DAILY MARKET COMMENTARY
31 October 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Japanese Finance Ministry authorized intervention in FX markets for the 3rd time this year, pushing USDJPY back to above 79.25 after the pair had touched a new post-war low of 75.35. The action itself is not surprising, but the timing is as many investors had expected the MoF to act after the FOMC decision this week, as there remains residual risk of fresh balance sheet expansion by the Fed, which would have exerted further downside pressure on USDJPY.
The Japanese authorities appear to have limited their intervention to an initial spurt at the market open and so far price action has been limited, though we do not anticipate any form of 'policy floor' in USDJPY to be adopted along the lines of the SNB, as Japan's economic exposures are far more different and authorities have more tools at their disposal. Otherwise, weekend commentary was relatively quiet. Italian Prime Minister Berlusconi said the euro is a "strange" currency that "hasn't convinced anyone". IIF Managing Director Dallara said he expects a high take-up of the 50% haircut deal for holders of Greek debt, at least from amongst the banking community. He was less optimistic about the intentions of other institutional holders. German Finance Minister Schaeuble said that while Europe preferred to take the voluntary haircut route regarding Greek debt, he said "a less consensual path was not excluded". ECB President Trichet steps down today. On the data front, Eurozone CPI is out and several activity indicators are out from the US. USDJPY traded 75.35-79.53 and EURUSD 1.3975-1.4141..
EUR
During the US session on Friday, Italian Prime Minister Berlusconi said the euro is a "strange" currency that "hasn't convinced anyone". He added that austerity measures will not work without growth, and that Italy is the "most solid" EU country after Germany. Italian 10y yields had earlier closed above 6%, after another day of spread-widening over bunds.
Moody's, S&P, and Fitch affirmed triple-A ratings on the EFSF. Significantly, the ratings do not take account of Thursday's summit decisions to 'leverage' the EFSF. As such, this is a verdict only on changes made to the EFSF which flow directly from Slovakia's parliamentary ratification. These changes take the EFSF's effective lending capacity up to EUR 440 bn, give it the authority to intervene in primary and secondary sovereign bond markets, and authorize it to help finance the recapitalization of banks by lending to governments specifically for this purpose.
EFSF CEO Regling has completed his visit to China, but Chinese officials have so far been publicly non-committal about their intentions regarding the provision of financial assistance to the EFSF. Vice Finance Minister Zhu said he was awaiting further details. Meanwhile, Regling hinted that the EFSF might eventually be willing to issue bonds denominated in CNY, but only with China's approval.
German Finance Minister Schaeuble said that while Europe preferred to take the voluntary haircut route regarding Greek debt, he said "a less consensual path was not excluded". IIF Managing Director Dallara, said he expects that "more than 90% of banks" will volunteer for the 50% haircut deal announced on Thursday. However, he conceded that the intentions of other market participants such as insurers and funds are less clear, and that "some persuasion is still needed there".
Speaking to Germany's Bild am Sonntag ECB President Trichet said Eurozone inflation over the next 10 years "will most probably stay very low; current expectations are for around 1.8 percent".
JPY
The Bank of Japan intervened in FX markets for the third time this year overnight. The action was confirmed by Finance Minister Azumi, citing the need to 'take firm steps against speculative action' and said the intervention was solo, though there has been communication with other countries.
The action puts Japan in an awkward position ahead of the upcoming G20 summit as consistent intervention is not considered a part of the global G20 governance framework the bloc is moving towards. However, given the funds may be redirected towards the Eurozone rescue, and Europe has been very open about attracting Asian interest in an expanded EFSF, criticism may be somewhat muted in the immediate future.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
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Monday, October 31, 2011
Friday, October 28, 2011
28th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
28 October 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH A clear break above 1.4202, the former trendline support that now marks resistance, would expose 1.4288 and then 1.4386. Support is at 1.3970.
USDJPY BEARISH The pair continues to move lower; our focus is on 75.00, the psychological level. Resistance is at 76.49.
GBPUSD BULLISH Recovery through 1.6104 has exposed 1.6203. Near-term support lies at 1.5955 ahead of 1.5891.
USDCHF BEARISH The break below 0.8647 has exposed support 0.8540 and 0.8458. Resistance is at 0.8825.
AUDUSD BULLISH The focus is on 1.0765; a break here would open the way for extension of gains towards 1.1007. Support lies at 1.0486 ahead of 1.0382.
USDCAD BEARISH The pair is testing a former trendline resistance drawn off the May 2010 high, now support, intersecting at 0.9894 today. A break here would open 0.9766. Resistance is at 1.0051.
EURCHF NEUTRAL Near-term directional triggers are at 1.2474 and 1.2123.
EURGBP BULLISH A move above 0.8842 would open 0.8886 next. Support lies at 0.8769.
EURJPY BULLISH Clearance of 107.68 has exposed 109.30. Support lies at 105.68.
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.
28 October 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH A clear break above 1.4202, the former trendline support that now marks resistance, would expose 1.4288 and then 1.4386. Support is at 1.3970.
USDJPY BEARISH The pair continues to move lower; our focus is on 75.00, the psychological level. Resistance is at 76.49.
GBPUSD BULLISH Recovery through 1.6104 has exposed 1.6203. Near-term support lies at 1.5955 ahead of 1.5891.
USDCHF BEARISH The break below 0.8647 has exposed support 0.8540 and 0.8458. Resistance is at 0.8825.
AUDUSD BULLISH The focus is on 1.0765; a break here would open the way for extension of gains towards 1.1007. Support lies at 1.0486 ahead of 1.0382.
USDCAD BEARISH The pair is testing a former trendline resistance drawn off the May 2010 high, now support, intersecting at 0.9894 today. A break here would open 0.9766. Resistance is at 1.0051.
EURCHF NEUTRAL Near-term directional triggers are at 1.2474 and 1.2123.
EURGBP BULLISH A move above 0.8842 would open 0.8886 next. Support lies at 0.8769.
EURJPY BULLISH Clearance of 107.68 has exposed 109.30. Support lies at 105.68.
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.
28th of October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
28 October 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro and risk assets rallied overnight as clear developments emerged from the EU summit. The most important outcome of last night's marathon summit seems to be reaching an agreement with the IIF that a 50% face value haircut would be accepted 'voluntarily'. This means in all likelihood that the ISDA will rule that the restructuring does not amount to a credit event and CDS payout is not triggered. On the EFSF, further details were lacking but a range of options, including a special purpose vehicle and/or credit enhancement, will aim to leverage the fund 4 to 5 times, boosting it to around EUR1 trn. On bank recaps, the capital position of banks will be expected to increase to 9% of core Tier 1 by the end of June 2012. While many doubts remain over the program, the short-term reaction of markets has been favourable and risk currencies, including the euro, will likely continue to perform for now. Elsewhere, The BoJ left the official target rate unchanged but decided to conduct more easing via JPY5 trn worth of more JGB purchases. Also, the RBNZ kept the policy rate unchanged at 2.5%, and left the policy guidance unchanged, retaining its explicit tightening bias. EURUSD traded in a range of 1.3825-1.4000 and USDJPY 75.89-76.32.
EUR
The EU summit ended overnight with clear signs of progress. French President Nikolas Sarkozy outlined the following points:
1. PSI: An agreement that should secure the decline of the Greek debt to GDP ratio with an objective of reaching 120% by 2020. Euro area Member States will contribute to the PSI package up to 30 bn euro. The nominal discount will be 50% on notional Greek debt held by private investors. A new EU-IMF multiannual programme financing up to 100 bn euro will be put in place by the end of the year. Reaching an agreement with the IIF that a 50% face value haircut would be accepted 'voluntarily' means that in all likelihood ISDA will rule that the restructuring does not amount to a credit event and CDS payout is not triggered. This provides significant questions to the CDS market going forward but removes the immediate problem of a credit event. The EU, ECB and IMF now have to decide amongst themselves how to wear the 30 bn loss between them. IMF has de facto preferred creditor status, meaning that the ECB may have to take a hit on its holdings of Greek bonds. If ECB refuses to take a loss then EU governments will simply write off 30 bn of the loans they have already advanced to Greece, which will not be looked upon favourably in several countries. Further details will be forthcoming on this however.
2. EFSF: There will be significant optimization of the EFSF resources, without extending the guarantees underpinning the facility. The options agreed will allow the EFSF resources to be leveraged up to 4 or 5x, which would yield around 1 trillion euros. Further details are limited but it might include a special purpose vehicle construction and/or credit enhancement. With the EFSF chief in China, potential sovereign interest will keep hopes alive for a comprehensive solution, even though many will remain skeptical, given the lack of details.
3. Bank recaps: The capital position of banks will be expected to increase to 9% of Core Tier 1 by the end of June 2012. This was in line with pre-summit . The EBA announced its estimates for how much the banking systems of various countries would need in fresh capital: French banks need EUR 8.8 bn, German EUR 5.2 bn, Portuguese EUR 7.8 bn, Greek EUR 30 bn, Spanish EUR 26.2 bn, and Irish banks none. In total, as signaled previously there is a EUR 106.45 bn capital shortfall.
While many doubts remain over the program, the short term reaction of markets has been favourable and risk currencies, including the euro, will continue to perform. However, with the ECB likely to cut rates, we remain skeptical over the longer-term viability of the euro at these levels and would look to enter fresh short positions once the market has priced these outcomes in..
JPY
The BoJ left the official target rate unchanged but decided to conduct more easing via Yen 5 trillion of more JGB purchases. The size of this program is quite timid, amounting to a JPY 5tn increase to the size of an existing JPY 50 trn asset purchase facility. Increases in this ceiling have occurred several times in the past and we note that any easing of this sort would likely only have a very minor and short-lived effect on USDJPY.
Finance Minister Azumi said that Japan will take bold action on the yen if necessary, and that he wants to keep monitoring FX moves during Tokyo trading on Thursday. Intervention risk remains high.
NZD
The RBNZ kept the policy rate unchanged at 2.5%, and also left the policy guidance unchanged, retaining its explicit tightening bias. If "global developments have only a mild impact on the New Zealand economy" then "future OCR increases" may be needed.
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.
28 October 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro and risk assets rallied overnight as clear developments emerged from the EU summit. The most important outcome of last night's marathon summit seems to be reaching an agreement with the IIF that a 50% face value haircut would be accepted 'voluntarily'. This means in all likelihood that the ISDA will rule that the restructuring does not amount to a credit event and CDS payout is not triggered. On the EFSF, further details were lacking but a range of options, including a special purpose vehicle and/or credit enhancement, will aim to leverage the fund 4 to 5 times, boosting it to around EUR1 trn. On bank recaps, the capital position of banks will be expected to increase to 9% of core Tier 1 by the end of June 2012. While many doubts remain over the program, the short-term reaction of markets has been favourable and risk currencies, including the euro, will likely continue to perform for now. Elsewhere, The BoJ left the official target rate unchanged but decided to conduct more easing via JPY5 trn worth of more JGB purchases. Also, the RBNZ kept the policy rate unchanged at 2.5%, and left the policy guidance unchanged, retaining its explicit tightening bias. EURUSD traded in a range of 1.3825-1.4000 and USDJPY 75.89-76.32.
EUR
The EU summit ended overnight with clear signs of progress. French President Nikolas Sarkozy outlined the following points:
1. PSI: An agreement that should secure the decline of the Greek debt to GDP ratio with an objective of reaching 120% by 2020. Euro area Member States will contribute to the PSI package up to 30 bn euro. The nominal discount will be 50% on notional Greek debt held by private investors. A new EU-IMF multiannual programme financing up to 100 bn euro will be put in place by the end of the year. Reaching an agreement with the IIF that a 50% face value haircut would be accepted 'voluntarily' means that in all likelihood ISDA will rule that the restructuring does not amount to a credit event and CDS payout is not triggered. This provides significant questions to the CDS market going forward but removes the immediate problem of a credit event. The EU, ECB and IMF now have to decide amongst themselves how to wear the 30 bn loss between them. IMF has de facto preferred creditor status, meaning that the ECB may have to take a hit on its holdings of Greek bonds. If ECB refuses to take a loss then EU governments will simply write off 30 bn of the loans they have already advanced to Greece, which will not be looked upon favourably in several countries. Further details will be forthcoming on this however.
2. EFSF: There will be significant optimization of the EFSF resources, without extending the guarantees underpinning the facility. The options agreed will allow the EFSF resources to be leveraged up to 4 or 5x, which would yield around 1 trillion euros. Further details are limited but it might include a special purpose vehicle construction and/or credit enhancement. With the EFSF chief in China, potential sovereign interest will keep hopes alive for a comprehensive solution, even though many will remain skeptical, given the lack of details.
3. Bank recaps: The capital position of banks will be expected to increase to 9% of Core Tier 1 by the end of June 2012. This was in line with pre-summit . The EBA announced its estimates for how much the banking systems of various countries would need in fresh capital: French banks need EUR 8.8 bn, German EUR 5.2 bn, Portuguese EUR 7.8 bn, Greek EUR 30 bn, Spanish EUR 26.2 bn, and Irish banks none. In total, as signaled previously there is a EUR 106.45 bn capital shortfall.
While many doubts remain over the program, the short term reaction of markets has been favourable and risk currencies, including the euro, will continue to perform. However, with the ECB likely to cut rates, we remain skeptical over the longer-term viability of the euro at these levels and would look to enter fresh short positions once the market has priced these outcomes in..
JPY
The BoJ left the official target rate unchanged but decided to conduct more easing via Yen 5 trillion of more JGB purchases. The size of this program is quite timid, amounting to a JPY 5tn increase to the size of an existing JPY 50 trn asset purchase facility. Increases in this ceiling have occurred several times in the past and we note that any easing of this sort would likely only have a very minor and short-lived effect on USDJPY.
Finance Minister Azumi said that Japan will take bold action on the yen if necessary, and that he wants to keep monitoring FX moves during Tokyo trading on Thursday. Intervention risk remains high.
NZD
The RBNZ kept the policy rate unchanged at 2.5%, and also left the policy guidance unchanged, retaining its explicit tightening bias. If "global developments have only a mild impact on the New Zealand economy" then "future OCR increases" may be needed.
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, October 27, 2011
27th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
27 October 2011 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.4013, a break above which would expose 1.4100. Initial support lies at 1.3799.
USDJPY BEARISH Near-term support lies at 75.72, the all time low ahead of 75.00, the psychological level. Resistance is at 76.49.
GBPUSD BULLISH Resistance is at 1.6083, a rise through which would open 1.6203. Near-term support lies at 1.5891.
USDCHF BEARISH Key support lies at 0.8647; a break through which would expose 0.8540. Resistance is at 0.8952.
AUDUSD BULLISH Near-term resistance is at 1.0501, a clear above which would open the way towards 1.0666. Support lies at 1.0203.
USDCAD BEARISH Pressure is on 0.9991, a break below which would expose 0.9885. Key resistance is at 1.0313.
EURCHF NEUTRAL Near-term directional triggers are at 1.2474 and 1.2123.
EURGBP BEARISH Initial support lies at 0.8670, a move below which would expose 0.8632. Resistance is at 0.8767.
EURJPY BULLISH Key resistance is at 106.54, a break above this level would open 107.68. Support lies at 104.75.
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 October 2011 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.4013, a break above which would expose 1.4100. Initial support lies at 1.3799.
