DAILY MARKET COMMENTARY
29 November 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3286, the intraday low, a move below which would expose 1.3212. Resistance is at 1.3412 ahead of 1.3531.
USDJPY BULLISH Clearance of 78.06 has opened the way towards 78.40 and 78.83. Support lies at 77.46.
GBPUSD BEARISH Initial Support lies at 1.5459, a break below which would open 1.5423. Resistance is at 1.5656.
USDCHF BULLISH Move above 0.9331 would pave the way for gain towards 0.9401. Key support lies at 0.9085.
AUDUSD BEARISH Break below 0.9863 would expose 0.9742. Resistance is at 1.0080.
USDCAD BULLISH Near-term resistance is at 1.0474, a rise through which would expose 1.0524, Nov. 25 key high. Support lies at 1.0283 ahead of 1.0208.
EURCHF NEUTRAL Key resistance is at 1.2474 while support lies at 1.2251.
EURGBP NEUTRAL Support lies at 0.8569 ahead of 0.8546, while resistance is at 0.8648 ahead of 0.8865.
EURJPY BEARISH Support comes in at 102.87 ahead of 102.49. Resistance is at 105.57.
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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Tuesday, November 29, 2011
29th of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
29 November 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk continues to enjoy a healthy recovery as today's Eurozone Finance Ministers look to approve Greece receiving the 6th tranche of aid today. More importantly, the details for EFSF leveraging are expected to receive the official go-ahead, though the marginal impact of these bits of 'good news' should be limited at best and investors will still cast a nervous eye towards this week's bond auctions and Eurozone yields in general may not find too much respite. Our analysts have significantly lowered their 2012 growth forecasts to -0.7% y/y from +0.2% y/y previously, reflecting heightened concerns about Europe. Knock-on effects to other economies means UBS now forecasts 2012 global growth forecast at only +2.7% y/y (prev. 3.1%).
A French newspaper also reported that S&P may change its outlook for France to negative within the next 10 days, and the timing would be particularly bad but may add to the urgency for Eurozone leaders to reach a comprehensive accord at the upcoming summit. In other news, Fitch affirmed the US rating at AAA, but lowered the outlook to negative from stable. Both the action and the timing had been previously signaled by Fitch and there was no FX reaction. Italy is due to tap the market for up to EUR8bn today. In the UK, Chancellor Osborne is expected give his autumn budget statement and the OBR will release economic and fiscal forecasts. Overnight EURUSD traded 1.3287-1.3373 and USDJPY 77.90-78.27.
EUR
A spokesman for the German government said that Germany and France are working together on proposals for concrete and limited EU treaty changes. The German Ministry of Finance denied that there are plans for Eurozone bond issuance amongst AAA countries only. This relates to news reported over the weekend that the six AAA rated Eurozone countries are considering issuing joint bonds. Austrian Finance Minister Fekter also said he 'sees no sense' in 'elite bonds' for Eurozone members.
EUR 8.58 bn worth of ECB purchases were settled last week under the Securities Markets Program, up from EUR 7.99 bn the week before. Bank of England Governor King said deleveraging by Eurozone banks is leading to early signs of a Eurozone credit crunch.
Monday's auction of Italian 2023 BTPEI yielded 7.30%. The Belgian auction was well received however with strong bid-to covers across the 4 bonds issued. The bonds had rallied ahead of the auction and continued to perform well afterwards. Italy is due to auction up to EUR 8 bn worth of BTPs on Tuesday.
La Tribune reported that S&P may change France's outlook to negative within 10 days.
According to media reports, EU Economics Commissioner Rehn is to tell Italy that fiscal measures of EUR11bn are needed 'immediately' and balancing the 2013 budget is a key prerequisite to regain credibility and improve media-term growth prospects.
Eurozone finance ministers are scheduled to meet today. A likely outcome is that the disbursement of Greece's long-awaited sixth tranche may be approved in principle.
Our analysts have adjusted their global GDP forecasts from 3.1%y/y for 2012 to 2.7%. We now expect the Eurozone economy to contract by 0.7% next year, with France, Italy, Spain and the UK all entering recession. The US is also expected to grow by 2.0% this year (vs. 2.3% original forecast).
CHF
SNB Chairman Hildebrand said that the Swiss franc is `highly valued' and he expects the currency to weaken further. These comments largely echo what other SNB officials have been saying however and the CHF failed to react much.
SNB Vice Chairman Jordan repeated that the bank is "prepared to take new measures, should economic prospects and deflationary risks make this necessary". He added that "the franc is still at an elevated level", and that a Eurozone breakup is not a realistic scenario.
JPY
Vice-Minister of Finance Nakao warned that Japan would intervene unilaterally in a speculative market, but said Japan was also ready to help the Eurozone nations if needed
Retail sales figures were robust overnight, coming in at 1.9%y/y. However the jobless rate increased to 4.5%.
GBP
The OBR is expected to deliver its economic and fiscal forecasts today and investors will be looking for signs of fiscal slippage to scrutinize the ability of the UK to stick to its current austerity plans.
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.
29 November 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Risk continues to enjoy a healthy recovery as today's Eurozone Finance Ministers look to approve Greece receiving the 6th tranche of aid today. More importantly, the details for EFSF leveraging are expected to receive the official go-ahead, though the marginal impact of these bits of 'good news' should be limited at best and investors will still cast a nervous eye towards this week's bond auctions and Eurozone yields in general may not find too much respite. Our analysts have significantly lowered their 2012 growth forecasts to -0.7% y/y from +0.2% y/y previously, reflecting heightened concerns about Europe. Knock-on effects to other economies means UBS now forecasts 2012 global growth forecast at only +2.7% y/y (prev. 3.1%).
A French newspaper also reported that S&P may change its outlook for France to negative within the next 10 days, and the timing would be particularly bad but may add to the urgency for Eurozone leaders to reach a comprehensive accord at the upcoming summit. In other news, Fitch affirmed the US rating at AAA, but lowered the outlook to negative from stable. Both the action and the timing had been previously signaled by Fitch and there was no FX reaction. Italy is due to tap the market for up to EUR8bn today. In the UK, Chancellor Osborne is expected give his autumn budget statement and the OBR will release economic and fiscal forecasts. Overnight EURUSD traded 1.3287-1.3373 and USDJPY 77.90-78.27.
EUR
A spokesman for the German government said that Germany and France are working together on proposals for concrete and limited EU treaty changes. The German Ministry of Finance denied that there are plans for Eurozone bond issuance amongst AAA countries only. This relates to news reported over the weekend that the six AAA rated Eurozone countries are considering issuing joint bonds. Austrian Finance Minister Fekter also said he 'sees no sense' in 'elite bonds' for Eurozone members.
EUR 8.58 bn worth of ECB purchases were settled last week under the Securities Markets Program, up from EUR 7.99 bn the week before. Bank of England Governor King said deleveraging by Eurozone banks is leading to early signs of a Eurozone credit crunch.
Monday's auction of Italian 2023 BTPEI yielded 7.30%. The Belgian auction was well received however with strong bid-to covers across the 4 bonds issued. The bonds had rallied ahead of the auction and continued to perform well afterwards. Italy is due to auction up to EUR 8 bn worth of BTPs on Tuesday.
La Tribune reported that S&P may change France's outlook to negative within 10 days.
According to media reports, EU Economics Commissioner Rehn is to tell Italy that fiscal measures of EUR11bn are needed 'immediately' and balancing the 2013 budget is a key prerequisite to regain credibility and improve media-term growth prospects.
Eurozone finance ministers are scheduled to meet today. A likely outcome is that the disbursement of Greece's long-awaited sixth tranche may be approved in principle.
Our analysts have adjusted their global GDP forecasts from 3.1%y/y for 2012 to 2.7%. We now expect the Eurozone economy to contract by 0.7% next year, with France, Italy, Spain and the UK all entering recession. The US is also expected to grow by 2.0% this year (vs. 2.3% original forecast).
CHF
SNB Chairman Hildebrand said that the Swiss franc is `highly valued' and he expects the currency to weaken further. These comments largely echo what other SNB officials have been saying however and the CHF failed to react much.
SNB Vice Chairman Jordan repeated that the bank is "prepared to take new measures, should economic prospects and deflationary risks make this necessary". He added that "the franc is still at an elevated level", and that a Eurozone breakup is not a realistic scenario.
JPY
Vice-Minister of Finance Nakao warned that Japan would intervene unilaterally in a speculative market, but said Japan was also ready to help the Eurozone nations if needed
Retail sales figures were robust overnight, coming in at 1.9%y/y. However the jobless rate increased to 4.5%.
GBP
The OBR is expected to deliver its economic and fiscal forecasts today and investors will be looking for signs of fiscal slippage to scrutinize the ability of the UK to stick to its current austerity plans.
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, November 28, 2011
28th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
28 November 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Focus is on 1.3146, the key low from Oct. 4, a break below which would open the way for deeper pullback towards 1.2867. Resistance is at 1.3412.
USDJPY BULLISH Next resistances are at 78.06 and 78.40. Support lies at 77.10.
GBPUSD BEARISH Support lies at 1.5423 ahead of 1.5272, Oct. 6 key low. Resistance is at 1.5566.
USDCHF BULLISH A clear break above 0.9316 would pave the way for gain towards 0.9401. Support lies at 0.9190.
AUDUSD BEARISH Break below 0.9742 would expose 0.9664. Resistance is at 1.0000.
USDCAD BULLISH Near-term resistance is at 1.0474 ahead of 1.0524. Support lies at 1.0346.
EURCHF NEUTRAL Key resistance is at 1.2474 while support lies at 1.2251.
EURGBP NEUTRAL Near-term directional triggers are at 0.8665 and 0.8519.
EURJPY BEARISH Support comes in at 102.43 ahead of 101.62. Resistance is at 104.39.
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 November 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Focus is on 1.3146, the key low from Oct. 4, a break below which would open the way for deeper pullback towards 1.2867. Resistance is at 1.3412.
USDJPY BULLISH Next resistances are at 78.06 and 78.40. Support lies at 77.10.
GBPUSD BEARISH Support lies at 1.5423 ahead of 1.5272, Oct. 6 key low. Resistance is at 1.5566.
USDCHF BULLISH A clear break above 0.9316 would pave the way for gain towards 0.9401. Support lies at 0.9190.
AUDUSD BEARISH Break below 0.9742 would expose 0.9664. Resistance is at 1.0000.
USDCAD BULLISH Near-term resistance is at 1.0474 ahead of 1.0524. Support lies at 1.0346.
EURCHF NEUTRAL Key resistance is at 1.2474 while support lies at 1.2251.
EURGBP NEUTRAL Near-term directional triggers are at 0.8665 and 0.8519.
EURJPY BEARISH Support comes in at 102.43 ahead of 101.62. Resistance is at 104.39.
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 November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
28 November 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The news for the Eurozone simply refuses to improve as Belgium was downgraded late on Friday and over the weekend, Italian newspaper La Stampa reported that the IMF is preparing a EUR600 bn loan for Italy in case the situation worsens. Early on Monday the IMF denied that any discussion was underway with Italy on any form of financing, and the numbers involved lack credibility as the IMF's totally lending capabilities are far short of that sum.
Nevertheless, the news underscores the amount of nervousness in the market, especially with another major week of bond supply up ahead. Italy alone will the tap the market for up to EUR8 bn on Tuesday and with the 2-year yield already trading past 8%, clearly the costs of borrowing are reaching intolerable levels. Belgium's downgrade came as a bit of a surprise, but over the weekend, in an apparent response to the downgrade, Belgian politicians finally agreed the terms of the 2012 budget, although the country still has no government. Belgium itself is going to tap the market today, though the amounts are relatively small with our fixed income analysts anticipating no more than EUR500 mn for each of the four lines in OLOs. The German newspaper Welt am Sonntag reported on Sunday that Germany and France are planning a new stability pact on fiscal discipline that could be implemented quickly without having to wait for a full EU Treaty amendment. France, Spain, Austria and Germany will also be in markets this week and every single result will be scrutinized. Eurozone finance ministers are also meeting on Tuesday. Overnight EURUSD traded 1.3278-1.3334 and USDJPY 77.47-77.71.
EUR
Italy's auction of 6m bills and 2y bonds on Friday was very weak, prompting yields to rise sharply into and after the auction. Two year yields breached 8% intra-day for the first-time since the euro's launch, and the 2s10s segment of the curve again closed in inverted territory. Attention will now focus on Tuesday's auction of up to EUR 8 bn worth of BTPs and the meeting of Eurozone finance ministers scheduled for the same day.
A statement issued from the office of Italian Prime Minister Monti on Friday said that both Germany and France realize that "a collapse of Italy would inevitably lead to the end of the euro". Over the weekend Bundesbank President Weidmann said he was optimistic that Italy can "cope with rates over 7% for a while". Italian newspaper La Stampa reported that the IMF is preparing a EUR 600 bn loan for Italy in case the situation worsens.
Late on Friday, S&P downgraded Belgium's long term rating by one notch to AA, outlook negative. Moody's and Fitch rate the sovereign one notch higher, but Moody's has had Belgium on review for a possible downgrade since Oct. 7. The announcement came after Eurozone bond markets had closed for the day. A statement from the Belgian Finance Ministry said even after the downgrade, Belgium still has one of the most solid credit ratings in Europe, and is one of the few countries that has managed to stabilize its debt.
Over the weekend, in an apparent response to the downgrade, Belgian politicians finally agreed the terms of the 2012 budget, although the country still has no government. Belgium is scheduled to sell a range of tenors from 10y-30y at Monday's bond auction which is due to take place at 1100GMT.
