DAILY MARKET COMMENTARY
31 January 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Initial resistance is at 1.3244 ahead of 1.3459. Support lies at 1.3077.
USDJPY BEARISH Decline through 76.33 has opened the way for losses towards 75.35. Resistance is at 76.78.
GBPUSD NEUTRAL Resistance is at 1.5740 ahead of the key bull trigger at 1.5780. Support lies at 1.5642 ahead of 1.5517.
USDCHF BEARISH Support at 0.9112 is intact for now; next support is at 0.9066, the Nov. 30 key low. Resistance is at 0.9229.
AUDUSD BULLISH Resistance is at 1.0688 ahead of 1.0765, the September 2011 high. Support lies at 1.0527.
USDCAD BEARISH Support lies at 0.9975 ahead of 0.9892, the October 2011 low. Resistance is at 1.0071.
EURCHF NEUTRAL Support lies at 1.2000 while resistance is at 1.2109.
EURGBP BEARISH A push below 0.8338 would open 0.8310. Key resistance is at 0.8422.
EURJPY BULLISH A rise above 101.58 would expose 102.54, the Dec. 21 key high. Support is at 99.99.
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.
+++ market trends - news - analysis - strategies and more! +++
Tuesday, January 31, 2012
31st of January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
31 January 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk appetite was boosted overnight by an article in the Financial Times claiming that the ECB's next 3y LTRO (due on Feb 29) could see demand for up to EUR1 trn in cash, double the previous amount. If so, it would go a long way towards alleviating term funding concerns for Eurozone banks as their bonds fall due throughout the year. There were no major surprises out of Monday's Eurozone summit. In French President Sarkozy's words, the summit 'went as planned'. Most of the decisions adopted on Monday, such as early execution of the ESM and updates on the situation in Greece ,were flagged well in advance. The Czech Republic joined the UK in opting out of the fiscal compact, with Sarkozy noting this was largely due to 'constitutional reasons'.
There has been a significant pullback in rhetoric since plans for potential transfer of fiscal sovereignty from Greece to Brussels were first floated over the weekend. However, governments remain aware that time is running out to finalise talks on the second Greek rescue before the mid-February deadlines, especially as the current debt-swap plans have not even been concluded. Portugal, the other elephant in the room, was not discussed outright at Monday's summit but the moves in bond markets surely have not gone unnoticed, and markets may need to brace for fresh volatility if yields continue to spiral higher. Ahead on Tuesday, macro figures are due across Europe, while consumer confidence is out in the US.
EUR
The Italian treasury sold a total of EUR7.5 bn worth of bonds, near the top of estimates. While the yields were down from the last auctions, our fixed income strategists were slightly disappointed by the results. They note that the bid/cover on the 5y was close to historical lows, despite EUR37 bn worth of redemptions and coupons this week, only a fraction of which was ploughed back into the auction.
Ireland's European Affairs Minister Lucinda Creighton said that if voters rejected a fiscal treaty, it would be hard for the country to remain in the Eurozone. The Irish government is due to decide in the coming month whether the text of the fiscal compact agreed last night will need to be ratified via referendum. Even if the government opts for parliamentary ratification, a potentially time-consuming Supreme Court challenge could be in store.
The Czech Republic has joined the United Kingdom in opting out of the fiscal compact. This was confirmed by EU President Van Rompuy. The Czech Prime Minister said that the new treaty was 'difficult to accept' and said its participation in negotiations 'will be purely symbolic'.
Several Eurozone officials confirmed that the ESM Treaty will be signed in March and will come into force in July. There were no details on the potential for strengthening the firepower of the fund, and the issue is due to be revisited in March. Portugal did not come up in discussions and the Portuguese PM ruled out any need for a Greece-like PSI.
Newswires reported that a special summit on Greece might be held in February to discuss fiscal sovereignty issues in particular, although there has been no official confirmation. German Chancellor Merkel said that rapid sealing of the fiscal pact is an 'important step' towards a stability union. However, when pressed on Greece, she said she did not back demands for greater oversight, which was suggested by some of her government partners earlier. French President Sarkozy affirmed this view, saying he is opposed to placing Greece under budgetary control.
In a further warning of Spain's aggregate fiscal position, S&P has cut the ratings or outlook on several Spanish regions. The ratings agency attributed the moves to recent action on the sovereign, in addition to the wider economic issues facing the country. Spain is due to issue bonds on Thursday, having aggressively front-loaded its funding so far this year, taking advantage of more preferable market conditions.
ECB Governing Council member Nowotny warned that the Eurozone economy could stagnate in 2012 and a recession for a certain period could materialise.
JPY
USDJPY continues to drift lower in the wake of the dovish FOMC. Finance Minister Azumi issued the usual warning overnight that there has been no change in Japan's stance on FX intervention, and that he stands ready to take FX steps if needed.
AUD
Australia produced a batch of relatively subdued data overnight, reinforcing our economists' view that the RBA is likely to cut the cash rate by 25bp next week. Business conditions and confidence were still below average in December, and credit growth was modest.
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.
31 January 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk appetite was boosted overnight by an article in the Financial Times claiming that the ECB's next 3y LTRO (due on Feb 29) could see demand for up to EUR1 trn in cash, double the previous amount. If so, it would go a long way towards alleviating term funding concerns for Eurozone banks as their bonds fall due throughout the year. There were no major surprises out of Monday's Eurozone summit. In French President Sarkozy's words, the summit 'went as planned'. Most of the decisions adopted on Monday, such as early execution of the ESM and updates on the situation in Greece ,were flagged well in advance. The Czech Republic joined the UK in opting out of the fiscal compact, with Sarkozy noting this was largely due to 'constitutional reasons'.
There has been a significant pullback in rhetoric since plans for potential transfer of fiscal sovereignty from Greece to Brussels were first floated over the weekend. However, governments remain aware that time is running out to finalise talks on the second Greek rescue before the mid-February deadlines, especially as the current debt-swap plans have not even been concluded. Portugal, the other elephant in the room, was not discussed outright at Monday's summit but the moves in bond markets surely have not gone unnoticed, and markets may need to brace for fresh volatility if yields continue to spiral higher. Ahead on Tuesday, macro figures are due across Europe, while consumer confidence is out in the US.
EUR
The Italian treasury sold a total of EUR7.5 bn worth of bonds, near the top of estimates. While the yields were down from the last auctions, our fixed income strategists were slightly disappointed by the results. They note that the bid/cover on the 5y was close to historical lows, despite EUR37 bn worth of redemptions and coupons this week, only a fraction of which was ploughed back into the auction.
Ireland's European Affairs Minister Lucinda Creighton said that if voters rejected a fiscal treaty, it would be hard for the country to remain in the Eurozone. The Irish government is due to decide in the coming month whether the text of the fiscal compact agreed last night will need to be ratified via referendum. Even if the government opts for parliamentary ratification, a potentially time-consuming Supreme Court challenge could be in store.
The Czech Republic has joined the United Kingdom in opting out of the fiscal compact. This was confirmed by EU President Van Rompuy. The Czech Prime Minister said that the new treaty was 'difficult to accept' and said its participation in negotiations 'will be purely symbolic'.
Several Eurozone officials confirmed that the ESM Treaty will be signed in March and will come into force in July. There were no details on the potential for strengthening the firepower of the fund, and the issue is due to be revisited in March. Portugal did not come up in discussions and the Portuguese PM ruled out any need for a Greece-like PSI.
Newswires reported that a special summit on Greece might be held in February to discuss fiscal sovereignty issues in particular, although there has been no official confirmation. German Chancellor Merkel said that rapid sealing of the fiscal pact is an 'important step' towards a stability union. However, when pressed on Greece, she said she did not back demands for greater oversight, which was suggested by some of her government partners earlier. French President Sarkozy affirmed this view, saying he is opposed to placing Greece under budgetary control.
In a further warning of Spain's aggregate fiscal position, S&P has cut the ratings or outlook on several Spanish regions. The ratings agency attributed the moves to recent action on the sovereign, in addition to the wider economic issues facing the country. Spain is due to issue bonds on Thursday, having aggressively front-loaded its funding so far this year, taking advantage of more preferable market conditions.
ECB Governing Council member Nowotny warned that the Eurozone economy could stagnate in 2012 and a recession for a certain period could materialise.
JPY
USDJPY continues to drift lower in the wake of the dovish FOMC. Finance Minister Azumi issued the usual warning overnight that there has been no change in Japan's stance on FX intervention, and that he stands ready to take FX steps if needed.
AUD
Australia produced a batch of relatively subdued data overnight, reinforcing our economists' view that the RBA is likely to cut the cash rate by 25bp next week. Business conditions and confidence were still below average in December, and credit growth was modest.
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, January 30, 2012
30th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
30 January 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Momentum is positive; focus is on 1.3197, a break here would open 1.3244 next. Support lies at 1.3078.
USDJPY BEARISH Support comes in at 76.55 ahead of key low at 76.33. Resistance is at 77.49.
GBPUSD NEUTRAL Key bull trigger is at 1.5780; a clearance of which would expose 1.5811. Support lies at 1.5651 ahead of 1.5517.
USDCHF BEARISH Next supports are at 0.9112 and 0.9066. Resistance is at 0.9339 ahead of 0.9413.
AUDUSD BULLISH Resistance is at 1.0688 ahead of 1.0765, the September 2011 high. Support lies at 1.0588.
USDCAD BEARISH Momentum conditions are bearish; support lies at 0.9975 ahead of 0.9892, the October 2011 low. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Support lies at 1.2058 while resistance is at 1.2133.
EURGBP BEARISH Initial support lies at 0.8310 ahead of 0.8273. Key resistance is at 0.8422.
EURJPY BULLISH Resistance is at 102.54, the Dec. 21 key high, a break of which would pave the way for gains towards 104.32. Support lies at 100.03.
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.
30 January 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Momentum is positive; focus is on 1.3197, a break here would open 1.3244 next. Support lies at 1.3078.
USDJPY BEARISH Support comes in at 76.55 ahead of key low at 76.33. Resistance is at 77.49.
GBPUSD NEUTRAL Key bull trigger is at 1.5780; a clearance of which would expose 1.5811. Support lies at 1.5651 ahead of 1.5517.
USDCHF BEARISH Next supports are at 0.9112 and 0.9066. Resistance is at 0.9339 ahead of 0.9413.
AUDUSD BULLISH Resistance is at 1.0688 ahead of 1.0765, the September 2011 high. Support lies at 1.0588.
USDCAD BEARISH Momentum conditions are bearish; support lies at 0.9975 ahead of 0.9892, the October 2011 low. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Support lies at 1.2058 while resistance is at 1.2133.
EURGBP BEARISH Initial support lies at 0.8310 ahead of 0.8273. Key resistance is at 0.8422.
EURJPY BULLISH Resistance is at 102.54, the Dec. 21 key high, a break of which would pave the way for gains towards 104.32. Support lies at 100.03.
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.
30th of January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
30 January 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Fitch downgraded five Eurozone sovereigns on Friday night shortly after Eurozone bond markets had closed. Italy, Spain, Slovenia were cut two notches each, while Belgium and Cyprus dropped one notch apiece. The downgrades themselves were signalled weeks ago, and were expected to occur before the end of January so EURUSD continued to rally in spite of the news, eventually closing above 1.32 for the first time in seven weeks. The timing of the downgrades is unfortunate given Italy's second BTP auction of 2012 is due to take place around 1000 GMT today. However our Eurozone rates strategists expect the supply to be easily absorbed, with demand boosted by redemptions and coupon payments worth about three times the debt on offer. Brisk demand is likely to give the euro another temporary boost.
The first EU summit of 2012 is due to get underway this afternoon. The objective is to finalise two texts: the new fiscal compact, and the treaty changes required to introduce the ESM rescue vehicle. Talks on the Greek bond swap made further progress over the weekend, and we expect a positive outcome in a matter of days. Despite the latest positive news flow we remain intensely cautious on the euro's prospects in the run-up to the March 20 Greek bond redemption. Already new hurdles to a second financial rescue are appearing. Over the weekend press reports surfaced on German plans for greater surveillance over Greece's fiscal affairs.
The fact that such proposals are even under discussion indicates that official sponsors are extremely wary of Greece's ability to bring its debt down to sustainable levels. The proposals have already met a frosty response in Greece and the controversy indicates how difficult it will be reach final agreement on the second rescue even if a bond swap deal is ultimately reached on a voluntary basis. With the euro having already rallied six big figures from the lows, we remain on alert for opportunities to enter fresh shorts. The US is due to release the core PCE report - a metric which has suddenly risen in importance after the Fed's adoption of an inflation target based specifically on this measure.
EUR
Both Greek Finance Minister Venizelos and the IIF said they expect to finalise the debt swap deal this week.
Over the weekend, several newswires reported that Germany wanted Greece to cede fiscal control to European institutions, or a to a European budget tsar. The measures were given official backing by German cabinet member Philipp Roesler. The reception to these proposals was understandably chilly in Greece - Finance Minister Venizelos warned against asking Greece to choose between economic assistance and national dignity. Although concluding a voluntary bond swap is an important element in a second financial rescue of Greece, many other issues clearly remain unresolved. We expect more euro-negative news of this sort to hit the headlines ahead of the March 20 bond redemption.
On Friday, Fitch downgraded Belgium, Spain, Italy, Cyprus and Slovenia. Ireland's rating - also on review - was affirmed.
According to Der Spiegel, Greece's funding needs from the second rescue package have ballooned again, this time to EUR145 bn, up from previous estimates of EUR130 bn. The figure is largely due to the deteriorating economic outlook in Greece, and puts pressure on the troika to support the strongest possible deal with private-sector creditors.
ECB member Gonzales-Paramo said the ECB is not involved in the Greek debt negotiations and highlighted the central bank's restrictions about lending to governments. He also said that the ECB has not committed to any minimum interest rate, suggesting that further cuts below the 1% level remain possible.
ECB Governing Council member Nowotny said he expects that the second 3y LTRO scheduled for Feb 29 is likely to be "similarly well used" as the first one given the "enormous refinancing need" of Eurozone banks.
The Sunday Times reported that the Irish government is lobbying the ECB to allow the repayment of a EUR31 bn loan to be delayed by 10 years. This would reduce the overall cost of the bailout for Irish banks.
Austrian Chancellor Faymann expressed support for increasing the Eurozone's bailout funds, including combining the firepower of the ESM and EFSF. In addition he has expressed support for granting the ESM a banking license, which has been a red line for Germany.
JPY
Moody's said the divergence between Japan's actual fiscal position and its deficit reduction goals could widen further, adding that the risk of a crisis would rise if credible fiscal action is not taken.
Prime Minister Noda said Japan is already helping Europe by buying EFSF bonds, and will continue to do so.
GBP
Bank of England MPC member Miles said it is "presumptuous" to conclude that another round of QE in February is inevitable. He said the decision will hinge on the forecasts contained in the quarterly inflation report. Nevertheless, he did acknowledge that CPI has been on a "pretty steep" downward trajectory recently. previously.
AUD
Fitch put a number of Australian banks on ratings watch negative, which caused AUDUSD to briefly slip 20 pips before recovering within minutes.
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.
30 January 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Fitch downgraded five Eurozone sovereigns on Friday night shortly after Eurozone bond markets had closed. Italy, Spain, Slovenia were cut two notches each, while Belgium and Cyprus dropped one notch apiece. The downgrades themselves were signalled weeks ago, and were expected to occur before the end of January so EURUSD continued to rally in spite of the news, eventually closing above 1.32 for the first time in seven weeks. The timing of the downgrades is unfortunate given Italy's second BTP auction of 2012 is due to take place around 1000 GMT today. However our Eurozone rates strategists expect the supply to be easily absorbed, with demand boosted by redemptions and coupon payments worth about three times the debt on offer. Brisk demand is likely to give the euro another temporary boost.
