP to mid-2013 to really surprise markets. Our three-month target of 85 remains intact, with further BoJ easing superimposed upon what we expect to be a steady Fed policy stance. Today Fed officials Dudley, Lockhart, Plosser, Kocherlakota and Raskin are also due to make an appearance..
EUR
After the sell-off in Spanish bonds during the past week, the market consolidated on Wednesday. Spanish CDS traded to a record wide of 488/497 bp but spreads versus bunds tightened. The data flow remains weak, however, as February industrial output fell 5.1% y/y.
A German bund auction was technically uncovered, with just EUR4.109 bn of bids received versus the EUR 5 bn on offer. While the result was very poor, we view it as more a function of pricing, with bund yields close to record lows.
JPY
Political pressure on the BoJ for further easing remains highly visible, most recently in the form of the meeting requested by the ruling DPJ with four BoJ Board members (excluding the Governor and two Deputy Governors) for "an exchange of opinions" according to DPJ official Kouhei Ohtsuka, who asserted "in this economic climate, with continuing deflation, the responsibility that the BoJ Policy Board members have to shoulder is very heavy".
Vice Finance Minister for International Affairs Takehiko Nakao cautioned that "we are not thinking of using our reserves like a sovereign wealth fund", noting that there were limits on how Japan's FX reserves could be used after taking into account the portions earmarked for supporting rescue efforts for Europe and the Chiang Mai Initiative, a pool of funds used to shield Asian economies from shocks. Nakao also warned that advanced economies like Japan "cannot postpone fiscal consolidation efforts forever".
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Monday, April 09, 2012
9th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
9 April 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Our support focus is on 1.3004, the March 15 low and then 1.2954. Resistance is at 1.3164 ahead of 1.3239.
USDJPY BEARISH The break of 81.47 has exposed support at 81.07 ahead of 80.59. Resistance is at 82.56.
GBPUSD NEUTRAL Key support lies at 1.5801; a break here would expose 1.5779, the 62% retracement of the March rally. Resistance is at 1.5918 ahead of 1.6063.
USDCHF NEUTRAL Resistance is at 0.9254 ahead of 0.9335, the March high. Support lies at 0.9094 ahead of 0.9002.
AUDUSD BEARISH Focus on 1.0229, a break here would open the way to 1.0119. Resistance is at 1.0355.
USDCAD NEUTRAL Key resistance area is marked by 1.0034/50, while support lies at 0.9888.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH The cross is under pressure, targeting 0.8222, the Jan low; a break here would open 0.8201. Resistance is at 0.8279.
EURJPY BEARISH Trend conditions are bearish; a break below 105.95 would trigger deeper sell-off towards 105.05. Resistance is at 107.84.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
9 April 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Our support focus is on 1.3004, the March 15 low and then 1.2954. Resistance is at 1.3164 ahead of 1.3239.
USDJPY BEARISH The break of 81.47 has exposed support at 81.07 ahead of 80.59. Resistance is at 82.56.
GBPUSD NEUTRAL Key support lies at 1.5801; a break here would expose 1.5779, the 62% retracement of the March rally. Resistance is at 1.5918 ahead of 1.6063.
USDCHF NEUTRAL Resistance is at 0.9254 ahead of 0.9335, the March high. Support lies at 0.9094 ahead of 0.9002.
AUDUSD BEARISH Focus on 1.0229, a break here would open the way to 1.0119. Resistance is at 1.0355.
USDCAD NEUTRAL Key resistance area is marked by 1.0034/50, while support lies at 0.9888.
EURCHF NEUTRAL Resistance is at 1.2049 ahead of 1.2070, while support lies at 1.2000.
EURGBP BEARISH The cross is under pressure, targeting 0.8222, the Jan low; a break here would open 0.8201. Resistance is at 0.8279.
EURJPY BEARISH Trend conditions are bearish; a break below 105.95 would trigger deeper sell-off towards 105.05. Resistance is at 107.84.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
9th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
9 April 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The dollar had a surprise recovery overnight, and quickly reclaimed all ground lost to the euro after Friday's weak US payrolls. However, flows were light as New Zealand, Australia, and Hong Kong remained closed. A stronger-than-expected China CPI failed to generate much interest, and allowed AUDUSD to take the news largely in its stride. Our core bullish dollar view is unchanged; we still expect the Fed to gradually back away from QE3 as other major central banks maintain an easier bias, likely ensuring outperformance of the US dollar over other majors this year.
Our analysts stress that the soft 120k US nonfarm payrolls print for March reflected 'payback' due to weather effects rather than fundamental weakening, with the earlier weather-related boost to payrolls now fully reversed. While the dip in the jobless rate to 8.2% in March from 8.3% in February came on the back of a 164k drop in the labour force, one should not lose sight of the pick-up in earnings growth amid improved job quality, as average hourly earnings rose 0.2% m/m (2.1% y/y).
USDJPY will also be sensitive to the risk of further easing in Japan, with the BoJ kicking off its two-day meeting today. Granted, we see greater odds of action on April 27 than April 10, but any disappointment on a 'no change' verdict this week should be limited by the dovish signals emanating from Japanese officials. Come April 27, the BoJ should be better placed to ease, having (i) seen the results of the FOMC's deliberations on April 24-25, (ii) adjusted its own macro forecasts and risk assessment, and (iii) possibly restored its full complement of 9 voting members. The mere fact that Ryutaro Kono's nomination for the Policy Board was rejected by the Upper House on the grounds that he simply was not dovish enough underscores the strong political pressure on the BoJ to ease further - a JPY5 trn boost to the APP would be a good start, while a removal of the self-imposed maturity guideline on JGB purchases would magnify the effect further. The bottom line is that any further USDJPY pullback towards 80.00-80.50 would provide attractive re-entry points for dip buyers. Fed Chairman Bernanke's speech today is not expected to address monetary policy.
EUR
Spanish yields are very likely to remain in focus this week, along with any negative spillover effects into the Italian bond market. Last week's disappointing Spanish auction has raised fresh doubts about the domestic banking system's willingness and capacity to absorb forthcoming sovereign supply, and our rates strategists remain concerned about a structural shortage of demand for sovereign debt issued by Europe's periphery.
Our analysts are generally impressed with the ambition of last week's budget in Spain, but are wary of the economic contraction this will induce. They also have some doubts that the announced measures will be enough to hit the deficit target of 5.3% of GDP in 2012.