The German newspaper Welt am Sonntag reported on Sunday that Germany and France are planning a new stability pact on fiscal discipline that could be implemented quickly without having to wait for a full EU Treaty amendment. The newspaper claimed that this should be enough to persuade the ECB to buy sovereign bonds more forcefully. ECB Executive Board member Stark said "the political pressure on the ECB is enormous", noting that there is a discussion about expanding the bank's duties.
ECB Executive Board member Gonzalez-Paramo said accelerated sovereign bond purchases by the ECB are "out of the question because they are out of our mandate". He said it is essential that the existing SMP program does not distort incentives for pursuing sound fiscal policies. However he did raise the possibility of other measures such as rate cuts and the provision of additional liquidity. Specifically he implied the ECB would not be bound by precedent if it felt the need to lower the refi rate below its historical low of 1%. Governing Board member Mersch also suggested that the provision of term liquidity beyond 1yr might eventually be considered.
The EURUSD 3m basis swap fell deeper into negative territory on Friday reaching -161 bps, and touching levels unseen since Q4 2008. The next 3m ECB dollar auction is scheduled for Dec. 7.
EU Commissioner Rehn said he does "not see the euro falling down" and said he sees no reason to speculate on any possible breakup of the euro. Responding to a question, Irish Finance Minister Noonan said he had contingency plans for a Eurozone break up but said the probability of that happening was "very slight". UK Chancellor Osborne said that the UK has stepped up its contingency planning in light of recent events inside the Eurozone.
Several other stories were worthy of attention overnight: Dow Jones reported that a major interdealer broker was testing Greek drachma trades against the dollar and euro, though only on a precautionary basis. Elsewhere, German news reported that the six AAA rated Eurozone countries are considering issuing joint bonds. The bonds would not only finance themselves but could also be used to provide assistance to the periphery
Wires reported that the EFSF is now aiming to sell as much as EUR20bn in bills on a monthly basis and diversify funding for bailouts. The leverage idea is also still in place, as the Fund aims to insure 20%-30% of bonds issued, and also hold an additional EUR10bn liquidity buffer. These plans may be sound but the last EFSF bond launch was very disappointing and we remain cautious on the fund's overall efficacy.
CHF
SNB Vice Chairman Jordan repeated that the bank is "prepared to take new measures, should economic prospects and deflationary risks make this necessary". He added that "the franc is still at an elevated level", and that a Eurozone breakup is not a realistic scenario.
GBP
UK Chancellor Osborne outlined plans to provide government guarantees for GBP 20 bn worth of bank loans to small and medium sized companies. He said he hoped this would lower their cost of borrowing by 1%.
Bank of England MPC member Fisher said he voted for a GBP 75 bn increase in the asset purchase target because it was "the smallest amount I was absolutely sure we needed to do", adding that "I still think we might need to do some more". Fellow MPC member Weale said it would be best to wait until the current round of asset purchases were completed before announcing further purchases beyond EUR275 bn. He reasoned that waiting would allow time for inflation to come down and so the bank's credibility would not be put at risk. We note that a VAT hike implemented in Jan. 2011 will soon fall out of the CPI calculation.
NZD
Prime Minister Key won the weekend general election. His National Party now control even more seats but still fell narrowly short of an absolute majority. The sale of minority stakes in public assets remains a central plank of Key's policy ambitions and if these assets are acquired by overseas investors some NZD-positive inflows could result.
GBP
Vice-Minister of Finance Nakao warned that Japan would intervene unilaterally in a speculative market, but said Japan was also ready to help the Eurozone nations 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.
28 November 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The news for the Eurozone simply refuses to improve as Belgium was downgraded late on Friday and over the weekend, Italian newspaper La Stampa reported that the IMF is preparing a EUR600 bn loan for Italy in case the situation worsens. Early on Monday the IMF denied that any discussion was underway with Italy on any form of financing, and the numbers involved lack credibility as the IMF's totally lending capabilities are far short of that sum.
Nevertheless, the news underscores the amount of nervousness in the market, especially with another major week of bond supply up ahead. Italy alone will the tap the market for up to EUR8 bn on Tuesday and with the 2-year yield already trading past 8%, clearly the costs of borrowing are reaching intolerable levels. Belgium's downgrade came as a bit of a surprise, but over the weekend, in an apparent response to the downgrade, Belgian politicians finally agreed the terms of the 2012 budget, although the country still has no government. Belgium itself is going to tap the market today, though the amounts are relatively small with our fixed income analysts anticipating no more than EUR500 mn for each of the four lines in OLOs. The German newspaper Welt am Sonntag reported on Sunday that Germany and France are planning a new stability pact on fiscal discipline that could be implemented quickly without having to wait for a full EU Treaty amendment. France, Spain, Austria and Germany will also be in markets this week and every single result will be scrutinized. Eurozone finance ministers are also meeting on Tuesday. Overnight EURUSD traded 1.3278-1.3334 and USDJPY 77.47-77.71.
EUR
Italy's auction of 6m bills and 2y bonds on Friday was very weak, prompting yields to rise sharply into and after the auction. Two year yields breached 8% intra-day for the first-time since the euro's launch, and the 2s10s segment of the curve again closed in inverted territory. Attention will now focus on Tuesday's auction of up to EUR 8 bn worth of BTPs and the meeting of Eurozone finance ministers scheduled for the same day.
A statement issued from the office of Italian Prime Minister Monti on Friday said that both Germany and France realize that "a collapse of Italy would inevitably lead to the end of the euro". Over the weekend Bundesbank President Weidmann said he was optimistic that Italy can "cope with rates over 7% for a while". Italian newspaper La Stampa reported that the IMF is preparing a EUR 600 bn loan for Italy in case the situation worsens.
Late on Friday, S&P downgraded Belgium's long term rating by one notch to AA, outlook negative. Moody's and Fitch rate the sovereign one notch higher, but Moody's has had Belgium on review for a possible downgrade since Oct. 7. The announcement came after Eurozone bond markets had closed for the day. A statement from the Belgian Finance Ministry said even after the downgrade, Belgium still has one of the most solid credit ratings in Europe, and is one of the few countries that has managed to stabilize its debt.
Over the weekend, in an apparent response to the downgrade, Belgian politicians finally agreed the terms of the 2012 budget, although the country still has no government. Belgium is scheduled to sell a range of tenors from 10y-30y at Monday's bond auction which is due to take place at 1100GMT.
The German newspaper Welt am Sonntag reported on Sunday that Germany and France are planning a new stability pact on fiscal discipline that could be implemented quickly without having to wait for a full EU Treaty amendment. The newspaper claimed that this should be enough to persuade the ECB to buy sovereign bonds more forcefully. ECB Executive Board member Stark said "the political pressure on the ECB is enormous", noting that there is a discussion about expanding the bank's duties.
ECB Executive Board member Gonzalez-Paramo said accelerated sovereign bond purchases by the ECB are "out of the question because they are out of our mandate". He said it is essential that the existing SMP program does not distort incentives for pursuing sound fiscal policies. However he did raise the possibility of other measures such as rate cuts and the provision of additional liquidity. Specifically he implied the ECB would not be bound by precedent if it felt the need to lower the refi rate below its historical low of 1%. Governing Board member Mersch also suggested that the provision of term liquidity beyond 1yr might eventually be considered.
The EURUSD 3m basis swap fell deeper into negative territory on Friday reaching -161 bps, and touching levels unseen since Q4 2008. The next 3m ECB dollar auction is scheduled for Dec. 7.
EU Commissioner Rehn said he does "not see the euro falling down" and said he sees no reason to speculate on any possible breakup of the euro. Responding to a question, Irish Finance Minister Noonan said he had contingency plans for a Eurozone break up but said the probability of that happening was "very slight". UK Chancellor Osborne said that the UK has stepped up its contingency planning in light of recent events inside the Eurozone.
Several other stories were worthy of attention overnight: Dow Jones reported that a major interdealer broker was testing Greek drachma trades against the dollar and euro, though only on a precautionary basis. Elsewhere, German news reported that the six AAA rated Eurozone countries are considering issuing joint bonds. The bonds would not only finance themselves but could also be used to provide assistance to the periphery
Wires reported that the EFSF is now aiming to sell as much as EUR20bn in bills on a monthly basis and diversify funding for bailouts. The leverage idea is also still in place, as the Fund aims to insure 20%-30% of bonds issued, and also hold an additional EUR10bn liquidity buffer. These plans may be sound but the last EFSF bond launch was very disappointing and we remain cautious on the fund's overall efficacy.
CHF
SNB Vice Chairman Jordan repeated that the bank is "prepared to take new measures, should economic prospects and deflationary risks make this necessary". He added that "the franc is still at an elevated level", and that a Eurozone breakup is not a realistic scenario.
GBP
UK Chancellor Osborne outlined plans to provide government guarantees for GBP 20 bn worth of bank loans to small and medium sized companies. He said he hoped this would lower their cost of borrowing by 1%.
Bank of England MPC member Fisher said he voted for a GBP 75 bn increase in the asset purchase target because it was "the smallest amount I was absolutely sure we needed to do", adding that "I still think we might need to do some more". Fellow MPC member Weale said it would be best to wait until the current round of asset purchases were completed before announcing further purchases beyond EUR275 bn. He reasoned that waiting would allow time for inflation to come down and so the bank's credibility would not be put at risk. We note that a VAT hike implemented in Jan. 2011 will soon fall out of the CPI calculation.
NZD
Prime Minister Key won the weekend general election. His National Party now control even more seats but still fell narrowly short of an absolute majority. The sale of minority stakes in public assets remains a central plank of Key's policy ambitions and if these assets are acquired by overseas investors some NZD-positive inflows could result.
GBP
Vice-Minister of Finance Nakao warned that Japan would intervene unilaterally in a speculative market, but said Japan was also ready to help the Eurozone nations 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.
Friday, November 25, 2011
25th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
25 November 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3242 ahead of 1.3146, the key low from Oct. 4. Resistance is at 1.3531.
USDJPY BEARISH Near-term support lies at 76.93, a break of which would expose 76.58. Key upside trigger lies at 77.58.
GBPUSD BEARISH Momentum is negative; break of 1.5483 has opened 1.5423 ahead of 1.5272, Oct. 6 key low. Resistance is at 1.5566.
USDCHF BULLISH The pair is testing 0.9237, a clearance of which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Near-term support lies at 0.9664 ahead of 0.9488. Resistance is at 0.9786.
USDCAD BULLISH Clearance of 1.0498 would open 1.0572. Support lies at 1.0375.
EURCHF NEUTRAL Resistance is at 1.2354 ahead of 1.2474, a key high from Oct. 19. Support lies at 1.2255, a move below which would expose 1.2208.
EURGBP NEUTRAL Near-term directional triggers are at 0.8665 and 0.8519.
EURJPY BEARISH Support comes in at 102.43 ahead of 101.62. Resistance is at 104.39.
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 November 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3242 ahead of 1.3146, the key low from Oct. 4. Resistance is at 1.3531.
USDJPY BEARISH Near-term support lies at 76.93, a break of which would expose 76.58. Key upside trigger lies at 77.58.
GBPUSD BEARISH Momentum is negative; break of 1.5483 has opened 1.5423 ahead of 1.5272, Oct. 6 key low. Resistance is at 1.5566.
USDCHF BULLISH The pair is testing 0.9237, a clearance of which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Near-term support lies at 0.9664 ahead of 0.9488. Resistance is at 0.9786.
USDCAD BULLISH Clearance of 1.0498 would open 1.0572. Support lies at 1.0375.
EURCHF NEUTRAL Resistance is at 1.2354 ahead of 1.2474, a key high from Oct. 19. Support lies at 1.2255, a move below which would expose 1.2208.
EURGBP NEUTRAL Near-term directional triggers are at 0.8665 and 0.8519.
EURJPY BEARISH Support comes in at 102.43 ahead of 101.62. Resistance is at 104.39.
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 November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
25 November 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 soft overnight but quiet holiday trading probably limited further losses and the breach of 1.33 against the dollar was only temporary. Investors remain nervous about the currency and although leaders are pushing for structural changes, short-term market-oriented solutions continue to be ruled out. German Chancellor Merkel, French President Sarkozy and Italian Prime Minister Monti met yesterday, but no new crisis-fighting measures were announced at the subsequent press conference. The ambition to change the Treaty remains in place, and Germany continues to rule out common bond issuance. Fitch downgraded Portugal one notch to BB+, becoming the second rating agency to cut the rating to junk status.
The Financial Times reported that the ECB is considering the introduction of 2y or even 3y liquidity operations to help ease funding pressures in the banking system. It appears that a letter sent to Brussels by Greek opposition leader Samaras has been deemed satisfactory. A letter from Samaras committing to the implementation of reforms had been set as a pre-condition for the release of additional funds to Greece. This will likely now pave the way for the disbursement of Greece's long-overdue sixth tranche of cash by mid-December. We expect to hear more on this at the upcoming meeting of Eurozone finance ministers on Nov. 29. Ahead today there is very little data out but Italy's T-bill and zero-bond auction will be a stern test of market sentiment, with up to EUR10 bn targeted. Yesterday the 10-year yield on BTPs went through 7% again. Equity markets were weak overnight in Asia. EURUSD traded 1.3299-1.3355 and USDJPY 77.10-77.53.
EUR
German Chancellor Merkel, French President Sarkozy and Italian Prime Minister Monti met. No new crisis-fighting measures were announced, but the long-term ambition to change the EU Treaty remains in place. Merkel restated her opposition to the introduction of common bond issuance, noting "the conditions aren't right" and that their introduction would send the "wrong signal". Sarkozy added they all agreed not to make demands of the ECB.