The first EU summit of 2012 is due to get underway this afternoon. The objective is to finalise two texts: the new fiscal compact, and the treaty changes required to introduce the ESM rescue vehicle. Talks on the Greek bond swap made further progress over the weekend, and we expect a positive outcome in a matter of days. Despite the latest positive news flow we remain intensely cautious on the euro's prospects in the run-up to the March 20 Greek bond redemption. Already new hurdles to a second financial rescue are appearing. Over the weekend press reports surfaced on German plans for greater surveillance over Greece's fiscal affairs.
The fact that such proposals are even under discussion indicates that official sponsors are extremely wary of Greece's ability to bring its debt down to sustainable levels. The proposals have already met a frosty response in Greece and the controversy indicates how difficult it will be reach final agreement on the second rescue even if a bond swap deal is ultimately reached on a voluntary basis. With the euro having already rallied six big figures from the lows, we remain on alert for opportunities to enter fresh shorts. The US is due to release the core PCE report - a metric which has suddenly risen in importance after the Fed's adoption of an inflation target based specifically on this measure.
EUR
Both Greek Finance Minister Venizelos and the IIF said they expect to finalise the debt swap deal this week.
Over the weekend, several newswires reported that Germany wanted Greece to cede fiscal control to European institutions, or a to a European budget tsar. The measures were given official backing by German cabinet member Philipp Roesler. The reception to these proposals was understandably chilly in Greece - Finance Minister Venizelos warned against asking Greece to choose between economic assistance and national dignity. Although concluding a voluntary bond swap is an important element in a second financial rescue of Greece, many other issues clearly remain unresolved. We expect more euro-negative news of this sort to hit the headlines ahead of the March 20 bond redemption.
On Friday, Fitch downgraded Belgium, Spain, Italy, Cyprus and Slovenia. Ireland's rating - also on review - was affirmed.
According to Der Spiegel, Greece's funding needs from the second rescue package have ballooned again, this time to EUR145 bn, up from previous estimates of EUR130 bn. The figure is largely due to the deteriorating economic outlook in Greece, and puts pressure on the troika to support the strongest possible deal with private-sector creditors.
ECB member Gonzales-Paramo said the ECB is not involved in the Greek debt negotiations and highlighted the central bank's restrictions about lending to governments. He also said that the ECB has not committed to any minimum interest rate, suggesting that further cuts below the 1% level remain possible.
ECB Governing Council member Nowotny said he expects that the second 3y LTRO scheduled for Feb 29 is likely to be "similarly well used" as the first one given the "enormous refinancing need" of Eurozone banks.
The Sunday Times reported that the Irish government is lobbying the ECB to allow the repayment of a EUR31 bn loan to be delayed by 10 years. This would reduce the overall cost of the bailout for Irish banks.
Austrian Chancellor Faymann expressed support for increasing the Eurozone's bailout funds, including combining the firepower of the ESM and EFSF. In addition he has expressed support for granting the ESM a banking license, which has been a red line for Germany.
JPY
Moody's said the divergence between Japan's actual fiscal position and its deficit reduction goals could widen further, adding that the risk of a crisis would rise if credible fiscal action is not taken.
Prime Minister Noda said Japan is already helping Europe by buying EFSF bonds, and will continue to do so.
GBP
Bank of England MPC member Miles said it is "presumptuous" to conclude that another round of QE in February is inevitable. He said the decision will hinge on the forecasts contained in the quarterly inflation report. Nevertheless, he did acknowledge that CPI has been on a "pretty steep" downward trajectory recently. previously.
AUD
Fitch put a number of Australian banks on ratings watch negative, which caused AUDUSD to briefly slip 20 pips before recovering within minutes.
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, January 27, 2012
27th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
27 January 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.3197, a break here would open 1.3244 next. Support lies at 1.3090.
USDJPY BULLISH Key resistance is at 78.29, a rally through this level would open the way for further gains towards 79.53. Support lies at 76.87.
GBPUSD NEUTRAL Near-term resistance is at 1.5728 ahead of the bull trigger at 1.5780. Support lies at 1.5517 ahead of 1.5451.
USDCHF BEARISH Next supports are at 0.9112 and 0.9066. Resistance is at 0.9339 ahead of 0.9413.
AUDUSD BULLISH Key resistance is at 1.0765; a rally through which would open the way for gains towards 1.1081. Support lies at 1.0428.
USDCAD BEARISH Near-term Support lies at 0.9975 ahead of 0.9892, the October 2011 low. Resistance is at 1.0049.
EURCHF NEUTRAL Support lies at 1.2058 while resistance is at 1.2133.
EURGBP BEARISH Initial support lies at 0.8310 ahead of 0.8273. Key resistance is at 0.8422.
EURJPY BULLISH Focus is on 102.54, a clearance of this level would pave the way for gains towards 104.32. Support lies at 100.98.
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.
27 January 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.3197, a break here would open 1.3244 next. Support lies at 1.3090.
USDJPY BULLISH Key resistance is at 78.29, a rally through this level would open the way for further gains towards 79.53. Support lies at 76.87.
GBPUSD NEUTRAL Near-term resistance is at 1.5728 ahead of the bull trigger at 1.5780. Support lies at 1.5517 ahead of 1.5451.
USDCHF BEARISH Next supports are at 0.9112 and 0.9066. Resistance is at 0.9339 ahead of 0.9413.
AUDUSD BULLISH Key resistance is at 1.0765; a rally through which would open the way for gains towards 1.1081. Support lies at 1.0428.
USDCAD BEARISH Near-term Support lies at 0.9975 ahead of 0.9892, the October 2011 low. Resistance is at 1.0049.
EURCHF NEUTRAL Support lies at 1.2058 while resistance is at 1.2133.
EURGBP BEARISH Initial support lies at 0.8310 ahead of 0.8273. Key resistance is at 0.8422.
EURJPY BULLISH Focus is on 102.54, a clearance of this level would pave the way for gains towards 104.32. Support lies at 100.98.
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.
27th of January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
27 January 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The USDJPY rally that began three days ago reversed completely overnight. Falling US Treasury yields in the aftermath of the dovish FOMC meeting were to blame. USDJPY had been following gradually ever since, and fresh long positions put on just ahead of the meeting finally had their stops triggered overnight. RBNZ Governor Bollard provided some more colour on his decision earlier this week to keep rates on hold. He said the OCR has not been raised since the emergency rate cut in March 2011 because of ongoing aftershocks in Christchurch which have delayed the reconstruction effort. The "deepening Euro crisis" also contributed to the decision to keep rates on hold.
Australia's debt management office announced plans to issue A$700 mn of 2022 bonds on Feb 1, and another A$700 mn of 2018 paper on Feb. 3. These are the first Australian commonwealth bonds to be issued this year, and given overseas investors continue to show a keen appetite for Australian debt, we would not be surprised to see some AUD inflows on the back of this. In Europe, there are some signs of healing in the Italian bond market, and the 10y yield slipped back below 6% yesterday for the first time since early December.
The focus has now shifted towards whether the ECB is willing to participate in the Greek debt swap, and European legislators are keen to point out that the boost to sentiment would be very strong, at very little financial cost to the ECB. Newswires reported that the IIF will meet with the Greek government on Friday to discuss 'legal and technical issues'. EURUSD traded 1.3078-1.3153 and USDJPY 76.90-77.51.
EUR
The Wall Street Journal reported that private sector creditors are willing to accept a coupon rate of below 4% on the new Greek bonds involved in the debt swap. Without naming sources, the story originates from local newspaper Ethno, which states that the IIF "will submit a new improved offer with an average interest rate of 3.75%".
Dow Jones reported that Greece will continue debt talks with creditors on Friday. A senior official said discussions will continue on a 'technical and legal' level, without giving details.
Eurogroup Chair Juncker said that even if the ECB took Greek debt losses (by participating in debt-swap talks) they would be small. However, he also stressed that the Eurogroup and the IMF are not pushing for the ECB to take any such losses.
Dow Jones reported that the IMF is to seek a Saudi contribution to the Eurozone bailout fund. Despite a lot of talk about expanding both Eurozone and IMF resources to tackle the debt crisis, so far there has been very little tangible progress by non-European G20 governments to contribute. Canadian Finance Minister Jim Flaherty said that Europe can solve its debt crisis 'without new IMF aid'.
On Thursday the German GfK consumer confidence survey came in slightly better than expected at 5.9. On Friday import price figures are due.
JPY
Prime Minister Noda said the Japanese government would work together with the BoJ to tackle yen strength, but the yen did not react to his remark.
GBP
The headline CBI reported sales balance was -22 in January, down from +9 in December. This marks the worst reading since March 2009.
Given the soft GDP report this week and the BoE minutes, our UK economist notes that the stage is set for more QE. However he has lowered his expectation for the size of the next QE installment and is now calling for a GBP 25 bn-50 bn increase in the asset purchase target in February - down from a GBP75 bn expansion previously.
AUD
Australia's debt management office announced plans to issue A$700 mln of 2022 bonds on Feb 1, and another A$700 mln of 2018 paper on Feb. 3. These are the first Australian commonwealth bonds to be issued this year, and given overseas investors continue to show a keen appetite for Australian debt, we would not be surprised to see some AUD inflows on the back of this.
NZD
RBNZ Governor Bollard said he has not raised the OCR again since the emergency rate cut in March 2011 because of ongoing aftershocks in Christchurch which have delayed the reconstruction effort. The "deepening Euro crisis" has also contributed to the decision to keep rates on hold.
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.
27 January 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The USDJPY rally that began three days ago reversed completely overnight. Falling US Treasury yields in the aftermath of the dovish FOMC meeting were to blame. USDJPY had been following gradually ever since, and fresh long positions put on just ahead of the meeting finally had their stops triggered overnight. RBNZ Governor Bollard provided some more colour on his decision earlier this week to keep rates on hold. He said the OCR has not been raised since the emergency rate cut in March 2011 because of ongoing aftershocks in Christchurch which have delayed the reconstruction effort. The "deepening Euro crisis" also contributed to the decision to keep rates on hold.
Australia's debt management office announced plans to issue A$700 mn of 2022 bonds on Feb 1, and another A$700 mn of 2018 paper on Feb. 3. These are the first Australian commonwealth bonds to be issued this year, and given overseas investors continue to show a keen appetite for Australian debt, we would not be surprised to see some AUD inflows on the back of this. In Europe, there are some signs of healing in the Italian bond market, and the 10y yield slipped back below 6% yesterday for the first time since early December.
The focus has now shifted towards whether the ECB is willing to participate in the Greek debt swap, and European legislators are keen to point out that the boost to sentiment would be very strong, at very little financial cost to the ECB. Newswires reported that the IIF will meet with the Greek government on Friday to discuss 'legal and technical issues'. EURUSD traded 1.3078-1.3153 and USDJPY 76.90-77.51.
EUR
The Wall Street Journal reported that private sector creditors are willing to accept a coupon rate of below 4% on the new Greek bonds involved in the debt swap. Without naming sources, the story originates from local newspaper Ethno, which states that the IIF "will submit a new improved offer with an average interest rate of 3.75%".
Dow Jones reported that Greece will continue debt talks with creditors on Friday. A senior official said discussions will continue on a 'technical and legal' level, without giving details.
Eurogroup Chair Juncker said that even if the ECB took Greek debt losses (by participating in debt-swap talks) they would be small. However, he also stressed that the Eurogroup and the IMF are not pushing for the ECB to take any such losses.
Dow Jones reported that the IMF is to seek a Saudi contribution to the Eurozone bailout fund. Despite a lot of talk about expanding both Eurozone and IMF resources to tackle the debt crisis, so far there has been very little tangible progress by non-European G20 governments to contribute. Canadian Finance Minister Jim Flaherty said that Europe can solve its debt crisis 'without new IMF aid'.
On Thursday the German GfK consumer confidence survey came in slightly better than expected at 5.9. On Friday import price figures are due.
JPY
Prime Minister Noda said the Japanese government would work together with the BoJ to tackle yen strength, but the yen did not react to his remark.
GBP
The headline CBI reported sales balance was -22 in January, down from +9 in December. This marks the worst reading since March 2009.
Given the soft GDP report this week and the BoE minutes, our UK economist notes that the stage is set for more QE. However he has lowered his expectation for the size of the next QE installment and is now calling for a GBP 25 bn-50 bn increase in the asset purchase target in February - down from a GBP75 bn expansion previously.
AUD
Australia's debt management office announced plans to issue A$700 mln of 2022 bonds on Feb 1, and another A$700 mln of 2018 paper on Feb. 3. These are the first Australian commonwealth bonds to be issued this year, and given overseas investors continue to show a keen appetite for Australian debt, we would not be surprised to see some AUD inflows on the back of this.
NZD
RBNZ Governor Bollard said he has not raised the OCR again since the emergency rate cut in March 2011 because of ongoing aftershocks in Christchurch which have delayed the reconstruction effort. The "deepening Euro crisis" has also contributed to the decision to keep rates on hold.
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, January 26, 2012
26th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
26 January 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key upside trigger is at 1.3077 and support lies at 1.2839.
USDJPY BULLISH Pressure is on 78.29, a rally through this level would open the way for further gains towards 79.53. Support lies at 77.62.
GBPUSD NEUTRAL Resistance is at 1.5670 ahead of the bull trigger at 1.5780. Support lies at 1.5517 ahead of 1.5451.
USDCHF NEUTRAL Key downside trigger lies at 0.9244, a clear break below this level would open 0.9176 next. Resistance is at 0.9413 ahead of 0.9498.
AUDUSD BULLISH Initial resistance is at 1.0573, a move above this level would open the key high of 1.0753. Support lies at 1.0428 ahead of 1.0359.
USDCAD NEUTRAL Key support lies at 1.0052, a decline through this level would trigger a bear trend and expose 0.9975. Resistance is at 1.0189 ahead of 1.0254.
EURCHF BEARISH Initial support lies at 1.2058 ahead of 1.2000. Resistance is at 1.2133.
EURGBP BEARISH Momentum is negative; near-term support lies at 0.8273 ahead of 0.8255. Key resistance is at 0.8422.
EURJPY BULLISH Resistance is at 101.89 ahead of key high of 102.54. Support lies at 100.03.
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.
26 January 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key upside trigger is at 1.3077 and support lies at 1.2839.
USDJPY BULLISH Pressure is on 78.29, a rally through this level would open the way for further gains towards 79.53. Support lies at 77.62.
GBPUSD NEUTRAL Resistance is at 1.5670 ahead of the bull trigger at 1.5780. Support lies at 1.5517 ahead of 1.5451.
USDCHF NEUTRAL Key downside trigger lies at 0.9244, a clear break below this level would open 0.9176 next. Resistance is at 0.9413 ahead of 0.9498.
AUDUSD BULLISH Initial resistance is at 1.0573, a move above this level would open the key high of 1.0753. Support lies at 1.0428 ahead of 1.0359.
USDCAD NEUTRAL Key support lies at 1.0052, a decline through this level would trigger a bear trend and expose 0.9975. Resistance is at 1.0189 ahead of 1.0254.
EURCHF BEARISH Initial support lies at 1.2058 ahead of 1.2000. Resistance is at 1.2133.
EURGBP BEARISH Momentum is negative; near-term support lies at 0.8273 ahead of 0.8255. Key resistance is at 0.8422.
EURJPY BULLISH Resistance is at 101.89 ahead of key high of 102.54. Support lies at 100.03.
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.
26th of January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
26 January 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The FOMC surprised markets by pledging to leave rates on hold until late 2014 and committing to an explicit inflation target. The Fed will target the y/y change of core personal consumption expenditure (PCE) at 2%, moving away from the previous informal target range of around 1.7% to 2%. The Fed also said it was not appropriate to adopt a fixed goal for employment because "the level of unemployment that can be achieved without sparking inflation is not largely determined by monetary factors". The dollar fell across the board upon the announcement, reversing the gains from the previous sessions.
Risk assets rallied, and EURUSD broke through 1.3100. In the post-statement conference Bernanke said that unless there's a substantial strengthening in the economy, the Fed will be holding those unusually low rates for a long time. He also said that leaving rates on hold until 2014 implies that sales of the balance sheet will not come before 2015. In the first ever "longer-run goals and policy strategy" it was revealed that 11 of the 17 members believe a rate hike is not appropriate before 2014. This change in strategy is likely to fuel the recent risk rally and will be encouraging for investors looking to move back into risk assets in the short term. Earlier, there was more strong data out of Germany with the Ifo improving once again while the January BoE minutes showed a 9-0 vote for no change in rates and the asset purchase program. The minutes acknowledge that the most serious near-term risks have moderated, but the overall tone remains dovish.