Japanese Finance Minister Azumi confirmed over the weekend that Japan would hold high-level talks with China over contributions to the IMF to help address the Eurozone crisis ahead of the G20 meetings in Washington on April 20-22. Azumi said "Europe's problem has eased from a critical situation seen last year, but it is not a situation where we can be optimistic. We need to watch the situation cautiously".
JPY
Current account and trade balance details released overnight were broadly in line with expectations, and USDJPY was unmoved.
Former BoJ Deputy Governor and current head of the Japan Center for Economic Research Kazumasa Iwata said in a Reuters interview on Friday that "February's action was a regime shift in the sense that the BoJ set a flexible inflation target. I think markets believed so, too". He argued that "the central bank must now make efforts to achieve the target as soon as possible", adding "the BoJ should abandon a limit on the maturity of bonds it accepts under its asset-buying programme" and "central banks faced with zero interest rates are all buying government bonds, and there's nothing wrong with that". Iwata, now a member of a government panel to advise on a longer-term growth strategy, also said that once the BoJ's goal of 1% inflation is in sight, it should raise its objective to 2%.
Regarding Japan's economy, Finance Minister Azumi said "the nation's domestic demand is improving considerably thanks to reconstruction demand. There have been various factors such as a strong yen and higher oil prices, but Japan's corporate fundamentals are not bad".
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
9 April 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The dollar had a surprise recovery overnight, and quickly reclaimed all ground lost to the euro after Friday's weak US payrolls. However, flows were light as New Zealand, Australia, and Hong Kong remained closed. A stronger-than-expected China CPI failed to generate much interest, and allowed AUDUSD to take the news largely in its stride. Our core bullish dollar view is unchanged; we still expect the Fed to gradually back away from QE3 as other major central banks maintain an easier bias, likely ensuring outperformance of the US dollar over other majors this year.
Our analysts stress that the soft 120k US nonfarm payrolls print for March reflected 'payback' due to weather effects rather than fundamental weakening, with the earlier weather-related boost to payrolls now fully reversed. While the dip in the jobless rate to 8.2% in March from 8.3% in February came on the back of a 164k drop in the labour force, one should not lose sight of the pick-up in earnings growth amid improved job quality, as average hourly earnings rose 0.2% m/m (2.1% y/y).
USDJPY will also be sensitive to the risk of further easing in Japan, with the BoJ kicking off its two-day meeting today. Granted, we see greater odds of action on April 27 than April 10, but any disappointment on a 'no change' verdict this week should be limited by the dovish signals emanating from Japanese officials. Come April 27, the BoJ should be better placed to ease, having (i) seen the results of the FOMC's deliberations on April 24-25, (ii) adjusted its own macro forecasts and risk assessment, and (iii) possibly restored its full complement of 9 voting members. The mere fact that Ryutaro Kono's nomination for the Policy Board was rejected by the Upper House on the grounds that he simply was not dovish enough underscores the strong political pressure on the BoJ to ease further - a JPY5 trn boost to the APP would be a good start, while a removal of the self-imposed maturity guideline on JGB purchases would magnify the effect further. The bottom line is that any further USDJPY pullback towards 80.00-80.50 would provide attractive re-entry points for dip buyers. Fed Chairman Bernanke's speech today is not expected to address monetary policy.
EUR
Spanish yields are very likely to remain in focus this week, along with any negative spillover effects into the Italian bond market. Last week's disappointing Spanish auction has raised fresh doubts about the domestic banking system's willingness and capacity to absorb forthcoming sovereign supply, and our rates strategists remain concerned about a structural shortage of demand for sovereign debt issued by Europe's periphery.
Our analysts are generally impressed with the ambition of last week's budget in Spain, but are wary of the economic contraction this will induce. They also have some doubts that the announced measures will be enough to hit the deficit target of 5.3% of GDP in 2012.
Japanese Finance Minister Azumi confirmed over the weekend that Japan would hold high-level talks with China over contributions to the IMF to help address the Eurozone crisis ahead of the G20 meetings in Washington on April 20-22. Azumi said "Europe's problem has eased from a critical situation seen last year, but it is not a situation where we can be optimistic. We need to watch the situation cautiously".
JPY
Current account and trade balance details released overnight were broadly in line with expectations, and USDJPY was unmoved.
Former BoJ Deputy Governor and current head of the Japan Center for Economic Research Kazumasa Iwata said in a Reuters interview on Friday that "February's action was a regime shift in the sense that the BoJ set a flexible inflation target. I think markets believed so, too". He argued that "the central bank must now make efforts to achieve the target as soon as possible", adding "the BoJ should abandon a limit on the maturity of bonds it accepts under its asset-buying programme" and "central banks faced with zero interest rates are all buying government bonds, and there's nothing wrong with that". Iwata, now a member of a government panel to advise on a longer-term growth strategy, also said that once the BoJ's goal of 1% inflation is in sight, it should raise its objective to 2%.
Regarding Japan's economy, Finance Minister Azumi said "the nation's domestic demand is improving considerably thanks to reconstruction demand. There have been various factors such as a strong yen and higher oil prices, but Japan's corporate fundamentals are not bad".
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Thursday, April 05, 2012
5th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
4 April 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH The break of 1.3150 signals scope for extension of weakness towards 1.3004, the March 15 low. Resistance is at 1.3239.
USDJPY NEUTRAL Key support lies at 81.47; a move below which would open 81.07. Resistance is at 82.99 ahead of 83.30.
GBPUSD NEUTRAL Support is marked by 1.5833/01 area, a break through which would open 1.5779, the 62% retracement of the March rally. Resistance is at 1.5975 ahead of 1.6063.
USDCHF NEUTRAL The recovery targets 0.9208, a break above would open 0.9335. Support lies at 0.9094 ahead of 0.9002.
AUDUSD BEARISH Focus on 1.0229, a break here would open the way to 1.0119. Resistance is at 1.0355.
USDCAD NEUTRAL Resistance is at 0.9991 ahead of 1.0034, while support lies at 0.9888 ahead of 0.9861-0.9842 area.
EURCHF NEUTRAL Support is at 1.2000. Resistance is at 1.2070.
EURGBP BEARISH The cross tests 0.8264, a clear break here would trigger deeper sell-off towards 0.8222. Resistance is at 0.8326.