EU Commissioner Rehn said Wednesday's bund auction shows that the crisis is spreading to healthy core countries. We note that bund yields did not come back in on Thursday, suggesting the psychology around the German bond market may be changing. If so this would be a euro negative development. Italy announced plans to issue up to EUR 8bn of BTPs on Nov. 29 (a meeting of Eurozone finance ministers is scheduled for the same day). This is likely to be another risk event for the euro, with further selling of BTPs likely in the days leading up the auction.
ECB Executive Board member Gonzalez-Paramo repeated the ECB's position that governments cannot expect the ECB to finance public debts given the ECB is not the lender of last resort to governments. He said the sovereign debt crisis is one of the biggest challenges Europe has ever faced.
The Financial Times reported that the ECB is considering the introduction of 2y or even 3y liquidity operations to help ease funding pressures in the banking system. We note that the maximum tenor currently available is 13m, so this would represent a significant extension. However, the report did not comment on whether any plans were afoot to help address the scarcity of ECB-eligible collateral.
Fitch downgraded Portugal one notch to BB+, becoming the second rating agency to cut the rating to junk status. The outlook remains negative. Moody's rates Portugal one level further down, and S&P rates the sovereign one level higher than Fitch.
It appears that a letter sent to Brussels by Greek opposition leader Samaras has been deemed satisfactory. A letter from Samaras committing to the implementation of reforms had been set as a pre-condition for the release of additional funds to Greece. This will likely now pave the way for the disbursement of Greece's long-overdue sixth tranche of cash by mid-December.
Germany's IFO for November surprised to the upside which gave the euro a temporary boost. The components were climate 106.6 (cons. 105.2), current assessment 116.7 (cons 115.0), expectations 97.3 (cons 96.0). Separately, Italian consumer confidence for November was much stronger than consensus at 96.5 (cons. 92.4, prev. 92.9). Our European economists note that it is the biggest increase in almost 3 years. It is quite surprising considering the ongoing troubles, but may be related to the installation of a new technocratic administration.
JPY
National CPI came in at -0.2%y/y, worse than expected and core inflation was at -1.0%. The fear of deflation expectations becoming ever-more entrenched suggest the BoJ will continue to act if JPY faces significant appreciation pressure.
AUD
RBA Governor Stevens said that the terms of trade have likely peaked, that the greatest risks to the Australian economy are external, and that China probably has ample scope for expansionary policy once it is confident that inflation is under control.
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 November 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 soft overnight but quiet holiday trading probably limited further losses and the breach of 1.33 against the dollar was only temporary. Investors remain nervous about the currency and although leaders are pushing for structural changes, short-term market-oriented solutions continue to be ruled out. German Chancellor Merkel, French President Sarkozy and Italian Prime Minister Monti met yesterday, but no new crisis-fighting measures were announced at the subsequent press conference. The ambition to change the Treaty remains in place, and Germany continues to rule out common bond issuance. Fitch downgraded Portugal one notch to BB+, becoming the second rating agency to cut the rating to junk status.
The Financial Times reported that the ECB is considering the introduction of 2y or even 3y liquidity operations to help ease funding pressures in the banking system. It appears that a letter sent to Brussels by Greek opposition leader Samaras has been deemed satisfactory. A letter from Samaras committing to the implementation of reforms had been set as a pre-condition for the release of additional funds to Greece. This will likely now pave the way for the disbursement of Greece's long-overdue sixth tranche of cash by mid-December. We expect to hear more on this at the upcoming meeting of Eurozone finance ministers on Nov. 29. Ahead today there is very little data out but Italy's T-bill and zero-bond auction will be a stern test of market sentiment, with up to EUR10 bn targeted. Yesterday the 10-year yield on BTPs went through 7% again. Equity markets were weak overnight in Asia. EURUSD traded 1.3299-1.3355 and USDJPY 77.10-77.53.
EUR
German Chancellor Merkel, French President Sarkozy and Italian Prime Minister Monti met. No new crisis-fighting measures were announced, but the long-term ambition to change the EU Treaty remains in place. Merkel restated her opposition to the introduction of common bond issuance, noting "the conditions aren't right" and that their introduction would send the "wrong signal". Sarkozy added they all agreed not to make demands of the ECB.
EU Commissioner Rehn said Wednesday's bund auction shows that the crisis is spreading to healthy core countries. We note that bund yields did not come back in on Thursday, suggesting the psychology around the German bond market may be changing. If so this would be a euro negative development. Italy announced plans to issue up to EUR 8bn of BTPs on Nov. 29 (a meeting of Eurozone finance ministers is scheduled for the same day). This is likely to be another risk event for the euro, with further selling of BTPs likely in the days leading up the auction.
ECB Executive Board member Gonzalez-Paramo repeated the ECB's position that governments cannot expect the ECB to finance public debts given the ECB is not the lender of last resort to governments. He said the sovereign debt crisis is one of the biggest challenges Europe has ever faced.
The Financial Times reported that the ECB is considering the introduction of 2y or even 3y liquidity operations to help ease funding pressures in the banking system. We note that the maximum tenor currently available is 13m, so this would represent a significant extension. However, the report did not comment on whether any plans were afoot to help address the scarcity of ECB-eligible collateral.
Fitch downgraded Portugal one notch to BB+, becoming the second rating agency to cut the rating to junk status. The outlook remains negative. Moody's rates Portugal one level further down, and S&P rates the sovereign one level higher than Fitch.
It appears that a letter sent to Brussels by Greek opposition leader Samaras has been deemed satisfactory. A letter from Samaras committing to the implementation of reforms had been set as a pre-condition for the release of additional funds to Greece. This will likely now pave the way for the disbursement of Greece's long-overdue sixth tranche of cash by mid-December.
Germany's IFO for November surprised to the upside which gave the euro a temporary boost. The components were climate 106.6 (cons. 105.2), current assessment 116.7 (cons 115.0), expectations 97.3 (cons 96.0). Separately, Italian consumer confidence for November was much stronger than consensus at 96.5 (cons. 92.4, prev. 92.9). Our European economists note that it is the biggest increase in almost 3 years. It is quite surprising considering the ongoing troubles, but may be related to the installation of a new technocratic administration.
JPY
National CPI came in at -0.2%y/y, worse than expected and core inflation was at -1.0%. The fear of deflation expectations becoming ever-more entrenched suggest the BoJ will continue to act if JPY faces significant appreciation pressure.
AUD
RBA Governor Stevens said that the terms of trade have likely peaked, that the greatest risks to the Australian economy are external, and that China probably has ample scope for expansionary policy once it is confident that inflation is under control.
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, November 24, 2011
24th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
24 November 2011 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3242 ahead of 1.3146, the key low from Oct. 4. Resistance is at 1.3531.
USDJPY BEARISH Initial support lies at 76.84, a break of which would expose 76.58. Resistance is at 77.58.
GBPUSD BEARISH Focus is on 1.5483 and next support is at 1.5423. Resistance is at 1.5656.
USDCHF BULLISH Initial resistance is at 0.9237, a rise through which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Break of 0.9710 has opened the way towards 0.9622 and then 0.9488. Resistance is at 0.9856.
USDCAD BULLISH Clearance of 1.0477 has opened 1.0572 ahead of 1.0658, the Oct. 4 key high. Support lies at 1.0346.
EURCHF NEUTRAL Near-term resistance is at 1.2354 ahead of 1.2474, a key high from Oct. 19. Support lies at 1.2165 ahead of 1.2123.
EURGBP NEUTRAL Near-term directional triggers are at 0.8665 and 0.8519.
EURJPY BEARISH Decline through 103.23 has opened support at 102.43 and 101.62. Resistance is at 104.39.
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 November 2011 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3242 ahead of 1.3146, the key low from Oct. 4. Resistance is at 1.3531.
USDJPY BEARISH Initial support lies at 76.84, a break of which would expose 76.58. Resistance is at 77.58.
GBPUSD BEARISH Focus is on 1.5483 and next support is at 1.5423. Resistance is at 1.5656.
USDCHF BULLISH Initial resistance is at 0.9237, a rise through which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Break of 0.9710 has opened the way towards 0.9622 and then 0.9488. Resistance is at 0.9856.
USDCAD BULLISH Clearance of 1.0477 has opened 1.0572 ahead of 1.0658, the Oct. 4 key high. Support lies at 1.0346.
EURCHF NEUTRAL Near-term resistance is at 1.2354 ahead of 1.2474, a key high from Oct. 19. Support lies at 1.2165 ahead of 1.2123.
EURGBP NEUTRAL Near-term directional triggers are at 0.8665 and 0.8519.
EURJPY BEARISH Decline through 103.23 has opened support at 102.43 and 101.62. Resistance is at 104.39.
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 November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
24 November 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 has managed to avoid further falls overnight but the recriminations will likely continue after yesterday's alarming bund auction for Germany. Renewed fears about Germany's debt situation are undoubtedly justified, but fears over the safety of France's AAA rating did not help either. Strikingly, 10y bund yields closed 16bp higher. In fact, the bonds of all AAA core Eurozone countries weakened, while the sell-off of Italian, Spanish and Belgium continued unabated. Given Eurozone equities also closed weaker on the day, it would appear that a broad-based liquidation of Eurozone assets may have begun. The pressure is now on the Eurozone to act with urgency, which unfortunately still appears lacking. Debt problems aside, growth is going to be of increasing concern not just in the Eurozone but globally. Today's release of Q3 GDP for Germany along with the Ifo index will have a material impact on how investors position themselves heading into year-end based on fundamental allocations. Weak liquidity as the US is on holiday for Thanksgiving is not going to help proceedings, though it is more likely that investors will choose to avoid markets altogether rather than put on fresh shorts. We remain cautious on the euro heading into the Dec. 9 summit, with time and patience starting to run out for another 'comprehensive solution'. Overnight EURUSD traded 1.3342-1.3384 and USDJPY traded 77.02-77.32. It is Thanksgiving in the US today.
EUR
Reaction to the German auction continued to pour in overnight. ECB Governing Board member Constancio said the incident does not raise any questions about Germany's capacity to finance itself. ECB Governing Board member Nowotny said the auction results were 'alarming'. Canada's Finance Minister Flaherty said the poor auction reinforces the need for a quick Eurozone solution. David Beers, head of Global Sovereign Ratings at S&P, said that upward pressure on German yields is quite telling, and might begin to change perceptions. However, the head of Germany's debt management agency said the results of the auction should not be over-interpreted.
Fitch warned that an intensification of the Eurozone crisis could put France's AAA rating at risk. Moody's has already warned twice in recent weeks that the outlook on the rating might be lowered to negative from stable, but so far no ratings actions have been taken.
The Euro was also affected news of fresh talks over a new rescue deal for a lender in Belgium and France. The market is worried that France's rating could be affected as a result of the bailout, which would damage the overall credit quality of any Eurozone guarantees. These comments were dismissed by the French government, which said that the current deals are not being renegotiated. The French government again called upon the ECB to play a full role in the solidarity of the Eurozone.
Belgium's Finance Minister Reynders said he is convinced the ECB will have to play a more prominent role in the Eurozone crisis.
EU Commission President Barroso said that without stronger governance it will be difficult if not impossible to sustain the euro.
The European Banking Authority said the market for medium and long term bank funding is frozen, while noting that European banks need to refinance to the tune of EUR 700 bn in 2012.
The OECD's chief economist said that Italian PM Monti's reform programme is very wide and ambitious but absolutely necessary.
Ahead today German GDP figures and the IFO survey is out (UBSe. 105.2, cons. 105.2).
GBP
The UK public sector net balance for October was slightly lower than expected at GBP3.4 bn instead of GBP3.8 bn. UK Prime Minister David Cameron acknowledged that at this stage it is harder to cut the deficit, given the weak growth outlook, but also said 'there is no letting up', suggesting the UK will stick to its austerity plan and not shift towards a more growth-oriented strategy.
BoE MPC member Miles released a paper on the UK housing market, noting that the proportion of homeowners in the UK is likely to drop on a permanent basis as a result of the 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.
24 November 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 has managed to avoid further falls overnight but the recriminations will likely continue after yesterday's alarming bund auction for Germany. Renewed fears about Germany's debt situation are undoubtedly justified, but fears over the safety of France's AAA rating did not help either. Strikingly, 10y bund yields closed 16bp higher. In fact, the bonds of all AAA core Eurozone countries weakened, while the sell-off of Italian, Spanish and Belgium continued unabated. Given Eurozone equities also closed weaker on the day, it would appear that a broad-based liquidation of Eurozone assets may have begun. The pressure is now on the Eurozone to act with urgency, which unfortunately still appears lacking. Debt problems aside, growth is going to be of increasing concern not just in the Eurozone but globally. Today's release of Q3 GDP for Germany along with the Ifo index will have a material impact on how investors position themselves heading into year-end based on fundamental allocations. Weak liquidity as the US is on holiday for Thanksgiving is not going to help proceedings, though it is more likely that investors will choose to avoid markets altogether rather than put on fresh shorts. We remain cautious on the euro heading into the Dec. 9 summit, with time and patience starting to run out for another 'comprehensive solution'. Overnight EURUSD traded 1.3342-1.3384 and USDJPY traded 77.02-77.32. It is Thanksgiving in the US today.
EUR
Reaction to the German auction continued to pour in overnight. ECB Governing Board member Constancio said the incident does not raise any questions about Germany's capacity to finance itself. ECB Governing Board member Nowotny said the auction results were 'alarming'. Canada's Finance Minister Flaherty said the poor auction reinforces the need for a quick Eurozone solution. David Beers, head of Global Sovereign Ratings at S&P, said that upward pressure on German yields is quite telling, and might begin to change perceptions. However, the head of Germany's debt management agency said the results of the auction should not be over-interpreted.