USDJPY BEARISH Near-term support lies at 75.72, the all time low ahead of 75.00, the psychological level. Resistance is at 76.49.
GBPUSD BULLISH Resistance is at 1.6083, a rise through which would open 1.6203. Near-term support lies at 1.5891.
USDCHF BEARISH Key support lies at 0.8647; a break through which would expose 0.8540. Resistance is at 0.8952.
AUDUSD BULLISH Near-term resistance is at 1.0501, a clear above which would open the way towards 1.0666. Support lies at 1.0203.
USDCAD BEARISH Pressure is on 0.9991, a break below which would expose 0.9885. Key resistance is at 1.0313.
EURCHF NEUTRAL Near-term directional triggers are at 1.2474 and 1.2123.
EURGBP BEARISH Initial support lies at 0.8670, a move below which would expose 0.8632. Resistance is at 0.8767.
EURJPY BULLISH Key resistance is at 106.54, a break above this level would open 107.68. Support lies at 104.75.
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 October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
27 October 2011 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro and risk assets rallied overnight as clear developments emerged from the EU summit. The most important outcome of last night's marathon summit seems to be reaching an agreement with the IIF that a 50% face value haircut would be accepted 'voluntarily'. This means in all likelihood that the ISDA will rule that the restructuring does not amount to a credit event and CDS payout is not triggered. On the EFSF, further details were lacking but a range of options, including a special purpose vehicle and/or credit enhancement, will aim to leverage the fund 4 to 5 times, boosting it to around EUR1 trn. On bank recaps, the capital position of banks will be expected to increase to 9% of core Tier 1 by the end of June 2012. While many doubts remain over the program, the short-term reaction of markets has been favourable and risk currencies, including the euro, will likely continue to perform for now. Elsewhere, The BoJ left the official target rate unchanged but decided to conduct more easing via JPY5 trn worth of more JGB purchases. Also, the RBNZ kept the policy rate unchanged at 2.5%, and left the policy guidance unchanged, retaining its explicit tightening bias. EURUSD traded in a range of 1.3825-1.4000 and USDJPY 75.89-76.32.
EUR
The EU summit ended overnight with clear signs of progress. French President Nikolas Sarkozy outlined the following points:
1. PSI: An agreement that should secure the decline of the Greek debt to GDP ratio with an objective of reaching 120% by 2020. Euro area Member States will contribute to the PSI package up to 30 bn euro. The nominal discount will be 50% on notional Greek debt held by private investors. A new EU-IMF multiannual programme financing up to 100 bn euro will be put in place by the end of the year. Reaching an agreement with the IIF that a 50% face value haircut would be accepted 'voluntarily' means that in all likelihood ISDA will rule that the restructuring does not amount to a credit event and CDS payout is not triggered. This provides significant questions to the CDS market going forward but removes the immediate problem of a credit event. The EU, ECB and IMF now have to decide amongst themselves how to wear the 30 bn loss between them. IMF has de facto preferred creditor status, meaning that the ECB may have to take a hit on its holdings of Greek bonds. If ECB refuses to take a loss then EU governments will simply write off 30 bn of the loans they have already advanced to Greece, which will not be looked upon favourably in several countries. Further details will be forthcoming on this however.
2. EFSF: There will be significant optimization of the EFSF resources, without extending the guarantees underpinning the facility. The options agreed will allow the EFSF resources to be leveraged up to 4 or 5x, which would yield around 1 trillion euros. Further details are limited but it might include a special purpose vehicle construction and/or credit enhancement. With the EFSF chief in China, potential sovereign interest will keep hopes alive for a comprehensive solution, even though many will remain skeptical, given the lack of details.
3. Bank recaps: The capital position of banks will be expected to increase to 9% of Core Tier 1 by the end of June 2012. This was in line with pre-summit . The EBA announced its estimates for how much the banking systems of various countries would need in fresh capital: French banks need EUR 8.8 bn, German EUR 5.2 bn, Portuguese EUR 7.8 bn, Greek EUR 30 bn, Spanish EUR 26.2 bn, and Irish banks none. In total, as signaled previously there is a EUR 106.45 bn capital shortfall.
While many doubts remain over the program, the short term reaction of markets has been favourable and risk currencies, including the euro, will continue to perform. However, with the ECB likely to cut rates, we remain skeptical over the longer-term viability of the euro at these levels and would look to enter fresh short positions once the market has priced these outcomes in..
JPY
The BoJ left the official target rate unchanged but decided to conduct more easing via Yen 5 trillion of more JGB purchases. The size of this program is quite timid, amounting to a JPY 5tn increase to the size of an existing JPY 50 trn asset purchase facility. Increases in this ceiling have occurred several times in the past and we note that any easing of this sort would likely only have a very minor and short-lived effect on USDJPY.
Finance Minister Azumi said that Japan will take bold action on the yen if necessary, and that he wants to keep monitoring FX moves during Tokyo trading on Thursday. Intervention risk remains high.
NZD
The RBNZ kept the policy rate unchanged at 2.5%, and also left the policy guidance unchanged, retaining its explicit tightening bias. If "global developments have only a mild impact on the New Zealand economy" then "future OCR increases" may be needed.
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 October 2011 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro and risk assets rallied overnight as clear developments emerged from the EU summit. The most important outcome of last night's marathon summit seems to be reaching an agreement with the IIF that a 50% face value haircut would be accepted 'voluntarily'. This means in all likelihood that the ISDA will rule that the restructuring does not amount to a credit event and CDS payout is not triggered. On the EFSF, further details were lacking but a range of options, including a special purpose vehicle and/or credit enhancement, will aim to leverage the fund 4 to 5 times, boosting it to around EUR1 trn. On bank recaps, the capital position of banks will be expected to increase to 9% of core Tier 1 by the end of June 2012. While many doubts remain over the program, the short-term reaction of markets has been favourable and risk currencies, including the euro, will likely continue to perform for now. Elsewhere, The BoJ left the official target rate unchanged but decided to conduct more easing via JPY5 trn worth of more JGB purchases. Also, the RBNZ kept the policy rate unchanged at 2.5%, and left the policy guidance unchanged, retaining its explicit tightening bias. EURUSD traded in a range of 1.3825-1.4000 and USDJPY 75.89-76.32.
EUR
The EU summit ended overnight with clear signs of progress. French President Nikolas Sarkozy outlined the following points:
1. PSI: An agreement that should secure the decline of the Greek debt to GDP ratio with an objective of reaching 120% by 2020. Euro area Member States will contribute to the PSI package up to 30 bn euro. The nominal discount will be 50% on notional Greek debt held by private investors. A new EU-IMF multiannual programme financing up to 100 bn euro will be put in place by the end of the year. Reaching an agreement with the IIF that a 50% face value haircut would be accepted 'voluntarily' means that in all likelihood ISDA will rule that the restructuring does not amount to a credit event and CDS payout is not triggered. This provides significant questions to the CDS market going forward but removes the immediate problem of a credit event. The EU, ECB and IMF now have to decide amongst themselves how to wear the 30 bn loss between them. IMF has de facto preferred creditor status, meaning that the ECB may have to take a hit on its holdings of Greek bonds. If ECB refuses to take a loss then EU governments will simply write off 30 bn of the loans they have already advanced to Greece, which will not be looked upon favourably in several countries. Further details will be forthcoming on this however.
2. EFSF: There will be significant optimization of the EFSF resources, without extending the guarantees underpinning the facility. The options agreed will allow the EFSF resources to be leveraged up to 4 or 5x, which would yield around 1 trillion euros. Further details are limited but it might include a special purpose vehicle construction and/or credit enhancement. With the EFSF chief in China, potential sovereign interest will keep hopes alive for a comprehensive solution, even though many will remain skeptical, given the lack of details.
3. Bank recaps: The capital position of banks will be expected to increase to 9% of Core Tier 1 by the end of June 2012. This was in line with pre-summit . The EBA announced its estimates for how much the banking systems of various countries would need in fresh capital: French banks need EUR 8.8 bn, German EUR 5.2 bn, Portuguese EUR 7.8 bn, Greek EUR 30 bn, Spanish EUR 26.2 bn, and Irish banks none. In total, as signaled previously there is a EUR 106.45 bn capital shortfall.
While many doubts remain over the program, the short term reaction of markets has been favourable and risk currencies, including the euro, will continue to perform. However, with the ECB likely to cut rates, we remain skeptical over the longer-term viability of the euro at these levels and would look to enter fresh short positions once the market has priced these outcomes in..
JPY
The BoJ left the official target rate unchanged but decided to conduct more easing via Yen 5 trillion of more JGB purchases. The size of this program is quite timid, amounting to a JPY 5tn increase to the size of an existing JPY 50 trn asset purchase facility. Increases in this ceiling have occurred several times in the past and we note that any easing of this sort would likely only have a very minor and short-lived effect on USDJPY.
Finance Minister Azumi said that Japan will take bold action on the yen if necessary, and that he wants to keep monitoring FX moves during Tokyo trading on Thursday. Intervention risk remains high.
NZD
The RBNZ kept the policy rate unchanged at 2.5%, and also left the policy guidance unchanged, retaining its explicit tightening bias. If "global developments have only a mild impact on the New Zealand economy" then "future OCR increases" may be needed.
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, October 26, 2011
26th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
26 October 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Break above 1.4013 would expose 1.4100. Initial support lies at 1.3704.
USDJPY BEARISH Initial support lies at 75.74 ahead of 75.00, the psychological level. Resistance is at 76.49.
GBPUSD BULLISH Resistance is at 1.6083, a break through this level would open 1.6203. Near-term support lies at 1.5900.
USDCHF BEARISH Momentum is negative; key support lies at 0.8647 ahead of 0.8540. Resistance is at 0.8952.
AUDUSD BULLISH Resistance is at 1.0501 ahead of 1.0666. Initial support lies at 1.0203.
USDCAD BEARISH Support lies at 0.9991 ahead of 0.9885. Key resistance is at 1.0273.
EURCHF NEUTRAL Near-term directional triggers are at 1.2474 and 1.2123.
EURGBP BEARISH Support lies at 0.8632, a break below which would expose 0.8583. Initial resistance is at 0.8733.
EURJPY BULLISH Key resistance is at 106.54, a break above this level would open 107.68. Support lies at 104.78.
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 October 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Break above 1.4013 would expose 1.4100. Initial support lies at 1.3704.
USDJPY BEARISH Initial support lies at 75.74 ahead of 75.00, the psychological level. Resistance is at 76.49.
GBPUSD BULLISH Resistance is at 1.6083, a break through this level would open 1.6203. Near-term support lies at 1.5900.
USDCHF BEARISH Momentum is negative; key support lies at 0.8647 ahead of 0.8540. Resistance is at 0.8952.
AUDUSD BULLISH Resistance is at 1.0501 ahead of 1.0666. Initial support lies at 1.0203.
USDCAD BEARISH Support lies at 0.9991 ahead of 0.9885. Key resistance is at 1.0273.
EURCHF NEUTRAL Near-term directional triggers are at 1.2474 and 1.2123.
EURGBP BEARISH Support lies at 0.8632, a break below which would expose 0.8583. Initial resistance is at 0.8733.
EURJPY BULLISH Key resistance is at 106.54, a break above this level would open 107.68. Support lies at 104.78.
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 October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
26 October 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
All eyes will be back on the Eurozone today as the leaders of the European Union hold their second summit in the space of a week in search of a comprehensive solution to the Eurozone debt crisis. However, pre-summit nerves are showing as Tuesday's headline flow was hardly reassuring for those in search of a positive outcome. German lawmakers initially disputed the inclusion of language in the final draft calling for more secondary bond purchases by the ECB. Shortly afterwards, newswires reported that Wednesday's meeting of EU Finance Ministers had been unexpectedly cancelled, which triggered a brief selloff of the euro and risk assets more generally. The announcement came without any explanation, and investors naturally assumed the worst. However, we note that the more important summits of EU and Eurozone leaders will still go ahead on Wednesday as planned. Given the negativity in markets it is surprising that EUR has held up relatively well, suggesting investors who wish to be short EURs already are, and most others are simply staying on the sidelines. Elsewhere, the recent run of solid US data hit a bump as consumer confidence came in exceptionally weak, returning to levels last seen in March 2009. If risk aversion wasn't seen within the EUR per se, other markets clearly priced in uncertainty. US Treasury securities rallied across the curve, and USDJPY fell to a new post-1945 low, briefly touching 75.74. Gold quickly climbed almost $50, breaching $1700/oz for the first time in a month. The reaction suggests that some investors are beginning to anticipate another round of Fed easing, although this is not the base case of our US economists and recent reports suggest a greater interest to tackle the housing market in the US rather than stick to conventional QE. Overnight EURUSD traded in a range of 1.3893-1.3936 and USDJPY 75.97-76.16.
EUR
Three events on Wednesday are likely to vie for investor attention. First, the German parliament is due to vote on whether to authorize the use of EFSF leverage. Our European economists expect the vote to be carried without difficulty, although they acknowledge the "slight risk" that the motion may fail. In the latter (albeit unlikely) case, Chancellor Merkel would have no mandate to approve the use of leverage at the Eurozone summit later that day, and the euro would likely experience a sharp fall.
The first summit is scheduled to begin at 1600 GMT, where the entire complement of 27 EU Leaders are due to attend for a short meeting. A second summit of only the leaders of the 17 Eurozone countries then convenes at 1715 GMT. We expect a formal communiqu? to be released eventually, plus a possible press conference, but no set times have been given. However, given the group clearly has much talking to do, we would not be surprised to see discussions continue until 2200 GMT or beyond.
Newswire headlines suggested that much work remains to be done on the Eurozone's so-called "comprehensive solution". Un-named EU officials said that Wednesday's Eurozone summit communiqu? is unlikely to quantify precisely the EFSF's new leveraged capacity. Instead, a range of possible sizes might be announced. It also appears that a firm figure will not be provided for the size of the EU's bank recapitalization ambitions. We also think we are unlikely to hear a concrete figure for the size of bondholder losses, but it will likely be made clear that the eventual figure will be well in excess of 21%. In short, the summit is likely to be largely a disappointment as far as investors hoping for finality are concerned.
Political tensions in Italy continue to build as a package of pension reforms is assembled ahead of Wednesday's EU summits. The EU is insisting on specific measures and commitments and it is not clear if the Italian government is in a position to strike a compromise with the opposition on the matter.
JPY
The Bank of Japan's two-day meeting is due to begin on Wednesday, with an announcement expected around 0400GMT on Thursday. The Nikkei newspaper reported that further easing will be discussed, perhaps by expanding its existing JPY 50 trn asset purchase facility by JPY 5 trn. We note that this is one of the gentler easing steps the BoJ could take, and that any ensuing USDJPY upside is likely to be small and short-lived and forgotten about entirely within a few hours.
Japanese Finance Minister Azumi said he had told G20 meeting Japan sees USDJPY level of 76/77 as appropriate, and stressed that he didn't think the G20 communiqu?'s wording on FX prevented Japan from intervening in markets. He also said Japan was ready to buy more EFSF bonds if Europe comes up with a credible solution.