As expected the RBNZ left its cash rate on hold but NZD was swept higher as part of the US dollar move. Ahead today, there are few major policy announcements in the G10 space but markets will remain sensitive to news out of the Eurozone as investors analyse the changes to Fed policy. EURUSD traded in a range of 1.3121-1.3047 and USDJPY 77.56-76.98.
EUR
ECB sources told Bloomberg that the central bank remains opposed to taking losses on its Greek debt holdings. German CDU's Meister called the call on the ECB to join the PSI as 'indecent', and said that IMF and politicians cannot dictate to the ECB. The role of the ECB in the PSI negotiations has been a fiercely debated topic n recent days. Yesterday, the FT reported that the IMF are putting the ECB under pressure to accept losses on its Greek holdings as the current stance is causing problems with private investors.
The Greek securities regulator said it will extend the short selling ban. This has been in force for several months already so is no surprise.
There was more strong data from Germany. The January IFO business. climate index rose to 108.3 vs 107.6 consensus. The expectations index rose to 100.9 vs 99.0 consensus. Our analysts note that this is clearly risk-on news and will support views of those who believe that the worst is over. This also confirms that Germany might continue to do better than the Eurozone average this year. As this was the third rise in a row, it may be seen as a turning point in the business cycle, according to the Ifo's own interpretation. In our view, this still hinges on credit conditions, which in turn depend on the sovereign crisis. Here the ECB's December LTRO clearly provided a lot of short-term support, but we think it is too simplistic to believe it will solve the crisis for good.
GBP
The January MPC minutes showed a 9-0 vote split for no change in rates and the asset purchase program. The minutes acknowledge that the most serious near-term risks have moderated, but the overall tone remains dovish. Our analysts note that there is a group in the MPC now a little less worried about the inflation undershoot. That group the 'risks to inflation were more finely balanced and it was less clear than inflation would fall below the target in the medium term'. The committee still believes that there major downside risks to the global economy remain and that economic growth in the euro area will remain weak for the foreseeable future. This leaves the door open for more QE for Feb. There is a downside risk to our Pound 75bn forecast.
Q4 GDP was softer than expectations at -0.2% q/q vs consensus of -0.1%. The pound was sold heavily into the data however with the market positioned short, there was minimal negative impact on the release.
AUD
Although the headline Q4 CPI was weaker than expected, core CPIs were slightly higher and AUD eventually rose 50 pips on the numbers. Specifically, the trimmed mean core reading climbed 0.6% in Q4 (cons. +0.5%) and the Q3 number was revised up to 0.4% (prev. 0.3%). Our Australian economists note that this puts the annualized rate back in the middle of the RBA's 2-3% target band, making the February policy decision a close call. Nevertheless, they continue to expect a 25bp cut to the cash rate in February.
NZD
As expected, the RBNZ left its cash rate on hold. Governor Bollard said. it remains prudent to keep the OCR on hold at 2.5%. The words 'for now' were dropped from the statement, suggesting the bank will be on hold for longer.
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.
26 January 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The FOMC surprised markets by pledging to leave rates on hold until late 2014 and committing to an explicit inflation target. The Fed will target the y/y change of core personal consumption expenditure (PCE) at 2%, moving away from the previous informal target range of around 1.7% to 2%. The Fed also said it was not appropriate to adopt a fixed goal for employment because "the level of unemployment that can be achieved without sparking inflation is not largely determined by monetary factors". The dollar fell across the board upon the announcement, reversing the gains from the previous sessions.
Risk assets rallied, and EURUSD broke through 1.3100. In the post-statement conference Bernanke said that unless there's a substantial strengthening in the economy, the Fed will be holding those unusually low rates for a long time. He also said that leaving rates on hold until 2014 implies that sales of the balance sheet will not come before 2015. In the first ever "longer-run goals and policy strategy" it was revealed that 11 of the 17 members believe a rate hike is not appropriate before 2014. This change in strategy is likely to fuel the recent risk rally and will be encouraging for investors looking to move back into risk assets in the short term. Earlier, there was more strong data out of Germany with the Ifo improving once again while the January BoE minutes showed a 9-0 vote for no change in rates and the asset purchase program. The minutes acknowledge that the most serious near-term risks have moderated, but the overall tone remains dovish.
As expected the RBNZ left its cash rate on hold but NZD was swept higher as part of the US dollar move. Ahead today, there are few major policy announcements in the G10 space but markets will remain sensitive to news out of the Eurozone as investors analyse the changes to Fed policy. EURUSD traded in a range of 1.3121-1.3047 and USDJPY 77.56-76.98.
EUR
ECB sources told Bloomberg that the central bank remains opposed to taking losses on its Greek debt holdings. German CDU's Meister called the call on the ECB to join the PSI as 'indecent', and said that IMF and politicians cannot dictate to the ECB. The role of the ECB in the PSI negotiations has been a fiercely debated topic n recent days. Yesterday, the FT reported that the IMF are putting the ECB under pressure to accept losses on its Greek holdings as the current stance is causing problems with private investors.
The Greek securities regulator said it will extend the short selling ban. This has been in force for several months already so is no surprise.
There was more strong data from Germany. The January IFO business. climate index rose to 108.3 vs 107.6 consensus. The expectations index rose to 100.9 vs 99.0 consensus. Our analysts note that this is clearly risk-on news and will support views of those who believe that the worst is over. This also confirms that Germany might continue to do better than the Eurozone average this year. As this was the third rise in a row, it may be seen as a turning point in the business cycle, according to the Ifo's own interpretation. In our view, this still hinges on credit conditions, which in turn depend on the sovereign crisis. Here the ECB's December LTRO clearly provided a lot of short-term support, but we think it is too simplistic to believe it will solve the crisis for good.
GBP
The January MPC minutes showed a 9-0 vote split for no change in rates and the asset purchase program. The minutes acknowledge that the most serious near-term risks have moderated, but the overall tone remains dovish. Our analysts note that there is a group in the MPC now a little less worried about the inflation undershoot. That group the 'risks to inflation were more finely balanced and it was less clear than inflation would fall below the target in the medium term'. The committee still believes that there major downside risks to the global economy remain and that economic growth in the euro area will remain weak for the foreseeable future. This leaves the door open for more QE for Feb. There is a downside risk to our Pound 75bn forecast.
Q4 GDP was softer than expectations at -0.2% q/q vs consensus of -0.1%. The pound was sold heavily into the data however with the market positioned short, there was minimal negative impact on the release.
AUD
Although the headline Q4 CPI was weaker than expected, core CPIs were slightly higher and AUD eventually rose 50 pips on the numbers. Specifically, the trimmed mean core reading climbed 0.6% in Q4 (cons. +0.5%) and the Q3 number was revised up to 0.4% (prev. 0.3%). Our Australian economists note that this puts the annualized rate back in the middle of the RBA's 2-3% target band, making the February policy decision a close call. Nevertheless, they continue to expect a 25bp cut to the cash rate in February.
NZD
As expected, the RBNZ left its cash rate on hold. Governor Bollard said. it remains prudent to keep the OCR on hold at 2.5%. The words 'for now' were dropped from the statement, suggesting the bank will be on hold for longer.
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, January 25, 2012
25th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
25 January 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key upside trigger is at 1.3077 and support lies at 1.2839.
USDJPY BULLISH Focus is on 78.29, a rally through this level would open the way for further gains towards 79.53. Support lies at 77.62.
GBPUSD NEUTRAL Resistance is at 1.5670 ahead of the bull trigger at 1.5780. Support lies at 1.5517 ahead of 1.5451.
USDCHF NEUTRAL Pair is testing 0.9244, a clear break below this level would trigger a bear trend and open 0.9176 next. Resistance is at 0.9413 ahead of 0.9498.
AUDUSD BULLISH Momentum is positive; initial resistance is at 1.0573, a move above this level would open the key high of 1.0753. Support lies at 1.0428.
USDCAD NEUTRAL Key downside trigger lies at 1.0052, a decline through this level would expose 0.9975. Resistance is at 1.0189 ahead of 1.0254.
EURCHF BEARISH Initial support lies at 1.2058 ahead of 1.2000. Resistance is at 1.2133.
EURGBP BEARISH Near-term support lies at 0.8273 ahead of 0.8255. Key resistance is at 0.8422.
EURJPY BULLISH Resistance is at 102.54, the Dec. 21 key high, a break above which would open the way for 104.32. Support lies at 100.03.
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.
25 January 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key upside trigger is at 1.3077 and support lies at 1.2839.
USDJPY BULLISH Focus is on 78.29, a rally through this level would open the way for further gains towards 79.53. Support lies at 77.62.
GBPUSD NEUTRAL Resistance is at 1.5670 ahead of the bull trigger at 1.5780. Support lies at 1.5517 ahead of 1.5451.
USDCHF NEUTRAL Pair is testing 0.9244, a clear break below this level would trigger a bear trend and open 0.9176 next. Resistance is at 0.9413 ahead of 0.9498.
AUDUSD BULLISH Momentum is positive; initial resistance is at 1.0573, a move above this level would open the key high of 1.0753. Support lies at 1.0428.
USDCAD NEUTRAL Key downside trigger lies at 1.0052, a decline through this level would expose 0.9975. Resistance is at 1.0189 ahead of 1.0254.
EURCHF BEARISH Initial support lies at 1.2058 ahead of 1.2000. Resistance is at 1.2133.
EURGBP BEARISH Near-term support lies at 0.8273 ahead of 0.8255. Key resistance is at 0.8422.
EURJPY BULLISH Resistance is at 102.54, the Dec. 21 key high, a break above which would open the way for 104.32. Support lies at 100.03.
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.
25th of January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
25 January 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
USDJPY continued to march higher during the Asia session despite domestic Japanese exporters selling into the rally. The move got underway during the US session yesterday, likely in anticipation of a significantly less-dovish Fed. Data confirming that Japan's trade balance slipped into deficit territory for 2011 for the first time since 1980 also probably supported the pair at the margin. However, we note that the current account still remains in surplus due to coupon-related inflows from overseas investments so USDJPY should remain heavy in the Asia timezone despite the end of the trade surplus.
The true test for USDJPY will be today's FOMC meeting where the Fed will unveil a new set of rate forecasts for the first time. There are three events to watch: the policy statement will first be released, followed later by the new projections for how for policy rate will evolve over the coming years. Fed Chairman Bernanke's post-meeting press conference will then start 15 minutes later. We expect journalists to quiz him extensively on the possibility of further QE, and we doubt he will rule it out entirely, especially given uncertainty over how the Eurozone sovereign debt crisis will evolve. Stronger core Australian CPI gave AUD a substantial boost overnight while EURUSD traded in a range of 1.3014-1.3047 and USDJPY 77.62-76.98. BoE minutes and UK Q4 GDP data are also due.
EUR
Greek Finance Minister Venizelos said he expects to conclude a PSI deal in the next few days and has a green light from the Eurogroup to do so. Dow Jones reported EU Commissioner Rehn as saying that the 'building blocks are in place' for a Greek PSI agreement, and that it would be preferable to reach agreement in January rather than February.
S&P sovereign ratings head Chambers said Greece will likely be downgraded to 'selective default'. This is unlikely to trigger CDS in our view - indeed, the practical consequences would be almost nil, as even the ECB has been persuaded to continue to accept Greek debt that is rated default.
Flash PMIs in the Eurozone were strong. The January composite PMI rose to 50.4 (cons. 48.5, prev 48.3). Our European economists note that there is good news also from sub-components. Manufacturing output was up to 50.0 (from 47.1), and this points to further stabilization. There was the same from service business expectations, which rose to 56.0 (from 53.6). Employment also seems to be holding up at 50.5 (up from 49.9).
JPY
USDJPY broke above a key resistance level during the US session despite no change in stance at the BoJ's policy meeting yesterday. It appears the market has started to price in a less dovish Fed at tonight's FOMC meeting on the back of strengthening US economic data. We have our doubts however, and our US economists expect Bernanke to stick to his dovish tone. Having said that, the newly minted projections for the evolution of the policy rate have the potential to trigger significant changes on the US Treasury yield curve so we would not be surprised to see an increase in USDJPY volatility.
GBP
The BoE minutes are due today and although we expect them to reveal a unanimous decision to leave both rates and the asset purchase program unchanged, there may be some subtle hints regarding future QE from the BoE. The current program is due to finish in February and we expect further purchases to be announced in due course. On Tuesday BoE Governor King, speaking from Brighton, held out the possibility of more asset purchases 'if needed'.
AUD
Although the headline Q4 CPI was weaker than expected, core CPIs were slightly higher and AUD eventually rose 50 pips on the numbers. Specifically, the trimmed mean core reading climbed 0.6% in Q4 (cons. +0.5%) and the Q3 number was revised up to 0.4% (prev. 0.3%). Our Australian economists note that this puts the annualized rate back in the middle of the RBA's 2-3% target band, making the February policy decision a close call. Nevertheless, they continue to expect a 25bp cut to the cash rate in February.
CHF
EURCHF got a modest boost after SNB Board Member Danthine showed no change in stance. He still expects Swiss franc depreciation 'in the future', and said the SNB stands ready to buy 'unlimited' foreign currencies.
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.
25 January 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
USDJPY continued to march higher during the Asia session despite domestic Japanese exporters selling into the rally. The move got underway during the US session yesterday, likely in anticipation of a significantly less-dovish Fed. Data confirming that Japan's trade balance slipped into deficit territory for 2011 for the first time since 1980 also probably supported the pair at the margin. However, we note that the current account still remains in surplus due to coupon-related inflows from overseas investments so USDJPY should remain heavy in the Asia timezone despite the end of the trade surplus.
The true test for USDJPY will be today's FOMC meeting where the Fed will unveil a new set of rate forecasts for the first time. There are three events to watch: the policy statement will first be released, followed later by the new projections for how for policy rate will evolve over the coming years. Fed Chairman Bernanke's post-meeting press conference will then start 15 minutes later. We expect journalists to quiz him extensively on the possibility of further QE, and we doubt he will rule it out entirely, especially given uncertainty over how the Eurozone sovereign debt crisis will evolve. Stronger core Australian CPI gave AUD a substantial boost overnight while EURUSD traded in a range of 1.3014-1.3047 and USDJPY 77.62-76.98. BoE minutes and UK Q4 GDP data are also due.
EUR
Greek Finance Minister Venizelos said he expects to conclude a PSI deal in the next few days and has a green light from the Eurogroup to do so. Dow Jones reported EU Commissioner Rehn as saying that the 'building blocks are in place' for a Greek PSI agreement, and that it would be preferable to reach agreement in January rather than February.
S&P sovereign ratings head Chambers said Greece will likely be downgraded to 'selective default'. This is unlikely to trigger CDS in our view - indeed, the practical consequences would be almost nil, as even the ECB has been persuaded to continue to accept Greek debt that is rated default.
Flash PMIs in the Eurozone were strong. The January composite PMI rose to 50.4 (cons. 48.5, prev 48.3). Our European economists note that there is good news also from sub-components. Manufacturing output was up to 50.0 (from 47.1), and this points to further stabilization. There was the same from service business expectations, which rose to 56.0 (from 53.6). Employment also seems to be holding up at 50.5 (up from 49.9).
JPY
USDJPY broke above a key resistance level during the US session despite no change in stance at the BoJ's policy meeting yesterday. It appears the market has started to price in a less dovish Fed at tonight's FOMC meeting on the back of strengthening US economic data. We have our doubts however, and our US economists expect Bernanke to stick to his dovish tone. Having said that, the newly minted projections for the evolution of the policy rate have the potential to trigger significant changes on the US Treasury yield curve so we would not be surprised to see an increase in USDJPY volatility.