Fitch warned that an intensification of the Eurozone crisis could put France's AAA rating at risk. Moody's has already warned twice in recent weeks that the outlook on the rating might be lowered to negative from stable, but so far no ratings actions have been taken.
The Euro was also affected news of fresh talks over a new rescue deal for a lender in Belgium and France. The market is worried that France's rating could be affected as a result of the bailout, which would damage the overall credit quality of any Eurozone guarantees. These comments were dismissed by the French government, which said that the current deals are not being renegotiated. The French government again called upon the ECB to play a full role in the solidarity of the Eurozone.
Belgium's Finance Minister Reynders said he is convinced the ECB will have to play a more prominent role in the Eurozone crisis.
EU Commission President Barroso said that without stronger governance it will be difficult if not impossible to sustain the euro.
The European Banking Authority said the market for medium and long term bank funding is frozen, while noting that European banks need to refinance to the tune of EUR 700 bn in 2012.
The OECD's chief economist said that Italian PM Monti's reform programme is very wide and ambitious but absolutely necessary.
Ahead today German GDP figures and the IFO survey is out (UBSe. 105.2, cons. 105.2).
GBP
The UK public sector net balance for October was slightly lower than expected at GBP3.4 bn instead of GBP3.8 bn. UK Prime Minister David Cameron acknowledged that at this stage it is harder to cut the deficit, given the weak growth outlook, but also said 'there is no letting up', suggesting the UK will stick to its austerity plan and not shift towards a more growth-oriented strategy.
BoE MPC member Miles released a paper on the UK housing market, noting that the proportion of homeowners in the UK is likely to drop on a permanent basis as a result of the 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.
Wednesday, November 23, 2011
23rd of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
23 November 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Focus is on 1.3406, a break below which would expose 1.3346. Resistance is at 1.3614.
USDJPY BEARISH Initial support lies at 76.58 ahead of 76.34. Near-term resistance is at 77.33.
GBPUSD BEARISH Near-term support lies at 1.5543 ahead of 1.5483. Resistance is at 1.5692.
USDCHF BULLISH Initial resistance is at 0.9237, a rise through which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Momentum is negative; the pair targets 0.9710, a move below which would open 0.9622. Resistance is at 0.9856.
USDCAD BULLISH Next resistances are at 1.0477 and 1.0572. Support lies at 1.0270.
EURCHF BULLISH Near-term resistance is at 1.2416 ahead of 1.2474, a key high from Oct. 19. Key support lies at 1.2281.
EURGBP NEUTRAL Resistance is at 0.8670, a break through which would open 0.8699. Support lies at 0.8547 ahead of 0.8519.
EURJPY BEARISH Key support is at 103.23; a clear break below would expose 102.43. Resistance is at 104.39.
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.
23 November 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Focus is on 1.3406, a break below which would expose 1.3346. Resistance is at 1.3614.
USDJPY BEARISH Initial support lies at 76.58 ahead of 76.34. Near-term resistance is at 77.33.
GBPUSD BEARISH Near-term support lies at 1.5543 ahead of 1.5483. Resistance is at 1.5692.
USDCHF BULLISH Initial resistance is at 0.9237, a rise through which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Momentum is negative; the pair targets 0.9710, a move below which would open 0.9622. Resistance is at 0.9856.
USDCAD BULLISH Next resistances are at 1.0477 and 1.0572. Support lies at 1.0270.
EURCHF BULLISH Near-term resistance is at 1.2416 ahead of 1.2474, a key high from Oct. 19. Key support lies at 1.2281.
EURGBP NEUTRAL Resistance is at 0.8670, a break through which would open 0.8699. Support lies at 0.8547 ahead of 0.8519.
EURJPY BEARISH Key support is at 103.23; a clear break below would expose 102.43. Resistance is at 104.39.
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.
23rd of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
23 November 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Despite the possible boost that risk could have received from dovish FOMC minutes and the IMF's decision to loosen the criteria for its liquidity facilities, risk was heavy overnight as growth worries resurfaced. Tuesday's soft US GDP figure in addition to a weak PMI print from China both cast doubt on hopes that the non-Eurozone economies would have been able to help the global economy avoid a deep recession. This is now more in doubt and it is understandable that investors are heading towards year end more cautious than usual. Overnight USDJPY traded 76.93-77.07 and EURUSD 1.3447-1.3531. The IMF's potential provision of up to EUR91bn for Italy over the course of two years was initially greeted cautiously, as the numbers, though welcome, would still not make a material difference to the funding needs of Italy and Spain. In addition, should pressure extend beyond the current combination of countries and threaten the core further, the IMF's resources would be far from enough. The pressure is now on the Eurozone to act with urgency, which unfortunately still appears lacking. On the US side, the Supercommittee's inability to reach a deal has to Moody's and S&P announced there would be no US rating actions flowing directly from the failure of a Congressional committee to agree on fiscal consolidation measures have prompted ratings agencies into action. Fitch however issued a reminder that the outlook on the US rating could be lowered to 'negative' from 'stable', and that a final decision on the matter would be taken before the end of November.
EUR
The euro was briefly boosted after the IMF expanded its lending facilities to enable it to provide more flexible financing to economies experiencing short term liquidity issues. Under the new design, IMF loans can be made available for between six months to two years, and funding of up to 10 times quota is available. We note that Italy could be eligible to borrow up to EUR 91 bn from the expanded facilities.
Germany's Finance Minister Schaeuble said the whole Eurozone faces a lack of investor trust. Repeating the language used ahead of previous EU summits, he said the Dec. 9 EU summit needs to give markets a 'clear' signal. He did not elaborate except to say that the EU can master the crisis with existing instruments.
A key personality in Portugal's previous administration suggested Portugal's EUR 78 bn rescue package might be too small. Carlos Pina, who as former Treasury Secretary was involved in the original EU/IMF/ECB negotiations, said a further EUR 20-25 bn might be needed. The additional funding would be needed to support Portugal's public companies which have lost their access to capital markets.
Bundesbank President Weidmann said the ECB cannot be the lender of last resort to governments and that high interest rates in the debt markets can be incentives for sovereign states to reform. Clearly, the core inside the ECB are not changing their tone and remain forcibly against any debt monetization, despite continued calls for greater involvement in stabilizing the Eurozone debt markets. European fixed income markets were little changed on Tuesday with spreads stabilizing somewhat.
The Euro was also affected news of fresh talks over a new rescue deal for a lender in Belgium and France. The market is worried that France's rating could be affected as a result of the bailout, which would damage the overall credit quality of any Eurozone guarantees.
A decision over the release of the 6th tranche of aid to Greece is expected to be made at the next Eurogroup meeting on Nov. 29. However, we note that this will only cover the EU's portion of the tranche, and the timetable for the IMF to disburse its contribution has not yet been announced.
GBP
The UK public sector net balance for October was slightly lower than expected at GBP3.4 bn instead of GBP3.8 bn. UK Prime Minister David Cameron acknowledged that at this stage it is harder to cut the deficit, given the weak growth outlook, but also said 'there is no letting up', suggesting the UK will stick to its austerity plan and not shift towards a more growth-oriented strategy.
BoE MPC member Miles released a paper on the UK housing market, noting that the proportion of homeowners in the UK is likely to drop on a permanent basis as a result of the 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.
23 November 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Despite the possible boost that risk could have received from dovish FOMC minutes and the IMF's decision to loosen the criteria for its liquidity facilities, risk was heavy overnight as growth worries resurfaced. Tuesday's soft US GDP figure in addition to a weak PMI print from China both cast doubt on hopes that the non-Eurozone economies would have been able to help the global economy avoid a deep recession. This is now more in doubt and it is understandable that investors are heading towards year end more cautious than usual. Overnight USDJPY traded 76.93-77.07 and EURUSD 1.3447-1.3531. The IMF's potential provision of up to EUR91bn for Italy over the course of two years was initially greeted cautiously, as the numbers, though welcome, would still not make a material difference to the funding needs of Italy and Spain. In addition, should pressure extend beyond the current combination of countries and threaten the core further, the IMF's resources would be far from enough. The pressure is now on the Eurozone to act with urgency, which unfortunately still appears lacking. On the US side, the Supercommittee's inability to reach a deal has to Moody's and S&P announced there would be no US rating actions flowing directly from the failure of a Congressional committee to agree on fiscal consolidation measures have prompted ratings agencies into action. Fitch however issued a reminder that the outlook on the US rating could be lowered to 'negative' from 'stable', and that a final decision on the matter would be taken before the end of November.
EUR
The euro was briefly boosted after the IMF expanded its lending facilities to enable it to provide more flexible financing to economies experiencing short term liquidity issues. Under the new design, IMF loans can be made available for between six months to two years, and funding of up to 10 times quota is available. We note that Italy could be eligible to borrow up to EUR 91 bn from the expanded facilities.
Germany's Finance Minister Schaeuble said the whole Eurozone faces a lack of investor trust. Repeating the language used ahead of previous EU summits, he said the Dec. 9 EU summit needs to give markets a 'clear' signal. He did not elaborate except to say that the EU can master the crisis with existing instruments.
A key personality in Portugal's previous administration suggested Portugal's EUR 78 bn rescue package might be too small. Carlos Pina, who as former Treasury Secretary was involved in the original EU/IMF/ECB negotiations, said a further EUR 20-25 bn might be needed. The additional funding would be needed to support Portugal's public companies which have lost their access to capital markets.
Bundesbank President Weidmann said the ECB cannot be the lender of last resort to governments and that high interest rates in the debt markets can be incentives for sovereign states to reform. Clearly, the core inside the ECB are not changing their tone and remain forcibly against any debt monetization, despite continued calls for greater involvement in stabilizing the Eurozone debt markets. European fixed income markets were little changed on Tuesday with spreads stabilizing somewhat.
The Euro was also affected news of fresh talks over a new rescue deal for a lender in Belgium and France. The market is worried that France's rating could be affected as a result of the bailout, which would damage the overall credit quality of any Eurozone guarantees.
A decision over the release of the 6th tranche of aid to Greece is expected to be made at the next Eurogroup meeting on Nov. 29. However, we note that this will only cover the EU's portion of the tranche, and the timetable for the IMF to disburse its contribution has not yet been announced.
GBP
The UK public sector net balance for October was slightly lower than expected at GBP3.4 bn instead of GBP3.8 bn. UK Prime Minister David Cameron acknowledged that at this stage it is harder to cut the deficit, given the weak growth outlook, but also said 'there is no letting up', suggesting the UK will stick to its austerity plan and not shift towards a more growth-oriented strategy.
BoE MPC member Miles released a paper on the UK housing market, noting that the proportion of homeowners in the UK is likely to drop on a permanent basis as a result of the 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.
Tuesday, November 22, 2011
22nd of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
22 November 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
USDCAD clears 1.0365
EURUSD BEARISH Support at 1.3406 is intact, a break below which would expose 1.3346. Resistance is at 1.3614.
USDJPY BEARISH Initial support lies at 76.58 ahead of 76.34. Near-term resistance is at 77.50.
GBPUSD BEARISH The pair is testing 1.5614, a clear break below which would open 1.5543 and then 1.5483. Initial resistance is at 1.5806.
USDCHF BULLISH Initial resistance is at 0.9237, a rise through which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Initial support is at 0.9710 ahead of 0.9622. Resistance is at 1.0020.
USDCAD BULLISH Yesterday's sharp rise broke through 1.0365 to open 1.0419 and 1.0477 next. Support lies at 1.0270.
EURCHF BULLISH The cross is consolidating below 1.2474, a rise through which would signal scope for gains towards 1.2646. Key support lies at 1.2281.
EURGBP NEUTRAL Break of 0.8612 has opened the way for gains towards 0.8656 and 0.8699. Initial support lies at 0.8547.
EURJPY BEARISH Key support is at g103.23; a clear break below would expose 102.43 and 101.62. Resistance is at 104.39.
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.
22 November 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
USDCAD clears 1.0365
EURUSD BEARISH Support at 1.3406 is intact, a break below which would expose 1.3346. Resistance is at 1.3614.
USDJPY BEARISH Initial support lies at 76.58 ahead of 76.34. Near-term resistance is at 77.50.
GBPUSD BEARISH The pair is testing 1.5614, a clear break below which would open 1.5543 and then 1.5483. Initial resistance is at 1.5806.
USDCHF BULLISH Initial resistance is at 0.9237, a rise through which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Initial support is at 0.9710 ahead of 0.9622. Resistance is at 1.0020.
USDCAD BULLISH Yesterday's sharp rise broke through 1.0365 to open 1.0419 and 1.0477 next. Support lies at 1.0270.
EURCHF BULLISH The cross is consolidating below 1.2474, a rise through which would signal scope for gains towards 1.2646. Key support lies at 1.2281.
EURGBP NEUTRAL Break of 0.8612 has opened the way for gains towards 0.8656 and 0.8699. Initial support lies at 0.8547.
EURJPY BEARISH Key support is at g103.23; a clear break below would expose 102.43 and 101.62. Resistance is at 104.39.
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.
22nd of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
22 November 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Investors continued to offload risk trades following yesterday's sharp declines in Europe. More attention was given to developments in the US as the chairs of the Congressional Super-Committee confirmed that no deal would be possible on fiscal consolidation. Ratings agencies so far have noted that there would be no impact on the US' standing, as political paralysis appears to have been widely expected. Indeed, this was one of the key reasons behind Standard & Poor's downgrade of the US this summer and so far their fears have been justified.