AUD
AUD dipped overnight after a soft Q3 CPI, which showed a 0.6% increase (nsa), in line with our forecasts. The annualized pace also edged down to 3.5% from 3.6%. Core measures were also soft. Our economists believe the Q3 numbers are now 'low enough' for an RBA cut and have revised RBA forecasts from a cut in Q1 2012 to November, and expect a follow-up cut in Q1 2012.
GBP
BoE Governor King gave his testimony to the Parliament's Treasury Select Committee. King noted that the MPC came close to voting for asset purchases a month earlier in September. He said the decision was ultimately taken in October on the grounds that financial market volatility had not receded.
CAD
The Bank of Canada kept the policy rate unchanged at 1.0%, as had been widely expected. However, significantly, the bank dropped its explicit tightening bias and has now assumed a neutral policy stance. USDCAD climbed 40 pips on the announcement and got a second boost minutes later when it emerged that Wednesday's meeting of EU Finance Ministers had been unexpectedly cancelled.
The Bank of Canada also lowered its growth forecasts to 2.1% (cons. 2.8%) in 2011 and 1.9% (cons. 2.6%) in 2012.
S&P affirmed Canada's long-term sovereign rating at AAA, outlook stable.
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 October 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
All eyes will be back on the Eurozone today as the leaders of the European Union hold their second summit in the space of a week in search of a comprehensive solution to the Eurozone debt crisis. However, pre-summit nerves are showing as Tuesday's headline flow was hardly reassuring for those in search of a positive outcome. German lawmakers initially disputed the inclusion of language in the final draft calling for more secondary bond purchases by the ECB. Shortly afterwards, newswires reported that Wednesday's meeting of EU Finance Ministers had been unexpectedly cancelled, which triggered a brief selloff of the euro and risk assets more generally. The announcement came without any explanation, and investors naturally assumed the worst. However, we note that the more important summits of EU and Eurozone leaders will still go ahead on Wednesday as planned. Given the negativity in markets it is surprising that EUR has held up relatively well, suggesting investors who wish to be short EURs already are, and most others are simply staying on the sidelines. Elsewhere, the recent run of solid US data hit a bump as consumer confidence came in exceptionally weak, returning to levels last seen in March 2009. If risk aversion wasn't seen within the EUR per se, other markets clearly priced in uncertainty. US Treasury securities rallied across the curve, and USDJPY fell to a new post-1945 low, briefly touching 75.74. Gold quickly climbed almost $50, breaching $1700/oz for the first time in a month. The reaction suggests that some investors are beginning to anticipate another round of Fed easing, although this is not the base case of our US economists and recent reports suggest a greater interest to tackle the housing market in the US rather than stick to conventional QE. Overnight EURUSD traded in a range of 1.3893-1.3936 and USDJPY 75.97-76.16.
EUR
Three events on Wednesday are likely to vie for investor attention. First, the German parliament is due to vote on whether to authorize the use of EFSF leverage. Our European economists expect the vote to be carried without difficulty, although they acknowledge the "slight risk" that the motion may fail. In the latter (albeit unlikely) case, Chancellor Merkel would have no mandate to approve the use of leverage at the Eurozone summit later that day, and the euro would likely experience a sharp fall.
The first summit is scheduled to begin at 1600 GMT, where the entire complement of 27 EU Leaders are due to attend for a short meeting. A second summit of only the leaders of the 17 Eurozone countries then convenes at 1715 GMT. We expect a formal communiqu? to be released eventually, plus a possible press conference, but no set times have been given. However, given the group clearly has much talking to do, we would not be surprised to see discussions continue until 2200 GMT or beyond.
Newswire headlines suggested that much work remains to be done on the Eurozone's so-called "comprehensive solution". Un-named EU officials said that Wednesday's Eurozone summit communiqu? is unlikely to quantify precisely the EFSF's new leveraged capacity. Instead, a range of possible sizes might be announced. It also appears that a firm figure will not be provided for the size of the EU's bank recapitalization ambitions. We also think we are unlikely to hear a concrete figure for the size of bondholder losses, but it will likely be made clear that the eventual figure will be well in excess of 21%. In short, the summit is likely to be largely a disappointment as far as investors hoping for finality are concerned.
Political tensions in Italy continue to build as a package of pension reforms is assembled ahead of Wednesday's EU summits. The EU is insisting on specific measures and commitments and it is not clear if the Italian government is in a position to strike a compromise with the opposition on the matter.
JPY
The Bank of Japan's two-day meeting is due to begin on Wednesday, with an announcement expected around 0400GMT on Thursday. The Nikkei newspaper reported that further easing will be discussed, perhaps by expanding its existing JPY 50 trn asset purchase facility by JPY 5 trn. We note that this is one of the gentler easing steps the BoJ could take, and that any ensuing USDJPY upside is likely to be small and short-lived and forgotten about entirely within a few hours.
Japanese Finance Minister Azumi said he had told G20 meeting Japan sees USDJPY level of 76/77 as appropriate, and stressed that he didn't think the G20 communiqu?'s wording on FX prevented Japan from intervening in markets. He also said Japan was ready to buy more EFSF bonds if Europe comes up with a credible solution.
AUD
AUD dipped overnight after a soft Q3 CPI, which showed a 0.6% increase (nsa), in line with our forecasts. The annualized pace also edged down to 3.5% from 3.6%. Core measures were also soft. Our economists believe the Q3 numbers are now 'low enough' for an RBA cut and have revised RBA forecasts from a cut in Q1 2012 to November, and expect a follow-up cut in Q1 2012.
GBP
BoE Governor King gave his testimony to the Parliament's Treasury Select Committee. King noted that the MPC came close to voting for asset purchases a month earlier in September. He said the decision was ultimately taken in October on the grounds that financial market volatility had not receded.
CAD
The Bank of Canada kept the policy rate unchanged at 1.0%, as had been widely expected. However, significantly, the bank dropped its explicit tightening bias and has now assumed a neutral policy stance. USDCAD climbed 40 pips on the announcement and got a second boost minutes later when it emerged that Wednesday's meeting of EU Finance Ministers had been unexpectedly cancelled.
The Bank of Canada also lowered its growth forecasts to 2.1% (cons. 2.8%) in 2011 and 1.9% (cons. 2.6%) in 2012.
S&P affirmed Canada's long-term sovereign rating at AAA, outlook stable.
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, October 25, 2011
25th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
25 October 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Near-term resistance is at 1.4013, a break above which would expose 1.4100. Initial support lies at 1.3704.
USDJPY BEARISH Support lies at 75.82, a break below which would open 75.00, the psychological level. Resistance is at 76.92.
GBPUSD BULLISH Momentum is positive; initial resistance is at 1.6083, a break through this level would open 1.6203. Near-term support lies at 1.5754.
USDCHF BEARISH Pressure is on 0.8786, a move below which would expose 0.8647. Resistance is at 0.8952.
AUDUSD BULLISH Break of 1.0478 has opened the way for extension of gains towards 1.0666 and 1.0765. Initial support lies at 1.0203.
USDCAD BEARISH Focus is on 1.0000, a break through which would open 0.9885 next. Resistance is at 1.0188.
EURCHF NEUTRAL Near-term directional triggers are at 1.2474 and 1.2123.
EURGBP NEUTRAL Initial resistance is at 0.8733, a rise through which would open 0.8767. Support lies at 0.8632 ahead of 0.8583.
EURJPY BULLISH Resistance is at 106.54, a move above this level would open the way for gains towards 107.68. Key support lies at 104.78.
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 October 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Near-term resistance is at 1.4013, a break above which would expose 1.4100. Initial support lies at 1.3704.
USDJPY BEARISH Support lies at 75.82, a break below which would open 75.00, the psychological level. Resistance is at 76.92.
GBPUSD BULLISH Momentum is positive; initial resistance is at 1.6083, a break through this level would open 1.6203. Near-term support lies at 1.5754.
USDCHF BEARISH Pressure is on 0.8786, a move below which would expose 0.8647. Resistance is at 0.8952.
AUDUSD BULLISH Break of 1.0478 has opened the way for extension of gains towards 1.0666 and 1.0765. Initial support lies at 1.0203.
USDCAD BEARISH Focus is on 1.0000, a break through which would open 0.9885 next. Resistance is at 1.0188.
EURCHF NEUTRAL Near-term directional triggers are at 1.2474 and 1.2123.
EURGBP NEUTRAL Initial resistance is at 0.8733, a rise through which would open 0.8767. Support lies at 0.8632 ahead of 0.8583.
EURJPY BULLISH Resistance is at 106.54, a move above this level would open the way for gains towards 107.68. Key support lies at 104.78.
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 October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
25 October 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The past few trading sessions have provided investors enough headlines to anticipate the broad outcomes of this week's Eurozone summit. There are plans on the table, which are not mutually exclusive, and the debate has shifted back to private sector participation in reducing Greece's liabilities. It is somewhat reassuring that no official calls for coercive restructuring have yet been made. Nevertheless, indications are that a 60% NPV reduction may now be on the cards, and achieving sufficient participation for such a plan on a voluntary basis could be a challenge.
Sentiment is still largely euro-negative, although there is little appetite to add to euro shorts here given the risk that a batch of euro-positive headlines could materialize only two days from now. Our FX Flow monitor published yesterday showed the euro was sold against a host of currencies last week but the marginal risk:reward to fresh positions to the downside is very weak. Meanwhile, growth concerns should continue to dominate proceedings, especially after yesterday's weak PMI readings out of Europe. We don't expect a recession in any of the world's major economies, especially if momentum out of the US manages to carry the rest of the world through, and a generally robust earnings season so far has helped consolidate economic expectations.
Overnight, EURUSD traded in a range of 1.3831-1.3907 and USDJPY in a range of 76.18-76.46, having rebounded from record lows last Friday Ahead today, German and Eurozone activity indicators are out but investors will continue to monitor Eurozone headlines ahead of Wednesday's summit. Flash China PMI rebounded to 51.1 overnight, a positive result for markets fearful of a hard landing in emerging markets.
EUR
The Financial Times reported that bondholders of Greek debt could be asked to take a 60% reduction in the "face value" of their bonds. It is not clear if the article was referring to haircuts on principal, or a combination of lower coupons and longer maturities. Either way, a 60% NPV reduction would be at the extreme upper end of market expectations. Elsewhere, Eurogroup Chairman Juncker said that bondholders of Greek debt may face losses of 50-60%, but he stressed that a coercive restructuring was ruled out.
A Greek government source told Reuters that the new private sector involvement proposal would cover all Greek sovereign bonds maturing out to 2035. We note that this goes far beyond the original plan, where only bonds maturing before 2020 were eligible to participate. If so, to us this suggests that Greece intends to buy itself additional breathing space by kicking future bond redemptions several decades into the future.
Bank of France Governor Noyer said it is now clear that Greece was not ready to enter the Eurozone when it joined in 2002. We note however that this is not a reason for Greece to leave now.
Noyer added that French banks would need no more than EUR 10 bn in fresh capital as part of the proposed recapitalization drive. French Finance Minister Baroin said that French banks are unlikely to need public funds, which if true we note would help France keep its AAA rating.
Norway's Finance Minister Johnsen said that Norway has not been approached to help leverage the EFSF. The denial came after suggestions that sovereign wealth funds might be encouraged to participate in a special purpose investment vehicle designed to hold Eurozone sovereign debt.
News reports indicate that the entire German parliament will be given the right to vote on leveraging the EFSF on Wednesday. German Chancellor Merkel has already indicated that Wednesday's summits will not begin until 1600GMT.
European PMIs were much softer than expected, helping to build the case for a rate cut at next week's ECB meeting. The composite PMI came in at 47.2 (cons. 48.8) and manufacturing was soft at 47.3 (cons. 48.0). German numbers were distressing, as the manufacturing sector showed a contraction to 48.9 (cons. 50), for the first time since July 2009.
SNB's Hildebrand noted overnight that the SNB would defend the CHF limit with full determination, and the SNB would expect the franc to fall gradually on its own."
GBP
Bank of England MPC member Weale said he would not be surprised if UK GDP contracted in Q4. BoE's King and Bean will testify before the Treasury Committee today at 8:45 GMT.
The UK Parliament rejected last night a motion calling for referendum on European Union membership..
CAD
All 27 economists surveyed by Bloomberg expect the Bank of Canada to leave the policy rate unchanged at Tuesday's meeting, and our economists agree. We would not be surprised if the bank completely abandons its implied tightening bias, shifting back to an explicitly neutral policy stance. This would be consistent with recent remarks by Governor Carney who indicated that rates have room to fall, but that he would not be "trigger happy" on the issue.
In addition to the decision, Canadian retail sales are due. The market is looking for a headline print of 0.3% and also a core print of 0.3%.
AUD
CPI for Q3 came in much softer than expected at only +0.4% q/q (cons. +0.7%) and +4.6% (cons. 4.9%). Although still elevated, the 30 pip drop in NZDUSD it provoked suggests the FX market now thinks the RBNZ may avoid hiking interest rates for a while longer.
RBA's Battelino noted overnight that there was no urgency to lower the RBA's benchmark rate. He noted that recent Chinese data was solid and demand for Australian commodities was holding up. However, as inflation outlook is less concerning, he repeated there was scope for policy support to the economy if needed.
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 October 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The past few trading sessions have provided investors enough headlines to anticipate the broad outcomes of this week's Eurozone summit. There are plans on the table, which are not mutually exclusive, and the debate has shifted back to private sector participation in reducing Greece's liabilities. It is somewhat reassuring that no official calls for coercive restructuring have yet been made. Nevertheless, indications are that a 60% NPV reduction may now be on the cards, and achieving sufficient participation for such a plan on a voluntary basis could be a challenge.
Sentiment is still largely euro-negative, although there is little appetite to add to euro shorts here given the risk that a batch of euro-positive headlines could materialize only two days from now. Our FX Flow monitor published yesterday showed the euro was sold against a host of currencies last week but the marginal risk:reward to fresh positions to the downside is very weak. Meanwhile, growth concerns should continue to dominate proceedings, especially after yesterday's weak PMI readings out of Europe. We don't expect a recession in any of the world's major economies, especially if momentum out of the US manages to carry the rest of the world through, and a generally robust earnings season so far has helped consolidate economic expectations.
Overnight, EURUSD traded in a range of 1.3831-1.3907 and USDJPY in a range of 76.18-76.46, having rebounded from record lows last Friday Ahead today, German and Eurozone activity indicators are out but investors will continue to monitor Eurozone headlines ahead of Wednesday's summit. Flash China PMI rebounded to 51.1 overnight, a positive result for markets fearful of a hard landing in emerging markets.
EUR
The Financial Times reported that bondholders of Greek debt could be asked to take a 60% reduction in the "face value" of their bonds. It is not clear if the article was referring to haircuts on principal, or a combination of lower coupons and longer maturities. Either way, a 60% NPV reduction would be at the extreme upper end of market expectations. Elsewhere, Eurogroup Chairman Juncker said that bondholders of Greek debt may face losses of 50-60%, but he stressed that a coercive restructuring was ruled out.
A Greek government source told Reuters that the new private sector involvement proposal would cover all Greek sovereign bonds maturing out to 2035. We note that this goes far beyond the original plan, where only bonds maturing before 2020 were eligible to participate. If so, to us this suggests that Greece intends to buy itself additional breathing space by kicking future bond redemptions several decades into the future.
Bank of France Governor Noyer said it is now clear that Greece was not ready to enter the Eurozone when it joined in 2002. We note however that this is not a reason for Greece to leave now.