GBP
The BoE minutes are due today and although we expect them to reveal a unanimous decision to leave both rates and the asset purchase program unchanged, there may be some subtle hints regarding future QE from the BoE. The current program is due to finish in February and we expect further purchases to be announced in due course. On Tuesday BoE Governor King, speaking from Brighton, held out the possibility of more asset purchases 'if needed'.
AUD
Although the headline Q4 CPI was weaker than expected, core CPIs were slightly higher and AUD eventually rose 50 pips on the numbers. Specifically, the trimmed mean core reading climbed 0.6% in Q4 (cons. +0.5%) and the Q3 number was revised up to 0.4% (prev. 0.3%). Our Australian economists note that this puts the annualized rate back in the middle of the RBA's 2-3% target band, making the February policy decision a close call. Nevertheless, they continue to expect a 25bp cut to the cash rate in February.
CHF
EURCHF got a modest boost after SNB Board Member Danthine showed no change in stance. He still expects Swiss franc depreciation 'in the future', and said the SNB stands ready to buy 'unlimited' foreign currencies.
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, January 24, 2012
24th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
24 January 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.2839, a move below which would open 1.2734. Key resistance is at 1.3077.
USDJPY NEUTRAL Key upside trigger lies at 77.34 and initial support lies at 76.55.
GBPUSD NEUTRAL Resistance is at 1.5629 ahead of 1.5670. Support lies at 1.5416 ahead of 1.5311.
USDCHF BULLISH Near-term resistance is at 0.9413, a rise through which would open 0.9498. Key supports are at 0.9306 and 0.9244.
AUDUSD BULLISH Momentum is positive; clearance of 1.0496 has opened the way for gains towards 1.0567 and then 1.0753. Support lies at 1.0359.
USDCAD NEUTRAL Key bear trigger lies at 1.0052 while resistance is at 1.0189.
EURCHF BEARISH Momentum conditions are bearish; tough support lies at 1.2000 and resistance is at 1.2133.
EURGBP BEARISH Support lies at 0.8255, a break here would open 0.8222, the Jan. 9 key low. Resistance is at 0.8378.
EURJPY NEUTRAL Initial resistance is at 100.34 ahead of 100.76, a prior low. Support lies at 98.56 ahead of 97.69.
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.
24 January 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.2839, a move below which would open 1.2734. Key resistance is at 1.3077.
USDJPY NEUTRAL Key upside trigger lies at 77.34 and initial support lies at 76.55.
GBPUSD NEUTRAL Resistance is at 1.5629 ahead of 1.5670. Support lies at 1.5416 ahead of 1.5311.
USDCHF BULLISH Near-term resistance is at 0.9413, a rise through which would open 0.9498. Key supports are at 0.9306 and 0.9244.
AUDUSD BULLISH Momentum is positive; clearance of 1.0496 has opened the way for gains towards 1.0567 and then 1.0753. Support lies at 1.0359.
USDCAD NEUTRAL Key bear trigger lies at 1.0052 while resistance is at 1.0189.
EURCHF BEARISH Momentum conditions are bearish; tough support lies at 1.2000 and resistance is at 1.2133.
EURGBP BEARISH Support lies at 0.8255, a break here would open 0.8222, the Jan. 9 key low. Resistance is at 0.8378.
EURJPY NEUTRAL Initial resistance is at 100.34 ahead of 100.76, a prior low. Support lies at 98.56 ahead of 97.69.
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.
24th of January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
24 January 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro settled above 1.30 during the US session as investors remain hopeful of a settlement on the Greek PSI. However, reports remain conflicting - a finance ministry source noted that there will be a final offer on the bond swap by February 13th, and the Eurogroup said that current talks on the debt deal were 'constructive', but other sources warned that there is currently no intention by either the Eurozone or the IMF to give more money to Greece.
However, there is more talk of a larger firewall for the Eurozone, especially via combining the ESM and EFSF if IMF funding is harder to come by. As a lot of the upside in EUR has come on the back of expectations of a positive outcome, swift unwinding could occur if reports suggest the result is to the contrary. In addition, we are cautious on the wider macro picture as even if the PSI were more aggressive, it is hard to see Greek debt coming down towards sustainable levels, which could complicate troika talks up ahead. Otherwise, activity was limited throughout the Monday session as most of Asia was on holidays for the lunar new year.
Today the dataflow out of Europe will start to pick up, in addition to the Ecofin meetings. German and pan-Eurozone PMI numbers are key ahead of the ECB's macro assessments, as simply providing liquidity to the banking sector will not be deemed enough as a growth stimulus and further policy measures may be on the way, despite persistent inflationary pressures. Meanwhile, there will be more focus on the Fed's upcoming decisions, especially the execution of new policy tools such as interest rate forecasts or even inflation targeting. Overall, barring a sudden collapse in PSI talks risk may continue to trade on a buoyant tone due to reallocation needs, but we continue to view this as a temporary respite and will look for good levels to consider entering new euro shorts. EURUSD traded 1.2855-1.3053 and USDJPY 76.87-77.08 on Monday.
EUR
The euro rallied after German CDU budget spokesman Barthle said that running the EFSF and the ESM in parallel is being discussed within the party.. This has been suggested on many occasions in the past however. Back in December, when the leveraging EFSF idea was losing ground, this idea was mentioned by 'EU sources'. It would effectively create a much bigger firewall if it happened but there are of course many stumbling blocks to its implementation - increased guarantees and potential German constitutional court challenges. However, later during the session the FT reported that German Chancellor Merkel is willing to countenance the combination, in return for even tough fiscal rules.
The details of the Greek bond swap have yet to be finalized, despite further signs of progress. Over the weekend the IIF (Institute of International Finance) gave its most upbeat assessment yet of the current state of play, noting that the elements of an agreement are "coming into place". It appears that terms have in fact been provisionally agreed between Greece and the IIF, but the plan is now being vetted by the EU/IMF. The Financial Times reported that the EU/IMF have already raised objections to the proposed coupon on the grounds that its perceived generosity would prevent Greece returning to a sustainable debt position. All the signs are that a deal will not now be struck in time for Monday's meeting of Eurozone finance ministers. There was little news from the ongoing talks in Greece on Mondy morning, although a Greek government spokesman said there was no chance of the debt swap talks failing.
Portugal 5y CDS spread hit a record wide of 1280bp on Monday. Spillover risk from Greece is still high and should there be a coercive restructuring in Greece, markets could well price in the same for Portugal.
The Eurogroup met on Monday but there was precious little to announce as talks are ongoing between Greece and private creditors. Meanwhile, there remain disagreements over the size and execution of the ESM's size and sources warned that there won't be any fresh funding for Greece under current circumstances. According to Dow Jones, major creditor funding 'won't be increased by a single euro' but without any decisions on the debt deal at this point, troika talks on the next tranches won't commence until month-end.
Dow Jones reported that Greece will make a formal offer on Bond Swap by February 13th - and officials noted that the current talks on the debt deal and Greece's second bailout were 'constructive'.
German Chancellor Merkel said that a bridge loan for Greece was not necessary. She also stressed that she 'will keep fighting' for fiscal discipline but warned the crisis won't end 'from one day to the next'. The Ecofin group of EU finance ministers will meet on today.
CHF
Interim SNB Chair Jordan again signaled the SNB's determination to defend the floor in EURCHF at 1.20. He said there is "no alternative" to the floor, adding that it will be kept "until it's no longer needed". Again he held out the prospect of additional policy measures if deflationary forces rise. Ahead on Tuesday SNB Governing Board member Danthine will be on the wires.
GBP
The MPC's Adam Posen said he and 'most of the MPC' believe that the UK will return to roughly pre-crisis productivity growth trends. He also warned that 'lack of confidence' is keeping the economy down and it was right that the BoE conducted QE to stop inflation from falling too low.
Today, fiscal figures will be out with public sector net credit requirement. Fiscal slippage is a key issue for the UK government at this stage and crucial for the maintenance of the AAA rating.
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.
24 January 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro settled above 1.30 during the US session as investors remain hopeful of a settlement on the Greek PSI. However, reports remain conflicting - a finance ministry source noted that there will be a final offer on the bond swap by February 13th, and the Eurogroup said that current talks on the debt deal were 'constructive', but other sources warned that there is currently no intention by either the Eurozone or the IMF to give more money to Greece.
However, there is more talk of a larger firewall for the Eurozone, especially via combining the ESM and EFSF if IMF funding is harder to come by. As a lot of the upside in EUR has come on the back of expectations of a positive outcome, swift unwinding could occur if reports suggest the result is to the contrary. In addition, we are cautious on the wider macro picture as even if the PSI were more aggressive, it is hard to see Greek debt coming down towards sustainable levels, which could complicate troika talks up ahead. Otherwise, activity was limited throughout the Monday session as most of Asia was on holidays for the lunar new year.
Today the dataflow out of Europe will start to pick up, in addition to the Ecofin meetings. German and pan-Eurozone PMI numbers are key ahead of the ECB's macro assessments, as simply providing liquidity to the banking sector will not be deemed enough as a growth stimulus and further policy measures may be on the way, despite persistent inflationary pressures. Meanwhile, there will be more focus on the Fed's upcoming decisions, especially the execution of new policy tools such as interest rate forecasts or even inflation targeting. Overall, barring a sudden collapse in PSI talks risk may continue to trade on a buoyant tone due to reallocation needs, but we continue to view this as a temporary respite and will look for good levels to consider entering new euro shorts. EURUSD traded 1.2855-1.3053 and USDJPY 76.87-77.08 on Monday.
EUR
The euro rallied after German CDU budget spokesman Barthle said that running the EFSF and the ESM in parallel is being discussed within the party.. This has been suggested on many occasions in the past however. Back in December, when the leveraging EFSF idea was losing ground, this idea was mentioned by 'EU sources'. It would effectively create a much bigger firewall if it happened but there are of course many stumbling blocks to its implementation - increased guarantees and potential German constitutional court challenges. However, later during the session the FT reported that German Chancellor Merkel is willing to countenance the combination, in return for even tough fiscal rules.
The details of the Greek bond swap have yet to be finalized, despite further signs of progress. Over the weekend the IIF (Institute of International Finance) gave its most upbeat assessment yet of the current state of play, noting that the elements of an agreement are "coming into place". It appears that terms have in fact been provisionally agreed between Greece and the IIF, but the plan is now being vetted by the EU/IMF. The Financial Times reported that the EU/IMF have already raised objections to the proposed coupon on the grounds that its perceived generosity would prevent Greece returning to a sustainable debt position. All the signs are that a deal will not now be struck in time for Monday's meeting of Eurozone finance ministers. There was little news from the ongoing talks in Greece on Mondy morning, although a Greek government spokesman said there was no chance of the debt swap talks failing.
Portugal 5y CDS spread hit a record wide of 1280bp on Monday. Spillover risk from Greece is still high and should there be a coercive restructuring in Greece, markets could well price in the same for Portugal.
The Eurogroup met on Monday but there was precious little to announce as talks are ongoing between Greece and private creditors. Meanwhile, there remain disagreements over the size and execution of the ESM's size and sources warned that there won't be any fresh funding for Greece under current circumstances. According to Dow Jones, major creditor funding 'won't be increased by a single euro' but without any decisions on the debt deal at this point, troika talks on the next tranches won't commence until month-end.
Dow Jones reported that Greece will make a formal offer on Bond Swap by February 13th - and officials noted that the current talks on the debt deal and Greece's second bailout were 'constructive'.
German Chancellor Merkel said that a bridge loan for Greece was not necessary. She also stressed that she 'will keep fighting' for fiscal discipline but warned the crisis won't end 'from one day to the next'. The Ecofin group of EU finance ministers will meet on today.
CHF
Interim SNB Chair Jordan again signaled the SNB's determination to defend the floor in EURCHF at 1.20. He said there is "no alternative" to the floor, adding that it will be kept "until it's no longer needed". Again he held out the prospect of additional policy measures if deflationary forces rise. Ahead on Tuesday SNB Governing Board member Danthine will be on the wires.
GBP
The MPC's Adam Posen said he and 'most of the MPC' believe that the UK will return to roughly pre-crisis productivity growth trends. He also warned that 'lack of confidence' is keeping the economy down and it was right that the BoE conducted QE to stop inflation from falling too low.
Today, fiscal figures will be out with public sector net credit requirement. Fiscal slippage is a key issue for the UK government at this stage and crucial for the maintenance of the AAA rating.
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, January 20, 2012
20th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
20 January 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support lies at 1.2734, a move below which would open 1.2624. Resistance is at 1.2947.
USDJPY BEARISH Momentum is negative; key support lies at 76.33 with interim support at 76.55. Resistance is at 77.13.
GBPUSD BEARISH Break below 1.5311 would expose 1.5273 next. Resistance is at 1.5501.
USDCHF BULLISH Resistance is at 0.9498, a rise through which would open the key high of 0.9596. Key support lies at 0.9306.
AUDUSD BULLISH Initial resistance is at 1.0450 ahead of 1.0496. Support lies at 1.0303.
USDCAD NEUTRAL Key bear trigger is at 1.0052 while resistance is at 1.0188.
EURCHF BEARISH Support lies at 1.2051, a move below which would open the key support at 1.2000. Resistance is at 1.2130.
EURGBP BEARISH Near-term support lies at 0.8303 ahead of 0.8255. Resistance is at 0.8376.
EURJPY BEARISH Initial support lies at 97.69, a break below which would open 97.04. Resistance is at 99.35.
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.
20 January 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support lies at 1.2734, a move below which would open 1.2624. Resistance is at 1.2947.
USDJPY BEARISH Momentum is negative; key support lies at 76.33 with interim support at 76.55. Resistance is at 77.13.
GBPUSD BEARISH Break below 1.5311 would expose 1.5273 next. Resistance is at 1.5501.
USDCHF BULLISH Resistance is at 0.9498, a rise through which would open the key high of 0.9596. Key support lies at 0.9306.
AUDUSD BULLISH Initial resistance is at 1.0450 ahead of 1.0496. Support lies at 1.0303.
USDCAD NEUTRAL Key bear trigger is at 1.0052 while resistance is at 1.0188.
EURCHF BEARISH Support lies at 1.2051, a move below which would open the key support at 1.2000. Resistance is at 1.2130.
EURGBP BEARISH Near-term support lies at 0.8303 ahead of 0.8255. Resistance is at 0.8376.
EURJPY BEARISH Initial support lies at 97.69, a break below which would open 97.04. Resistance is at 99.35.
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 January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
20 January 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro continued its rebound on Thursday, trading in a 1.2839-1.2972 range against the dollar, on the back of strong auction results and hopes of a satisfactory conclusion to PSI talks in Greece. Spanish and French auctions were taken favorably by the markets and the euro pushed higher in the European session. The IIF will continue discussions on Friday and a deal is already expected, though wires have suggested several different proposals remain on the table. Expectations have reached a certain level such that any potential missteps could prove costly for sentiment.
Nevertheless, given the information flow over the past week most investors would probably not want to be excessively short the euro, or hold positions which express a similar view to the downside. The troika have clearly stated that there won't be fresh funding for Greece's upcoming payment requirements until the PSI is settled, and a satisfactory solution removes one further barrier towards crisis resolution, though from a wider standpoint, macro adjustment throughout the Eurozone must be a priority and on this front good news will be far harder to come by. For example, there is no guarantee that Greece will embark on a sustainable debt path post-PSI. In addition, scrutiny over the fiscal compact will return, and reports today suggest again that the final agreement may not prove as watertight as agreed during the initial discussions as once again allowances for 'exceptions' are being made.
Late during the US session, Moody's warned that while a disorderly default in Greece is not their 'central case view', the probability is rising. An orderly decline in the euro remains a part of that process; improvements on the Greek front will help ensure financial stability, and more importantly avert wider sovereign contagion, but we believe investors will need to be cognizant of the wider macro backdrop. Ahead on Friday, markets will be looking for further assurances that the global economy will be able to avert recession, especially if the flash manufacturing PMI out of China rebounds above 50. UK retail sales figures are due, and CPI figures are due in Canada. USDJPY traded in a 76.70-77.32 range on Thursday..