Our analysts expect the headlines to pass without major incident and the focus will revert to the situation in Europe. Although there are no major summits due, work is already underway for the heads of newly-installed/elected governments in southern Europe to contain the fallout from the debt crisis. Italian PM Mario Monti is due to meet EU President Van Rompuy later today, before meeting Sarkozy and Merkel tomorrow. Greek PM Papademos is due to meet Eurogroup Chair Juncker today in Luxembourg and ECB President Draghi in Frankfurt. A decision over the release of the 6th tranche of aid to Greece is expected to be made on Nov. 29th at the next Eurogroup meeting, and domestically Greece will push for parliament to vote on a new aid deal with the Eurozone in January. Meanwhile, in a further sign of sovereign stress starting to affect the core, Austrian banks are now required to limit further lending to central and eastern European nations as potential losses rise. Overnight EURUSD traded 1.3470-1.3508 and USDJPY 76.88-77.31. Ahead today, US GDP and the FOMC minutes are due.
EUR
Moody's gave a warning about France, saying that elevated borrowing costs would be credit negative if they continue. Outlook remains stable (in line with other agencies) but this could be easily threatened if funding costs remain elevated.
Eurogroup Chairman Juncker said if France were to lose its triple-A rating, then so would the EFSF. He added that it would be inappropriate for a ratings agency to downgrade France.
Greek Prime Minister Papademos said staying inside the Eurozone is the only option, and that the prospects are excellent for reducing Greece's debt burden as laid out in the Oct 26 Summit agreement.
The euro was boosted by Greek Finance Minister Venizelos who said the Eurogroup meeting on Nov 29 would decide on releasing the sixth tranche of aid to Greece. EU Council President von Rompuy agreed.
However, Venizelos also appeared to postpone the dates of events that had been due to take place before year-end. He now aims to complete the debt swap in time for a EUR 14.4 bn bond redemption due on March 20, and does not see the Greek parliament voting on the deal until January.
Regarding the Greek banking system, Venizelos said all bank deposits are guaranteed in practice though the state may need to take over some smaller lenders. One stumbling block in Greece for the next tranche remains that the opposition leader Antonis Samaras has refused to sign a letter committing his party to the previously-agreed austerity measures.
The ECB announced it made EUR 7.99 bn worth of bond purchases in the week ended Tuesday, Nov 15 - higher than the EUR 4.48 bn done the week before, but not exceptionally large by any means. Clearly the ECB has not yet stepped up the pace of its bond buying in response to recent events.
The ECB's Nowotny said that they will have to discuss ECB's role in crisis resolution and that printing money is not an option 'in simple form'. The comments may be referencing reports that the IMF might be able to boost its lending capacity by first borrowing from the ECB and then on-lending the cash to needy sovereigns. Newswires reported the idea was first floated at the Oct. 27 EU Summit, but that both Germany and the ECB opposed it. We note that earlier plans to allow the EFSF to borrow from the ECB were not implemented, suggesting this latest proposal also may never see the light of day..
GBP
Public sector borrowing numbers are due in the UK today, and the market is expecting a ?1bn print for the net credit requirement, with borrowing falling to ?3.8bn from ?11.4bn previously.
UK Prime Minister David Cameron acknowledged that at this stage it is harder to cut the deficit, given the weak growth outlook, but also said 'there is no letting up', suggesting the UK will stick to its austerity plan and not shift towards a more growth-oriented strategy.
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.
22 November 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Investors continued to offload risk trades following yesterday's sharp declines in Europe. More attention was given to developments in the US as the chairs of the Congressional Super-Committee confirmed that no deal would be possible on fiscal consolidation. Ratings agencies so far have noted that there would be no impact on the US' standing, as political paralysis appears to have been widely expected. Indeed, this was one of the key reasons behind Standard & Poor's downgrade of the US this summer and so far their fears have been justified.
Our analysts expect the headlines to pass without major incident and the focus will revert to the situation in Europe. Although there are no major summits due, work is already underway for the heads of newly-installed/elected governments in southern Europe to contain the fallout from the debt crisis. Italian PM Mario Monti is due to meet EU President Van Rompuy later today, before meeting Sarkozy and Merkel tomorrow. Greek PM Papademos is due to meet Eurogroup Chair Juncker today in Luxembourg and ECB President Draghi in Frankfurt. A decision over the release of the 6th tranche of aid to Greece is expected to be made on Nov. 29th at the next Eurogroup meeting, and domestically Greece will push for parliament to vote on a new aid deal with the Eurozone in January. Meanwhile, in a further sign of sovereign stress starting to affect the core, Austrian banks are now required to limit further lending to central and eastern European nations as potential losses rise. Overnight EURUSD traded 1.3470-1.3508 and USDJPY 76.88-77.31. Ahead today, US GDP and the FOMC minutes are due.
EUR
Moody's gave a warning about France, saying that elevated borrowing costs would be credit negative if they continue. Outlook remains stable (in line with other agencies) but this could be easily threatened if funding costs remain elevated.
Eurogroup Chairman Juncker said if France were to lose its triple-A rating, then so would the EFSF. He added that it would be inappropriate for a ratings agency to downgrade France.
Greek Prime Minister Papademos said staying inside the Eurozone is the only option, and that the prospects are excellent for reducing Greece's debt burden as laid out in the Oct 26 Summit agreement.
The euro was boosted by Greek Finance Minister Venizelos who said the Eurogroup meeting on Nov 29 would decide on releasing the sixth tranche of aid to Greece. EU Council President von Rompuy agreed.
However, Venizelos also appeared to postpone the dates of events that had been due to take place before year-end. He now aims to complete the debt swap in time for a EUR 14.4 bn bond redemption due on March 20, and does not see the Greek parliament voting on the deal until January.
Regarding the Greek banking system, Venizelos said all bank deposits are guaranteed in practice though the state may need to take over some smaller lenders. One stumbling block in Greece for the next tranche remains that the opposition leader Antonis Samaras has refused to sign a letter committing his party to the previously-agreed austerity measures.
The ECB announced it made EUR 7.99 bn worth of bond purchases in the week ended Tuesday, Nov 15 - higher than the EUR 4.48 bn done the week before, but not exceptionally large by any means. Clearly the ECB has not yet stepped up the pace of its bond buying in response to recent events.
The ECB's Nowotny said that they will have to discuss ECB's role in crisis resolution and that printing money is not an option 'in simple form'. The comments may be referencing reports that the IMF might be able to boost its lending capacity by first borrowing from the ECB and then on-lending the cash to needy sovereigns. Newswires reported the idea was first floated at the Oct. 27 EU Summit, but that both Germany and the ECB opposed it. We note that earlier plans to allow the EFSF to borrow from the ECB were not implemented, suggesting this latest proposal also may never see the light of day..
GBP
Public sector borrowing numbers are due in the UK today, and the market is expecting a ?1bn print for the net credit requirement, with borrowing falling to ?3.8bn from ?11.4bn previously.
UK Prime Minister David Cameron acknowledged that at this stage it is harder to cut the deficit, given the weak growth outlook, but also said 'there is no letting up', suggesting the UK will stick to its austerity plan and not shift towards a more growth-oriented strategy.
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, November 21, 2011
21st of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
21 November 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3447 ahead of 1.3406. Resistance is at 1.3641.
USDJPY BEARISH Initial support lies at 76.58; a break below the level would open 76.34. Near-term resistance is at 77.15.
GBPUSD BEARISH Support at 1.5738 is broken to open 1.5691. Next support is at 1.5614 whereas initial resistance is at 1.5806.
USDCHF BULLISH Initial resistance is at 0.9237, a rise through which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Focus is on support at 0.9909, a break below which would expose 0.9866. Resistance is at 1.0118.
USDCAD BULLISH Next resistances are at 1.0365 and 1.0419. Support lies at 1.0199.
EURCHF BULLISH The pair continues to consolidate below 1.2474, a rise through which would signal scope for gains towards 1.2646. Key support lies at 1.2281.
EURGBP BEARISH As long as the resistance at 0.8612 holds, the trend remains bearish. Initial support lies at 0.8547 ahead of 0.8519.
EURJPY BEARISH Key support at 103.32 still holds; a move below this would expose 102.43. Resistance is 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.
21 November 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3447 ahead of 1.3406. Resistance is at 1.3641.
USDJPY BEARISH Initial support lies at 76.58; a break below the level would open 76.34. Near-term resistance is at 77.15.
GBPUSD BEARISH Support at 1.5738 is broken to open 1.5691. Next support is at 1.5614 whereas initial resistance is at 1.5806.
USDCHF BULLISH Initial resistance is at 0.9237, a rise through which would expose 0.9316, the key high from Oct. 6. Support lies at 0.9079.
AUDUSD BEARISH Focus is on support at 0.9909, a break below which would expose 0.9866. Resistance is at 1.0118.
USDCAD BULLISH Next resistances are at 1.0365 and 1.0419. Support lies at 1.0199.
EURCHF BULLISH The pair continues to consolidate below 1.2474, a rise through which would signal scope for gains towards 1.2646. Key support lies at 1.2281.
EURGBP BEARISH As long as the resistance at 0.8612 holds, the trend remains bearish. Initial support lies at 0.8547 ahead of 0.8519.
EURJPY BEARISH Key support at 103.32 still holds; a move below this would expose 102.43. Resistance is 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.
21st of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
21 November 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Headlines this week are expected to be dominated by further news on debt woes, with the US' problems adding to the mix. Barring a last-minute breakthrough, we believe it would be hard for the Congressional 'super committee' to come up with structural cuts to eat into the US fiscal deficit, thus beginning the process of painful sequesters, as mandated by legislation. Although there will be plenty of headlines generated, we doubt that the process will be as traumatic as the debt ceiling debate this summer, though given the scale of the cuts on hand, investors will worry whether the US' growth trajectory would be affected, especially in light of external conditions. In the Eurozone, Spain's Popular Party won a sweeping electoral victory but prime minister-elect Rajoy warned not to expect any miracles as debt concerns escalate. Last week's disappointing bond auctions for Spain have laid bare the scale of market disquiet over the fiscal situation and as in Greece and Italy, the new administration will probably not enjoy too long a honeymoon period before concrete action is expected. The Financial Times reports that the European Commission is expected to publish a report on Wednesday arguing for the creation of commonly backed 'stability bonds' to help all Eurozone members 'meet their financing needs'. However, the report is also expected to acknowledge that treaty changes are needed so this would not be the most feasible scheme in the current environment. Overnight EURUSD traded 1.3507-1.3537 and USDJPY 76.77-76.91.
EUR
The euro climbed on Friday amid reports that the IMF might be able to boost its lending capacity by first borrowing from the ECB and then on-lending the cash to needy sovereigns. Newswires reported the idea was first floated at the Oct. 27 EU Summit, but that both Germany and the ECB opposed it. We note that earlier plans to allow the EFSF to borrow from the ECB were not implemented, suggesting this latest proposal also may never see the light of day.
An unnamed IMF official seemed hopeful however, noting that Article 23 of the ECB's charter allows it to conduct "banking transactions in relations with third countries and international organizations, including borrowing and lending operations". Also, IMF Deputy Chief Lipsky noted that the IMF "can borrow from anyone, its member states and central banks".
The Financial Times reported that in a report set to be published on Wednesday, the European Commission is expected to outline three proposals for debt crisis resolution. First, the complete substitution of national bonds for 'eurobonds'; the other two options are limited guarantees for new bonds, or an intermediate approach where 'a large portion of national debt would be funded through Eurobonds but countries would be forced to issue national bonds if debt levels go too high'. The second option would not require a treaty change but is not dissimilar to the much-maligned EFSF.
Dutch Finance Minister de Jager said last week's increase in Dutch yields is "not an alarming signal". He noted borrowing costs are still around their lowest levels in 200 years, and that investors consider "Dutch state bonds as very stable, very secure". He added that a leveraged EFSF might still be able to reach a EUR 1 tn effective lending capacity, but suggested that one of the leverage options - the SPIV idea - may no longer be a serious contender.
The debate continues over whether the ECB should intervene more forcefully in sovereign bond markets. ECB President Mario Draghi gave no indication that the ECB will step up its bond purchases. Rather, he sounded exasperated over the slow pace of implementation of EFSF leveraging saying "we should not be waiting any longer." ECB Executive Board member Gonzalez-Paramo said quantitative easing is not feasible in the Eurozone and is against EU rules in any event. Germany's Finance Minister Schaeuble said there is no pressure on the ECB to "unleash" all its "firepower", and that even if it did the "calm would last for a few weeks at most". Former German Chancellor Gerhard Schroeder opined that if the "situation in Italy, Spain and possibly also France worsens, the ECB will make it clear that it will intervene without limits to defend the euro".
Germany's Frankfurter Allgemeine Zeitung newspaper reported that the ECB has privately agreed that weekly bond purchases under the SMP program should be capped at EUR 20 bn per week. The market initially took the headline as a euro-positive, likely because weekly bond purchases have been considerably lower of late, and have only once exceeded EUR 20 bn previously. However, we caution that such a relatively low limit seems to preclude the possibility for QE. The paper also reported that skepticism over the SMP is growing more widespread on the 23-person governing council - central bankers from Germany, Luxembourg, Netherlands and Austria are now reportedly opposed.
Current German Chancellor Merkel said the British are "right" to demand that "we use a large amount of firepower to win back credibility for the Eurozone". However she added that care should be taken not to "pretend to have powers we don't have. Because the markets will figure out very quickly that this won't work."
Mario Monti formally became Italian prime minister on Friday after a vote of confidence in his government was passed in the lower house of parliament, 556 votes to 61. He said he will provide details of his new economic program at the Nov. 28 meeting of EU finance ministers. On Tuesday, Monti is due to meet EU Commission President Barroso and EU Council President Von Rompuy. Meetings with French President Sarkozy and German Chancellor Merkel are due to follow on Wednesday.