EURJPY BEARISH Pressure on 107.86, a break here would open 106.60. Resistance is at 109.82 ahead of 111.26.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
4 April 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH The break of 1.3150 signals scope for extension of weakness towards 1.3004, the March 15 low. Resistance is at 1.3239.
USDJPY NEUTRAL Key support lies at 81.47; a move below which would open 81.07. Resistance is at 82.99 ahead of 83.30.
GBPUSD NEUTRAL Support is marked by 1.5833/01 area, a break through which would open 1.5779, the 62% retracement of the March rally. Resistance is at 1.5975 ahead of 1.6063.
USDCHF NEUTRAL The recovery targets 0.9208, a break above would open 0.9335. Support lies at 0.9094 ahead of 0.9002.
AUDUSD BEARISH Focus on 1.0229, a break here would open the way to 1.0119. Resistance is at 1.0355.
USDCAD NEUTRAL Resistance is at 0.9991 ahead of 1.0034, while support lies at 0.9888 ahead of 0.9861-0.9842 area.
EURCHF NEUTRAL Support is at 1.2000. Resistance is at 1.2070.
EURGBP BEARISH The cross tests 0.8264, a clear break here would trigger deeper sell-off towards 0.8222. Resistance is at 0.8326.
EURJPY BEARISH Pressure on 107.86, a break here would open 106.60. Resistance is at 109.82 ahead of 111.26.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
5th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
5 April 2012 – 8:00 GMT
Thusday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Subdued trading in Asia meant EURUSD was confined to a 25-pip range. The price action in USDJPY and AUDUSD was somewhat more lively, but flows were light across the board in pre-holiday trade. Newswires would have been mostly silent were it not for Japan's Finance Minister Azumi defending his intervention policy. He said that even if there were differences of opinion with the US on yen intervention, this would not affect Japan's stance. Asian equity markets were mixed, and did not seemly overly perturbed by yesterday's sell-off in Europe.
Meanwhile the shift in FOMC opinion continues. San Francisco Fed President Williams - traditionally a notable dove - conceded that the argument for a new dose of monetary stimulus is not that strong now. Having said that, he still thinks it is "essential that we keep strong monetary stimulus in place" but was also keen to emphasise that "our unusually stimulative monetary policy won't last forever".
Today's Swiss CPI number has the potential to make headlines - our Switzerland economist expects the lowest annualized reading since Bloomberg records began in 1971. German and the UK industrial output figures are due too. The BoE also delivers its latest policy verdict – our analysts are in line with consensus opinion and expects no change to policy settings despite two dovish dissenters emerging at the March meeting. In the US, the focus will remain on the labour market. Wednesday's in-line ADP release on bodes well for Friday's payrolls number, while markets are expecting a slight rise today in initial jobless claims. Canada's employment report will be out too, and a strong performance in full-time hiring would help CAD continue its advance on the crosses.
EUR
The ECB chose to leave policy on hold overnight, and net-net Draghi appeared to be more concerned about weak growth prospects rather than inflation. He noted that risks to growth from the sovereign debt crisis were still in place, and the soft growth environment will lead to inflation heading to below 2% in 2013. Discussion of an exit strategy was deemed 'premature'.
Despite the relatively benign interpretation on inflation, Draghi essentially warned national governments not to expect any 'stimulus' favours in the form of monetary policy. He maintained that it was up to structural reforms by national governments to boost competitiveness, and it appears he does not see any scope for looser policy in the near-term.
The Spanish Economy Ministry noted that the country has already covered 47% of the planned issuance for 2012, although we note that a larger than expected deficit along with accelerated sovereign payments into the ESM means that the issuance target may need to be revised upwards. Spanish Prime Minister Rajoy said the challenge ahead is 'giant'.
EU Economics Commissioner Rehn said that the EU may need to provide a 'bridge' for Portugal's market return. This may be the first formal acknowledgement that the current rescue plan (which calls for Portugal issuing EUR 10 bn in bonds in 2013) may need to be revised.
Austria's central bank announced it would join the Bundesbank in no longer accepting sovereign-guaranteed bank bonds as collateral if the sovereigns in question are in receipt of EU/IMF aid payments. Draghi has already suggested the impact will be minimal.
IMF's Christine Lagarde urged the US to help back-stop the Euro zone debt crisis, as she argued the need for more 'firepower' to the tune of $500 bn to tackle the global financial crisis. We expect to hear a lot more about this proposition at the IMF/World-Bank meetings on April 20-22.
GBP
The key services PMI beat expectations at 55.3 (cons. 53.4). In addition Halifax House Prices rebounded by 2.2% m/m - the highest monthly jump in three years. The upsurge is probably due to buyers trying to take advantage of the stamp duty holiday which expired at the end of March.
Our analysts note that the PMI survey has a mixed record when it comes to predicting short term GDP outturn. That said it remains an important lead indicator for the MPC, which meets on Thursday. No change to the asset purchase target is expected, despite two MPC members dissenting in favour of further Gilt purchases at the March policy meeting.
CHF
Swiss CPI will be released on Thursday. The market is looking for a -1.1% y/y decline, but our Switzerland economist is even more pessimistic. He expects a -1.3% y/y drop, which would be the weakest inflation print since Bloomberg records began in 1971.
Local reports suggest the Swiss Federal Council could announce their decision on SNB board appointments at an upcoming weekly meeting. Given the announcement was not made yesterday, next Wednesday's meeting may provide the next opportunity to do so.
CAD
Canada's employment numbers will be released on Thursday. We expect a net gain of +10k jobs, while the unemployment rate is expected to remain steady at 7.4%. As usual the full-time/part-time mix will be a critical determinant of how CAD reacts.
Bank of Canada Deputy Governor Boivin said that monetary policy must 'obey' the long run speed limit of the economy, and that the bank would take 'whatever action appropriate' to achieve its 2% inflation target over the medium term. As the Fed is moving away from fresh stimulus, the comments suggest the BoC can also to adopt a less dovish stance.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
5 April 2012 – 8:00 GMT
Thusday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Subdued trading in Asia meant EURUSD was confined to a 25-pip range. The price action in USDJPY and AUDUSD was somewhat more lively, but flows were light across the board in pre-holiday trade. Newswires would have been mostly silent were it not for Japan's Finance Minister Azumi defending his intervention policy. He said that even if there were differences of opinion with the US on yen intervention, this would not affect Japan's stance. Asian equity markets were mixed, and did not seemly overly perturbed by yesterday's sell-off in Europe.