EUR
Auctions in Spain and France were well received by the market. In a 3-line auction, the Spanish treasure managed to issue over EUR 6.6bn, above initial estimates of EUR4.5bn. The yields were also relatively low, at an average 5.403% on the 10-year (compares to 6.975% in November) and strong bid-to-covers. Most importantly, Spain has now issued almost EUR17bn of bonds in the last two weeks, which constitutes around 20% of their yearly issuance. The French auction was also relatively successful, issuance was at the top of estimates of EUR8bn.
The ECB said that EUR3.317 bn was borrowed using the overnight loan facility and EUR395.327 bn was deposited. This is a big drop in overnight deposits, but that is due to technical reasons (a new maintenance period kicked in yesterday) and not due to an improvement in market functioning. We expect deposits to keep rising further from here, and to make new highs, perhaps within days.
Fitch said that it expects to downgrade most of the 6 Eurozone countries by 1-2 notches by the end of its ratings review. This refers to Spain, Slovenia, Italy, Ireland and Cyprus, which are on review until the end of January.
Despite S&P's downgrade, EFSF lending capacity should be adequate for all programmes underway, Slovak FinMin Miklos says.
More details on the Greek PSI were released on Friday, as it appears final details on the bond swap terms need to be refined but parties may be closer to agreement. The Wall Street Journal reported that Greece is now proposal a 3.6%-3.7% initial coupon which will 'progressively increase over time'. EU officials said it was 'very possible' that a deal would be done on Friday. The IIF, however, is looking for a 4% initial coupon and increases every two years.
The draft of the ESM treaty noted that the combined capacity of Eurozone temporary and permanent bailout funds remains at EUR500bn. Collective action clauses will be introduced in all new Eurozone bonds one month after it comes into force. However, member states will be able to deviate from balanced budget goals in 'exceptional circumstances' if there are 'unusual events' or 'periods of severe economic downturn'.
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.
20 January 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro continued its rebound on Thursday, trading in a 1.2839-1.2972 range against the dollar, on the back of strong auction results and hopes of a satisfactory conclusion to PSI talks in Greece. Spanish and French auctions were taken favorably by the markets and the euro pushed higher in the European session. The IIF will continue discussions on Friday and a deal is already expected, though wires have suggested several different proposals remain on the table. Expectations have reached a certain level such that any potential missteps could prove costly for sentiment.
Nevertheless, given the information flow over the past week most investors would probably not want to be excessively short the euro, or hold positions which express a similar view to the downside. The troika have clearly stated that there won't be fresh funding for Greece's upcoming payment requirements until the PSI is settled, and a satisfactory solution removes one further barrier towards crisis resolution, though from a wider standpoint, macro adjustment throughout the Eurozone must be a priority and on this front good news will be far harder to come by. For example, there is no guarantee that Greece will embark on a sustainable debt path post-PSI. In addition, scrutiny over the fiscal compact will return, and reports today suggest again that the final agreement may not prove as watertight as agreed during the initial discussions as once again allowances for 'exceptions' are being made.
Late during the US session, Moody's warned that while a disorderly default in Greece is not their 'central case view', the probability is rising. An orderly decline in the euro remains a part of that process; improvements on the Greek front will help ensure financial stability, and more importantly avert wider sovereign contagion, but we believe investors will need to be cognizant of the wider macro backdrop. Ahead on Friday, markets will be looking for further assurances that the global economy will be able to avert recession, especially if the flash manufacturing PMI out of China rebounds above 50. UK retail sales figures are due, and CPI figures are due in Canada. USDJPY traded in a 76.70-77.32 range on Thursday..
EUR
Auctions in Spain and France were well received by the market. In a 3-line auction, the Spanish treasure managed to issue over EUR 6.6bn, above initial estimates of EUR4.5bn. The yields were also relatively low, at an average 5.403% on the 10-year (compares to 6.975% in November) and strong bid-to-covers. Most importantly, Spain has now issued almost EUR17bn of bonds in the last two weeks, which constitutes around 20% of their yearly issuance. The French auction was also relatively successful, issuance was at the top of estimates of EUR8bn.
The ECB said that EUR3.317 bn was borrowed using the overnight loan facility and EUR395.327 bn was deposited. This is a big drop in overnight deposits, but that is due to technical reasons (a new maintenance period kicked in yesterday) and not due to an improvement in market functioning. We expect deposits to keep rising further from here, and to make new highs, perhaps within days.
Fitch said that it expects to downgrade most of the 6 Eurozone countries by 1-2 notches by the end of its ratings review. This refers to Spain, Slovenia, Italy, Ireland and Cyprus, which are on review until the end of January.
Despite S&P's downgrade, EFSF lending capacity should be adequate for all programmes underway, Slovak FinMin Miklos says.
More details on the Greek PSI were released on Friday, as it appears final details on the bond swap terms need to be refined but parties may be closer to agreement. The Wall Street Journal reported that Greece is now proposal a 3.6%-3.7% initial coupon which will 'progressively increase over time'. EU officials said it was 'very possible' that a deal would be done on Friday. The IIF, however, is looking for a 4% initial coupon and increases every two years.
The draft of the ESM treaty noted that the combined capacity of Eurozone temporary and permanent bailout funds remains at EUR500bn. Collective action clauses will be introduced in all new Eurozone bonds one month after it comes into force. However, member states will be able to deviate from balanced budget goals in 'exceptional circumstances' if there are 'unusual events' or 'periods of severe economic downturn'.
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, January 19, 2012
19th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
19 January 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support lies at 1.2734, a move below which would open 1.2624. Resistance is at 1.2902.
USDJPY BEARISH Key support lies at 76.33 with interim support at 76.55. Resistance is at 77.13.
GBPUSD BEARISH Decline through 1.5273 would open 1.5235 next. Resistance is at 1.5409 ahead of 1.5501.
USDCHF BULLISH Resistance is at 0.9498, a rise through which would open the key high of 0.9596. Support lies at 0.9306.
AUDUSD BULLISH Next resistances are at 1.0496 and 1.0567. Support lies at 1.0303.
USDCAD NEUTRAL Support lies at 1.0104 ahead of bear trigger at 1.0052. Resistance is at 1.0188 ahead of 1.0253.
EURCHF BEARISH Initial support lies at 1.2051 ahead of key support at 1.2000. Resistance is at 1.2130.
EURGBP BEARISH Near-term support lies at 0.8303 ahead of 0.8255. Resistance comes in at 0.8376.
EURJPY BEARISH Support lies at 97.69, a break below which would open 97.04. Resistance is at 98.80 ahead of 99.35.
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 January 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support lies at 1.2734, a move below which would open 1.2624. Resistance is at 1.2902.
USDJPY BEARISH Key support lies at 76.33 with interim support at 76.55. Resistance is at 77.13.
GBPUSD BEARISH Decline through 1.5273 would open 1.5235 next. Resistance is at 1.5409 ahead of 1.5501.
USDCHF BULLISH Resistance is at 0.9498, a rise through which would open the key high of 0.9596. Support lies at 0.9306.
AUDUSD BULLISH Next resistances are at 1.0496 and 1.0567. Support lies at 1.0303.
USDCAD NEUTRAL Support lies at 1.0104 ahead of bear trigger at 1.0052. Resistance is at 1.0188 ahead of 1.0253.
EURCHF BEARISH Initial support lies at 1.2051 ahead of key support at 1.2000. Resistance is at 1.2130.
EURGBP BEARISH Near-term support lies at 0.8303 ahead of 0.8255. Resistance comes in at 0.8376.
EURJPY BEARISH Support lies at 97.69, a break below which would open 97.04. Resistance is at 98.80 ahead of 99.35.
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 January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
19 January 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Both the AUD and NZD fell after disappointing domestic data releases. Unusually, the euro carried on regardless and further consolidated its recent gains. The possibility of a deal between Greece and private sector bond holders appears to be growing, according to the Financial Times. Our house view that coercive measures may be needed further down the line remains unchanged. The news comes on the back of the IMF's proposal for a fresh $500bn funding call, which would be a significant boost to the funds' resources. Whether Largarde's call for new one-off contributions obtains much buy-in from non-Eurozone nations remains to be seen, but the momentum clearly matters for risk and the euro. EURUSD traded 1.2835-1.2879 and USDJPY 76.69-76.85 during the Asia session, while acceptable US data also helped equity markets finish yesterday on a more buoyant note. Industrial production was slightly softer than expected at +0.4%m/m, while PPI registered a decline of 0.1%. TIC data showed a rise in long-term capital flows into the US, and we expect such trends to remain a source of structural support for the dollar. Ahead on Thursday, the US releases CPI data. Price figures may attract more attention in the US in the short term as there is talk of an explicit inflation target being adopted by the Federal Reserve.
EUR
The Financial Times has reported that Greece is nearing a deal with private-sector creditors on a debt swap. Rather than a fixed coupon, which had been a point of contention, the current deal on the table looks for a variable rate, starting at 3% before rising to 4.5%. The IIF noted discussions would continue on Thursday, while the IMF will be waiting in the wings as talks on further aid cannot begin in earnest until the PSI is completed.
German Chancellor Merkel today tried to allay market fears of a watering down of the fiscal compact. She noted that negotiations are ongoing.
The euro rallied after Bloomberg reported that the IMF has said that they will propose boosting their lending resources by $1 trn. The comments were not official however so we question the reliability of the figures. It is clear that negotiations are underway behind the scenes so comments like this are to be expected. The current size of the available resources is $385 bn and Eurozone countries have pledged another c. $200 bn - so the rest would need to come from other countries, including the US, Japan and BRICs. While any development of this magnitude would be a significant boost to risk appetite, we note that previous G20 meetings have had a tendency to disappoint market expectations. Earlier, IMF chief Lagarde said the fund's staff is still exploring ways to ensure 'adequate fund firepower'.
A 'senior Fitch Director' said that a two-notch downgrade of Italy is 'still an option'. Fitch still has Italy at A+ and has suggested action before month end. Ratings agencies remain in focus of Eurozone governments, though French President Sarkozy again played down the loss of France's AAA status by calling the downgrade itself a 'non event'.
The German government has cut its 2012 growth forecast to 0.7% from 1% earlier. Germany sold EUR3.44 bn of its 0.25% two-year Schatz notes on Wednesday, paying an average yield that set a new a multi-decade low.
JPY
ECB Governing Council member Nowotny tentatively joined the EURJPY intervention debate in an interview with Japan's Nikkei newspaper. He said he understands Japan's concerns about a weak euro, but added that it was premature to declare that the euro's moves are one-sided given that it continues to move within its normal range.
GBP
Nationwide consumer confidence figures were in line with consensus expectations and fell to 38 (prev. 40) - only two points above the lowest reading ever.
NOK Targets: EURNOK 1m 7.70, 3m 7.80.
AUD
AUDUSD drifted lower in the aftermath of a mixed - but generally soft - employment report. Employment fell -29.3k in December, despite expectations of a 10k increase. A steady unemployment rate was some consolation however, and full time employment actually increased. Our Australia economists still expect the RBA to trim rates again in February.
NZD
NZDUSD fell 50 pips overnight after Q4 CPI came in sharply below expectations at 1.8% y/y (cons. 2.6%, prev. 4.6%). Our New Zealand economist still thinks the RBNZ will remain on hold until June, but he acknowledges the risks to global growth, domestic demand, and inflation raise the risk that the OCR remains on hold for longer.
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 January 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Both the AUD and NZD fell after disappointing domestic data releases. Unusually, the euro carried on regardless and further consolidated its recent gains. The possibility of a deal between Greece and private sector bond holders appears to be growing, according to the Financial Times. Our house view that coercive measures may be needed further down the line remains unchanged. The news comes on the back of the IMF's proposal for a fresh $500bn funding call, which would be a significant boost to the funds' resources. Whether Largarde's call for new one-off contributions obtains much buy-in from non-Eurozone nations remains to be seen, but the momentum clearly matters for risk and the euro. EURUSD traded 1.2835-1.2879 and USDJPY 76.69-76.85 during the Asia session, while acceptable US data also helped equity markets finish yesterday on a more buoyant note. Industrial production was slightly softer than expected at +0.4%m/m, while PPI registered a decline of 0.1%. TIC data showed a rise in long-term capital flows into the US, and we expect such trends to remain a source of structural support for the dollar. Ahead on Thursday, the US releases CPI data. Price figures may attract more attention in the US in the short term as there is talk of an explicit inflation target being adopted by the Federal Reserve.
EUR
The Financial Times has reported that Greece is nearing a deal with private-sector creditors on a debt swap. Rather than a fixed coupon, which had been a point of contention, the current deal on the table looks for a variable rate, starting at 3% before rising to 4.5%. The IIF noted discussions would continue on Thursday, while the IMF will be waiting in the wings as talks on further aid cannot begin in earnest until the PSI is completed.
German Chancellor Merkel today tried to allay market fears of a watering down of the fiscal compact. She noted that negotiations are ongoing.
The euro rallied after Bloomberg reported that the IMF has said that they will propose boosting their lending resources by $1 trn. The comments were not official however so we question the reliability of the figures. It is clear that negotiations are underway behind the scenes so comments like this are to be expected. The current size of the available resources is $385 bn and Eurozone countries have pledged another c. $200 bn - so the rest would need to come from other countries, including the US, Japan and BRICs. While any development of this magnitude would be a significant boost to risk appetite, we note that previous G20 meetings have had a tendency to disappoint market expectations. Earlier, IMF chief Lagarde said the fund's staff is still exploring ways to ensure 'adequate fund firepower'.
A 'senior Fitch Director' said that a two-notch downgrade of Italy is 'still an option'. Fitch still has Italy at A+ and has suggested action before month end. Ratings agencies remain in focus of Eurozone governments, though French President Sarkozy again played down the loss of France's AAA status by calling the downgrade itself a 'non event'.
The German government has cut its 2012 growth forecast to 0.7% from 1% earlier. Germany sold EUR3.44 bn of its 0.25% two-year Schatz notes on Wednesday, paying an average yield that set a new a multi-decade low.
JPY
ECB Governing Council member Nowotny tentatively joined the EURJPY intervention debate in an interview with Japan's Nikkei newspaper. He said he understands Japan's concerns about a weak euro, but added that it was premature to declare that the euro's moves are one-sided given that it continues to move within its normal range.
GBP
Nationwide consumer confidence figures were in line with consensus expectations and fell to 38 (prev. 40) - only two points above the lowest reading ever.
NOK Targets: EURNOK 1m 7.70, 3m 7.80.
AUD
AUDUSD drifted lower in the aftermath of a mixed - but generally soft - employment report. Employment fell -29.3k in December, despite expectations of a 10k increase. A steady unemployment rate was some consolation however, and full time employment actually increased. Our Australia economists still expect the RBA to trim rates again in February.
NZD
NZDUSD fell 50 pips overnight after Q4 CPI came in sharply below expectations at 1.8% y/y (cons. 2.6%, prev. 4.6%). Our New Zealand economist still thinks the RBNZ will remain on hold until June, but he acknowledges the risks to global growth, domestic demand, and inflation raise the risk that the OCR remains on hold for longer.
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, January 18, 2012
18th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
18 January 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Initial support lies at 1.2624, a move below which would open the key low at 1.2588. Resistance is at 1.2879.
USDJPY BEARISH Momentum is negative; key near-term support lies at 76.33 while resistance is at 77.13.
GBPUSD BEARISH Decline through 1.5273 would open 1.5235 next. Resistance is at 1.5409.
USDCHF BULLISH Key resistance is at 0.9596; a break above this level would open the way towards 0.9784, the January 2011 high. Key support lies at 0.9407.
AUDUSD BULLISH Next resistances are at 1.0496 and 1.0567. Support lies at 1.0303.
USDCAD NEUTRAL Near-term directional triggers are at 1.0319 and 1.0052.
EURCHF BEARISH Key support lies at 1.2000 while resistance is at 1.2130.
EURGBP BEARISH Support lies at 0.8255 ahead of key low at 0.8222. Resistance comes in at 0.8376.
EURJPY BEARISH Near-term support lies at 97.04, a break below which would open 95.68. Resistance is at 98.80.