The Greek government revealed its 2012 budget plan. It sees the budget deficit at 5.4% of GDP, if the debt swap is implemented, but 6.7% of GDP if it is not. It sees 2012 debt at 145.5% of GDP at EUR309.3 bn, if the debt swap is implemented.
JPY
The minutes of the BoJ's Oct. 27 meeting are due for release. At this meeting the ceiling on the size of the asset purchase program was increased by JPY 5 trn to JPY 55 trn. There was no material currency reaction at the time, and we doubt the publication of the minutes today will be any more market moving. However, it will be of interest to see if the BoJ considered the possibility of expanding its monthly bond purchases beyond the current pace of JPY 1.8 trn per month. In the unlikely event that this option was seriously entertained, we would interpret it as a yen-negative.
AUD
RBA Assistant Governor Guy Debelle said overnight that Australia's mortgage rates are about 'where the central bank wants them to be', suggesting that there would be no short-term rates relief from the RBA for households.
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 November 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Headlines this week are expected to be dominated by further news on debt woes, with the US' problems adding to the mix. Barring a last-minute breakthrough, we believe it would be hard for the Congressional 'super committee' to come up with structural cuts to eat into the US fiscal deficit, thus beginning the process of painful sequesters, as mandated by legislation. Although there will be plenty of headlines generated, we doubt that the process will be as traumatic as the debt ceiling debate this summer, though given the scale of the cuts on hand, investors will worry whether the US' growth trajectory would be affected, especially in light of external conditions. In the Eurozone, Spain's Popular Party won a sweeping electoral victory but prime minister-elect Rajoy warned not to expect any miracles as debt concerns escalate. Last week's disappointing bond auctions for Spain have laid bare the scale of market disquiet over the fiscal situation and as in Greece and Italy, the new administration will probably not enjoy too long a honeymoon period before concrete action is expected. The Financial Times reports that the European Commission is expected to publish a report on Wednesday arguing for the creation of commonly backed 'stability bonds' to help all Eurozone members 'meet their financing needs'. However, the report is also expected to acknowledge that treaty changes are needed so this would not be the most feasible scheme in the current environment. Overnight EURUSD traded 1.3507-1.3537 and USDJPY 76.77-76.91.
EUR
The euro climbed on Friday amid reports that the IMF might be able to boost its lending capacity by first borrowing from the ECB and then on-lending the cash to needy sovereigns. Newswires reported the idea was first floated at the Oct. 27 EU Summit, but that both Germany and the ECB opposed it. We note that earlier plans to allow the EFSF to borrow from the ECB were not implemented, suggesting this latest proposal also may never see the light of day.
An unnamed IMF official seemed hopeful however, noting that Article 23 of the ECB's charter allows it to conduct "banking transactions in relations with third countries and international organizations, including borrowing and lending operations". Also, IMF Deputy Chief Lipsky noted that the IMF "can borrow from anyone, its member states and central banks".
The Financial Times reported that in a report set to be published on Wednesday, the European Commission is expected to outline three proposals for debt crisis resolution. First, the complete substitution of national bonds for 'eurobonds'; the other two options are limited guarantees for new bonds, or an intermediate approach where 'a large portion of national debt would be funded through Eurobonds but countries would be forced to issue national bonds if debt levels go too high'. The second option would not require a treaty change but is not dissimilar to the much-maligned EFSF.
Dutch Finance Minister de Jager said last week's increase in Dutch yields is "not an alarming signal". He noted borrowing costs are still around their lowest levels in 200 years, and that investors consider "Dutch state bonds as very stable, very secure". He added that a leveraged EFSF might still be able to reach a EUR 1 tn effective lending capacity, but suggested that one of the leverage options - the SPIV idea - may no longer be a serious contender.
The debate continues over whether the ECB should intervene more forcefully in sovereign bond markets. ECB President Mario Draghi gave no indication that the ECB will step up its bond purchases. Rather, he sounded exasperated over the slow pace of implementation of EFSF leveraging saying "we should not be waiting any longer." ECB Executive Board member Gonzalez-Paramo said quantitative easing is not feasible in the Eurozone and is against EU rules in any event. Germany's Finance Minister Schaeuble said there is no pressure on the ECB to "unleash" all its "firepower", and that even if it did the "calm would last for a few weeks at most". Former German Chancellor Gerhard Schroeder opined that if the "situation in Italy, Spain and possibly also France worsens, the ECB will make it clear that it will intervene without limits to defend the euro".
Germany's Frankfurter Allgemeine Zeitung newspaper reported that the ECB has privately agreed that weekly bond purchases under the SMP program should be capped at EUR 20 bn per week. The market initially took the headline as a euro-positive, likely because weekly bond purchases have been considerably lower of late, and have only once exceeded EUR 20 bn previously. However, we caution that such a relatively low limit seems to preclude the possibility for QE. The paper also reported that skepticism over the SMP is growing more widespread on the 23-person governing council - central bankers from Germany, Luxembourg, Netherlands and Austria are now reportedly opposed.
Current German Chancellor Merkel said the British are "right" to demand that "we use a large amount of firepower to win back credibility for the Eurozone". However she added that care should be taken not to "pretend to have powers we don't have. Because the markets will figure out very quickly that this won't work."
Mario Monti formally became Italian prime minister on Friday after a vote of confidence in his government was passed in the lower house of parliament, 556 votes to 61. He said he will provide details of his new economic program at the Nov. 28 meeting of EU finance ministers. On Tuesday, Monti is due to meet EU Commission President Barroso and EU Council President Von Rompuy. Meetings with French President Sarkozy and German Chancellor Merkel are due to follow on Wednesday.
The Greek government revealed its 2012 budget plan. It sees the budget deficit at 5.4% of GDP, if the debt swap is implemented, but 6.7% of GDP if it is not. It sees 2012 debt at 145.5% of GDP at EUR309.3 bn, if the debt swap is implemented.
JPY
The minutes of the BoJ's Oct. 27 meeting are due for release. At this meeting the ceiling on the size of the asset purchase program was increased by JPY 5 trn to JPY 55 trn. There was no material currency reaction at the time, and we doubt the publication of the minutes today will be any more market moving. However, it will be of interest to see if the BoJ considered the possibility of expanding its monthly bond purchases beyond the current pace of JPY 1.8 trn per month. In the unlikely event that this option was seriously entertained, we would interpret it as a yen-negative.
AUD
RBA Assistant Governor Guy Debelle said overnight that Australia's mortgage rates are about 'where the central bank wants them to be', suggesting that there would be no short-term rates relief from the RBA for households.
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, November 18, 2011
18th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
18 November 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3406 ahead of 1.3346. Resistance is at 1.3557.
USDJPY BEARISH The pair is testing 76.82; a clear break below which would expose 76.34. Resistance is at 77.50.
GBPUSD BEARISH Support lies at 1.5691, a break below which would open 1.5614. Resistance is at 1.5828 ahead of 1.5932.
USDCHF BULLISH Key resistance is at 0.9316; a clearance of which would expose 0.9506. Near-term support lies at 0.9079.
AUDUSD BEARISH Break below 1.0000 has opened 0.9909 ahead of 0.9866. Resistance is at 1.0118.
USDCAD BULLISH Clearance of 1.0288 has opened the way for further gains towards 1.0365 and 1.0419 next. Support lies at 1.0208.
EURCHF BULLISH The pair is trading heavy below 1.2474, a rise through which would signal scope for gains towards 1.2646. Key support lies at 1.2281.
EURGBP BEARISH Initial support lies at 0.8519, a break below which would expose 0.8486. Resistance is at 0.8612.
EURJPY BEARISH Pressure is on support at 103.32; a move below this would expose 102.43. Resistance is at 104.39.
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 November 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.3406 ahead of 1.3346. Resistance is at 1.3557.
USDJPY BEARISH The pair is testing 76.82; a clear break below which would expose 76.34. Resistance is at 77.50.
GBPUSD BEARISH Support lies at 1.5691, a break below which would open 1.5614. Resistance is at 1.5828 ahead of 1.5932.
USDCHF BULLISH Key resistance is at 0.9316; a clearance of which would expose 0.9506. Near-term support lies at 0.9079.
AUDUSD BEARISH Break below 1.0000 has opened 0.9909 ahead of 0.9866. Resistance is at 1.0118.
USDCAD BULLISH Clearance of 1.0288 has opened the way for further gains towards 1.0365 and 1.0419 next. Support lies at 1.0208.
EURCHF BULLISH The pair is trading heavy below 1.2474, a rise through which would signal scope for gains towards 1.2646. Key support lies at 1.2281.
EURGBP BEARISH Initial support lies at 0.8519, a break below which would expose 0.8486. Resistance is at 0.8612.
EURJPY BEARISH Pressure is on support at 103.32; a move below this would expose 102.43. Resistance is at 104.39.
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 November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
18 November 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Although G10 FX markets were relatively range-bound during the Asia session, local equities followed US stocks lower. New York Fed President Dudley said the euro is certain to survive the crisis. There was a general lack of commentary about the Eurozone itself though new Italian Prime Minister Monti has cleared a first hurdle by passing a confidence vote in the Italian senate. However, the previous administration's senior ruling party has warned that it would withdraw support for the technocratic government if a wealth tax were to be introduced. In other developments, the German government appears to be pushing for fresh treaty changes as a part of an overhaul of governance in the Eurozone, though there could be significant opposition within the wider European Union given the political logistics involved. The US managed to continue its good run of form on the data front, with housing starts, building permits and jobless claims all surprising to the positive side. Ahead on Friday, ECB President Mario Draghi will be speaking and investors will be looking for further insight on his position towards an expansion in the ECB's bond purchases. Over the past 24 hours, EURUSD traded 1.3422-1.3489 and USDJPY 76.85-77.09.
EUR
The euro came under pressure on Thursday, following a weak Spanish auction. The 10 year bonds came far below the market at an average yield of 6.975% and a bid:cover of 1.54. Our fixed income traders noted that the auction had a long tail and they needed to fill everyone who participated in order to sell the bonds. Initial estimates for the size had been between EUR3 and 5 bn. A French multi-tranche auction was better received however, coming at the higher end of initial estimates. The SMP were actively buying in the markets once again.
Angela Merkel said that even if the ECB took on the role of the lender of last resort, it would not immediately solve the Eurozone crisis. She also said that Europe must consider treaty changes in order to back the euro and that budget control requires a limited change. See above for a further discussion on this.
Funding stress remains elevated, FRA-EONIA continued to widen on Thursday while EURUSD basis swaps also ticked lower. Liquidity issues are clearly driving some of these problems but the issues are getting increased coverage with market speculation that the Fed may lower the cost of its swap line funding with the ECB. One effect of this would have to be to expanding the Fed's balance sheet. After the fall of Lehman Brothers, Fed swap line usage hit $590 bn - about 20% of the current size of the Fed's balance sheet - and might be seen as a USD-negative development.
In comments made on Thursday, German Chancellor Angela Merkel said the country would press for a Eurozone treaty change on Dec. 9, the date of the next European Union summit. The Wall Street Journal suggests that although non-Eurozone EU nations have reservations, UK Prime Minister David Cameron appears to be backing limited treaty changes in exchange for guarantees London's status as a financial status would not be hurt.
Italian PM Monti easily passed a confidence vote in the Senate and is expected to win similar support in a vote in the Chamber of Deputies. The PdL has warned that it would withdraw support if a wealth tax is enacted.
According to Reuters, an EFSF official said feedback from investors on leveraging options is positive, and would join leveraging schemes if volatility falls and the market's confidence improves. The fund could still be leveraged 4-5 times but countries 'need to do their reform homework'. However, the official warned that the IMF would not be able to directly participate in the leverage scheme.
GBP
In an interview in today's Financial Times, Bank of England MPC member Weale said there is a "very strong case" for extending Gilt purchases into next year unless the outlook improves. He added that it is "perfectly possible" the UK economy is already contracting.
UK retail sales were stronger than consensus estimates at +0.6% (m/m) +0.9% (y/y). While the numbers appear on the surface fairly strong, the data print is volatile and the ONS say that the strength was driven by pre-Christmas sales.
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 November 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Although G10 FX markets were relatively range-bound during the Asia session, local equities followed US stocks lower. New York Fed President Dudley said the euro is certain to survive the crisis. There was a general lack of commentary about the Eurozone itself though new Italian Prime Minister Monti has cleared a first hurdle by passing a confidence vote in the Italian senate. However, the previous administration's senior ruling party has warned that it would withdraw support for the technocratic government if a wealth tax were to be introduced. In other developments, the German government appears to be pushing for fresh treaty changes as a part of an overhaul of governance in the Eurozone, though there could be significant opposition within the wider European Union given the political logistics involved. The US managed to continue its good run of form on the data front, with housing starts, building permits and jobless claims all surprising to the positive side. Ahead on Friday, ECB President Mario Draghi will be speaking and investors will be looking for further insight on his position towards an expansion in the ECB's bond purchases. Over the past 24 hours, EURUSD traded 1.3422-1.3489 and USDJPY 76.85-77.09.
EUR
The euro came under pressure on Thursday, following a weak Spanish auction. The 10 year bonds came far below the market at an average yield of 6.975% and a bid:cover of 1.54. Our fixed income traders noted that the auction had a long tail and they needed to fill everyone who participated in order to sell the bonds. Initial estimates for the size had been between EUR3 and 5 bn. A French multi-tranche auction was better received however, coming at the higher end of initial estimates. The SMP were actively buying in the markets once again.
Angela Merkel said that even if the ECB took on the role of the lender of last resort, it would not immediately solve the Eurozone crisis. She also said that Europe must consider treaty changes in order to back the euro and that budget control requires a limited change. See above for a further discussion on this.