Meanwhile the shift in FOMC opinion continues. San Francisco Fed President Williams - traditionally a notable dove - conceded that the argument for a new dose of monetary stimulus is not that strong now. Having said that, he still thinks it is "essential that we keep strong monetary stimulus in place" but was also keen to emphasise that "our unusually stimulative monetary policy won't last forever".
Today's Swiss CPI number has the potential to make headlines - our Switzerland economist expects the lowest annualized reading since Bloomberg records began in 1971. German and the UK industrial output figures are due too. The BoE also delivers its latest policy verdict – our analysts are in line with consensus opinion and expects no change to policy settings despite two dovish dissenters emerging at the March meeting. In the US, the focus will remain on the labour market. Wednesday's in-line ADP release on bodes well for Friday's payrolls number, while markets are expecting a slight rise today in initial jobless claims. Canada's employment report will be out too, and a strong performance in full-time hiring would help CAD continue its advance on the crosses.
EUR
The ECB chose to leave policy on hold overnight, and net-net Draghi appeared to be more concerned about weak growth prospects rather than inflation. He noted that risks to growth from the sovereign debt crisis were still in place, and the soft growth environment will lead to inflation heading to below 2% in 2013. Discussion of an exit strategy was deemed 'premature'.
Despite the relatively benign interpretation on inflation, Draghi essentially warned national governments not to expect any 'stimulus' favours in the form of monetary policy. He maintained that it was up to structural reforms by national governments to boost competitiveness, and it appears he does not see any scope for looser policy in the near-term.
The Spanish Economy Ministry noted that the country has already covered 47% of the planned issuance for 2012, although we note that a larger than expected deficit along with accelerated sovereign payments into the ESM means that the issuance target may need to be revised upwards. Spanish Prime Minister Rajoy said the challenge ahead is 'giant'.
EU Economics Commissioner Rehn said that the EU may need to provide a 'bridge' for Portugal's market return. This may be the first formal acknowledgement that the current rescue plan (which calls for Portugal issuing EUR 10 bn in bonds in 2013) may need to be revised.
Austria's central bank announced it would join the Bundesbank in no longer accepting sovereign-guaranteed bank bonds as collateral if the sovereigns in question are in receipt of EU/IMF aid payments. Draghi has already suggested the impact will be minimal.
IMF's Christine Lagarde urged the US to help back-stop the Euro zone debt crisis, as she argued the need for more 'firepower' to the tune of $500 bn to tackle the global financial crisis. We expect to hear a lot more about this proposition at the IMF/World-Bank meetings on April 20-22.
GBP
The key services PMI beat expectations at 55.3 (cons. 53.4). In addition Halifax House Prices rebounded by 2.2% m/m - the highest monthly jump in three years. The upsurge is probably due to buyers trying to take advantage of the stamp duty holiday which expired at the end of March.
Our analysts note that the PMI survey has a mixed record when it comes to predicting short term GDP outturn. That said it remains an important lead indicator for the MPC, which meets on Thursday. No change to the asset purchase target is expected, despite two MPC members dissenting in favour of further Gilt purchases at the March policy meeting.
CHF
Swiss CPI will be released on Thursday. The market is looking for a -1.1% y/y decline, but our Switzerland economist is even more pessimistic. He expects a -1.3% y/y drop, which would be the weakest inflation print since Bloomberg records began in 1971.
Local reports suggest the Swiss Federal Council could announce their decision on SNB board appointments at an upcoming weekly meeting. Given the announcement was not made yesterday, next Wednesday's meeting may provide the next opportunity to do so.
CAD
Canada's employment numbers will be released on Thursday. We expect a net gain of +10k jobs, while the unemployment rate is expected to remain steady at 7.4%. As usual the full-time/part-time mix will be a critical determinant of how CAD reacts.
Bank of Canada Deputy Governor Boivin said that monetary policy must 'obey' the long run speed limit of the economy, and that the bank would take 'whatever action appropriate' to achieve its 2% inflation target over the medium term. As the Fed is moving away from fresh stimulus, the comments suggest the BoC can also to adopt a less dovish stance.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Wednesday, April 04, 2012
4th of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
4 April 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL A break below 1.3134 would expose 1.3004. Resistance is at 1.3386.
USDJPY BEARISH Key support lies at 81.47; a move below which would open 81.07. Resistance is at 83.30.
GBPUSD BULLISH We view the pull back as a short-term correction and expect the pair to recover. Resistance is at 1.6063 ahead of 1.6096. Support lies at 1.5947.
USDCHF NEUTRAL The recovery through 0.9094 has shifted our focus towards 0.9179. Support lies at 0.9002.
AUDUSD BEARISH The pair is currently testing 1.0260; next support comes in at 1.0146. Resistance is at 1.0471.
USDCAD NEUTRAL Key support area is at 0.9861-0.9842. Resistance is at 0.9991.
EURCHF NEUTRAL Support is at 1.2000. Resistance is at 1.2070.
EURGBP NEUTRAL Trend conditions remain unclear. Initial support lies at 0.8283 ahead of 0.8264. Resistance is at 0.8360.
EURJPY NEUTRAL Initial support lies at 108.49, a break through which would open 107.52. Resistance is at 109.82 ahead of 111.26.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
4 April 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL A break below 1.3134 would expose 1.3004. Resistance is at 1.3386.
USDJPY BEARISH Key support lies at 81.47; a move below which would open 81.07. Resistance is at 83.30.
GBPUSD BULLISH We view the pull back as a short-term correction and expect the pair to recover. Resistance is at 1.6063 ahead of 1.6096. Support lies at 1.5947.
USDCHF NEUTRAL The recovery through 0.9094 has shifted our focus towards 0.9179. Support lies at 0.9002.
AUDUSD BEARISH The pair is currently testing 1.0260; next support comes in at 1.0146. Resistance is at 1.0471.
USDCAD NEUTRAL Key support area is at 0.9861-0.9842. Resistance is at 0.9991.
EURCHF NEUTRAL Support is at 1.2000. Resistance is at 1.2070.