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 January 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Initial support lies at 1.2624, a move below which would open the key low at 1.2588. Resistance is at 1.2879.
USDJPY BEARISH Momentum is negative; key near-term support lies at 76.33 while resistance is at 77.13.
GBPUSD BEARISH Decline through 1.5273 would open 1.5235 next. Resistance is at 1.5409.
USDCHF BULLISH Key resistance is at 0.9596; a break above this level would open the way towards 0.9784, the January 2011 high. Key support lies at 0.9407.
AUDUSD BULLISH Next resistances are at 1.0496 and 1.0567. Support lies at 1.0303.
USDCAD NEUTRAL Near-term directional triggers are at 1.0319 and 1.0052.
EURCHF BEARISH Key support lies at 1.2000 while resistance is at 1.2130.
EURGBP BEARISH Support lies at 0.8255 ahead of key low at 0.8222. Resistance comes in at 0.8376.
EURJPY BEARISH Near-term support lies at 97.04, a break below which would open 95.68. Resistance is at 98.80.
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 January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
18 January 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Japan's Finance Minister Azumi spoke but, unlike yesterday, did not mention EURJPY specifically. Intervention was still on his mind though. He said it would be hard for Japan to emulate the Swiss approach and defend a particular line in the sand, noting that the supply of yen in global markets is vast. This is the first time this idea has been so firmly rejected. He warned though that Japan stood ready to take firm steps against speculative FX moves. In Europe, the IIF is expected to resume debt talks with Greece today for a satisfactory conclusion on PSI involvement. The closer to the relevant deadlines the parties involved get, the bigger the risk of a large selloff if talks ultimately fail. Greece has already been talking openly about adopting coercive measures - sentiment echoed by Prime Minister Papademos overnight. Although data globally has managed to continue supporting investors' general growth expectations, standards are pretty low at this point and we expect risk currencies to remain vulnerable. For example, on Tuesday, the German ZEW was strong, with the economic sentiment index printing 21.6 (vs. expectations of -49.4). Such figures were cheered by the market, notwithstanding the fact that sentiment remains deep in negative territory. A ZEW economist said that ECB liquidity, lower yields and better US data boosted sentiment. Eurozone periphery spreads versus Germany tightened and equity markets finished up across most of Europe. The US Empire State manufacturing index for January was above consensus at 13.5 and the indexes of new orders, shipments, and employment all improved. EURUSD traded 1.2718-1.2788, USDJPY 76.66-76.85 in Asia.
EUR
In an interview with The New York Times, Greek Prime Minister Papademos said that he will consider introducing legislation to force bondholders to take losses if they refuse to participate in the voluntary bond swap agreement, negotiations on which resume today. Earlier, IIF Chief Charles Dallara called upon all sides in the negotiations to work 'in good faith' and with a 'sense of urgency'.
IMF chief Lagarde said the fund's staff is still exploring ways to ensure 'adequate fund firepower'. Since Q4 2011 efforts to further boost the fund's resources, especially via non-Eurozone sources, have not proven fruitful as the rest of the G20 continue to call for Europe to act more to contain the debt crisis.
The EFSF sold EUR1.501 bn of 6-month bills at 0.266%. The bid-to-cover ratio was 3.1x. Demand did not appear to be materially lower following Monday night's S&P downgrade. The size was not particularly large, but it was in line with its initial targeted amount.
The ECB's Nowotny said the ECB is looking at alternatives to sovereign bond buying, but is not in a position to stop the SMP at the moment. He added that the need for intervention is widely recognized but within the ECB council, there is still scepticism over bond buying. These comments offer an interesting take on the SMP program and illustrate the tensions inside the bank. In the past, the ECB has bought covered bonds, but we do not think that this means it will switch the SMP program into other assets just yet.
Fitch analyst Edward Parker said that Greece is insolvent and will default. While these are the views of the analyst, they echo those of many commentators. Yesterday, S&P Managing Director of Sovereign Ratings Moritz Kraemer said he believed Greece 'would default soon'. He also suggested that policymakers were working to avoid a 'disorderly default' as such a development would have consequences for other countries.
S&P commented on the prospect of further downgrades for banks, insurers and some government-related entities, following its Eurozone sovereign downgrades on Friday. The ratings agency said that it will decide on ratings for the institutions within 4 weeks.
CHF
The Swiss Economics Minister said EURCHF should be 1.35-1.40, Bloomberg reported. EURCHF rallied slightly on the headlines but we see limited impact from the statement. The Swiss KOF indicator is due on Wednesday.
JPY
Finance Minister Azumi again alluded to Japan extending help to Europe via the IMF. He said both Japan and China need to seek a realistic way of achieving this, but that the attitude of the US would determine the IMF's role in Europe's sovereign debt crisis.
Azumi warned again about Japan's own fiscal position, saying that smooth JGB bond sales and low JGB yields are no excuse for complacency, given that bond yields can jump suddenly and sharply.
Dow Jones reported that Japan bought 8% of the EFSF 6m bills auctioned yesterday, citing a Ministry of Finance official. Japan bought 20% of the first bond auctioned a year ago, according to official announcements at that time.
GBP
December CPI came in at +4.2% y/y, in line with consensus. Our UK economist notes that the slowdown is driven by prices of petrol, gas and clothing. Inflation should continue to fall in the months ahead, with CPI expected to end the year below 2%.
CAD
As expected, the Bank of Canada left the overnight rate target unchanged at 1.00%. The bank said the outlook for the global economy has deteriorated and uncertainty has increased". It also now expects the pace of Canadian growth to be more modest than previously envisaged, largely due to the external environment".
Government data showed that foreigners bought a net C$15 bn ($14.8 bn) of Canadian securities in November, the most in six months.
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 January 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Japan's Finance Minister Azumi spoke but, unlike yesterday, did not mention EURJPY specifically. Intervention was still on his mind though. He said it would be hard for Japan to emulate the Swiss approach and defend a particular line in the sand, noting that the supply of yen in global markets is vast. This is the first time this idea has been so firmly rejected. He warned though that Japan stood ready to take firm steps against speculative FX moves. In Europe, the IIF is expected to resume debt talks with Greece today for a satisfactory conclusion on PSI involvement. The closer to the relevant deadlines the parties involved get, the bigger the risk of a large selloff if talks ultimately fail. Greece has already been talking openly about adopting coercive measures - sentiment echoed by Prime Minister Papademos overnight. Although data globally has managed to continue supporting investors' general growth expectations, standards are pretty low at this point and we expect risk currencies to remain vulnerable. For example, on Tuesday, the German ZEW was strong, with the economic sentiment index printing 21.6 (vs. expectations of -49.4). Such figures were cheered by the market, notwithstanding the fact that sentiment remains deep in negative territory. A ZEW economist said that ECB liquidity, lower yields and better US data boosted sentiment. Eurozone periphery spreads versus Germany tightened and equity markets finished up across most of Europe. The US Empire State manufacturing index for January was above consensus at 13.5 and the indexes of new orders, shipments, and employment all improved. EURUSD traded 1.2718-1.2788, USDJPY 76.66-76.85 in Asia.
EUR
In an interview with The New York Times, Greek Prime Minister Papademos said that he will consider introducing legislation to force bondholders to take losses if they refuse to participate in the voluntary bond swap agreement, negotiations on which resume today. Earlier, IIF Chief Charles Dallara called upon all sides in the negotiations to work 'in good faith' and with a 'sense of urgency'.
IMF chief Lagarde said the fund's staff is still exploring ways to ensure 'adequate fund firepower'. Since Q4 2011 efforts to further boost the fund's resources, especially via non-Eurozone sources, have not proven fruitful as the rest of the G20 continue to call for Europe to act more to contain the debt crisis.
The EFSF sold EUR1.501 bn of 6-month bills at 0.266%. The bid-to-cover ratio was 3.1x. Demand did not appear to be materially lower following Monday night's S&P downgrade. The size was not particularly large, but it was in line with its initial targeted amount.
The ECB's Nowotny said the ECB is looking at alternatives to sovereign bond buying, but is not in a position to stop the SMP at the moment. He added that the need for intervention is widely recognized but within the ECB council, there is still scepticism over bond buying. These comments offer an interesting take on the SMP program and illustrate the tensions inside the bank. In the past, the ECB has bought covered bonds, but we do not think that this means it will switch the SMP program into other assets just yet.
Fitch analyst Edward Parker said that Greece is insolvent and will default. While these are the views of the analyst, they echo those of many commentators. Yesterday, S&P Managing Director of Sovereign Ratings Moritz Kraemer said he believed Greece 'would default soon'. He also suggested that policymakers were working to avoid a 'disorderly default' as such a development would have consequences for other countries.
S&P commented on the prospect of further downgrades for banks, insurers and some government-related entities, following its Eurozone sovereign downgrades on Friday. The ratings agency said that it will decide on ratings for the institutions within 4 weeks.
CHF
The Swiss Economics Minister said EURCHF should be 1.35-1.40, Bloomberg reported. EURCHF rallied slightly on the headlines but we see limited impact from the statement. The Swiss KOF indicator is due on Wednesday.
JPY
Finance Minister Azumi again alluded to Japan extending help to Europe via the IMF. He said both Japan and China need to seek a realistic way of achieving this, but that the attitude of the US would determine the IMF's role in Europe's sovereign debt crisis.
Azumi warned again about Japan's own fiscal position, saying that smooth JGB bond sales and low JGB yields are no excuse for complacency, given that bond yields can jump suddenly and sharply.
Dow Jones reported that Japan bought 8% of the EFSF 6m bills auctioned yesterday, citing a Ministry of Finance official. Japan bought 20% of the first bond auctioned a year ago, according to official announcements at that time.
GBP
December CPI came in at +4.2% y/y, in line with consensus. Our UK economist notes that the slowdown is driven by prices of petrol, gas and clothing. Inflation should continue to fall in the months ahead, with CPI expected to end the year below 2%.
CAD
As expected, the Bank of Canada left the overnight rate target unchanged at 1.00%. The bank said the outlook for the global economy has deteriorated and uncertainty has increased". It also now expects the pace of Canadian growth to be more modest than previously envisaged, largely due to the external environment".
Government data showed that foreigners bought a net C$15 bn ($14.8 bn) of Canadian securities in November, the most in six months.
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, January 17, 2012
17th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
17 January 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Initial support lies at 1.2588 ahead of 1.2500. Resistance is at 1.2879.
USDJPY BEARISH Intraday momentum is negative; Key near-term support lies at 76.33. Resistance is at 77.34.
GBPUSD BEARISH Decline through 1.5273 would open 1.5235 next. Resistance is at 1.5409.
USDCHF BULLISH Recovery through 0.9596 would open up the way towards 0.9784, the January 2011 high. Key near-term support lies at 0.9407.
AUDUSD BULLISH Clearance of 1.0387 has opened the way for gains towards 1.0447 and then 1.0496. Initial support lies at 1.0229.
USDCAD NEUTRAL Near-term directional triggers are at 1.0319 and 1.0052.
EURCHF BEARISH Support lies at 1.2000, while resistance is at 1.2148.
EURGBP BEARISH Outlook is bearish; a move below 0.8222 would expose 0.8205. Resistance comes in at 0.8376.
EURJPY BEARISH Support lies at 95.90 ahead of the psychological level of 95.00. Resistance is at 98.80.
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 January 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Initial support lies at 1.2588 ahead of 1.2500. Resistance is at 1.2879.
USDJPY BEARISH Intraday momentum is negative; Key near-term support lies at 76.33. Resistance is at 77.34.
GBPUSD BEARISH Decline through 1.5273 would open 1.5235 next. Resistance is at 1.5409.
USDCHF BULLISH Recovery through 0.9596 would open up the way towards 0.9784, the January 2011 high. Key near-term support lies at 0.9407.
AUDUSD BULLISH Clearance of 1.0387 has opened the way for gains towards 1.0447 and then 1.0496. Initial support lies at 1.0229.
USDCAD NEUTRAL Near-term directional triggers are at 1.0319 and 1.0052.
EURCHF BEARISH Support lies at 1.2000, while resistance is at 1.2148.
EURGBP BEARISH Outlook is bearish; a move below 0.8222 would expose 0.8205. Resistance comes in at 0.8376.
EURJPY BEARISH Support lies at 95.90 ahead of the psychological level of 95.00. Resistance is at 98.80.
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 January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
17 January 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro experienced a double-dose of upside during the Asia session. First, Japan's Finance Minister Azumi raised the possibility of intervention in EURJPY, but said he has not yet made a decision on the matter. We see the immediate intervention risk as remote, but investors were in no mood to take chances. China's Q4 GDP growth then came in stronger than expected, boosting the euro and taking AUDUSD briefly through 1.04. EURUSD traded 1.2649-1.2737, USDJPY 76.67-76.88. Earlier, a senior official at S&P ratings said in an interview with Bloomberg TV that he expected Greece to default soon. The EFSF was also downgraded one notch to AA+. With troika officials descending upon Athens this week, it is clear the stakes are being raised and there may be some need for contingency planning ahead.
We continue to envisage coercive action by Greece, and while reports suggest that retroactive collective action clauses will be put into use, with the troika's blessing, the Eurozone authorities would want to ensure such action remains a one-off. Otherwise, the market managed to absorb the ratings news with relative ease, as France launched a successful bill auction where the one-year yield actually fell. However, Portugal may prove to be a bigger worry in the short term, as it now holds junk status with all three major ratings agencies, which may have caused the country's paper to drop out of bond indices. The forced liquidation of real money holdings has led to a sharp rise in yields, though in the past few weeks the European authorities and IMF have continued to view the country's programme as on track. CPI figures are due in the UK and Eurozone, and the German ZEW is also out. We have revised our short-term FX forecasts and continue to target a stronger dollar - our 3m EURUSD view is now at 1.15.
EUR
The EFSF has been downgraded to AA+ by S&P. This came in the wake of the agency's downgrades of France and Austria. The facility's CEO, Klaus Regling, said in response that the EFSF's investor base was well-diversified and noted that it still possessed AAA ratings from two other agencies. However, ECB President Draghi warned that such a move would have 'consequences'.
Moody's said it would keep France's AAA rating but that its stable outlook was under pressure. It said it would update the market during the first quarter of this year as part of its broader Eurozone assessment.
Germany swiftly rejected any chance of raising its guarantees for the EFSF. Chancellor Merkel's spokesperson said that current funding was adequate, and the Finance Ministry also said that it saw no need to act on the ESM.
S&P Managing Director of Sovereign Ratings Moritz Kraemer said he believed Greece 'would default soon'. He also suggested that policymakers were working to avoid a 'disorderly default' as such a development would have consequences for other countries.
It is clear that talks between the Greek government and the IIF on the PSI have reached an impasse, with the institute's head Dallara warning that a deal was needed 'urgently', but he also said current interest rates being offered by Greece were 'completely unreasonable'.
Earlier on Monday Greek PM Papademos again stressed that 'leaving the euro is not an option for Greece' and said talks with creditors would continue..
CHF
Switzerland's combined producer and import price index for December came in higher than consensus estimates, increasing by +0.3% m/m. The y/y reading was still a -2.3% fall. Our Swiss economist notes that print is above all the result of higher producer prices. These increased by +0.2% on the month, resulting in a decline of -2.2% y/y. On the margin the data is EURCHF-negative, although the cross will be driven by external forces in the near term.
JPY
Japan's Finance Minister Azumi referred to EURJPY overnight, becoming the second Japanese finance official to do so in as many days. The rhetorical intensity increased a notch too, and Azumi referred directly to the possibility of intervention in the cross. He said he first wanted to examine current FX moves before making his decision. Both EURJPY and EURUSD turned bid on the headlines.
We see no imminent risk of intervention in the cross, and expect Japan to maintain its historical focus on USDJPY instead. We note that Japan last bought EURJPY in May 2003, when the cross was trading at about 130, but the amounts were small, infrequent, and largely symbolic.
Yesterday, Senior Vice Finance Minister Igarashi warned that EURJPY moves were a bit 'rapid' and that his ministry would monitor these moves closely.