Noyer added that French banks would need no more than EUR 10 bn in fresh capital as part of the proposed recapitalization drive. French Finance Minister Baroin said that French banks are unlikely to need public funds, which if true we note would help France keep its AAA rating.
Norway's Finance Minister Johnsen said that Norway has not been approached to help leverage the EFSF. The denial came after suggestions that sovereign wealth funds might be encouraged to participate in a special purpose investment vehicle designed to hold Eurozone sovereign debt.
News reports indicate that the entire German parliament will be given the right to vote on leveraging the EFSF on Wednesday. German Chancellor Merkel has already indicated that Wednesday's summits will not begin until 1600GMT.
European PMIs were much softer than expected, helping to build the case for a rate cut at next week's ECB meeting. The composite PMI came in at 47.2 (cons. 48.8) and manufacturing was soft at 47.3 (cons. 48.0). German numbers were distressing, as the manufacturing sector showed a contraction to 48.9 (cons. 50), for the first time since July 2009.
SNB's Hildebrand noted overnight that the SNB would defend the CHF limit with full determination, and the SNB would expect the franc to fall gradually on its own."
GBP
Bank of England MPC member Weale said he would not be surprised if UK GDP contracted in Q4. BoE's King and Bean will testify before the Treasury Committee today at 8:45 GMT.
The UK Parliament rejected last night a motion calling for referendum on European Union membership..
CAD
All 27 economists surveyed by Bloomberg expect the Bank of Canada to leave the policy rate unchanged at Tuesday's meeting, and our economists agree. We would not be surprised if the bank completely abandons its implied tightening bias, shifting back to an explicitly neutral policy stance. This would be consistent with recent remarks by Governor Carney who indicated that rates have room to fall, but that he would not be "trigger happy" on the issue.
In addition to the decision, Canadian retail sales are due. The market is looking for a headline print of 0.3% and also a core print of 0.3%.
AUD
CPI for Q3 came in much softer than expected at only +0.4% q/q (cons. +0.7%) and +4.6% (cons. 4.9%). Although still elevated, the 30 pip drop in NZDUSD it provoked suggests the FX market now thinks the RBNZ may avoid hiking interest rates for a while longer.
RBA's Battelino noted overnight that there was no urgency to lower the RBA's benchmark rate. He noted that recent Chinese data was solid and demand for Australian commodities was holding up. However, as inflation outlook is less concerning, he repeated there was scope for policy support to the economy if needed.
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, October 24, 2011
24th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
24 October 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Pressure is on 1.3914/37 area; a break through which would expose 1.4013. Initial support lies at 1.3653.
USDJPY BEARISH Pair defined a new low at 75.82, a break below which would open 75.00, a psychological level. Resistance is at 77.09.
GBPUSD BULLISH Near-term resistance is at 1.5991, a move above this level would expose 1.6104. Near-term support lies at 1.5754.
USDCHF NEUTRAL Resistance is at 0.8952 ahead of 0.9083. Support lies at 0.8786 and then 0.8647.
AUDUSD BULLISH A clear break above 1.0399 would expose 1.0434 ahead of 1.0478. Support lies at 1.0203.
USDCAD BEARISH Pressure is on 1.0044, a break of which would signal scope for extension of losses towards 1.0000 and 0.9885. Resistance is at 1.0188.
EURCHF NEUTRAL Support lies at 1.2123, while resistance is at 1.2474.
EURGBP NEUTRAL Near-term resistance is at 0.8767, a rise through which would open 0.8797. Support lies at 0.8632 ahead of 0.8583.
EURJPY BULLISH Clearance of 106.54 would open the way for gains towards 107.68. Key support lies at 104.78.
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 October 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Pressure is on 1.3914/37 area; a break through which would expose 1.4013. Initial support lies at 1.3653.
USDJPY BEARISH Pair defined a new low at 75.82, a break below which would open 75.00, a psychological level. Resistance is at 77.09.
GBPUSD BULLISH Near-term resistance is at 1.5991, a move above this level would expose 1.6104. Near-term support lies at 1.5754.
USDCHF NEUTRAL Resistance is at 0.8952 ahead of 0.9083. Support lies at 0.8786 and then 0.8647.
AUDUSD BULLISH A clear break above 1.0399 would expose 1.0434 ahead of 1.0478. Support lies at 1.0203.
USDCAD BEARISH Pressure is on 1.0044, a break of which would signal scope for extension of losses towards 1.0000 and 0.9885. Resistance is at 1.0188.
EURCHF NEUTRAL Support lies at 1.2123, while resistance is at 1.2474.
EURGBP NEUTRAL Near-term resistance is at 0.8767, a rise through which would open 0.8797. Support lies at 0.8632 ahead of 0.8583.
EURJPY BULLISH Clearance of 106.54 would open the way for gains towards 107.68. Key support lies at 104.78.
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 October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
24 October 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Price action overnight suggests the market is still holding on to hopes that a half-satisfactory plan for a comprehensive solution to the Eurozone debt crisis can be found, but final results will need to wait until the Wednesday summit. This meeting will now be held between all 27 members of the European Union rather than the Eurozone alone, much to French displeasure according to French reports. German Chancellor Merkel's priority over the next 48 hours is to secure constitutional and parliamentary guarantees domestically over potential agreements over the expanded EFSF.
The only concrete progress over the weekend appear to be that the details of the bank recapitalization plan are now virtually agreed, with the Financial Times suggesting a capital shortfall of EUR 108 bn has been identified - slightly larger than market expectations. The French delegation also appear to have completely abandoned calls to employ the ECB as a leveraging agent for the EFSF - both French President Sarkozy and Finance Minister Baroin have indicated that this avenue is no longer being explored. However, EU President Van Rompuy said that completely ruling out ECB participation was also not advised, as many options are being explored still. Finally it would seem that Italy has come under significant peer pressure to demonstrate a renewed commitment to austerity measures and structural reform, and additional measures on this front could be forthcoming as part of a wider agreement.
Overnight, EURUSD traded in a range of 1.3831-1.3907 and USDJPY in a range of 76.18-76.46, having rebounded from record lows last Friday Ahead today, German and Eurozone activity indicators are out but investors will continue to monitor Eurozone headlines ahead of Wednesday's summit. Flash China PMI rebounded to 51.1 overnight, a positive result for markets fearful of a hard landing in emerging markets.
EUR
French President Sarkozy said that his "wish is that on Wednesday, an accord will be found that will alleviate the financial crisis". German Chancellor Merkel also pointed to Wednesday as a key date - remarking on progress she said "we are in a good situation to make progress so that we can finalise our work on Wednesday". Finland's Prime Minister Katainen reinforced the message saying "one should not expect decisions from the euro (leaders') group today but rather on Wednesday. I want to emphasise that so as to make clear what to expect."
Merkel said that EU finance ministers have by-and-large agreed to the details of the bank recapitalization plan.
The German and Austrian contingents have revealed that EFSF leveraging options have been narrowed down to two possibilities, neither of which involves the ECB, although they did not elaborate further. No details have leaked out about how large the losses of holders of Greek bonds will be, although an NPV reduction of 50-60% has been floated.
EU Council President von Rompuy said that Europeans are calling for an immediate effort from Italy and that the Italian authorities are willing to comply. He also confirmed that two options for the EFSF were being explored, one involved an insurance fund and the other involved establishing a SWF-like entity with outside participation to invest in the bonds of at-risk countries, though the EFSF would bear the first losses.
German Economy Minister and FDP Chief Roesler said giving the EFSF a banking license was 'out of the question' and called for the EFSF to be expanded to stem contagion only.
Irish Finance Minister Kenny said that "the prevention of contagion and the construction of firewalls is of critical importance."
JPY
On Friday, USDJPY briefly dipped to a new post-1945 low. Bloomberg put it at 75.82, while our traders saw the low at 75.78. A run of stop losses was to blame. The move triggered a quick response from Japan's Finance Minister Azumi who again pledged to take decisive action on excessive speculative moves.
AUD
Q3 PPI came in below expectations overnight at 0.60%q/q (cons. 0.80%). Core PPI was higher at 0.7%q/q, but the annualized rate moderated to 2.3%.
Our analysts note that Overall, today's PPI data was a little lower than expected, with the y/y pace now at its historical average of 2.7% (and its lowest in 3 quarters). Across the 'underlying measures' there is also some evidence of moderating upstream price pressures.
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 October 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Price action overnight suggests the market is still holding on to hopes that a half-satisfactory plan for a comprehensive solution to the Eurozone debt crisis can be found, but final results will need to wait until the Wednesday summit. This meeting will now be held between all 27 members of the European Union rather than the Eurozone alone, much to French displeasure according to French reports. German Chancellor Merkel's priority over the next 48 hours is to secure constitutional and parliamentary guarantees domestically over potential agreements over the expanded EFSF.
The only concrete progress over the weekend appear to be that the details of the bank recapitalization plan are now virtually agreed, with the Financial Times suggesting a capital shortfall of EUR 108 bn has been identified - slightly larger than market expectations. The French delegation also appear to have completely abandoned calls to employ the ECB as a leveraging agent for the EFSF - both French President Sarkozy and Finance Minister Baroin have indicated that this avenue is no longer being explored. However, EU President Van Rompuy said that completely ruling out ECB participation was also not advised, as many options are being explored still. Finally it would seem that Italy has come under significant peer pressure to demonstrate a renewed commitment to austerity measures and structural reform, and additional measures on this front could be forthcoming as part of a wider agreement.
Overnight, EURUSD traded in a range of 1.3831-1.3907 and USDJPY in a range of 76.18-76.46, having rebounded from record lows last Friday Ahead today, German and Eurozone activity indicators are out but investors will continue to monitor Eurozone headlines ahead of Wednesday's summit. Flash China PMI rebounded to 51.1 overnight, a positive result for markets fearful of a hard landing in emerging markets.
EUR
French President Sarkozy said that his "wish is that on Wednesday, an accord will be found that will alleviate the financial crisis". German Chancellor Merkel also pointed to Wednesday as a key date - remarking on progress she said "we are in a good situation to make progress so that we can finalise our work on Wednesday". Finland's Prime Minister Katainen reinforced the message saying "one should not expect decisions from the euro (leaders') group today but rather on Wednesday. I want to emphasise that so as to make clear what to expect."
Merkel said that EU finance ministers have by-and-large agreed to the details of the bank recapitalization plan.
The German and Austrian contingents have revealed that EFSF leveraging options have been narrowed down to two possibilities, neither of which involves the ECB, although they did not elaborate further. No details have leaked out about how large the losses of holders of Greek bonds will be, although an NPV reduction of 50-60% has been floated.
EU Council President von Rompuy said that Europeans are calling for an immediate effort from Italy and that the Italian authorities are willing to comply. He also confirmed that two options for the EFSF were being explored, one involved an insurance fund and the other involved establishing a SWF-like entity with outside participation to invest in the bonds of at-risk countries, though the EFSF would bear the first losses.
German Economy Minister and FDP Chief Roesler said giving the EFSF a banking license was 'out of the question' and called for the EFSF to be expanded to stem contagion only.
Irish Finance Minister Kenny said that "the prevention of contagion and the construction of firewalls is of critical importance."
JPY
On Friday, USDJPY briefly dipped to a new post-1945 low. Bloomberg put it at 75.82, while our traders saw the low at 75.78. A run of stop losses was to blame. The move triggered a quick response from Japan's Finance Minister Azumi who again pledged to take decisive action on excessive speculative moves.
AUD
Q3 PPI came in below expectations overnight at 0.60%q/q (cons. 0.80%). Core PPI was higher at 0.7%q/q, but the annualized rate moderated to 2.3%.
Our analysts note that Overall, today's PPI data was a little lower than expected, with the y/y pace now at its historical average of 2.7% (and its lowest in 3 quarters). Across the 'underlying measures' there is also some evidence of moderating upstream price pressures.
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, October 21, 2011
21st of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
21 October 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Resistance is at 1.3914/37 area, a break above which would signal scope for gains towards 1.4013. Key support lies at 1.3566.
USDJPY NEUTRAL Resistance is at 77.49, while support lies at 76.31.
GBPUSD BULLISH Focus is on resistance at 1.5853, a break here would expose 1.5945. Support lies at 1.5632.
USDCHF NEUTRAL Break below 0.8881 would be a key bearish development and open up 0.8786. Resistance is at 0.9083 ahead of 0.9123.
AUDUSD BULLISH Bullish conditions remain intact; while support at 1.0102 holds, expect a move towards resistance at 1.0399 and then 1.0434.
USDCAD NEUTRAL Resistance is at 1.0273 and 1.0339. Support lies at 1.0085 ahead of 1.0044.
EURCHF BULLISH Break above 1.2495 would signal scope for extension of gains towards 1.2646. Support lies at 1.2218 ahead of 1.2123.
EURGBP BULLISH Initial resistance is at 0.8797, a clearance of which would expose 0.8842. Support lies at 0.8688.
EURJPY BULLISH Rise through 106.54 would open the way for gains towards 107.68. Key support lies at 104.02.
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.
21 October 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Resistance is at 1.3914/37 area, a break above which would signal scope for gains towards 1.4013. Key support lies at 1.3566.
USDJPY NEUTRAL Resistance is at 77.49, while support lies at 76.31.
GBPUSD BULLISH Focus is on resistance at 1.5853, a break here would expose 1.5945. Support lies at 1.5632.
USDCHF NEUTRAL Break below 0.8881 would be a key bearish development and open up 0.8786. Resistance is at 0.9083 ahead of 0.9123.
AUDUSD BULLISH Bullish conditions remain intact; while support at 1.0102 holds, expect a move towards resistance at 1.0399 and then 1.0434.
USDCAD NEUTRAL Resistance is at 1.0273 and 1.0339. Support lies at 1.0085 ahead of 1.0044.
EURCHF BULLISH Break above 1.2495 would signal scope for extension of gains towards 1.2646. Support lies at 1.2218 ahead of 1.2123.
EURGBP BULLISH Initial resistance is at 0.8797, a clearance of which would expose 0.8842. Support lies at 0.8688.
EURJPY BULLISH Rise through 106.54 would open the way for gains towards 107.68. Key support lies at 104.02.
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.
21st of October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
21 October 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro remained hostage to headlines regarding the Eurozone sovereign debt crisis during the US session, and it seems several more days of this headline sensitivity lies ahead. Eurozone officials have called a second summit for Wednesday Oct. 26, although the original one on Sunday Oct 23 is also due to go ahead as planned. We see this as an acknowledgement of the highly complex issues that policymakers must now grapple with, and a recognition that more effort and more time will be needed to thrash out the details of a solution. Bloomberg reported, without citing sources, that a plan to combine the firepower of the EFSF and the proposed ESM to provide a EUR940 bn lending capacity is under consideration. The troika's report on Greece was published. Sensationally, the troika concluded that Greece's debt dynamics are not sustainable, but recommended that the sixth quarterly tranche should be paid out regardless. The Greek parliament passed the latest Bill on austerity measures. There was one dissenter among the ranks of Prime Minister Papandreou's parliamentary party, and the deputy was promptly expelled from the party, effectively reducing the governing party's majority to only three seats. EURUSD traded 1.3656-1.3843 and USDJPY 76.68-77.09.