Funding stress remains elevated, FRA-EONIA continued to widen on Thursday while EURUSD basis swaps also ticked lower. Liquidity issues are clearly driving some of these problems but the issues are getting increased coverage with market speculation that the Fed may lower the cost of its swap line funding with the ECB. One effect of this would have to be to expanding the Fed's balance sheet. After the fall of Lehman Brothers, Fed swap line usage hit $590 bn - about 20% of the current size of the Fed's balance sheet - and might be seen as a USD-negative development.
In comments made on Thursday, German Chancellor Angela Merkel said the country would press for a Eurozone treaty change on Dec. 9, the date of the next European Union summit. The Wall Street Journal suggests that although non-Eurozone EU nations have reservations, UK Prime Minister David Cameron appears to be backing limited treaty changes in exchange for guarantees London's status as a financial status would not be hurt.
Italian PM Monti easily passed a confidence vote in the Senate and is expected to win similar support in a vote in the Chamber of Deputies. The PdL has warned that it would withdraw support if a wealth tax is enacted.
According to Reuters, an EFSF official said feedback from investors on leveraging options is positive, and would join leveraging schemes if volatility falls and the market's confidence improves. The fund could still be leveraged 4-5 times but countries 'need to do their reform homework'. However, the official warned that the IMF would not be able to directly participate in the leverage scheme.
GBP
In an interview in today's Financial Times, Bank of England MPC member Weale said there is a "very strong case" for extending Gilt purchases into next year unless the outlook improves. He added that it is "perfectly possible" the UK economy is already contracting.
UK retail sales were stronger than consensus estimates at +0.6% (m/m) +0.9% (y/y). While the numbers appear on the surface fairly strong, the data print is volatile and the ONS say that the strength was driven by pre-Christmas sales.
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, November 17, 2011
17th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
17 November 2011 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support is at 1.3406; a move below this would open 1.3346. Resistance is at 1.3557.
USDJPY BEARISH Decline through 76.82 would expose 76.34. Resistance is at 77.50.
GBPUSD BEARISH Support at 1.5719 is broken to open up 1.5681. Next support lies at 1.5614. Resistance is at 1.5828.
USDCHF BULLISH The pair approaches the key resistance at 0.9316; a clearance of which would expose 0.9506. Near-term support lies at 0.9139.
AUDUSD BEARISH A break through 1.0052 has opened 1.0000, which lies ahead of 0.9909. Resistance is at 1.0184.
USDCAD BULLISH Initial resistance is at 1.0288; a clearance here would likely extend the gains towards 1.0365. Support lies at 1.0159.
EURCHF BULLISH Rise through the key high of 1.2474 would signal scope for gains towards 1.2646. Support lies at 1.2281.
EURGBP BEARISH Initial support lies at 0.8519, a break below which would expose 0.8486. Resistance is at 0.8612.
EURJPY BEARISH Pressure is on support at 103.32; a move below this would expose 102.43. Resistance is at 104.39.
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 November 2011 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support is at 1.3406; a move below this would open 1.3346. Resistance is at 1.3557.
USDJPY BEARISH Decline through 76.82 would expose 76.34. Resistance is at 77.50.
GBPUSD BEARISH Support at 1.5719 is broken to open up 1.5681. Next support lies at 1.5614. Resistance is at 1.5828.
USDCHF BULLISH The pair approaches the key resistance at 0.9316; a clearance of which would expose 0.9506. Near-term support lies at 0.9139.
AUDUSD BEARISH A break through 1.0052 has opened 1.0000, which lies ahead of 0.9909. Resistance is at 1.0184.
USDCAD BULLISH Initial resistance is at 1.0288; a clearance here would likely extend the gains towards 1.0365. Support lies at 1.0159.
EURCHF BULLISH Rise through the key high of 1.2474 would signal scope for gains towards 1.2646. Support lies at 1.2281.
EURGBP BEARISH Initial support lies at 0.8519, a break below which would expose 0.8486. Resistance is at 0.8612.
EURJPY BEARISH Pressure is on support at 103.32; a move below this would expose 102.43. Resistance is at 104.39.
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 November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
17 November 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 faltered just before the Asia session got underway after Fitch warned that contagion from Europe could spread across the Atlantic, and might eventually have negative outlook implications for the ratings of US banks. This undid much of the positivity triggered by a stronger than expected US industrial production report. US headline inflation cooled to 3.5%, while core inflation was steady. Capital flows into the US surprised to the upside. Although these points are still not enough to turn the US dollarinto a growth currency, the sustained flow of capital into the US to capture stronger growth will likely pick up speed if the flow of solid economic data can be maintained. On Thursday the news and data flow is somewhat lighter, though Europe will face more bond auctions by sovereigns and slip-ups are likely to prove costly. Mario Monti was formally sworn in as Italian prime minister with a purely technocratic cabinet, and we believe he will need to race against time to come up with comprehensive plans to turn around Italy's debt situation. EURUSD traded 1.3422-1.3553 and USDJPY 76.94-77.07.
EUR
France appears to be shifting its position again on the question of whether to give the EFSF a banking license. Having initially advocated this approach months ago, only to drop the idea weeks later, it appears the proposal may once again be back on the table. In comments made on Wednesday afternoon, Finance Minister Baroin said an EFSF banking license would be the best way to create a structural firewall around the Eurozone and to prevent contagion. However, he said that "Germany has reservations that are more than historical, almost sociological and structural, concerning such an intervention from the central bank". Indeed, Germany's deputy finance minister flatly ruled out such an approach, saying "it is essential that the EFSF cannot tap the ECB".
In a report, Fitch ratings agency said the ratings outlook for US banks could materially worsen if conditions in the Eurozone were to deteriorate. However, the agency acknowledged that US banks had significantly reduced exposure to Eurozone banks.
Italian Prime Minister Monti was officially sworn in on Wednesday. Eurogoup chief Juncker said he was the 'right man' to reform Italy. Juncker also noted that Germany's debt to GDP ratio was actually larger than Spain's, but "no one wants to know about that".
The Troika review for Portugal was largely positive. The ECB said the mission agreed on program policies and growth in 2011 was better than expected. However, 2012 would be more challenging in growth terms, and the report warned that the program's success depended on structural reforms. Crucially, the next EUR8bn tranche would be disbursed either in December or January.
The IMF's Europe director resigned without giving details on Wednesday.
GBP
The BoE released its quarterly inflation report, downgrading both its GDP and CPI outlooks. The report stated that inflation is likely to be below target in the next two years and the outlook for growth is unusually uncertain. Growth is expected to be markedly weaker than the Bank had previously thought. They see the Eurozone crisis as the biggest single risk to the UK. The fan charts show CPI at around 1.3% in 2 years. Provided that CPI begins to decline as the BoE expects, the scope for further asset purchases is relatively high, especially if conditions in the Eurozone deteriorate further.
Labour data was mixed, October jobless claims increased +5.3k vs +21.0k consensus and the claimant count rate fell to 5.0% vs 5.1% expected. However, the ILO unemployment rate rose to 8.3%.
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 November 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 faltered just before the Asia session got underway after Fitch warned that contagion from Europe could spread across the Atlantic, and might eventually have negative outlook implications for the ratings of US banks. This undid much of the positivity triggered by a stronger than expected US industrial production report. US headline inflation cooled to 3.5%, while core inflation was steady. Capital flows into the US surprised to the upside. Although these points are still not enough to turn the US dollarinto a growth currency, the sustained flow of capital into the US to capture stronger growth will likely pick up speed if the flow of solid economic data can be maintained. On Thursday the news and data flow is somewhat lighter, though Europe will face more bond auctions by sovereigns and slip-ups are likely to prove costly. Mario Monti was formally sworn in as Italian prime minister with a purely technocratic cabinet, and we believe he will need to race against time to come up with comprehensive plans to turn around Italy's debt situation. EURUSD traded 1.3422-1.3553 and USDJPY 76.94-77.07.
EUR
France appears to be shifting its position again on the question of whether to give the EFSF a banking license. Having initially advocated this approach months ago, only to drop the idea weeks later, it appears the proposal may once again be back on the table. In comments made on Wednesday afternoon, Finance Minister Baroin said an EFSF banking license would be the best way to create a structural firewall around the Eurozone and to prevent contagion. However, he said that "Germany has reservations that are more than historical, almost sociological and structural, concerning such an intervention from the central bank". Indeed, Germany's deputy finance minister flatly ruled out such an approach, saying "it is essential that the EFSF cannot tap the ECB".
In a report, Fitch ratings agency said the ratings outlook for US banks could materially worsen if conditions in the Eurozone were to deteriorate. However, the agency acknowledged that US banks had significantly reduced exposure to Eurozone banks.
Italian Prime Minister Monti was officially sworn in on Wednesday. Eurogoup chief Juncker said he was the 'right man' to reform Italy. Juncker also noted that Germany's debt to GDP ratio was actually larger than Spain's, but "no one wants to know about that".
The Troika review for Portugal was largely positive. The ECB said the mission agreed on program policies and growth in 2011 was better than expected. However, 2012 would be more challenging in growth terms, and the report warned that the program's success depended on structural reforms. Crucially, the next EUR8bn tranche would be disbursed either in December or January.
The IMF's Europe director resigned without giving details on Wednesday.
GBP
The BoE released its quarterly inflation report, downgrading both its GDP and CPI outlooks. The report stated that inflation is likely to be below target in the next two years and the outlook for growth is unusually uncertain. Growth is expected to be markedly weaker than the Bank had previously thought. They see the Eurozone crisis as the biggest single risk to the UK. The fan charts show CPI at around 1.3% in 2 years. Provided that CPI begins to decline as the BoE expects, the scope for further asset purchases is relatively high, especially if conditions in the Eurozone deteriorate further.
Labour data was mixed, October jobless claims increased +5.3k vs +21.0k consensus and the claimant count rate fell to 5.0% vs 5.1% expected. However, the ILO unemployment rate rose to 8.3%.
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, November 16, 2011
16th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
16 November 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Momentum is negative; support lies at 1.3406 ahead of 1.3346. Resistance is at 1.3540.
USDJPY BEARISH Near-term support lies at 76.82 ahead of 76.34. Resistance is at 77.50.
GBPUSD BEARISH Focus is on 1.5719, a break below which would expose 1.5681. Resistance is at 1.5828.
USDCHF BULLISH Key resistance is at 0.9316; a clearance of which would expose 0.9506. Near-term support lies at 0.9079.
AUDUSD BEARISH Pressure is on 1.0052, a break through which would open the way for losses towards 1.0000 and 0.9909. Resistance is at 1.0182.
USDCAD BULLISH Clearance of 1.0273 has opened 1.0365 ahead of 1.0419. Support lies at 1.0199.
EURCHF BULLISH Rise through the key high of 1.2474 would signal scope for gains towards 1.2646. Support lies at 1.2281.
EURGBP BEARISH Decline through 0.8486, the key low from Nov. 10, would expose 0.8456. Resistance is at 0.8558.
EURJPY BEARISH Break below 103.32 would expose 102.43. Resistance is at 104.38.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
16 November 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Momentum is negative; support lies at 1.3406 ahead of 1.3346. Resistance is at 1.3540.
USDJPY BEARISH Near-term support lies at 76.82 ahead of 76.34. Resistance is at 77.50.
GBPUSD BEARISH Focus is on 1.5719, a break below which would expose 1.5681. Resistance is at 1.5828.
USDCHF BULLISH Key resistance is at 0.9316; a clearance of which would expose 0.9506. Near-term support lies at 0.9079.
AUDUSD BEARISH Pressure is on 1.0052, a break through which would open the way for losses towards 1.0000 and 0.9909. Resistance is at 1.0182.
USDCAD BULLISH Clearance of 1.0273 has opened 1.0365 ahead of 1.0419. Support lies at 1.0199.
EURCHF BULLISH Rise through the key high of 1.2474 would signal scope for gains towards 1.2646. Support lies at 1.2281.
EURGBP BEARISH Decline through 0.8486, the key low from Nov. 10, would expose 0.8456. Resistance is at 0.8558.
EURJPY BEARISH Break below 103.32 would expose 102.43. Resistance is at 104.38.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
16th of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
16 November 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
News was thin on the ground during the Asia session, but that did not stop EURUSD falling further to a five-week low. AUDUSD also dropped over 100 pips as risk sentiment remained fragile despite stronger US economic data earlier. The Bank of Japan left monetary policy entirely unchanged as widely expected. EURUSD traded 1.3435-1.3557 and USDJPY 76.98-77.15. Italian Prime Minister-designate Monti spoke late on Tuesday declaring that the pieces appeared to be in place for a new government - we expect an official announcement on the cabinet's composition later today. Italian and Spanish 10y yields remain elevated and investors will be nervous about the risk that yields may hit levels that could trigger shifts in repo market margin requirements. We still consider the euro overvalued at current levels. Although we acknowledge that short positions are heavy, event-based short covering over the past two weeks has re-opened the path for fresh downside. US retail sales were stronger than expected at 0.5% (cons. 0.3%), and the Empire Manufacturing headline reading moved back into positive territory.
EUR
Spain sold EUR3.16 bn worth of 12m and 18m t-bills at yields of 5.022% and 5.159% respectively. Our fixed income team views this as a weak auction and Spanish yields continued to drift higher afterwards, along with those of other Eurozone sovereigns.
The debt protection costs of France, Italy, Belgium and Spain hit record highs on Tuesday, while the German 2-year yield fell below 0.3% for the first time.
The German ZEW survey came out mixed. The investor expectations figure was worse than expected at 55.2 (cons. 52.5) but the current climate figure was somewhat better at 34.2 (cons. 32.0).