Azumi added that S&P's decision to downgrade the EFSF one notch to AA+ will not immediately change Japan's policy of purchasing EFSF bonds.
GBP
UK CPI is out on Friday. The market is looking for a 4.2% headline print but we doubt this will affect the BoE's broader outlook, as the likelihood of QE extension remains high in the coming months.
Given the UK's ratings status remains solid compared to most of the Eurozone, and the Gilt market continues to provide the necessary liquidity, we continue to see EURGBP trading lower and move our 3m target to 0.80, in line with our year-end forecasts.
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 January 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro experienced a double-dose of upside during the Asia session. First, Japan's Finance Minister Azumi raised the possibility of intervention in EURJPY, but said he has not yet made a decision on the matter. We see the immediate intervention risk as remote, but investors were in no mood to take chances. China's Q4 GDP growth then came in stronger than expected, boosting the euro and taking AUDUSD briefly through 1.04. EURUSD traded 1.2649-1.2737, USDJPY 76.67-76.88. Earlier, a senior official at S&P ratings said in an interview with Bloomberg TV that he expected Greece to default soon. The EFSF was also downgraded one notch to AA+. With troika officials descending upon Athens this week, it is clear the stakes are being raised and there may be some need for contingency planning ahead.
We continue to envisage coercive action by Greece, and while reports suggest that retroactive collective action clauses will be put into use, with the troika's blessing, the Eurozone authorities would want to ensure such action remains a one-off. Otherwise, the market managed to absorb the ratings news with relative ease, as France launched a successful bill auction where the one-year yield actually fell. However, Portugal may prove to be a bigger worry in the short term, as it now holds junk status with all three major ratings agencies, which may have caused the country's paper to drop out of bond indices. The forced liquidation of real money holdings has led to a sharp rise in yields, though in the past few weeks the European authorities and IMF have continued to view the country's programme as on track. CPI figures are due in the UK and Eurozone, and the German ZEW is also out. We have revised our short-term FX forecasts and continue to target a stronger dollar - our 3m EURUSD view is now at 1.15.
EUR
The EFSF has been downgraded to AA+ by S&P. This came in the wake of the agency's downgrades of France and Austria. The facility's CEO, Klaus Regling, said in response that the EFSF's investor base was well-diversified and noted that it still possessed AAA ratings from two other agencies. However, ECB President Draghi warned that such a move would have 'consequences'.
Moody's said it would keep France's AAA rating but that its stable outlook was under pressure. It said it would update the market during the first quarter of this year as part of its broader Eurozone assessment.
Germany swiftly rejected any chance of raising its guarantees for the EFSF. Chancellor Merkel's spokesperson said that current funding was adequate, and the Finance Ministry also said that it saw no need to act on the ESM.
S&P Managing Director of Sovereign Ratings Moritz Kraemer said he believed Greece 'would default soon'. He also suggested that policymakers were working to avoid a 'disorderly default' as such a development would have consequences for other countries.
It is clear that talks between the Greek government and the IIF on the PSI have reached an impasse, with the institute's head Dallara warning that a deal was needed 'urgently', but he also said current interest rates being offered by Greece were 'completely unreasonable'.
Earlier on Monday Greek PM Papademos again stressed that 'leaving the euro is not an option for Greece' and said talks with creditors would continue..
CHF
Switzerland's combined producer and import price index for December came in higher than consensus estimates, increasing by +0.3% m/m. The y/y reading was still a -2.3% fall. Our Swiss economist notes that print is above all the result of higher producer prices. These increased by +0.2% on the month, resulting in a decline of -2.2% y/y. On the margin the data is EURCHF-negative, although the cross will be driven by external forces in the near term.
JPY
Japan's Finance Minister Azumi referred to EURJPY overnight, becoming the second Japanese finance official to do so in as many days. The rhetorical intensity increased a notch too, and Azumi referred directly to the possibility of intervention in the cross. He said he first wanted to examine current FX moves before making his decision. Both EURJPY and EURUSD turned bid on the headlines.
We see no imminent risk of intervention in the cross, and expect Japan to maintain its historical focus on USDJPY instead. We note that Japan last bought EURJPY in May 2003, when the cross was trading at about 130, but the amounts were small, infrequent, and largely symbolic.
Yesterday, Senior Vice Finance Minister Igarashi warned that EURJPY moves were a bit 'rapid' and that his ministry would monitor these moves closely.
Azumi added that S&P's decision to downgrade the EFSF one notch to AA+ will not immediately change Japan's policy of purchasing EFSF bonds.
GBP
UK CPI is out on Friday. The market is looking for a 4.2% headline print but we doubt this will affect the BoE's broader outlook, as the likelihood of QE extension remains high in the coming months.
Given the UK's ratings status remains solid compared to most of the Eurozone, and the Gilt market continues to provide the necessary liquidity, we continue to see EURGBP trading lower and move our 3m target to 0.80, in line with our year-end forecasts.
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, January 13, 2012
13th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
13 January 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH A bounce through 1.2818 has exposed 1.2947. The underlying trend remains bearish with focus on the Jan. 11 low of 1.2662.
USDJPY BEARISH A break below 76.61 would expose the key low of 76.33. Resistance is at 77.34.
GBPUSD BEARISH The pair targets 1.5272; a push below the level would expose 1.5192, the 61.8% retracement of the 1.4231-to-1.6747 uptrend. Resistance is at 1.5501
USDCHF BULLISH A recovery through 0.9596 would open up the way towards 0.9784, the January 2011 high. Key near-term support lies at 0.9306
AUDUSD BULLISH Recovery eyes 1.0387; a break here would be an important bullish development to expose 1.0447. Initial support lies at 1.0229 ahead of 1.0146.
USDCAD NEUTRAL The key near-term directional triggers are at 1.0319 and 1.0077
EURCHF BEARISH Support lies at 1.2000, while resistance is at 1.2254.
EURGBP NEUTRAL Key resistance is at 0.8422; a break here would trigger a bull trend. Support lies at 0.8288.
EURJPY BEARISH Violation of 97.28 would expose 95.00, the base of the bear trend channel drawn off the April 11 high. Resistance is at 98.85.
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.
13 January 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH A bounce through 1.2818 has exposed 1.2947. The underlying trend remains bearish with focus on the Jan. 11 low of 1.2662.
USDJPY BEARISH A break below 76.61 would expose the key low of 76.33. Resistance is at 77.34.
GBPUSD BEARISH The pair targets 1.5272; a push below the level would expose 1.5192, the 61.8% retracement of the 1.4231-to-1.6747 uptrend. Resistance is at 1.5501
USDCHF BULLISH A recovery through 0.9596 would open up the way towards 0.9784, the January 2011 high. Key near-term support lies at 0.9306
AUDUSD BULLISH Recovery eyes 1.0387; a break here would be an important bullish development to expose 1.0447. Initial support lies at 1.0229 ahead of 1.0146.
USDCAD NEUTRAL The key near-term directional triggers are at 1.0319 and 1.0077
EURCHF BEARISH Support lies at 1.2000, while resistance is at 1.2254.
EURGBP NEUTRAL Key resistance is at 0.8422; a break here would trigger a bull trend. Support lies at 0.8288.
EURJPY BEARISH Violation of 97.28 would expose 95.00, the base of the bear trend channel drawn off the April 11 high. Resistance is at 98.85.
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.
13th of January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
13 January 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro's rebound continued during the Asia session, buoyed by yesterday's rally across Eurozone sovereign bond markets. EURUSD traded 1.2807-1.2873, USDJPY traded 76.69-76.84. Strong demand at Thursday's Spanish auction has raised hopes for a positive outcome when Italy tries to sell EUR3-4.75 bn of BTPs today. Our Eurozone rates strategy colleagues expect the relatively small amount of supply to be easily absorbed, which we expect will give the euro a short-term boost. However, they doubt the performance of Italian debt will be as impressive today as it was yesterday. Even though fundamentals have not budged by one inch for the Eurozone, it appears that there is demand out there for sovereign paper. Spain's Tesoro sold almost EUR10 bn across three lines, double the guidance and over 10% this year's planned issuance.
The ECB left interest rates unchanged yesterday, and President Draghi sounded the expected warning bells over the Eurozone economy, but said that there were some 'signs of stabilisation', albeit at very low levels. The ECB was also non-committal on future policy moves, and on the SMP programme, but it appears current market conditions did not warrant a very dovish stance. However, this does not change our bearish outlook on the euro, and we remain short EURUSD as a trade recommendation. In the US, however, retail sales surprised to the downside as core figures fell by 0.2% (cons. 0.3%). The December budget deficit was also higher than expected at -$86bn (cons. -$83.7bn). Trade figures are due out in the US and Canada, along with the University of Michigan Confidence reading.
EUR
Fitch said on Thursday that France's debt and deficit make it the weakest AAA in the Eurozone, and warned that there is a significant risk of an Italy downgrade.
The Greek deputy finance minister said that Greece may need more funds from European partners if participation of private investors in the PSI scheme falls short of 100%. Despite reports from Greek and EU sources that the PSI negotiations are going well, positive signals from the IIF have been in short supply and the issue remains unresolved.
Charles Dallara, the Managing Director of the IIF warned that all parties must confirm they are seeking a voluntary deal and it 'has to be done really in the next few days'. He said he was 'concerned' about the lack of 'clear process' over Greece, according to the Wall Street Journal
The IMF warned that Greek IMF loans depend on a private bondholder deal, as full financing for any programme was required. In addition the IMF said it was still targeting a 120% debt-to-GDP ratio for the country and warned that higher ratios would be unsustainable. The next mission to the country is planned for Jan 17.
Italian industrial output was surprisingly strong in November, coming in at +0.3% m/m. This still marks a 4.1% y/y decline however. Prime Minister Monti said Italy is against the introduction of more rigid restrictions or further sanctions in the fiscal pact. Monti added that the ECB could be "more relaxed" after the fiscal pact is concluded. The ECB has continually stated that developments on the fiscal front are necessary before further ECB action.
GBP
Industrial production in November fell -0.6% m/m, lower than expectations of -0.1%. Our UK economist notes that the sharp drop is because of a contraction in oil and gas extraction and electricity production. Manufacturing, the dominant component of overall industrial production, came in at -0.2% m/m instead of -0.1% expected. This raises the possibility of negative GDP growth in Q4, but it's important to note that the industrial sector is much smaller than the services sector. We have a GDP growth forecast of -0.2% q/q for Q4
The Bank of England kept rates on hold, and said that the BoE expects the programme to end in early February, presumably after the next BoE meeting. Our UK economist notes that this gives the MPC an extra month to think through their forthcoming decision - data on the domestic front data such as the PMIs will be key, along with any signs of life in the bank unsecured term-funding market.
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.
13 January 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro's rebound continued during the Asia session, buoyed by yesterday's rally across Eurozone sovereign bond markets. EURUSD traded 1.2807-1.2873, USDJPY traded 76.69-76.84. Strong demand at Thursday's Spanish auction has raised hopes for a positive outcome when Italy tries to sell EUR3-4.75 bn of BTPs today. Our Eurozone rates strategy colleagues expect the relatively small amount of supply to be easily absorbed, which we expect will give the euro a short-term boost. However, they doubt the performance of Italian debt will be as impressive today as it was yesterday. Even though fundamentals have not budged by one inch for the Eurozone, it appears that there is demand out there for sovereign paper. Spain's Tesoro sold almost EUR10 bn across three lines, double the guidance and over 10% this year's planned issuance.
The ECB left interest rates unchanged yesterday, and President Draghi sounded the expected warning bells over the Eurozone economy, but said that there were some 'signs of stabilisation', albeit at very low levels. The ECB was also non-committal on future policy moves, and on the SMP programme, but it appears current market conditions did not warrant a very dovish stance. However, this does not change our bearish outlook on the euro, and we remain short EURUSD as a trade recommendation. In the US, however, retail sales surprised to the downside as core figures fell by 0.2% (cons. 0.3%). The December budget deficit was also higher than expected at -$86bn (cons. -$83.7bn). Trade figures are due out in the US and Canada, along with the University of Michigan Confidence reading.
EUR
Fitch said on Thursday that France's debt and deficit make it the weakest AAA in the Eurozone, and warned that there is a significant risk of an Italy downgrade.
The Greek deputy finance minister said that Greece may need more funds from European partners if participation of private investors in the PSI scheme falls short of 100%. Despite reports from Greek and EU sources that the PSI negotiations are going well, positive signals from the IIF have been in short supply and the issue remains unresolved.
Charles Dallara, the Managing Director of the IIF warned that all parties must confirm they are seeking a voluntary deal and it 'has to be done really in the next few days'. He said he was 'concerned' about the lack of 'clear process' over Greece, according to the Wall Street Journal
The IMF warned that Greek IMF loans depend on a private bondholder deal, as full financing for any programme was required. In addition the IMF said it was still targeting a 120% debt-to-GDP ratio for the country and warned that higher ratios would be unsustainable. The next mission to the country is planned for Jan 17.
Italian industrial output was surprisingly strong in November, coming in at +0.3% m/m. This still marks a 4.1% y/y decline however. Prime Minister Monti said Italy is against the introduction of more rigid restrictions or further sanctions in the fiscal pact. Monti added that the ECB could be "more relaxed" after the fiscal pact is concluded. The ECB has continually stated that developments on the fiscal front are necessary before further ECB action.
GBP
Industrial production in November fell -0.6% m/m, lower than expectations of -0.1%. Our UK economist notes that the sharp drop is because of a contraction in oil and gas extraction and electricity production. Manufacturing, the dominant component of overall industrial production, came in at -0.2% m/m instead of -0.1% expected. This raises the possibility of negative GDP growth in Q4, but it's important to note that the industrial sector is much smaller than the services sector. We have a GDP growth forecast of -0.2% q/q for Q4
The Bank of England kept rates on hold, and said that the BoE expects the programme to end in early February, presumably after the next BoE meeting. Our UK economist notes that this gives the MPC an extra month to think through their forthcoming decision - data on the domestic front data such as the PMIs will be key, along with any signs of life in the bank unsecured term-funding market.
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, January 06, 2012
6th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
6 January 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.2642, today's intersection of the bottom of the trend channel drawn off Nov. 14 high, ahead of key low at 1.2588. Resistance is at 1.2947.
USDJPY BEARISH Near-term support lies at 76.61, a break here would expose 76.33. Resistance is at 77.50.
GBPUSD BEARISH Initial support is at 1.5402, a break here would open the key low of 1.5362. Resistance is at 1.5629.
USDCHF BULLISH Pressure is on the key high of 0.9548, a clearance of which would open the way towards 0.9784 with interim resistance at 0.9602. Support lies at 0.9413.
AUDUSD BULLISH Resistance is at 1.0387, a move above this level would open 1.0447 next. Support is at 1.0127.
USDCAD BEARISH Support lies at 1.0104 ahead of the key support at 1.0052. Resistance is at 1.0269.
EURCHF NEUTRAL Initial resistance is at 1.2254 ahead of 1.2398. Support lies at 1.2126 ahead of 1.2051.
EURGBP BEARISH Focus is on 0.8202, a decline through this level would open the way for 0.8142, the August 2010 low. Resistance is at 0.8289.
EURJPY BEARISH The cross is testing 98.66, a clear break below which would open 97.65. Resistance is at 100.31.
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.
6 January 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.2642, today's intersection of the bottom of the trend channel drawn off Nov. 14 high, ahead of key low at 1.2588. Resistance is at 1.2947.
USDJPY BEARISH Near-term support lies at 76.61, a break here would expose 76.33. Resistance is at 77.50.
GBPUSD BEARISH Initial support is at 1.5402, a break here would open the key low of 1.5362. Resistance is at 1.5629.
USDCHF BULLISH Pressure is on the key high of 0.9548, a clearance of which would open the way towards 0.9784 with interim resistance at 0.9602. Support lies at 0.9413.
AUDUSD BULLISH Resistance is at 1.0387, a move above this level would open 1.0447 next. Support is at 1.0127.
USDCAD BEARISH Support lies at 1.0104 ahead of the key support at 1.0052. Resistance is at 1.0269.