EUR
The euro rallied a big figure after a document regarding the implementation of the new EFSF powers announced in July hit the wires. The document stated that the EFSF will be able to repo bonds with commercial banks, a more subtle form of leverage. Nonetheless, differences of opinion on how to implement EFSF leveraging still exist and will be a key hurdle to overcome.
The Troika will present its analysis on Greek debt sustainability at the Eurogroup meeting over weekend. However, a draft of the report was leaked to the wires. It added that Greek government debt dynamics remain extremely worrying and its debt sustainability has effectively deteriorated. On a more positive note, the troika said that it recommends paying the sixth Greek aid tranche 'as soon as possible'.
Eurozone Finance Ministers said that they aim to finalise the treaty on a permanent bailout mechanism by the end of November, according to a draft Eurozone summit statement.
According to a Bloomberg report, a draft paper of the EFSF bank recapitalization plans envisages focusing on financial sector repair. Banks taking aid will have to restructure, and only distressed banks with systemic risk are eligible. These terms appear to be more stringent than what is currently being discussed, but they are based on the initial July 21st agreements.
According to Handelsblatt, citing members of the German panel of European affairs, German Finance said that he will no longer rule out a default when talking to banks about a haircut on Greece's debt. Talks are ongoing regarding the PSI which could feature a 50% haircut on Greek debt..
GBP
UK retail sales were significantly above consensus, rising 0.6% m/m. The gains were led by the electronics sector, particularly from sales of laptops. It is worth noting however that the previous y/y measure was revised down to -0.8% leaving the new y/y number in line with expectations at +0.6%.
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.
21 October 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro remained hostage to headlines regarding the Eurozone sovereign debt crisis during the US session, and it seems several more days of this headline sensitivity lies ahead. Eurozone officials have called a second summit for Wednesday Oct. 26, although the original one on Sunday Oct 23 is also due to go ahead as planned. We see this as an acknowledgement of the highly complex issues that policymakers must now grapple with, and a recognition that more effort and more time will be needed to thrash out the details of a solution. Bloomberg reported, without citing sources, that a plan to combine the firepower of the EFSF and the proposed ESM to provide a EUR940 bn lending capacity is under consideration. The troika's report on Greece was published. Sensationally, the troika concluded that Greece's debt dynamics are not sustainable, but recommended that the sixth quarterly tranche should be paid out regardless. The Greek parliament passed the latest Bill on austerity measures. There was one dissenter among the ranks of Prime Minister Papandreou's parliamentary party, and the deputy was promptly expelled from the party, effectively reducing the governing party's majority to only three seats. EURUSD traded 1.3656-1.3843 and USDJPY 76.68-77.09.
EUR
The euro rallied a big figure after a document regarding the implementation of the new EFSF powers announced in July hit the wires. The document stated that the EFSF will be able to repo bonds with commercial banks, a more subtle form of leverage. Nonetheless, differences of opinion on how to implement EFSF leveraging still exist and will be a key hurdle to overcome.
The Troika will present its analysis on Greek debt sustainability at the Eurogroup meeting over weekend. However, a draft of the report was leaked to the wires. It added that Greek government debt dynamics remain extremely worrying and its debt sustainability has effectively deteriorated. On a more positive note, the troika said that it recommends paying the sixth Greek aid tranche 'as soon as possible'.
Eurozone Finance Ministers said that they aim to finalise the treaty on a permanent bailout mechanism by the end of November, according to a draft Eurozone summit statement.
According to a Bloomberg report, a draft paper of the EFSF bank recapitalization plans envisages focusing on financial sector repair. Banks taking aid will have to restructure, and only distressed banks with systemic risk are eligible. These terms appear to be more stringent than what is currently being discussed, but they are based on the initial July 21st agreements.
According to Handelsblatt, citing members of the German panel of European affairs, German Finance said that he will no longer rule out a default when talking to banks about a haircut on Greece's debt. Talks are ongoing regarding the PSI which could feature a 50% haircut on Greek debt..
GBP
UK retail sales were significantly above consensus, rising 0.6% m/m. The gains were led by the electronics sector, particularly from sales of laptops. It is worth noting however that the previous y/y measure was revised down to -0.8% leaving the new y/y number in line with expectations at +0.6%.
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, October 20, 2011
20th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
20 October 2011 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Key resistance is at 1.3937; a break above which would open 1.4013. Support lies at 1.3653 ahead of 1.3566.
USDJPY NEUTRAL Resistance is at 77.49 while support lies at 76.31.
GBPUSD BULLISH Clearance of 1.5853 would expose 1.5945. Support lies at 1.5632.
USDCHF NEUTRAL Focus is on 0.9123 ahead of 0.9316. Initial support lies at 0.8881 ahead of 0.8786.
AUDUSD BULLISH Initial resistance is at 1.0264 ahead of key high of 1.0399. Near-term support lies at 1.0102 ahead of 1.0000.
USDCAD NEUTRAL Resistance is at 1.0273 and 1.0339 while support lies at 1.0085 and 1.0044.
EURCHF BULLISH Resistance is at 1.2495, a break above this level would expose 1.2646. Support lies at 1.2290.
EURGBP BULLISH Break above 0.8797 would expose 0.8842. Support lies at 0.8688/64 area.
EURJPY BULLISH Initial resistance is at 106.54 ahead of 107.68. Support lies at 104.02.
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 October 2011 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Key resistance is at 1.3937; a break above which would open 1.4013. Support lies at 1.3653 ahead of 1.3566.
USDJPY NEUTRAL Resistance is at 77.49 while support lies at 76.31.
GBPUSD BULLISH Clearance of 1.5853 would expose 1.5945. Support lies at 1.5632.
USDCHF NEUTRAL Focus is on 0.9123 ahead of 0.9316. Initial support lies at 0.8881 ahead of 0.8786.
AUDUSD BULLISH Initial resistance is at 1.0264 ahead of key high of 1.0399. Near-term support lies at 1.0102 ahead of 1.0000.
USDCAD NEUTRAL Resistance is at 1.0273 and 1.0339 while support lies at 1.0085 and 1.0044.
EURCHF BULLISH Resistance is at 1.2495, a break above this level would expose 1.2646. Support lies at 1.2290.
EURGBP BULLISH Break above 0.8797 would expose 0.8842. Support lies at 0.8688/64 area.
EURJPY BULLISH Initial resistance is at 106.54 ahead of 107.68. Support lies at 104.02.
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 October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
20 October 2011 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Although Eurozone officials have repeatedly warned over the last 72 hours that the weekend is unlikely to deliver a cure-all for the sovereign crisis, there is a heightened sense of urgency after emergency talks yesterday between French President Sarkozy, German Chancellor Merkel and the heads of the IMF and ECB. In particular, the Financial Times reported that the size of the European bank recapitalization plan is likely to be only EUR70-90 bn or less, and that banks would be given up to 9 months to raise the capital. We note that this would likely disappoint market expectations, being too small in scale and too slow in delivery. France is of particular interest in this respect due to its higher banking risks, and multiple news reports suggest that yesterday's emergency talks were aimed, in part at determining how France would be able to retain its AAA rating. German Finance Minister Schaeuble, according to Handelsblatt, also said that he is no longer ruling out a Greek default, though Greece itself continues to deny that this is on the cards. Yesterday the Greek Parliament passed an initial reading of the new austerity measures, despite a nationwide strike. Elsewhere, activity data are due in Europe and the US,, but we expect headline risk to dominate price action. Overnight EURUSD traded 1.3687-1.3783 and USDJPY 76.68-76.86.
EUR
According to a Bloomberg report, a draft paper of the EFSF bank recapitalization plans envisages focusing on financial sector repair. Banks taking aid will have to restructure, and only distressed banks with systemic risk are eligible. These terms appear to be more stringent than what is currently being discussed, but they are based on the initial July 21st agreements.
According to Handelsblatt, citing members of the German panel of European affairs, German Finance Minister Schaeuble told the group that he will no longer rule out a default when talking to banks about a haircut on Greece's debt. Talks are ongoing regarding the PSI which could feature a 50% haircut on Greek debt.
The Financial Times reported that the size of the European bank recapitalization plan is likely to be only EUR 70-90 bn or less, and that banks would be given up to 9 months to raise the capital. We note that this would likely disappoint market expectations, being too small in scale and too slow in delivery.
French Finance Minister Baroin said that France would like the EFSF to obtain a banking license but recognises that the ECB and Germany are opposed to this. We note that a banking license would in principle allow the EFSF to use the ECB to provide the required leverage.
Newswires reported that IMF Managing Director Lagarde, ECB President Trichet, French President Sarkozy, and German Chancellor Merkel met for emergency talks in Frankfurt, but no further details were announced. We note however that the fact that the meeting took place at all suggests negotiations have become bogged down, at least for now.
France's Central Bank Governor Noyer said that French banks can already withstand a sovereign debt default, but that more capital could be raised with the participation of sovereign wealth funds.
Finland's Prime Minister Katainen said that he doubts Sunday's EU Summit can produce big decisions given that the crisis is so deep that it cannot be solved with a single meeting.
Greek police estimated that over 120,000 people demonstrated outside the Greek parliament ahead of tomorrow's parliamentary votes on further austerity measures. It was the biggest anti-austerity demonstration so far.
Austria's Finance Minister 's Fekter said models to make the EFSF more flexible need significantly more preparation. She added that a banking concession for the EFSF is under intense discussion, and there are still questions on this. She also wants to see bigger private-sector contribution to the second Greek rescue package.
GBP
The BoE minutes showed a unanimous vote in favour of the QE program. It was reported that a program between 50 and 100 billion was discussed, an indication that further purchases may indeed be on their way. As expected, the MPC emphasized that the action was pre-emptive and they maintain the view that inflation will fall from the current highs in 2012. Sterling initially sold off following the headlines but, in similar fashion to the announcement itself, rallied back afterwards.
BoE Governor Mervyn King warned that 'time is running out' for authorities to coordinate international action and called for a 'bold response'. He also noted that inflation should fall sharply up ahead as base effects from higher energy prices and tax increases fade and warned that growth would 'stall' without fresh stimulus. He also warned that the economic recovery had 'gone off track' and it would take longer to restore normality to economic growth and fiscal conditions.
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 October 2011 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Although Eurozone officials have repeatedly warned over the last 72 hours that the weekend is unlikely to deliver a cure-all for the sovereign crisis, there is a heightened sense of urgency after emergency talks yesterday between French President Sarkozy, German Chancellor Merkel and the heads of the IMF and ECB. In particular, the Financial Times reported that the size of the European bank recapitalization plan is likely to be only EUR70-90 bn or less, and that banks would be given up to 9 months to raise the capital. We note that this would likely disappoint market expectations, being too small in scale and too slow in delivery. France is of particular interest in this respect due to its higher banking risks, and multiple news reports suggest that yesterday's emergency talks were aimed, in part at determining how France would be able to retain its AAA rating. German Finance Minister Schaeuble, according to Handelsblatt, also said that he is no longer ruling out a Greek default, though Greece itself continues to deny that this is on the cards. Yesterday the Greek Parliament passed an initial reading of the new austerity measures, despite a nationwide strike. Elsewhere, activity data are due in Europe and the US,, but we expect headline risk to dominate price action. Overnight EURUSD traded 1.3687-1.3783 and USDJPY 76.68-76.86.
EUR
According to a Bloomberg report, a draft paper of the EFSF bank recapitalization plans envisages focusing on financial sector repair. Banks taking aid will have to restructure, and only distressed banks with systemic risk are eligible. These terms appear to be more stringent than what is currently being discussed, but they are based on the initial July 21st agreements.
According to Handelsblatt, citing members of the German panel of European affairs, German Finance Minister Schaeuble told the group that he will no longer rule out a default when talking to banks about a haircut on Greece's debt. Talks are ongoing regarding the PSI which could feature a 50% haircut on Greek debt.
The Financial Times reported that the size of the European bank recapitalization plan is likely to be only EUR 70-90 bn or less, and that banks would be given up to 9 months to raise the capital. We note that this would likely disappoint market expectations, being too small in scale and too slow in delivery.
French Finance Minister Baroin said that France would like the EFSF to obtain a banking license but recognises that the ECB and Germany are opposed to this. We note that a banking license would in principle allow the EFSF to use the ECB to provide the required leverage.
Newswires reported that IMF Managing Director Lagarde, ECB President Trichet, French President Sarkozy, and German Chancellor Merkel met for emergency talks in Frankfurt, but no further details were announced. We note however that the fact that the meeting took place at all suggests negotiations have become bogged down, at least for now.
France's Central Bank Governor Noyer said that French banks can already withstand a sovereign debt default, but that more capital could be raised with the participation of sovereign wealth funds.
Finland's Prime Minister Katainen said that he doubts Sunday's EU Summit can produce big decisions given that the crisis is so deep that it cannot be solved with a single meeting.
Greek police estimated that over 120,000 people demonstrated outside the Greek parliament ahead of tomorrow's parliamentary votes on further austerity measures. It was the biggest anti-austerity demonstration so far.
Austria's Finance Minister 's Fekter said models to make the EFSF more flexible need significantly more preparation. She added that a banking concession for the EFSF is under intense discussion, and there are still questions on this. She also wants to see bigger private-sector contribution to the second Greek rescue package.
GBP
The BoE minutes showed a unanimous vote in favour of the QE program. It was reported that a program between 50 and 100 billion was discussed, an indication that further purchases may indeed be on their way. As expected, the MPC emphasized that the action was pre-emptive and they maintain the view that inflation will fall from the current highs in 2012. Sterling initially sold off following the headlines but, in similar fashion to the announcement itself, rallied back afterwards.
BoE Governor Mervyn King warned that 'time is running out' for authorities to coordinate international action and called for a 'bold response'. He also noted that inflation should fall sharply up ahead as base effects from higher energy prices and tax increases fade and warned that growth would 'stall' without fresh stimulus. He also warned that the economic recovery had 'gone off track' and it would take longer to restore normality to economic growth and fiscal conditions.
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, October 19, 2011
19th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
19 October 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.3937, a break above which would open 1.4013. Initial support lies at 1.3653.
USDJPY NEUTRAL Initial resistance is at 77.49 and support lies at 76.31.
GBPUSD BULLISH Break above 1.5853 would expose 1.5945. Support lies at 1.5632.
USDCHF NEUTRAL Resistance is at 0.9123 while support lies at 0.8881.
AUDUSD BULLISH Key resistance is at 1.0335/99 area; a break of which would signal scope for extension of gains towards 1.0478. Near-term support lies at 1.0102.
USDCAD NEUTRAL Near-term directional triggers are at 1.0339 and 1.0044.
EURCHF NEUTRAL Key resistance is at 1.2435; a break here would expose 1.2495. Support lies at 1.2218.
EURGBP BULLISH Focus is on 0.8797, a break above which would open the way for 0.8842. Support lies at 0.8688.
EURJPY BULLISH Initial resistance is at 106.58, channel top drawn off July 4 high ahead of 107.68. Support lies at 104.02.
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 October 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.3937, a break above which would open 1.4013. Initial support lies at 1.3653.
USDJPY NEUTRAL Initial resistance is at 77.49 and support lies at 76.31.
GBPUSD BULLISH Break above 1.5853 would expose 1.5945. Support lies at 1.5632.