EURGBP NEUTRAL Trend conditions remain unclear. Initial support lies at 0.8283 ahead of 0.8264. Resistance is at 0.8360.
EURJPY NEUTRAL Initial support lies at 108.49, a break through which would open 107.52. Resistance is at 109.82 ahead of 111.26.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
4th of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
4 April 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Australia chalked up a second consecutive trade deficit in February triggering a 30 pip drop in AUDUSD. Losses could have been greater had a technical support line not made its presence felt. The consensus had been looking for a rebound back into surplus territory, as the effects of the Lunar New Year holiday were expected to have worn off by now. However, iron ore exports only partially recovered from January's steep drop, and the value of coal exports fell another -16% m/m. Naturally questions are now being asked if this latest data point is yet another symptom of a China slowdown. We reserve judgment for now, and note that inclement weather may have disrupted iron ore shipments in particular. The dollar continued its broad-based advance overnight in the wake of the FOMC minutes which suggested the Fed is some distance away from pushing the QE3 button. This stands in contrast to the impression markets received after Chairman Bernanke's March 26th speech.
Overall, our analysts note that the minutes have laid a marker for eventual altering of the 'late 2014' guidance for the FOMC, though material movements are needed both on growth and inflation to ultimately achieve revision in their current policy communication. The Fed's staff forecasts also pointed to better GDP figures and higher inflation, and trend growth was downgraded. A stronger-than-expected payrolls print would set the stage for a robust Q2 for both the dollar and risk appetite. Within a G10 context, the Fed still appears well ahead of the curve, though the ECB, which meets on Wednesday (a day earlier than usual), is more likely to act on an inflationary impulse, and we see the possibility of an ECB rate hike in 2013 if the sovereign debt situation continues to improve. Germany and the UK will release services PMI figures for March, while the ADP report and non-manufacturing ISM are due in the US.
EUR
The ECB will host its policy rate decision on Wednesday, a day earlier than usual. Our analysts and the market are looking for rates to remain unchanged, and we do not expect inflation to be a major issue in the short term.
Germany Chancellor Merkel said that EU governments will probably cede more powers to the European Union in future, and warned that external investors may shun the euro area unless it pursues reforms.
Spain announce that total central government borrowing will reach 79.8% of GDP in 2012, and that it would increase use of long-term debt, and reduce the use of bills. The budget minister warned that Spain is in a 'critical situation, at the limit', while 2012 interest payments could amount to 2.75% of GDP. Spanish bond yields increased as a result.
The EU said that Portugal's financing projections included in the country's external aid program 'remain valid', while the liquidity position of domestic banks has improved considerably. The 2011 rescue plan for Portugal still assumes a return to markets by 2013, so that EUR 16 bn in bonds can be issued.
GBP
March construction PMI rose to 56.7 vs 53.4 consensus. Construction only represents a small sector in the UK economy (5%) but still provides more encouraging signs for the BoE. As the most important indicator, Wednesday's services PMI will be even more closely watched. Industrial production and BoE decisions are due on Thursday.
AUD
The Australian trade balance was much weaker than expected showing a deficit of A$ -0.48 bn while the consensus had been looking for a surplus of A$ +1.1 bn.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
4 April 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Australia chalked up a second consecutive trade deficit in February triggering a 30 pip drop in AUDUSD. Losses could have been greater had a technical support line not made its presence felt. The consensus had been looking for a rebound back into surplus territory, as the effects of the Lunar New Year holiday were expected to have worn off by now. However, iron ore exports only partially recovered from January's steep drop, and the value of coal exports fell another -16% m/m. Naturally questions are now being asked if this latest data point is yet another symptom of a China slowdown. We reserve judgment for now, and note that inclement weather may have disrupted iron ore shipments in particular. The dollar continued its broad-based advance overnight in the wake of the FOMC minutes which suggested the Fed is some distance away from pushing the QE3 button. This stands in contrast to the impression markets received after Chairman Bernanke's March 26th speech.
Overall, our analysts note that the minutes have laid a marker for eventual altering of the 'late 2014' guidance for the FOMC, though material movements are needed both on growth and inflation to ultimately achieve revision in their current policy communication. The Fed's staff forecasts also pointed to better GDP figures and higher inflation, and trend growth was downgraded. A stronger-than-expected payrolls print would set the stage for a robust Q2 for both the dollar and risk appetite. Within a G10 context, the Fed still appears well ahead of the curve, though the ECB, which meets on Wednesday (a day earlier than usual), is more likely to act on an inflationary impulse, and we see the possibility of an ECB rate hike in 2013 if the sovereign debt situation continues to improve. Germany and the UK will release services PMI figures for March, while the ADP report and non-manufacturing ISM are due in the US.
EUR
The ECB will host its policy rate decision on Wednesday, a day earlier than usual. Our analysts and the market are looking for rates to remain unchanged, and we do not expect inflation to be a major issue in the short term.
Germany Chancellor Merkel said that EU governments will probably cede more powers to the European Union in future, and warned that external investors may shun the euro area unless it pursues reforms.
Spain announce that total central government borrowing will reach 79.8% of GDP in 2012, and that it would increase use of long-term debt, and reduce the use of bills. The budget minister warned that Spain is in a 'critical situation, at the limit', while 2012 interest payments could amount to 2.75% of GDP. Spanish bond yields increased as a result.
The EU said that Portugal's financing projections included in the country's external aid program 'remain valid', while the liquidity position of domestic banks has improved considerably. The 2011 rescue plan for Portugal still assumes a return to markets by 2013, so that EUR 16 bn in bonds can be issued.
GBP
March construction PMI rose to 56.7 vs 53.4 consensus. Construction only represents a small sector in the UK economy (5%) but still provides more encouraging signs for the BoE. As the most important indicator, Wednesday's services PMI will be even more closely watched. Industrial production and BoE decisions are due on Thursday.
AUD
The Australian trade balance was much weaker than expected showing a deficit of A$ -0.48 bn while the consensus had been looking for a surplus of A$ +1.1 bn.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Tuesday, April 03, 2012
3rd of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
3 April 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.3386; a clearance of this level would trigger extension of gains to the key high of 1.3486. Support holds at 1.3252 for now.
USDJPY BEARISH A close below 81.96 is required to confirm the break of the level and open next support at 81.47. Resistance is at 83.30.