EURCHF NEUTRAL Initial resistance is at 1.2254 ahead of 1.2398. Support lies at 1.2126 ahead of 1.2051.
EURGBP BEARISH Focus is on 0.8202, a decline through this level would open the way for 0.8142, the August 2010 low. Resistance is at 0.8289.
EURJPY BEARISH The cross is testing 98.66, a clear break below which would open 97.65. Resistance is at 100.31.
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.
6th of January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
6 January 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
In a typical prelude to a US payrolls release, FX markets traded in very tight ranges in Asia until newswires reported speculation of a nuclear incident in North Korea. Officials in Seoul and Tokyo later rejected the idea, but not before EURUSD broke to new 15-month lows, and AUDUSD dropped 20 pips. Expectations for a buoyant payrolls report are still running high after the December ADP employment report came in strongly above expectations at +325k. Our analysts note though that the figures may not be a forward indicator of stronger official BLS payroll numbers today, and they keep their forecast for private payrolls unchanged at +150k (headline +125k).
End-of-year reconciliations of payroll records typically result in an artificially high ADP estimate. That was the case last year, and appears to have been the case this year as well. Caution is therefore clearly warranted. St. Louis Fed President Bullard noted that the Fed may choose to adopt inflation targeting this year. Given the Fed's current stance, this could suggest targeted asset purchases until headline CPI or core PCE reaches a certain level. Given that zero rates are here to stay until 2014 or so (according to current pricing), it is clear that any inflation target in the medium term will be calibrated through quantitative balance sheet targets rather than interest rates. Elsewhere, Eurozone concerns remain amid reports that the IMF had pushed back its payment schedule for Greece, and the Eurozone financial sector remains under scrutiny. Ahead on Friday, in addition to the unemployment report, Canadian jobs numbers are out and Swiss CPI will be released. EURUSD traded 1.2764-1.2799 and USDJPY 77.07-77.26.
EUR
France sold a total of EUR7.96 bn in a four-way auction, towards the upper end of supply expectations. In general the result was treated as decent, though this failed to arrest the euro's decline. The Euribor fixing coming in lower than expected minutes afterwards did not help the euro's cause either.
Italian 10y yields closed above 7% again yesterday and the spread over the German 10-year has now widened to well over 500bp. Our euro rates strategists expect Italian bonds to remain under selling pressure into Italy's first auction of the new year on Friday, Jan. 13.
German data were disappointing. Retail sales for November came in at -0.9% m/m (cons. 0.2%). Eurozone figures were weak as well: industrial new orders grew by 1.6% in October.
Reuters reported that due to a delay in payment for the latest tranche from the troika, the aid payment schedule for Greece will be delayed by 3 months. This could complicate Greece's efforts to meet major bond redemptions in March, although the intention remains to replace the initial rescue program with a new one once the terms of the private sector participation plan are agreed.
CHF
Swiss inflation numbers for December are due. The SNB has already revised lower CPI figures in the wake of growth headwinds and a still-overvalued currency, but declined to raise the floor in EURCHF at their December meeting. The market is expecting a -0.5% print (UBSe. -0.7%), which doesn't appear to meet the definition of massive deflation that would need to be met to justify additional measures, such as raising the floor..
GBP
UK services PMI surprised to the upside for December, coming in at 54.0 vs. 52.1 prior.
Latest data showed that Gilt purchases by institutional investors in October and November were the largest on record, according to the Financial Times. We believe the move was in part driven by such investors rethinking their previous policy of diverting from periphery debt into the Eurozone AAA core. Now, it appears, Gilts are serving as an alternative safe haven, although we would caution against buying sterling purely for this reason given the UK's own challenging fiscal position.
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.
6 January 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
In a typical prelude to a US payrolls release, FX markets traded in very tight ranges in Asia until newswires reported speculation of a nuclear incident in North Korea. Officials in Seoul and Tokyo later rejected the idea, but not before EURUSD broke to new 15-month lows, and AUDUSD dropped 20 pips. Expectations for a buoyant payrolls report are still running high after the December ADP employment report came in strongly above expectations at +325k. Our analysts note though that the figures may not be a forward indicator of stronger official BLS payroll numbers today, and they keep their forecast for private payrolls unchanged at +150k (headline +125k).
End-of-year reconciliations of payroll records typically result in an artificially high ADP estimate. That was the case last year, and appears to have been the case this year as well. Caution is therefore clearly warranted. St. Louis Fed President Bullard noted that the Fed may choose to adopt inflation targeting this year. Given the Fed's current stance, this could suggest targeted asset purchases until headline CPI or core PCE reaches a certain level. Given that zero rates are here to stay until 2014 or so (according to current pricing), it is clear that any inflation target in the medium term will be calibrated through quantitative balance sheet targets rather than interest rates. Elsewhere, Eurozone concerns remain amid reports that the IMF had pushed back its payment schedule for Greece, and the Eurozone financial sector remains under scrutiny. Ahead on Friday, in addition to the unemployment report, Canadian jobs numbers are out and Swiss CPI will be released. EURUSD traded 1.2764-1.2799 and USDJPY 77.07-77.26.
EUR
France sold a total of EUR7.96 bn in a four-way auction, towards the upper end of supply expectations. In general the result was treated as decent, though this failed to arrest the euro's decline. The Euribor fixing coming in lower than expected minutes afterwards did not help the euro's cause either.
Italian 10y yields closed above 7% again yesterday and the spread over the German 10-year has now widened to well over 500bp. Our euro rates strategists expect Italian bonds to remain under selling pressure into Italy's first auction of the new year on Friday, Jan. 13.
German data were disappointing. Retail sales for November came in at -0.9% m/m (cons. 0.2%). Eurozone figures were weak as well: industrial new orders grew by 1.6% in October.
Reuters reported that due to a delay in payment for the latest tranche from the troika, the aid payment schedule for Greece will be delayed by 3 months. This could complicate Greece's efforts to meet major bond redemptions in March, although the intention remains to replace the initial rescue program with a new one once the terms of the private sector participation plan are agreed.
CHF
Swiss inflation numbers for December are due. The SNB has already revised lower CPI figures in the wake of growth headwinds and a still-overvalued currency, but declined to raise the floor in EURCHF at their December meeting. The market is expecting a -0.5% print (UBSe. -0.7%), which doesn't appear to meet the definition of massive deflation that would need to be met to justify additional measures, such as raising the floor..
GBP
UK services PMI surprised to the upside for December, coming in at 54.0 vs. 52.1 prior.
Latest data showed that Gilt purchases by institutional investors in October and November were the largest on record, according to the Financial Times. We believe the move was in part driven by such investors rethinking their previous policy of diverting from periphery debt into the Eurozone AAA core. Now, it appears, Gilts are serving as an alternative safe haven, although we would caution against buying sterling purely for this reason given the UK's own challenging fiscal position.
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, January 05, 2012
5th of January 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
5 January 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Focus is on 1.2858; a decline through which would signal scope for deeper pull back towards 1.2588. Resistance is at 1.3077.
USDJPY BEARISH Support lies at 76.33, a move below this level would open key low of 75.35. Near-term resistance is at 77.17.
GBPUSD BEARISH Initial support is at 1.5502, a break of which would open 1.5469. Resistance is at 1.5692.
USDCHF BULLISH Pressure is on 0.9470, a clearance of which would expose the key high of 0.9548. Key support lies at 0.9244.
AUDUSD BULLISH Resistance is at 1.0387, a move above this level would open 1.0447 next. Support is at 1.0233.
USDCAD BEARISH Key support lies at 1.0052, a break below which would open 0.9975. Resistance is at 1.0220.
EURCHF NEUTRAL Initial support lies at 1.2126 ahead of 1.2051. Resistance is at 1.2254 ahead of 1.2398.
EURGBP BEARISH The cross is testing 0.8285, a close below this level would open the way for 0.8252 and 0.8202 next. Resistance is at 0.8372.
EURJPY BEARISH Focus is on key low at 98.66, a decline through which would open 97.65. Resistance is at 100.31.
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.
5 January 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Focus is on 1.2858; a decline through which would signal scope for deeper pull back towards 1.2588. Resistance is at 1.3077.
USDJPY BEARISH Support lies at 76.33, a move below this level would open key low of 75.35. Near-term resistance is at 77.17.
GBPUSD BEARISH Initial support is at 1.5502, a break of which would open 1.5469. Resistance is at 1.5692.
USDCHF BULLISH Pressure is on 0.9470, a clearance of which would expose the key high of 0.9548. Key support lies at 0.9244.
AUDUSD BULLISH Resistance is at 1.0387, a move above this level would open 1.0447 next. Support is at 1.0233.
USDCAD BEARISH Key support lies at 1.0052, a break below which would open 0.9975. Resistance is at 1.0220.
EURCHF NEUTRAL Initial support lies at 1.2126 ahead of 1.2051. Resistance is at 1.2254 ahead of 1.2398.
EURGBP BEARISH The cross is testing 0.8285, a close below this level would open the way for 0.8252 and 0.8202 next. Resistance is at 0.8372.
EURJPY BEARISH Focus is on key low at 98.66, a decline through which would open 97.65. Resistance is at 100.31.
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 January 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
5 January 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
FX markets traded mostly sideways during the Asia session, although the dollar enjoyed a very modest bid tone. News reports over the state of Spain's governments and banks are leading to further uncertainty, even though the overall story is not new. As such, we still regard any rally above 1.30 in EURUSD as unsustainable. Meanwhile, the US has managed to register some more positive data. Factory orders increased by 1.8% in November - less than expected but still robust compared to the US' G10 peers. In comments made in a paper, Fed Chairman Bernanke warned that more action was needed on the housing market, and further price declines are still possible. Today, several job surveys are out in the US, ahead of the upcoming payrolls release. Retail sales figures are also due in Germany and France is due to auction a range of OATs, aiming to raise EUR7-8 bn. Our euro rates strategy team sees this as an important test of investor appetite for French paper following the significant spread widening of France over Germany in the past two weeks. Fortunately, France still holds a AAA rating and the auctions are expected to be supported particularly by domestic investors after the recent underperformance of longer-dated French paper.
EUR
Germany's services PMI for December was revised down to 52.4 from 52.7 preliminary, but that still represents a significant lift from November's 50.3. The news from Italy was more worrying however. Italian services PMI fell to 44.5 (cons. 45.3), from 45.8 in November. Our analysts note that the latest data indicate negative Q4 growth for Italy, perhaps in the region of -0.3% to -0.5%.
The flash Eurozone CPI for Dec. was in line with expectations at +2.8% y/y. This supports the ECB's forecasts made in their December meeting. Our European economists expect the ECB will cut the refi rate by a further 50bp in Q1.
Eurogroup Chair Juncker said that a 'return to the drachma is not an option for Greece' and called 2012 a 'key year' for the Eurozone. German Chancellor Merkel announced she will meet with Italian Prime Minister Monti next week.
Germany sold EUR5 bn in 10-year bonds. The official bid to cover ratio was 1.3x. Portugal sold EUR1 bn in 3m T-bills, and the auction was well covered.
The Financial Times reported that Spain expects banks to set aside up to EUR50 bn in new provisions. Citing Economy Minister Guidnos, the report stressed the need for the Spanish banking sector to clean up balance sheets, without leaning too much on central government assistance.
There is increasing scrutiny on Spain's fiscal health, especially that of its regions and banking system. There were reports, later denied, that Spain was seeking IMF and EU help for its banking system. In addition, there were reports that a Spanish region needed help from the central government to repay an overdue loan. This was also denied, but it underscores that even though the Spanish national balance sheet appears to be robust, contingent liabilities from the banking sector and regions may weigh on sentiment, and could add to downside pressure in the euro.
Greek PM Papademos warned that the country faces risk of a disorderly default in March without a bailout deal, and everything is to be determined in the coming weeks.
On Thursday, German retail sales and Eurozone industrial new orders are due.
GBP
UK PMI construction surprised to the upside at 53.2, while consumer credit numbers were also robust at ?0.4bn. Mortgage approvals increased slightly to 52.9k. However, M4 money supply continued to decline, falling by 0.6% m/m.
Sterling has rallied strongly of late but we expect growth headwinds to weigh more on sentiment ahead. A weaker than expected reading in today's important services PMI could prompt the market to reappraise its view on sterling's prospects.
AUD
Australia's trade surplus for November came in weaker than expected at a 9-month low. Although AUD was unperturbed, our Australia economics teams observe that iron ore and coal exports - Australia's two main exports - fell quite sharply. This provides the first tangible evidence that softening external conditions are beginning to have a negative impact on the domestic economy.
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 January 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
FX markets traded mostly sideways during the Asia session, although the dollar enjoyed a very modest bid tone. News reports over the state of Spain's governments and banks are leading to further uncertainty, even though the overall story is not new. As such, we still regard any rally above 1.30 in EURUSD as unsustainable. Meanwhile, the US has managed to register some more positive data. Factory orders increased by 1.8% in November - less than expected but still robust compared to the US' G10 peers. In comments made in a paper, Fed Chairman Bernanke warned that more action was needed on the housing market, and further price declines are still possible. Today, several job surveys are out in the US, ahead of the upcoming payrolls release. Retail sales figures are also due in Germany and France is due to auction a range of OATs, aiming to raise EUR7-8 bn. Our euro rates strategy team sees this as an important test of investor appetite for French paper following the significant spread widening of France over Germany in the past two weeks. Fortunately, France still holds a AAA rating and the auctions are expected to be supported particularly by domestic investors after the recent underperformance of longer-dated French paper.
EUR
Germany's services PMI for December was revised down to 52.4 from 52.7 preliminary, but that still represents a significant lift from November's 50.3. The news from Italy was more worrying however. Italian services PMI fell to 44.5 (cons. 45.3), from 45.8 in November. Our analysts note that the latest data indicate negative Q4 growth for Italy, perhaps in the region of -0.3% to -0.5%.
The flash Eurozone CPI for Dec. was in line with expectations at +2.8% y/y. This supports the ECB's forecasts made in their December meeting. Our European economists expect the ECB will cut the refi rate by a further 50bp in Q1.
Eurogroup Chair Juncker said that a 'return to the drachma is not an option for Greece' and called 2012 a 'key year' for the Eurozone. German Chancellor Merkel announced she will meet with Italian Prime Minister Monti next week.
Germany sold EUR5 bn in 10-year bonds. The official bid to cover ratio was 1.3x. Portugal sold EUR1 bn in 3m T-bills, and the auction was well covered.
The Financial Times reported that Spain expects banks to set aside up to EUR50 bn in new provisions. Citing Economy Minister Guidnos, the report stressed the need for the Spanish banking sector to clean up balance sheets, without leaning too much on central government assistance.
There is increasing scrutiny on Spain's fiscal health, especially that of its regions and banking system. There were reports, later denied, that Spain was seeking IMF and EU help for its banking system. In addition, there were reports that a Spanish region needed help from the central government to repay an overdue loan. This was also denied, but it underscores that even though the Spanish national balance sheet appears to be robust, contingent liabilities from the banking sector and regions may weigh on sentiment, and could add to downside pressure in the euro.
Greek PM Papademos warned that the country faces risk of a disorderly default in March without a bailout deal, and everything is to be determined in the coming weeks.
On Thursday, German retail sales and Eurozone industrial new orders are due.
GBP
UK PMI construction surprised to the upside at 53.2, while consumer credit numbers were also robust at ?0.4bn. Mortgage approvals increased slightly to 52.9k. However, M4 money supply continued to decline, falling by 0.6% m/m.
Sterling has rallied strongly of late but we expect growth headwinds to weigh more on sentiment ahead. A weaker than expected reading in today's important services PMI could prompt the market to reappraise its view on sterling's prospects.
AUD
Australia's trade surplus for November came in weaker than expected at a 9-month low. Although AUD was unperturbed, our Australia economics teams observe that iron ore and coal exports - Australia's two main exports - fell quite sharply. This provides the first tangible evidence that softening external conditions are beginning to have a negative impact on the domestic economy.
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.
Subscribe to:
Posts (Atom)