USDCHF NEUTRAL Resistance is at 0.9123 while support lies at 0.8881.
AUDUSD BULLISH Key resistance is at 1.0335/99 area; a break of which would signal scope for extension of gains towards 1.0478. Near-term support lies at 1.0102.
USDCAD NEUTRAL Near-term directional triggers are at 1.0339 and 1.0044.
EURCHF NEUTRAL Key resistance is at 1.2435; a break here would expose 1.2495. Support lies at 1.2218.
EURGBP BULLISH Focus is on 0.8797, a break above which would open the way for 0.8842. Support lies at 0.8688.
EURJPY BULLISH Initial resistance is at 106.58, channel top drawn off July 4 high ahead of 107.68. Support lies at 104.02.
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 October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
19 October 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk sentiment has opened on a better footing in Europe despite disappointing headlines overnight. Initially the euro jumped sharply during the US session after The Guardian newspaper reported that France and Germany have agreed to create a leveraged EFSF worth EUR 2 trn. All gains were surrendered after the report was quickly denied by other wires. Adding to the mix, Moody's downgraded Spain's sovereign rating by two notches to A1, taking it one notch below both S&P and Fitch. There was surprisingly little reaction in the euro, perhaps because attention is now squarely focused on the policy initiatives that may emerge from Friday's meeting of Eurozone finance ministers and Sunday's EU summit.
EUR
Moody's downgraded Spain two notches to A1, outlook negative. S&P and Fitch still rate Spain one notch higher at AA-. There was surprisingly little FX reaction, and the euro only shed 20 pips before recovering. By way of rationale, the agency said the sovereign continues to be vulnerable to market stress and event risk, with its large borrowing needs and highly indebted banks.
The Financial Times reported French President Sarkozy saying that "an unprecedented financial crisis will lead us to take important, very important decisions in the coming days".
The euro rallied 70 pips towards the end of the US session after the UK's Guardian newspaper said agreement had been reached on a leveraged EFSF with a size of EUR 2 trn. Dow Jones newswires soon afterwards quoted an unnamed source denying the story was true, and the euro gave back all its gains.
The spread of French 10y yields above bunds rose to 114bp during the European session - its highest level in 16 years - after Moody's earlier implied that it might lower the outlook on France's rating over the coming months.
ECB Governing Council member Lipstok said the ECB did not cut rates at the October policy meeting because the inflation risks were balanced, and that a cut may not have had the desired benefit for borrowers due conditions in the banking system issues having "grown worse".
The German ZEW survey came in softer than expected.
GBP
The Bank of England minutes for this month's policy meeting are due and investors will be looking to see the thinking behind the decision to re-open the asset purchase program. Yesterday's strong inflation print may have cast doubt on the sustainability of aggressive stimulus.
BoE Governor Mervyn King warned that 'time is running out' for authorities to coordinate international action and called for a 'bold response'. He also noted that inflation should fall sharply ahead as base effects from higher energy prices and tax increases fade and warned that growth would 'stall' without fresh stimulus. He also warned that the economic recovery had 'gone off track' and it would take longer to restore normality to economic growth and fiscal conditions.
UK CPI came in far higher than consensus expectations, at +5.2% y/y - the highest print since September 2008. The ONS observed that the largest upward pressure came from increases in gas and electricity charges. Sterling suffered on the back of the news.
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 October 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk sentiment has opened on a better footing in Europe despite disappointing headlines overnight. Initially the euro jumped sharply during the US session after The Guardian newspaper reported that France and Germany have agreed to create a leveraged EFSF worth EUR 2 trn. All gains were surrendered after the report was quickly denied by other wires. Adding to the mix, Moody's downgraded Spain's sovereign rating by two notches to A1, taking it one notch below both S&P and Fitch. There was surprisingly little reaction in the euro, perhaps because attention is now squarely focused on the policy initiatives that may emerge from Friday's meeting of Eurozone finance ministers and Sunday's EU summit.
EUR
Moody's downgraded Spain two notches to A1, outlook negative. S&P and Fitch still rate Spain one notch higher at AA-. There was surprisingly little FX reaction, and the euro only shed 20 pips before recovering. By way of rationale, the agency said the sovereign continues to be vulnerable to market stress and event risk, with its large borrowing needs and highly indebted banks.
The Financial Times reported French President Sarkozy saying that "an unprecedented financial crisis will lead us to take important, very important decisions in the coming days".
The euro rallied 70 pips towards the end of the US session after the UK's Guardian newspaper said agreement had been reached on a leveraged EFSF with a size of EUR 2 trn. Dow Jones newswires soon afterwards quoted an unnamed source denying the story was true, and the euro gave back all its gains.
The spread of French 10y yields above bunds rose to 114bp during the European session - its highest level in 16 years - after Moody's earlier implied that it might lower the outlook on France's rating over the coming months.
ECB Governing Council member Lipstok said the ECB did not cut rates at the October policy meeting because the inflation risks were balanced, and that a cut may not have had the desired benefit for borrowers due conditions in the banking system issues having "grown worse".
The German ZEW survey came in softer than expected.
GBP
The Bank of England minutes for this month's policy meeting are due and investors will be looking to see the thinking behind the decision to re-open the asset purchase program. Yesterday's strong inflation print may have cast doubt on the sustainability of aggressive stimulus.
BoE Governor Mervyn King warned that 'time is running out' for authorities to coordinate international action and called for a 'bold response'. He also noted that inflation should fall sharply ahead as base effects from higher energy prices and tax increases fade and warned that growth would 'stall' without fresh stimulus. He also warned that the economic recovery had 'gone off track' and it would take longer to restore normality to economic growth and fiscal conditions.
UK CPI came in far higher than consensus expectations, at +5.2% y/y - the highest print since September 2008. The ONS observed that the largest upward pressure came from increases in gas and electricity charges. Sterling suffered on the back of the news.
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, October 18, 2011
18th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
18 October 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.3937, a break of which would open 1.4013. Key support lies at 1.3685.
USDJPY NEUTRAL Resistance is at 77.49 ahead of 77.86, whereas support lies at 76.31 and 76.11.
GBPUSD BULLISH Initial resistance is at 1.5869, a break above which would expose 1.5945. Support lies at 1.5722.
USDCHF NEUTRAL Support lies at 0.8836, a break here would expose 0.8647. Resistance is at 0.9039 ahead of 0.9123.
AUDUSD BULLISH Clearance of 1.0399 would expose 1.0440, a Fibonacci level. Near-term support lies at 1.0102.
USDCAD NEUTRAL Resistance is at 1.0339, while support lies at 1.0044.
EURCHF NEUTRAL Key resistance is at 1.2435; a break here would expose 1.2495. Near-term support lies at 1.2218 ahead of 1.2123.
EURGBP BULLISH Initial resistance is at 0.8797, a break through which would open 0.8842. Support lies at 0.8583.
EURJPY BULLISH Break above 108.00 would expose 109.09, while support lies at 105.13.
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 October 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Focus is on 1.3937, a break of which would open 1.4013. Key support lies at 1.3685.
USDJPY NEUTRAL Resistance is at 77.49 ahead of 77.86, whereas support lies at 76.31 and 76.11.
GBPUSD BULLISH Initial resistance is at 1.5869, a break above which would expose 1.5945. Support lies at 1.5722.
USDCHF NEUTRAL Support lies at 0.8836, a break here would expose 0.8647. Resistance is at 0.9039 ahead of 0.9123.
AUDUSD BULLISH Clearance of 1.0399 would expose 1.0440, a Fibonacci level. Near-term support lies at 1.0102.
USDCAD NEUTRAL Resistance is at 1.0339, while support lies at 1.0044.
EURCHF NEUTRAL Key resistance is at 1.2435; a break here would expose 1.2495. Near-term support lies at 1.2218 ahead of 1.2123.
EURGBP BULLISH Initial resistance is at 0.8797, a break through which would open 0.8842. Support lies at 0.8583.
EURJPY BULLISH Break above 108.00 would expose 109.09, while support lies at 105.13.
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 October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
18 October 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk sold off heavily overnight as China posted its weakest quarterly growth figures in two years on softer conditions domestically and a fall in external demand. Given the European Union is China's largest trading partner, investors are justifiably questioning Europe's ability to register enough growth to help alleviate its debt crisis. The soft data added to worries sparked yesterday by Germany warning markets not to be too expectant of a grand bargain at the upcoming EU summit. Even though Eurozone leaders have pledged to work with haste towards a comprehensive solution, Chancellor Merkel's government warned against quick fixes while outstanding issues are yet to be resolved. On the data front, yesterday's US Empire manufacturing was disappointingly weak. Ahead today the German ZEW survey is due, and CPI is out in the UK (UBSe. 4.70%, cons. 4.90%). Fed Chairman Bernanke is due to speak later in the session. EURUSD traded 1.3725-1.3788 and USDJPY traded 76.79-76.88.
EUR
A German government spokesman, Siebert, started the expectations management exercise for next weekend's EU summit, saying that dreams that the euro crisis being solved by next Monday cannot be fulfilled. He said the search for a solution would continue into 2012. We agree and believe that expectations for a 'comprehensive solution' have perhaps become stretched. Policymakers are likely to try to play down these expectations over the next few days and the risk of disappointment is now quite high.
At the close of the US session, Moody's expressed some concern about how France's fiscal position might evolve over the coming months. The agency noted that a number of challenges may lie ahead for France given it may have to support other EU sovereigns and banks - both of which could mean new French liabilities. Moody's said it would observe France's progress over the next three months. We stress however that Moody's did not downgrade France's credit rating, did not put the rating on negative watch, and did not lower the outlook on the rating (which remains at "stable").
ECB Executive Board member Stark also appeared to play down expectations of a breakthrough at the upcoming summit, saying that what is on the table now is not the "quantum leap" the ECB had requested. He said that asking the ECB to do more would overburden the central bank and challenge its independence.
Portugal's finance minister announced that the budget deficit in 2011 would be about EUR 3.4 bn more than expected.
Canadian Finance Minister Flaherty said he is disappointed by Europe's response to the crisis and that, unless decisive action is taken, a global crisis will ensue.
AUD
The minutes are due from the RBA's Oct. 3 policy meeting. Our economists noted that the RBA overall reiterated the post-meeting release, where the bank took another step in the dovish direction. However, our economists stress that the meeting was held during the must turbulent times in markets of late and given sentiment has shifted somewhat since, the actual release may not wholly represent the RBA's current thinking. It is clear their policy path remains conditional on growth and inflation figures.
GBP
CPI figures are due today - the first price release since the BoE embarked on a new round of QE. Given balance sheet expansion has been approved it is clear that the BoE is less worried about inflation overshooting to the upside rather than the downside, as it was clear in the run-up to the QE vote that the Eurozone debt crisis had already risked credit conditions contracting sharply. Our economists expect a 4.70% print vs. consensus at 4.90%.
We have gone long a 2-month GBPUSD Butterfly, with the following parameters: Strikes: Leg 1: Buy 1.4500 put / Leg 2 Sell 1.5100 put (2x notional) / Leg 3 buy 1.5700 put; Spot reference: 1.5773, Max Payout 3.80%. The cost is 0.802% (indicative). We believe this structure is an attractive way of expressing our fundamental negative view on sterling.
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 October 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk sold off heavily overnight as China posted its weakest quarterly growth figures in two years on softer conditions domestically and a fall in external demand. Given the European Union is China's largest trading partner, investors are justifiably questioning Europe's ability to register enough growth to help alleviate its debt crisis. The soft data added to worries sparked yesterday by Germany warning markets not to be too expectant of a grand bargain at the upcoming EU summit. Even though Eurozone leaders have pledged to work with haste towards a comprehensive solution, Chancellor Merkel's government warned against quick fixes while outstanding issues are yet to be resolved. On the data front, yesterday's US Empire manufacturing was disappointingly weak. Ahead today the German ZEW survey is due, and CPI is out in the UK (UBSe. 4.70%, cons. 4.90%). Fed Chairman Bernanke is due to speak later in the session. EURUSD traded 1.3725-1.3788 and USDJPY traded 76.79-76.88.
EUR
A German government spokesman, Siebert, started the expectations management exercise for next weekend's EU summit, saying that dreams that the euro crisis being solved by next Monday cannot be fulfilled. He said the search for a solution would continue into 2012. We agree and believe that expectations for a 'comprehensive solution' have perhaps become stretched. Policymakers are likely to try to play down these expectations over the next few days and the risk of disappointment is now quite high.
At the close of the US session, Moody's expressed some concern about how France's fiscal position might evolve over the coming months. The agency noted that a number of challenges may lie ahead for France given it may have to support other EU sovereigns and banks - both of which could mean new French liabilities. Moody's said it would observe France's progress over the next three months. We stress however that Moody's did not downgrade France's credit rating, did not put the rating on negative watch, and did not lower the outlook on the rating (which remains at "stable").
ECB Executive Board member Stark also appeared to play down expectations of a breakthrough at the upcoming summit, saying that what is on the table now is not the "quantum leap" the ECB had requested. He said that asking the ECB to do more would overburden the central bank and challenge its independence.
Portugal's finance minister announced that the budget deficit in 2011 would be about EUR 3.4 bn more than expected.
Canadian Finance Minister Flaherty said he is disappointed by Europe's response to the crisis and that, unless decisive action is taken, a global crisis will ensue.
AUD
The minutes are due from the RBA's Oct. 3 policy meeting. Our economists noted that the RBA overall reiterated the post-meeting release, where the bank took another step in the dovish direction. However, our economists stress that the meeting was held during the must turbulent times in markets of late and given sentiment has shifted somewhat since, the actual release may not wholly represent the RBA's current thinking. It is clear their policy path remains conditional on growth and inflation figures.
GBP
CPI figures are due today - the first price release since the BoE embarked on a new round of QE. Given balance sheet expansion has been approved it is clear that the BoE is less worried about inflation overshooting to the upside rather than the downside, as it was clear in the run-up to the QE vote that the Eurozone debt crisis had already risked credit conditions contracting sharply. Our economists expect a 4.70% print vs. consensus at 4.90%.
We have gone long a 2-month GBPUSD Butterfly, with the following parameters: Strikes: Leg 1: Buy 1.4500 put / Leg 2 Sell 1.5100 put (2x notional) / Leg 3 buy 1.5700 put; Spot reference: 1.5773, Max Payout 3.80%. The cost is 0.802% (indicative). We believe this structure is an attractive way of expressing our fundamental negative view on sterling.
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, October 17, 2011
17th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
17 October 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Initial resistance is at 1.3937 ahead of 1.4013. Support lies at 1.3685 and 1.3566.
USDJPY NEUTRAL Resistance is at 77.49 ahead of 77.86, while support is at 76.68 ahead of 76.31.
GBPUSD BULLISH Break above 1.5869 would expose 1.5945. Near-term support lies at 1.5667.
USDCHF NEUTRAL Support lies at 0.8836, a break here would expose 0.8647. Resistance is at 0.9123 ahead of 0.9316.
AUDUSD BULLISH Clearance of 1.0399 would open 1.0440/78 area. Near-term support lies at 1.0102.
USDCAD NEUTRAL Support lies at the psychological level of 1.0000 ahead of 0.9910, while resistance is at 1.0273 ahead of 1.0339.
EURCHF BULLISH Resistance is at 1.2435/95 area, a break above which would open the way for 1.2646. Initial support lies at 1.2218.