GBPUSD BULLISH Next target resistance is at 1.6096, where a break would open the key high of 1.6167. Support lies at 1.5947.
USDCHF BEARISH Pressure is on 0.9002; a break here would favour extension of weakness to 0.8961. Resistance is at 0.9094.
AUDUSD NEUTRAL Resistance is at 1.0515, the 38% retracement of the March sell-off. Initial support lies at 1.0305 ahead of 1.0260.
USDCAD NEUTRAL Violation of 0.9901 has exposed the March 19 low of 0.9861. Resistance holds at 0.9991.
EURCHF NEUTRAL Support is at 1.2000. Resistance is at 1.2070.
EURGBP NEUTRAL Trend conditions are unclear at the moment. Initial support lies at 0.8283 ahead of 0.8264. Resistance is at 0.8355.
EURJPY BULLISH The cross remains constructive above 108.49. We expect the cross to trade back to the recent high of 111.26 where a break would expose 111.60.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
3 April 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.3386; a clearance of this level would trigger extension of gains to the key high of 1.3486. Support holds at 1.3252 for now.
USDJPY BEARISH A close below 81.96 is required to confirm the break of the level and open next support at 81.47. Resistance is at 83.30.
GBPUSD BULLISH Next target resistance is at 1.6096, where a break would open the key high of 1.6167. Support lies at 1.5947.
USDCHF BEARISH Pressure is on 0.9002; a break here would favour extension of weakness to 0.8961. Resistance is at 0.9094.
AUDUSD NEUTRAL Resistance is at 1.0515, the 38% retracement of the March sell-off. Initial support lies at 1.0305 ahead of 1.0260.
USDCAD NEUTRAL Violation of 0.9901 has exposed the March 19 low of 0.9861. Resistance holds at 0.9991.
EURCHF NEUTRAL Support is at 1.2000. Resistance is at 1.2070.
EURGBP NEUTRAL Trend conditions are unclear at the moment. Initial support lies at 0.8283 ahead of 0.8264. Resistance is at 0.8355.
EURJPY BULLISH The cross remains constructive above 108.49. We expect the cross to trade back to the recent high of 111.26 where a break would expose 111.60.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
3rd of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
3 April 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The RBA held the cash rate at 4.25%, in line with expectations. The rates market had 8bp of easing priced in, and AUDUSD jumped 20 pips immediately. The more dovish policy statement quickly put an end to the rally and the pair soon dropped 40 pips below its pre-announcement level. Growth was deemed to be "somewhat below trend" and "somewhat lower than earlier estimated". This represents a significant shift from the "close to trend" language used previously.
The rhetorical shift means the RBA may consider a rate cut in May if the Q1 inflation reading (due on April 24) is low enough. If a cut eventually materializes this would not do AUD any favours in our view. However, even with a policy rate at 4% AUD would still offer by far the most attractive carry in G10, and still be the first port of call for yield-hungry investors.
The events calendar is relatively quiet today. FOMC minutes from the March 14 meeting are due, and this will provide the latest opportunity to assess policy opinion across the committee. However, thirteen of the seventeen FOMC officials have already aired their views in public since the meeting - including Fed Chair Bernanke himself - and so the scope for a market-moving surprise is limited. The April 25 meeting is now just over 3 weeks away and promises to be a far more interesting affair. At this meeting the Fed Funds target forecasts are due to be updated for the first time since they were first presented in January. This will provide an instant quantitative measure of how opinion is distributed across the committee - and just as importantly how this opinion has changed over the past three months in response to the improving economic data flow.
Overnight EURUSD traded 1.3314-1.3356 and USDJPY 81.56-82.23. Asian equities were mixed, despite the S&P500 climbing a further 0.75% to set another 4-year high.
EUR
Spain's Prime Minister Rajoy defended his decision to press ahead with an austerity program, and warned members of his party that 'the alternative is infinitely worse'. He stressed that losing market access is not 'theoretical', citing precedents within the Eurozone. More details on Spain's budget are due today after an outline was released last week.
Germany's CDU Parliamentary Leader Kauder said that Spain is currently doing all it can to meet goals, and there is 'no need' to discuss the possibility of Spain needing a bailout.
EU Economics Commissioner Rehn said that he saw a gradual recovery in confidence and growth later this year, but he again warned that the Eurozone economy is being hampered by debt and structural problems. Monday's Eurozone-wide data appeared to confirm Rehn's bleak near-term prognosis. Eurozone Manufacturing PMI was confirmed at 47.7, a fall from February's print of 49. The French number was revised down to 46.7 and the German number up to 48.4. The Eurozone February jobless rate rose to 10.8%, in line with consensus. The Italian February jobless rate rose to 9.3%, the highest increase since January 2004.
GBP
The UK's construction PMI is due, and the consensus expects a modest drop to 53.4 (from 54.3). On Monday the manufacturing PMI came in at 52.1, well above expectations of 50.7, and set a 10-month high. The more important services PMI is not due until Wednesday.
AUD
Apart from the unchanged policy rate, retail sales data were also released. They grew in line with consensus at +0.2% m/m. More evidence of the two-speed economy is evident in the data as our Australia economics team observes: resource-rich Western Australia showed a +1.0% m/m increase while NSW and Victoria showed monthly declines.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
3 April 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The RBA held the cash rate at 4.25%, in line with expectations. The rates market had 8bp of easing priced in, and AUDUSD jumped 20 pips immediately. The more dovish policy statement quickly put an end to the rally and the pair soon dropped 40 pips below its pre-announcement level. Growth was deemed to be "somewhat below trend" and "somewhat lower than earlier estimated". This represents a significant shift from the "close to trend" language used previously.
The rhetorical shift means the RBA may consider a rate cut in May if the Q1 inflation reading (due on April 24) is low enough. If a cut eventually materializes this would not do AUD any favours in our view. However, even with a policy rate at 4% AUD would still offer by far the most attractive carry in G10, and still be the first port of call for yield-hungry investors.
The events calendar is relatively quiet today. FOMC minutes from the March 14 meeting are due, and this will provide the latest opportunity to assess policy opinion across the committee. However, thirteen of the seventeen FOMC officials have already aired their views in public since the meeting - including Fed Chair Bernanke himself - and so the scope for a market-moving surprise is limited. The April 25 meeting is now just over 3 weeks away and promises to be a far more interesting affair. At this meeting the Fed Funds target forecasts are due to be updated for the first time since they were first presented in January. This will provide an instant quantitative measure of how opinion is distributed across the committee - and just as importantly how this opinion has changed over the past three months in response to the improving economic data flow.