EURGBP BULLISH Focus is on 0.8795, a move above which would expose 0.8842. Support lies at 0.8688.
EURJPY BULLISH Resistance is at 108.00 ahead of 109.09, while support lies at 105.13.
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 October 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Initial resistance is at 1.3937 ahead of 1.4013. Support lies at 1.3685 and 1.3566.
USDJPY NEUTRAL Resistance is at 77.49 ahead of 77.86, while support is at 76.68 ahead of 76.31.
GBPUSD BULLISH Break above 1.5869 would expose 1.5945. Near-term support lies at 1.5667.
USDCHF NEUTRAL Support lies at 0.8836, a break here would expose 0.8647. Resistance is at 0.9123 ahead of 0.9316.
AUDUSD BULLISH Clearance of 1.0399 would open 1.0440/78 area. Near-term support lies at 1.0102.
USDCAD NEUTRAL Support lies at the psychological level of 1.0000 ahead of 0.9910, while resistance is at 1.0273 ahead of 1.0339.
EURCHF BULLISH Resistance is at 1.2435/95 area, a break above which would open the way for 1.2646. Initial support lies at 1.2218.
EURGBP BULLISH Focus is on 0.8795, a move above which would expose 0.8842. Support lies at 0.8688.
EURJPY BULLISH Resistance is at 108.00 ahead of 109.09, while support lies at 105.13.
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 October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
17 October 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The weekend meeting of G20 finance ministers and central bank governors passed largely without incident and there were no concrete signs that any tangible progress had been made. The IMF, however, does appear to be increasingly amenable to providing short term liquidity to solvent sovereigns, and IMF Managing Director Lagarde said proposals on this would be presented at the Nov. 3 G20 summit. The current strategies being proposed by the Eurozone, which are scheduled to be signed off at the upcoming EU/Eurozone leaders' summit in Brussels appear to have won the endorsement of G20 partners, but there are still conflicting reports of the IMF's and non-Eurozone economies' respective roles, as the Eurozone appears intent on completing matters without external help. This may damage sentiment somewhat as investors question whether the currency union has the adequate firepower. While it is clear that risks to the process remain, not only to markets but to growth, fears of a global recession have probably softened slightly. On the US data front, after solid ISM, payrolls, and retail sales reports, our economists have materially raised their Q3 GDP forecasts to 2.6% from 1.5% annualised. Overnight Asian equities were broadly firm, EURUSD traded 1.3827-1.3888 and USDJPY traded 76.94-77.33.
EUR
German Finance Minister Schaeuble conceded for the first time that private holders of Greek debt will likely suffer losses greater than the 21% initially agreed in July. He said the details of this are still being discussed, and that final agreement on this need not be reached by the EU summit on Oct 23, but that at least "the principles must be clear" by then. He also raised the possibility of a coercive approach for the first time noting that agreement with the banks would be welcome "if possible", but that "there must be a level of participation which is enough to bring about a lasting solution for Greece".
Shortly before the close of the US session on Friday, the Financial Times reported that holders of Greek debt are unwilling to accept losses above and beyond 21%. IIF Managing Director Callara who brokered the original July 21 agreement was cited as the source.
German Chancellor Merkel has now begun to talk publicly about the possibility of a haircut being applied to Greek debt. She said that if a haircut were to be hypothetically applied, it would need cautious preparation.
EU Commissioner Barroso said that any review of the Greek rescue package must retain the voluntary involvement of banks and not lead to a credit event. French Finance Minister Baroin said that France would reject any proposed solution to the Greek crisis that would mean a credit event.
Schaeuble also hinted that the process of bank recapitalisation will not be swift even if agreement is reached on a recapitalisation program at the upcoming EU summit. He said that European banks should be given more time to raise capital privately.
Bundesbank President Weidmann acknowledged that trust between European banks has been in decline since the middle of the year. Weidmann, like several other ECB policymakers before him, rejected the idea of the ECB being used to leverage the EFSF. He said it was simply "not on the agenda", noting that it is excluded under EU rules. To us, this implies that the idea of giving the EFSF bank status so that it might avail of ECB liquidity facilities seems increasingly far-fetched.
ECB President Trichet suggested that once the EFSF starts to buy bonds in the secondary market, this would restore stability to financial markets, and that would mean it would no longer be necessary for the ECB to buy bonds under its SMP program.
EU Commissioner Rehn said that the Oct. 23 Summit will take a decision on Greece's second rescue program. He also suggested that an earlier launch of the European Stability Mechanism would be beneficial (the ESM was originally intended to become operational in July 2103). We note that one of the tasks of the proposed ESM is to facilitate the restructuring of sovereign debt for sovereigns deemed to be insolvent. A desire to accelerate its introduction suggests that a sovereign default could be closer than many investors think. It supports the view of our economists that a Greek default by Q1 of 2012 is more likely than not.
JPY
USDJPY spiked higher after newswires reported that Japan would unveil new steps against the strong yen as early as this coming week, citing an unnamed Japanese government official. Measures to encourage overseas investment by Japanese coporates were mentioned.
BoJ Governor Shirakawa said that uncertainty in the global economy is behind the yen's strength. Overnight Japan industrial production was softer than expected at 0.6%m/m (cons. 0.8%), 0.4%y/y.
CAD
Bank of Canada Governor Carney said that the policy rate is currently appropriate, although he hinted that interest rate cuts could be considered in future. Specifically, he noted that "we have additional room with our overnight rate; it's higher than the lowest level it can go". Nevertheless, he stressed that the bank would not be "trigger happy" when it came to interest rate adjustments.
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 October 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The weekend meeting of G20 finance ministers and central bank governors passed largely without incident and there were no concrete signs that any tangible progress had been made. The IMF, however, does appear to be increasingly amenable to providing short term liquidity to solvent sovereigns, and IMF Managing Director Lagarde said proposals on this would be presented at the Nov. 3 G20 summit. The current strategies being proposed by the Eurozone, which are scheduled to be signed off at the upcoming EU/Eurozone leaders' summit in Brussels appear to have won the endorsement of G20 partners, but there are still conflicting reports of the IMF's and non-Eurozone economies' respective roles, as the Eurozone appears intent on completing matters without external help. This may damage sentiment somewhat as investors question whether the currency union has the adequate firepower. While it is clear that risks to the process remain, not only to markets but to growth, fears of a global recession have probably softened slightly. On the US data front, after solid ISM, payrolls, and retail sales reports, our economists have materially raised their Q3 GDP forecasts to 2.6% from 1.5% annualised. Overnight Asian equities were broadly firm, EURUSD traded 1.3827-1.3888 and USDJPY traded 76.94-77.33.
EUR
German Finance Minister Schaeuble conceded for the first time that private holders of Greek debt will likely suffer losses greater than the 21% initially agreed in July. He said the details of this are still being discussed, and that final agreement on this need not be reached by the EU summit on Oct 23, but that at least "the principles must be clear" by then. He also raised the possibility of a coercive approach for the first time noting that agreement with the banks would be welcome "if possible", but that "there must be a level of participation which is enough to bring about a lasting solution for Greece".
Shortly before the close of the US session on Friday, the Financial Times reported that holders of Greek debt are unwilling to accept losses above and beyond 21%. IIF Managing Director Callara who brokered the original July 21 agreement was cited as the source.
German Chancellor Merkel has now begun to talk publicly about the possibility of a haircut being applied to Greek debt. She said that if a haircut were to be hypothetically applied, it would need cautious preparation.
EU Commissioner Barroso said that any review of the Greek rescue package must retain the voluntary involvement of banks and not lead to a credit event. French Finance Minister Baroin said that France would reject any proposed solution to the Greek crisis that would mean a credit event.
Schaeuble also hinted that the process of bank recapitalisation will not be swift even if agreement is reached on a recapitalisation program at the upcoming EU summit. He said that European banks should be given more time to raise capital privately.
Bundesbank President Weidmann acknowledged that trust between European banks has been in decline since the middle of the year. Weidmann, like several other ECB policymakers before him, rejected the idea of the ECB being used to leverage the EFSF. He said it was simply "not on the agenda", noting that it is excluded under EU rules. To us, this implies that the idea of giving the EFSF bank status so that it might avail of ECB liquidity facilities seems increasingly far-fetched.
ECB President Trichet suggested that once the EFSF starts to buy bonds in the secondary market, this would restore stability to financial markets, and that would mean it would no longer be necessary for the ECB to buy bonds under its SMP program.
EU Commissioner Rehn said that the Oct. 23 Summit will take a decision on Greece's second rescue program. He also suggested that an earlier launch of the European Stability Mechanism would be beneficial (the ESM was originally intended to become operational in July 2103). We note that one of the tasks of the proposed ESM is to facilitate the restructuring of sovereign debt for sovereigns deemed to be insolvent. A desire to accelerate its introduction suggests that a sovereign default could be closer than many investors think. It supports the view of our economists that a Greek default by Q1 of 2012 is more likely than not.
JPY
USDJPY spiked higher after newswires reported that Japan would unveil new steps against the strong yen as early as this coming week, citing an unnamed Japanese government official. Measures to encourage overseas investment by Japanese coporates were mentioned.
BoJ Governor Shirakawa said that uncertainty in the global economy is behind the yen's strength. Overnight Japan industrial production was softer than expected at 0.6%m/m (cons. 0.8%), 0.4%y/y.
CAD
Bank of Canada Governor Carney said that the policy rate is currently appropriate, although he hinted that interest rate cuts could be considered in future. Specifically, he noted that "we have additional room with our overnight rate; it's higher than the lowest level it can go". Nevertheless, he stressed that the bank would not be "trigger happy" when it came to interest rate adjustments.
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, October 14, 2011
14th of October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
14 October 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk sentiment was mixed in Asia after Standard & Poor's downgraded Spain and US stock markets closed lower. S&P downgraded Spain to AA- from AA and kept a negative outlook, citing high unemployment, tightening credit and high private-sector debt as the main reasons. As S&P's decision only matched Fitch's move to downgrade Spain and as there is no indication of a similar short-term move on Italy, the impact on the euro was muted. Given still subdued investor sentiment and hence extreme short positioning in pairs such as EURUSD and AUDUSD, any downside remains corrective, especially with scope for additional positive surprises and hence more position squaring over the coming weeks. Apart from the EU summit later this month, investors will also focus on the US Q3 earnings season, which picks up pace from next week. As domestic spending and external demand may have held up better than initially expected, there is potential for positive surprises, especially as expectations have been dampened by several profit warnings; the manufacturing and retail sectors should provide a gauge of demand conditions. In Italy, Prime Minister Berlusconi faces a confidence vote today, which we expect him to survive as we anticipate no disruptions from the Northern League after the party's leader said yesterday that the government would survive today's vote. US stock futures are trading broadly flat. EURUSD traded 1.3723-1.3783 and 76.86-76.98.
EUR
The Slovakian parliament finally ratified the July 21 agreement to enhance the powers of the EFSF. Slovakia's decision removes the final political obstacle to implementation given that all seventeen Eurozone nations have now completed the ratification process. Most significantly, the new powers authorise the EFSF to buy Eurozone sovereign bonds in the secondary market, which in principle would allow it to relieve the ECB from doing so. The EFSF announced that it would finalise procedures to use its new instruments "in the near future".
The EFSF announced that any decision to use its lending capacity more efficiently through leveraging will not affect its triple-A rating.
EFSF CEO Regling said he is sure that the EU Summit on Oct. 23 will have enough substance to respond to market concerns. The euro did not react to this remark.
Eurogroup Chairman Juncker said he is expecting to receive the troika's report in the middle of next week, and that he is optimistic that Europe will disburse Greece's sixth tranche. He said that all those who are speculating that Greece will leave the Eurozone are wrong.
ECB President Trichet said it is important to avoid any suggestion that Eurozone countries other than Greece might fail to fully honour their debts.
The ECB's monthly report noted that private sector involvement in the debt crisis can be expected to add to FX volatility, to damage the euro's reputation, and to have a direct negative impact on the banking sector across the Eurozone.
ECB Executive Board member Gonzales-Paramo said the pursuit of price stability remains the central bank's main objective and that it tries to keep market interventions at the lowest appropriate level.
JPY
Finance Minister Azumi said he would urge his European counterparts to make use of a large-scale scheme, including the EFSF, to support the banking sector. He added that he would also consult with the US as needed on how to help tackling the EU debt crisis.
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.
14 October 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk sentiment was mixed in Asia after Standard & Poor's downgraded Spain and US stock markets closed lower. S&P downgraded Spain to AA- from AA and kept a negative outlook, citing high unemployment, tightening credit and high private-sector debt as the main reasons. As S&P's decision only matched Fitch's move to downgrade Spain and as there is no indication of a similar short-term move on Italy, the impact on the euro was muted. Given still subdued investor sentiment and hence extreme short positioning in pairs such as EURUSD and AUDUSD, any downside remains corrective, especially with scope for additional positive surprises and hence more position squaring over the coming weeks. Apart from the EU summit later this month, investors will also focus on the US Q3 earnings season, which picks up pace from next week. As domestic spending and external demand may have held up better than initially expected, there is potential for positive surprises, especially as expectations have been dampened by several profit warnings; the manufacturing and retail sectors should provide a gauge of demand conditions. In Italy, Prime Minister Berlusconi faces a confidence vote today, which we expect him to survive as we anticipate no disruptions from the Northern League after the party's leader said yesterday that the government would survive today's vote. US stock futures are trading broadly flat. EURUSD traded 1.3723-1.3783 and 76.86-76.98.
EUR
The Slovakian parliament finally ratified the July 21 agreement to enhance the powers of the EFSF. Slovakia's decision removes the final political obstacle to implementation given that all seventeen Eurozone nations have now completed the ratification process. Most significantly, the new powers authorise the EFSF to buy Eurozone sovereign bonds in the secondary market, which in principle would allow it to relieve the ECB from doing so. The EFSF announced that it would finalise procedures to use its new instruments "in the near future".
The EFSF announced that any decision to use its lending capacity more efficiently through leveraging will not affect its triple-A rating.
EFSF CEO Regling said he is sure that the EU Summit on Oct. 23 will have enough substance to respond to market concerns. The euro did not react to this remark.
Eurogroup Chairman Juncker said he is expecting to receive the troika's report in the middle of next week, and that he is optimistic that Europe will disburse Greece's sixth tranche. He said that all those who are speculating that Greece will leave the Eurozone are wrong.
ECB President Trichet said it is important to avoid any suggestion that Eurozone countries other than Greece might fail to fully honour their debts.
The ECB's monthly report noted that private sector involvement in the debt crisis can be expected to add to FX volatility, to damage the euro's reputation, and to have a direct negative impact on the banking sector across the Eurozone.
ECB Executive Board member Gonzales-Paramo said the pursuit of price stability remains the central bank's main objective and that it tries to keep market interventions at the lowest appropriate level.
JPY
Finance Minister Azumi said he would urge his European counterparts to make use of a large-scale scheme, including the EFSF, to support the banking sector. He added that he would also consult with the US as needed on how to help tackling the EU debt crisis.