Overnight EURUSD traded 1.3314-1.3356 and USDJPY 81.56-82.23. Asian equities were mixed, despite the S&P500 climbing a further 0.75% to set another 4-year high.
EUR
Spain's Prime Minister Rajoy defended his decision to press ahead with an austerity program, and warned members of his party that 'the alternative is infinitely worse'. He stressed that losing market access is not 'theoretical', citing precedents within the Eurozone. More details on Spain's budget are due today after an outline was released last week.
Germany's CDU Parliamentary Leader Kauder said that Spain is currently doing all it can to meet goals, and there is 'no need' to discuss the possibility of Spain needing a bailout.
EU Economics Commissioner Rehn said that he saw a gradual recovery in confidence and growth later this year, but he again warned that the Eurozone economy is being hampered by debt and structural problems. Monday's Eurozone-wide data appeared to confirm Rehn's bleak near-term prognosis. Eurozone Manufacturing PMI was confirmed at 47.7, a fall from February's print of 49. The French number was revised down to 46.7 and the German number up to 48.4. The Eurozone February jobless rate rose to 10.8%, in line with consensus. The Italian February jobless rate rose to 9.3%, the highest increase since January 2004.
GBP
The UK's construction PMI is due, and the consensus expects a modest drop to 53.4 (from 54.3). On Monday the manufacturing PMI came in at 52.1, well above expectations of 50.7, and set a 10-month high. The more important services PMI is not due until Wednesday.
AUD
Apart from the unchanged policy rate, retail sales data were also released. They grew in line with consensus at +0.2% m/m. More evidence of the two-speed economy is evident in the data as our Australia economics team observes: resource-rich Western Australia showed a +1.0% m/m increase while NSW and Victoria showed monthly declines.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Monday, April 02, 2012
2nd of April 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
2 April 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH If resistance at 1.3386 gives way, risk would be for extension of gains to the key high of 1.3486. Support holds at 1.3252 for now.
USDJPY BULLISH Failure to follow through on the break of 81.96 has shifted our focus back to upside. A recovery through 83.39 would expose 84.18. Support is at 81.83.
GBPUSD BULLISH Next target resistance is at 1.6096, where a break would open the key high of 1.6167. Support lies at 1.5947.
USDCHF BEARISH A closing break below 0.9016 would favour extension of weakness to 0.8961. Resistance is at 0.9094.
AUDUSD NEUTRAL Resistance is at 1.0515, the 38% retracement of the March sell-off. Initial support lies at 1.0305 ahead of 1.0260.
USDCAD NEUTRAL The pair is under pressure again signaling downside risk. Initial support lies at 0.9901, while resistance is at 1.0019.
EURCHF NEUTRAL Opened gap down, support is at 1.2000. Resistance is at 1.2070.
EURGBP NEUTRAL Initial resistance is at 0.8395 ahead of the key bull trigger at 0.8424. Support lies at 0.8300.
EURJPY BULLISH The cross is back up targeting the key high of 111.26; a break here would open 111.60. Support is at 108.77.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
2 April 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH If resistance at 1.3386 gives way, risk would be for extension of gains to the key high of 1.3486. Support holds at 1.3252 for now.
USDJPY BULLISH Failure to follow through on the break of 81.96 has shifted our focus back to upside. A recovery through 83.39 would expose 84.18. Support is at 81.83.
GBPUSD BULLISH Next target resistance is at 1.6096, where a break would open the key high of 1.6167. Support lies at 1.5947.
USDCHF BEARISH A closing break below 0.9016 would favour extension of weakness to 0.8961. Resistance is at 0.9094.
AUDUSD NEUTRAL Resistance is at 1.0515, the 38% retracement of the March sell-off. Initial support lies at 1.0305 ahead of 1.0260.
USDCAD NEUTRAL The pair is under pressure again signaling downside risk. Initial support lies at 0.9901, while resistance is at 1.0019.
EURCHF NEUTRAL Opened gap down, support is at 1.2000. Resistance is at 1.2070.
EURGBP NEUTRAL Initial resistance is at 0.8395 ahead of the key bull trigger at 0.8424. Support lies at 0.8300.
EURJPY BULLISH The cross is back up targeting the key high of 111.26; a break here would open 111.60. Support is at 108.77.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
2nd of April 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
2 April 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
China's official manufacturing PMI released over the weekend came in at 53.1 (cons. 50.8), substantially beating consensus opinion. The Australian dollar was the main beneficiary and climbed over 100 pips at the Asia open, although the rally eventually lost some steam after a very weak Australian building approvals report. The weekend PMI was all the more surprising given investors had been mentally prepared for a soft print after the weak private sector flash estimate released over a week ago. The weekend PMI is likely to continue to set a positive tone throughout the week, although US data releases such as ISM and non-farm payrolls will also be key. In particular, the data comes at a crucial moment for AUD given the RBA is scheduled to meet on Tuesday. Our Australia economics team expect no change to the cash rate and the latest Chinese numbers support this view - despite a loss of momentum in recent Australian economic data.
USDJPY has also started the week on a firmer note as Japan's new fiscal year gets underway. The prospect of yield-seeking yen-outflows over the weeks ahead should keep the pair on a trajectory towards our 3m target of 85.00. Japan's Tankan survey was slightly weaker than expected which gave USDJPY a nudge higher by slightly raising the risk of another round of BoJ easing. US data on Friday showed core PCE in line at +1.9% y/y while University of Chicago consumer confidence survey hit a 13-month high. BoE and ECB policy decisions are due this week and our economists expect no material change in policy settings.
EUR
Eurozone finance ministers agreed to raise the ceiling on the combined EFSF/ESM bailout facility to EUR 700 bn from EUR 500 bn previously. Although this option was the least ambitious of those on the table, it is still very much in line with consensus opinion, and so is unlikely to be market moving. Reuters reported that Germany, Finland, the Netherlands, Estonia and Slovenia opposed a larger increase in the fund.