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, October 13, 2011
13th of October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
13 October 2011 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk appetite has been firm in Asia, mainly due to continuing optimism that EU officials may be nearing a solution to the debt crisis and better-than-expected data releases. The FOMC's Sept 20-21 meeting minutes showed some officials wanted to keep further asset purchases as an option to boost the economy. Without a marked improvement in labour market conditions, there is little scope for the Fed to become less worried about growth conditions, and hence it will leave all options open. In Australia, employment rose the most in seven months, well above market expectations, and the unemployment rate dropped back to 5.2% from 5.3% in August. This suggests there is little scope for an RBA rate cut this year - in contrast to market expectations. With hopes of a solution to the EU debt crisis continuing to rise and little scope for the Fed to become less dovish on monetary policy in the near term, risk sentiment is likely to stay supported. As positioning in pairs such as EURUSD or AUDUSD remains skewed to the downside, there's scope for additional gains and dips should therefore be bought.
EUR
ECB Executive Board member Gonzales-Paramo said the pursuit of price stability remains the central bank's main objective and that it tries to keep market interventions at the lowest appropriate level.
Incoming ECB President Draghi warned that if high Italian bond yields persist, they could negate the benefit of fiscal consolidation (by raising debt servicing costs). He said there was a danger that an "ungovernable" spiral could develop.
Greek Prime Minister Papandreou is due to meet Eurogroup Chairman Juncker and EU Council President von Rompuy on Thursday, and also to speak with IMF Managing Director Lagarde and US Treasury Secretary Geithner in the coming days.
Reuters reported that an extra meeting of Eurozone finance ministers is being scheduled for Oct. 21 - two days before the full EU summit is due to take place.
GBP
UK jobless claims for September came in lower than expected at +17.5k (cons. 24.0k), although the unemployment rate rose to 8.1% (cons. 8.0%; prev. 7.9%).
Bank of England MPC member Dale said the MPC voted for more QE primarily because the UK economy slowed down in Q3, and is expected to slow further in Q4. The MPC will assess the right scale of QE purchases on a monthly basis, Dale added.
JPY
According to the BOJ September minutes downside risks to growth have increased but not below levels taken into consideration at the August meeting already. Still some board members said further easing may become necessary in the future should conditions deteriorate further abroad.
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 October 2011 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk appetite has been firm in Asia, mainly due to continuing optimism that EU officials may be nearing a solution to the debt crisis and better-than-expected data releases. The FOMC's Sept 20-21 meeting minutes showed some officials wanted to keep further asset purchases as an option to boost the economy. Without a marked improvement in labour market conditions, there is little scope for the Fed to become less worried about growth conditions, and hence it will leave all options open. In Australia, employment rose the most in seven months, well above market expectations, and the unemployment rate dropped back to 5.2% from 5.3% in August. This suggests there is little scope for an RBA rate cut this year - in contrast to market expectations. With hopes of a solution to the EU debt crisis continuing to rise and little scope for the Fed to become less dovish on monetary policy in the near term, risk sentiment is likely to stay supported. As positioning in pairs such as EURUSD or AUDUSD remains skewed to the downside, there's scope for additional gains and dips should therefore be bought.
EUR
ECB Executive Board member Gonzales-Paramo said the pursuit of price stability remains the central bank's main objective and that it tries to keep market interventions at the lowest appropriate level.
Incoming ECB President Draghi warned that if high Italian bond yields persist, they could negate the benefit of fiscal consolidation (by raising debt servicing costs). He said there was a danger that an "ungovernable" spiral could develop.
Greek Prime Minister Papandreou is due to meet Eurogroup Chairman Juncker and EU Council President von Rompuy on Thursday, and also to speak with IMF Managing Director Lagarde and US Treasury Secretary Geithner in the coming days.
Reuters reported that an extra meeting of Eurozone finance ministers is being scheduled for Oct. 21 - two days before the full EU summit is due to take place.
GBP
UK jobless claims for September came in lower than expected at +17.5k (cons. 24.0k), although the unemployment rate rose to 8.1% (cons. 8.0%; prev. 7.9%).
Bank of England MPC member Dale said the MPC voted for more QE primarily because the UK economy slowed down in Q3, and is expected to slow further in Q4. The MPC will assess the right scale of QE purchases on a monthly basis, Dale added.
JPY
According to the BOJ September minutes downside risks to growth have increased but not below levels taken into consideration at the August meeting already. Still some board members said further easing may become necessary in the future should conditions deteriorate further abroad.
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, October 12, 2011
12th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
12 October 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Near-term resistance is at 1.3837 ahead of 1.3937, while support lies at 1.3346.
USDJPY NEUTRAL Resistance is at 77.34, trendline drawn off Apr. 7 high, ahead of 77.86. Key support lies at 75.95.
GBPUSD NEUTRAL Key resistance area is at 1.5716/81. Support is at 1.5423 and 1.5272, a key low from Oct. 6.
USDCHF BULLISH A break above 0.9340 would expose 0.9401, a Fibonacci level. Support lies at 0.8919.
AUDUSD NEUTRAL Initial resistance is at 1.0035 ahead of 1.0239, a Fibonacci level. Support lies at 0.9728 ahead of 0.9622.
USDCAD NEUTRAL Break above 1.0419 would expose 1.0483, while a move below 1.0235 would open the key support of 1.0144.
EURCHF BULLISH Rise through 1.2495 would open the way towards 1.2646. Support lies at 1.2218.
EURGBP NEUTRAL Key resistance is at 0.8795; a break above which would expose 0.8842. Support lies at 0.8583 ahead of key low of 0.8530.
EURJPY NEUTRAL Near-term directional triggers are at 106.99 and 100.76.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12 October 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Near-term resistance is at 1.3837 ahead of 1.3937, while support lies at 1.3346.
USDJPY NEUTRAL Resistance is at 77.34, trendline drawn off Apr. 7 high, ahead of 77.86. Key support lies at 75.95.
GBPUSD NEUTRAL Key resistance area is at 1.5716/81. Support is at 1.5423 and 1.5272, a key low from Oct. 6.
USDCHF BULLISH A break above 0.9340 would expose 0.9401, a Fibonacci level. Support lies at 0.8919.
AUDUSD NEUTRAL Initial resistance is at 1.0035 ahead of 1.0239, a Fibonacci level. Support lies at 0.9728 ahead of 0.9622.
USDCAD NEUTRAL Break above 1.0419 would expose 1.0483, while a move below 1.0235 would open the key support of 1.0144.
EURCHF BULLISH Rise through 1.2495 would open the way towards 1.2646. Support lies at 1.2218.
EURGBP NEUTRAL Key resistance is at 0.8795; a break above which would expose 0.8842. Support lies at 0.8583 ahead of key low of 0.8530.
EURJPY NEUTRAL Near-term directional triggers are at 106.99 and 100.76.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12th of October 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
12 October 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk sentiment was stable in Asia, mainly on a view that China will continue to support the domestic stock market and expectations the Slovakian parliament will still approve enhancements to the EFSF despite the failure of the first vote. The first vote failed as it was linked to a confidence vote for the government, and was thus based on the desire to vote down the government rather than on changes to the stability fund. Already ahead of the vote Finance Minister Miklos said that one way or the other, there would be an approval of EFSF enhancements by the end of the week, and the main opposition party is now set to support the measures.
In other news the US Senate passed the China Currency Bill. However, the bill is not expected to pass the House of Representatives, mainly as Republicans are strongly opposed to it. Elsewhere, Alcoa kicked of the Q3 US earnings season, missing estimates mainly as Europeans were said to have cut orders dramatically due to economic uncertainty.
Nevertheless, the focus during this earnings season will be on retailers and the manufacturing sector in order to evaluate the consumer as well as external demand. With expectations muted there is scope for the current earnings season to beat depressed expectations. This is mainly due to external demand as well as domestic spending holding up better than initially expected. The latest upside surprise of export growth in Germany, which is largely driven by demand in emerging markets, already suggested that demand held up better than initially expected. Last but not least, the troika said Greece will receive the next aid tranche early in November.
Ahead today investors will watch the release of the Sept 20-21 FOMC meeting. Elsewhere, Bank of Italy Governor and incoming ECB president Draghi will speak about the Italian economy. Most Asian stock markets are trading in the black, with the Hang Seng Index up by 0.6%. Alongside stable risk sentiment, still stretched short positioning suggests EURUSD and risk-sensitive pairs such as AUDUSD should find buyers on dips for now..
EUR
Troika staff inspectors announced that the next tranche of cash will be released to Greece when the Eurozone Finance Ministers and the IMF Board approve their report and authorise the release of the funds. The EUR 8 bn is expected to be disbursed in early November. Interestingly, the troika staff felt the cash should be released even though they acknowledged Greece would not meet its 2011 targets.
After silence on the matter for several months, ECB President Trichet warned that a credit event in Greece must be avoided. This is yet another piece of evidence that the July 21 agreement on private sector participation in the Greek rescue has been reopened.
EU Commission President Barroso is scheduled to announce a bank recapitalisation proposal on Wednesday. We note that this is distinct from the Franco-German capitalisation plan that was apparently agreed on Sunday between French President Sarkozy and German Chancellor Merkel, although no details have yet been released..
GBP
Bank of England MPC member Miles said that the central bank could have quite a "substantial effect" on bringing down the cost of corporate debt by buying Gilts. He supports the bank's latest moves and remains a key dove.
Bank of England MPC member Posen said he was pleased the MPC has voted in favour of a resumption of QE, a comment which promptly sent Cable 30 points lower. Later Posen added that QE will be expanded again if an expansion is needed. As for the possibility of buying other assets beyond Gilts, he said that was not a decision for the MPC to make.
JPY
Core machinery orders in August rose by 11% m/m and 2.1% y/y. This was considerably higher than expected and the largest month-on-month gain in more than a year. Latest data suggests that companies are still focused on bringing production levels back to pre-quake levels. This comes as some relief as machinery orders are acting as a leading indicator to capital expenditure.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12 October 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk sentiment was stable in Asia, mainly on a view that China will continue to support the domestic stock market and expectations the Slovakian parliament will still approve enhancements to the EFSF despite the failure of the first vote. The first vote failed as it was linked to a confidence vote for the government, and was thus based on the desire to vote down the government rather than on changes to the stability fund. Already ahead of the vote Finance Minister Miklos said that one way or the other, there would be an approval of EFSF enhancements by the end of the week, and the main opposition party is now set to support the measures.
In other news the US Senate passed the China Currency Bill. However, the bill is not expected to pass the House of Representatives, mainly as Republicans are strongly opposed to it. Elsewhere, Alcoa kicked of the Q3 US earnings season, missing estimates mainly as Europeans were said to have cut orders dramatically due to economic uncertainty.
Nevertheless, the focus during this earnings season will be on retailers and the manufacturing sector in order to evaluate the consumer as well as external demand. With expectations muted there is scope for the current earnings season to beat depressed expectations. This is mainly due to external demand as well as domestic spending holding up better than initially expected. The latest upside surprise of export growth in Germany, which is largely driven by demand in emerging markets, already suggested that demand held up better than initially expected. Last but not least, the troika said Greece will receive the next aid tranche early in November.
Ahead today investors will watch the release of the Sept 20-21 FOMC meeting. Elsewhere, Bank of Italy Governor and incoming ECB president Draghi will speak about the Italian economy. Most Asian stock markets are trading in the black, with the Hang Seng Index up by 0.6%. Alongside stable risk sentiment, still stretched short positioning suggests EURUSD and risk-sensitive pairs such as AUDUSD should find buyers on dips for now..
EUR
Troika staff inspectors announced that the next tranche of cash will be released to Greece when the Eurozone Finance Ministers and the IMF Board approve their report and authorise the release of the funds. The EUR 8 bn is expected to be disbursed in early November. Interestingly, the troika staff felt the cash should be released even though they acknowledged Greece would not meet its 2011 targets.
After silence on the matter for several months, ECB President Trichet warned that a credit event in Greece must be avoided. This is yet another piece of evidence that the July 21 agreement on private sector participation in the Greek rescue has been reopened.
EU Commission President Barroso is scheduled to announce a bank recapitalisation proposal on Wednesday. We note that this is distinct from the Franco-German capitalisation plan that was apparently agreed on Sunday between French President Sarkozy and German Chancellor Merkel, although no details have yet been released..
GBP
Bank of England MPC member Miles said that the central bank could have quite a "substantial effect" on bringing down the cost of corporate debt by buying Gilts. He supports the bank's latest moves and remains a key dove.
Bank of England MPC member Posen said he was pleased the MPC has voted in favour of a resumption of QE, a comment which promptly sent Cable 30 points lower. Later Posen added that QE will be expanded again if an expansion is needed. As for the possibility of buying other assets beyond Gilts, he said that was not a decision for the MPC to make.
JPY
Core machinery orders in August rose by 11% m/m and 2.1% y/y. This was considerably higher than expected and the largest month-on-month gain in more than a year. Latest data suggests that companies are still focused on bringing production levels back to pre-quake levels. This comes as some relief as machinery orders are acting as a leading indicator to capital expenditure.
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, October 11, 2011
11th of October 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
11 October 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Break above 1.3690 has turned the model neutral. Resistance is at 1.3837 ahead of 1.3937, while support lies at 1.3346.
USDJPY NEUTRAL Initial resistance is at 77.40, top of the bear channel drawn off April 7 high ahead of 77.86. Support lies at 76.50 ahead of 75.95.
GBPUSD NEUTRAL Resistance is at 1.5716/81 area. Support is at 1.5525 and 1.5423.
USDCHF BULLISH Resistance is at 0.9340, a break here would expose 0.9401, a Fibonacci level. Support lies at 0.8919.
AUDUSD NEUTRAL Focus is on 1.0035, a break above which would open 1.0239, a Fibonacci level. Support lies at 0.9728 ahead of 0.9622.
USDCAD BULLISH Initial resistance is at 1.0419 ahead of 1.0483. Key support lies at 1.0144.
EURCHF BULLISH Resistance is at 1.2495, a break above which would open the way towards 1.2646. Support lies at 1.2123.
EURGBP NEUTRAL Resistance is at 0.8750, trendline drawn off July 1 high. Next level is at 0.8795. Support lies at 0.8583.
EURJPY NEUTRAL Near-term directional triggers are at 106.99 and 100.76.
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.
11 October 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Break above 1.3690 has turned the model neutral. Resistance is at 1.3837 ahead of 1.3937, while support lies at 1.3346.
USDJPY NEUTRAL Initial resistance is at 77.40, top of the bear channel drawn off April 7 high ahead of 77.86. Support lies at 76.50 ahead of 75.95.
GBPUSD NEUTRAL Resistance is at 1.5716/81 area. Support is at 1.5525 and 1.5423.
USDCHF BULLISH Resistance is at 0.9340, a break here would expose 0.9401, a Fibonacci level. Support lies at 0.8919.
AUDUSD NEUTRAL Focus is on 1.0035, a break above which would open 1.0239, a Fibonacci level. Support lies at 0.9728 ahead of 0.9622.
USDCAD BULLISH Initial resistance is at 1.0419 ahead of 1.0483. Key support lies at 1.0144.
EURCHF BULLISH Resistance is at 1.2495, a break above which would open the way towards 1.2646. Support lies at 1.2123.
EURGBP NEUTRAL Resistance is at 0.8750, trendline drawn off July 1 high. Next level is at 0.8795. Support lies at 0.8583.
EURJPY NEUTRAL Near-term directional triggers are at 106.99 and 100.76.
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.