Additionally, it was decided to accelerate the payment of government capital into the ESM. The crucial point here is that unlike the EFSF (which has to fund itself exclusively in the market), when the ESM becomes fully operational it is due to hold a stock of EUR 80 bn in readily-available capital which it can use to fund its aid programs directly. That EUR 80 bn was due to be paid in by Eurozone governments in instalments over the course of five years. On Friday however, finance ministers agreed to accelerate the pay-in schedule so that it is completed in less than two years. This will put additional short-term funding pressure on sovereigns who will now need to find the money more quickly, and it should soon become apparent if any ratings actions flow from this.
Newswire reports suggest that Greece may now be preparing to default on Greek sovereign bonds which are governed by foreign law. Recall that holders of debt governed by Greek law have already been dealt with, whereas holders of foreign-law governed Greek debt have been given until April 4 to volunteer for a restructuring deal. The Greek parliament does not have jurisdiction over these bonds and so CACs cannot be used to enforce participation. However, Reuters reports that Eurozone finance ministers have granted Greece approval to simply refuse to pay holders of this debt if they do not come forward voluntarily.
Spain announced a budget outline on Friday, with more details due on Tuesday. The government has re-committed to the upwardly-revised 2012 deficit target of 5.3%, down from 8.5% in 2011.
Italy's Prime Minister Monti qualified some of his previously upbeat remarks, and now contends that "no one can say the euro zone crisis is totally over", but he declared the crisis "virtually over". He spoke after meetings in China with Chinese President Hu and the head of CIC where, according to Monti, the question of Chinese investment in Italy was a key talking point.
JPY
Japan's Finance Minister Azumi described Europe's decision to raise the EFSF/ESM funding ceiling as "a big step forward". Attention now shifts to the upcoming meetings of the IMF and World Bank on April 22, when IMF members debate whether to make more money available for crisis fighting, both in Europe and beyond.
The large manufacturer's Tankan index for Q1 came in unchanged at -4, despite consensus expectations that it would rise to -1.
Data released on Friday show that Japan did not carry out any FX intervention between Feb. 28 and Mar 28.
AUD
Building approvals in February fell -7.8% m/m in Feb, well below market expectations of a +0.5% m/m increase. Our Australian economics team notes that the decline was concentrated in NSW, where changes to the stamp duty system encouraged approvals to be fast-tracked in previous months, leaving a vacuum of approvals in the current month.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
2 April 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
China's official manufacturing PMI released over the weekend came in at 53.1 (cons. 50.8), substantially beating consensus opinion. The Australian dollar was the main beneficiary and climbed over 100 pips at the Asia open, although the rally eventually lost some steam after a very weak Australian building approvals report. The weekend PMI was all the more surprising given investors had been mentally prepared for a soft print after the weak private sector flash estimate released over a week ago. The weekend PMI is likely to continue to set a positive tone throughout the week, although US data releases such as ISM and non-farm payrolls will also be key. In particular, the data comes at a crucial moment for AUD given the RBA is scheduled to meet on Tuesday. Our Australia economics team expect no change to the cash rate and the latest Chinese numbers support this view - despite a loss of momentum in recent Australian economic data.
USDJPY has also started the week on a firmer note as Japan's new fiscal year gets underway. The prospect of yield-seeking yen-outflows over the weeks ahead should keep the pair on a trajectory towards our 3m target of 85.00. Japan's Tankan survey was slightly weaker than expected which gave USDJPY a nudge higher by slightly raising the risk of another round of BoJ easing. US data on Friday showed core PCE in line at +1.9% y/y while University of Chicago consumer confidence survey hit a 13-month high. BoE and ECB policy decisions are due this week and our economists expect no material change in policy settings.
EUR
Eurozone finance ministers agreed to raise the ceiling on the combined EFSF/ESM bailout facility to EUR 700 bn from EUR 500 bn previously. Although this option was the least ambitious of those on the table, it is still very much in line with consensus opinion, and so is unlikely to be market moving. Reuters reported that Germany, Finland, the Netherlands, Estonia and Slovenia opposed a larger increase in the fund.
Additionally, it was decided to accelerate the payment of government capital into the ESM. The crucial point here is that unlike the EFSF (which has to fund itself exclusively in the market), when the ESM becomes fully operational it is due to hold a stock of EUR 80 bn in readily-available capital which it can use to fund its aid programs directly. That EUR 80 bn was due to be paid in by Eurozone governments in instalments over the course of five years. On Friday however, finance ministers agreed to accelerate the pay-in schedule so that it is completed in less than two years. This will put additional short-term funding pressure on sovereigns who will now need to find the money more quickly, and it should soon become apparent if any ratings actions flow from this.
Newswire reports suggest that Greece may now be preparing to default on Greek sovereign bonds which are governed by foreign law. Recall that holders of debt governed by Greek law have already been dealt with, whereas holders of foreign-law governed Greek debt have been given until April 4 to volunteer for a restructuring deal. The Greek parliament does not have jurisdiction over these bonds and so CACs cannot be used to enforce participation. However, Reuters reports that Eurozone finance ministers have granted Greece approval to simply refuse to pay holders of this debt if they do not come forward voluntarily.
Spain announced a budget outline on Friday, with more details due on Tuesday. The government has re-committed to the upwardly-revised 2012 deficit target of 5.3%, down from 8.5% in 2011.
Italy's Prime Minister Monti qualified some of his previously upbeat remarks, and now contends that "no one can say the euro zone crisis is totally over", but he declared the crisis "virtually over". He spoke after meetings in China with Chinese President Hu and the head of CIC where, according to Monti, the question of Chinese investment in Italy was a key talking point.
JPY
Japan's Finance Minister Azumi described Europe's decision to raise the EFSF/ESM funding ceiling as "a big step forward". Attention now shifts to the upcoming meetings of the IMF and World Bank on April 22, when IMF members debate whether to make more money available for crisis fighting, both in Europe and beyond.
The large manufacturer's Tankan index for Q1 came in unchanged at -4, despite consensus expectations that it would rise to -1.
Data released on Friday show that Japan did not carry out any FX intervention between Feb. 28 and Mar 28.
AUD
Building approvals in February fell -7.8% m/m in Feb, well below market expectations of a +0.5% m/m increase. Our Australian economics team notes that the decline was concentrated in NSW, where changes to the stamp duty system encouraged approvals to be fast-tracked in previous months, leaving a vacuum of approvals in the current month.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
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