The French Finance Minister stressed that EFSF leverage must reach EUR1 trn, and expressed full confidence in the ECB. He said EFSF enhancements are expected to be completed by December. He also said France could meet its 2012 deficit goal even with growth at 0.5%.
Greek GDP showed how austerity and high debt costs are continuing to sap the economy. Greek seasonally unadjusted GDP shrank 5.2% y/y in Q3, after 7.4% y/y and 8.3% y/y declines in the previous quarters.
Italian PM-designate Monti is expected to announce his new government at 1100 GMT on Wednesday. On Tuesday he noted that the 'framework was clearly delineated' though some more time was needed.
GBP
Labour market data and the November inflation report are due out of the UK. We expect a dovish tone in the report which could point to additional easing, and should continue to weigh on sterling. October CPI released yesterday was slightly softer than expectations at 5.0%.
JPY
The BoJ left policy entirely unchanged at Wednesday's policy meeting, as widely expected.
Finance Minister Azumi said his position is unchanged on FX intervention, and we expect the MoF/BoJ to be on high alert in light of recent volatility.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
16 November 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
News was thin on the ground during the Asia session, but that did not stop EURUSD falling further to a five-week low. AUDUSD also dropped over 100 pips as risk sentiment remained fragile despite stronger US economic data earlier. The Bank of Japan left monetary policy entirely unchanged as widely expected. EURUSD traded 1.3435-1.3557 and USDJPY 76.98-77.15. Italian Prime Minister-designate Monti spoke late on Tuesday declaring that the pieces appeared to be in place for a new government - we expect an official announcement on the cabinet's composition later today. Italian and Spanish 10y yields remain elevated and investors will be nervous about the risk that yields may hit levels that could trigger shifts in repo market margin requirements. We still consider the euro overvalued at current levels. Although we acknowledge that short positions are heavy, event-based short covering over the past two weeks has re-opened the path for fresh downside. US retail sales were stronger than expected at 0.5% (cons. 0.3%), and the Empire Manufacturing headline reading moved back into positive territory.
EUR
Spain sold EUR3.16 bn worth of 12m and 18m t-bills at yields of 5.022% and 5.159% respectively. Our fixed income team views this as a weak auction and Spanish yields continued to drift higher afterwards, along with those of other Eurozone sovereigns.
The debt protection costs of France, Italy, Belgium and Spain hit record highs on Tuesday, while the German 2-year yield fell below 0.3% for the first time.
The German ZEW survey came out mixed. The investor expectations figure was worse than expected at 55.2 (cons. 52.5) but the current climate figure was somewhat better at 34.2 (cons. 32.0).
The French Finance Minister stressed that EFSF leverage must reach EUR1 trn, and expressed full confidence in the ECB. He said EFSF enhancements are expected to be completed by December. He also said France could meet its 2012 deficit goal even with growth at 0.5%.
Greek GDP showed how austerity and high debt costs are continuing to sap the economy. Greek seasonally unadjusted GDP shrank 5.2% y/y in Q3, after 7.4% y/y and 8.3% y/y declines in the previous quarters.
Italian PM-designate Monti is expected to announce his new government at 1100 GMT on Wednesday. On Tuesday he noted that the 'framework was clearly delineated' though some more time was needed.
GBP
Labour market data and the November inflation report are due out of the UK. We expect a dovish tone in the report which could point to additional easing, and should continue to weigh on sterling. October CPI released yesterday was slightly softer than expectations at 5.0%.
JPY
The BoJ left policy entirely unchanged at Wednesday's policy meeting, as widely expected.
Finance Minister Azumi said his position is unchanged on FX intervention, and we expect the MoF/BoJ to be on high alert in light of recent volatility.
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, November 15, 2011
15th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
15 November 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Momentum remains negative; a push through 1.3578 would expose 1.3484. Resistance is at 1.3814.
USDJPY BEARISH Near-term support lies at 76.34 ahead of 76.00. Resistance is at 77.68.
GBPUSD NEUTRAL The focus is on 1.5869; a break below this level would trigger a bear trend opening 1.5825 next. Initial resistance is at 1.6096 ahead of 1.6167.
USDCHF BULLISH Clearance of 0.9151 would expose the key high of 0.9316. Near-term support lies at 0.8953.
AUDUSD BEARISH A push below 1.0106 would expose the key low of 1.0052 from Nov 10. Resistance comes in at 1.0350.
USDCAD BULLISH Initial resistance is at 1.0232 ahead of the tough resistance at 1.0273. Support lies at 1.0077.
EURCHF BULLISH Key resistance lies at 1.2474; a break above which would signal scope for gains towards 1.2646. Support lies at 1.2321.
EURGBP BEARISH Decline through 0.8529 would expose 0.8486, the key low from Nov. 10. Resistance is at 0.8612.
EURJPY BEARISH Downside pressure persists and the cross targets the key support at 104.73 ahead of 104.02. Resistance is at 105.57.
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.
15 November 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Momentum remains negative; a push through 1.3578 would expose 1.3484. Resistance is at 1.3814.
USDJPY BEARISH Near-term support lies at 76.34 ahead of 76.00. Resistance is at 77.68.
GBPUSD NEUTRAL The focus is on 1.5869; a break below this level would trigger a bear trend opening 1.5825 next. Initial resistance is at 1.6096 ahead of 1.6167.
USDCHF BULLISH Clearance of 0.9151 would expose the key high of 0.9316. Near-term support lies at 0.8953.
AUDUSD BEARISH A push below 1.0106 would expose the key low of 1.0052 from Nov 10. Resistance comes in at 1.0350.
USDCAD BULLISH Initial resistance is at 1.0232 ahead of the tough resistance at 1.0273. Support lies at 1.0077.
EURCHF BULLISH Key resistance lies at 1.2474; a break above which would signal scope for gains towards 1.2646. Support lies at 1.2321.
EURGBP BEARISH Decline through 0.8529 would expose 0.8486, the key low from Nov. 10. Resistance is at 0.8612.
EURJPY BEARISH Downside pressure persists and the cross targets the key support at 104.73 ahead of 104.02. Resistance is at 105.57.
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.
15th of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
15 November 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
FX price action was relatively subdued in Asia except for a very brief spike higher in USDJPY on the break of 77.00. The pair promptly settled back down, and the absence of rhetoric from Japan afterwards suggests the move was not particularly noteworthy. The AUD also got a brief boost after the RBA minutes from the Oct. 31 meeting revealed that the board seriously considered not cutting the policy rate, but eventually decided to do so. This suggests no hurry on their part to follow through with further cuts. We lowered our EURUSD and cable forecasts overnight, and also raised our EURCHF forecasts, given the risk that the SNB will raise the floor in EURCHF to 1.25 at the Dec. 15 policy meeting.
The tricky process of government formation continues in Italy, but the selloff of Spanish bonds on Monday suggests the market may already be broadening its gaze to include other at-risk sovereigns. Up to EUR23 bn in Eurozone bond supply is due to be auctioned this week with key countries such as France and Spain all tapping the markets. Investors' ability to absorb this supply in a challenging environment will be crucial to the euro's fortunes. The data calendar is heavy on Tuesday, with German and GDP due, and inflation numbers out of the UK. In the US, advance retail sales and the empire manufacturing index are scheduled for release. EURUSD traded 1.3594-1.3644 and USDJPY 76.98-77.70.
EUR
Italy's PM-designate Monti said his government should be able to last until the end of legislature in 2013, but that would depend on maintaining the confidence of parliament. He said that he was willing to have politicians in his government but parties must decide. As it stands he commands overwhelming support in the lower house.
Greek opposition leader Samaras said that he would not agree to any new austerity measures, or sign any binding agreement, which was demanded by the European Union.
Spanish banks announced that they borrowed EUR86.2 bn from the ECB in October, up from EUR79.4 bn the previous month..
Italy held a 5-year bond auction, with yields coming in at 6.29% vs. 5.32% for the previous 5-year; the bid to cover ratio was 1.469.
In Germany, the CDU held its annual congress and a resolution allowing Eurozone exits was passed. Finance Minister Schaeuble noted that one 'can't force anyone to stay in or leave the Eurozone'. The resolution allows members to leave the Eurozone without leaving the European Union.
ECB's Mersch said that President Draghi's comments that 'the ECB's bond-buy programme is limited' reflects the 'opinion on the ECB Governing Council'. At this stage it is clear that the ECB is not willing to compromise on its position against acting as the lender of last resort for governments.
German Chancellor Merkel said she wanted a change in the EU charter earlier than scheduled - by the end of 2012 rather than mid-2013. Reuters reported a limited amendment to the Treaty was needed to allow 'greater influence over states that bust budget rules and agreed obligations on stability and consolidation'.
New Greek Prime Minister Papademos again highlighted the Dec. 15 deadline to receive the next tranche of aid from the troika. He also said that remaining in the Eurozone is the only solution for Greece.
CHF
Our analysts have the opinion that conditions are beginning to align in favour of the SNB lifting the EURCHF floor to 1.25 from 1.20, and we therefore raise our forecasts accordingly. The SNB itself, through its recent communication, has explicitly determined that the franc remains overvalued. Political support is holding and calls from industry are growing. An initial shift towards 1.25 is likely at the upcoming policy assessment in December amid deteriorating inflation prints.
GBP
October CPI is due and we expect a 5.1% annualized print. This is well above target but less relevant at this stage given the BoE has already commenced a new round of quantitative easing.
The November inflation report on Wednesday is the key release of the week, and we expect a dovish outcome which will continue to weigh on GBP sentiment.
AUD
The AUD got a brief boost after the RBA minutes from the Oct. 31 meeting revealed that the board seriously considered not cutting the policy rate, but eventually decided to do so. This suggests no hurry on their part to follow through with further cuts, and supports the view of our analysts who think only one more rate cut is likely, and not until Q1 next year.
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.
15 November 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
FX price action was relatively subdued in Asia except for a very brief spike higher in USDJPY on the break of 77.00. The pair promptly settled back down, and the absence of rhetoric from Japan afterwards suggests the move was not particularly noteworthy. The AUD also got a brief boost after the RBA minutes from the Oct. 31 meeting revealed that the board seriously considered not cutting the policy rate, but eventually decided to do so. This suggests no hurry on their part to follow through with further cuts. We lowered our EURUSD and cable forecasts overnight, and also raised our EURCHF forecasts, given the risk that the SNB will raise the floor in EURCHF to 1.25 at the Dec. 15 policy meeting.
The tricky process of government formation continues in Italy, but the selloff of Spanish bonds on Monday suggests the market may already be broadening its gaze to include other at-risk sovereigns. Up to EUR23 bn in Eurozone bond supply is due to be auctioned this week with key countries such as France and Spain all tapping the markets. Investors' ability to absorb this supply in a challenging environment will be crucial to the euro's fortunes. The data calendar is heavy on Tuesday, with German and GDP due, and inflation numbers out of the UK. In the US, advance retail sales and the empire manufacturing index are scheduled for release. EURUSD traded 1.3594-1.3644 and USDJPY 76.98-77.70.
EUR
Italy's PM-designate Monti said his government should be able to last until the end of legislature in 2013, but that would depend on maintaining the confidence of parliament. He said that he was willing to have politicians in his government but parties must decide. As it stands he commands overwhelming support in the lower house.
Greek opposition leader Samaras said that he would not agree to any new austerity measures, or sign any binding agreement, which was demanded by the European Union.
Spanish banks announced that they borrowed EUR86.2 bn from the ECB in October, up from EUR79.4 bn the previous month..
Italy held a 5-year bond auction, with yields coming in at 6.29% vs. 5.32% for the previous 5-year; the bid to cover ratio was 1.469.
In Germany, the CDU held its annual congress and a resolution allowing Eurozone exits was passed. Finance Minister Schaeuble noted that one 'can't force anyone to stay in or leave the Eurozone'. The resolution allows members to leave the Eurozone without leaving the European Union.
ECB's Mersch said that President Draghi's comments that 'the ECB's bond-buy programme is limited' reflects the 'opinion on the ECB Governing Council'. At this stage it is clear that the ECB is not willing to compromise on its position against acting as the lender of last resort for governments.
German Chancellor Merkel said she wanted a change in the EU charter earlier than scheduled - by the end of 2012 rather than mid-2013. Reuters reported a limited amendment to the Treaty was needed to allow 'greater influence over states that bust budget rules and agreed obligations on stability and consolidation'.
New Greek Prime Minister Papademos again highlighted the Dec. 15 deadline to receive the next tranche of aid from the troika. He also said that remaining in the Eurozone is the only solution for Greece.
CHF
Our analysts have the opinion that conditions are beginning to align in favour of the SNB lifting the EURCHF floor to 1.25 from 1.20, and we therefore raise our forecasts accordingly. The SNB itself, through its recent communication, has explicitly determined that the franc remains overvalued. Political support is holding and calls from industry are growing. An initial shift towards 1.25 is likely at the upcoming policy assessment in December amid deteriorating inflation prints.
GBP
October CPI is due and we expect a 5.1% annualized print. This is well above target but less relevant at this stage given the BoE has already commenced a new round of quantitative easing.
The November inflation report on Wednesday is the key release of the week, and we expect a dovish outcome which will continue to weigh on GBP sentiment.
AUD
The AUD got a brief boost after the RBA minutes from the Oct. 31 meeting revealed that the board seriously considered not cutting the policy rate, but eventually decided to do so. This suggests no hurry on their part to follow through with further cuts, and supports the view of our analysts who think only one more rate cut is likely, and not until Q1 next year.
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, November 14, 2011
14th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
14 November 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Outlook remains bearish; Focus is on 1.3406 ahead of 1.3346. Resistance is at 1.3871.
USDJPY NEUTRAL Resistance is at 78.10 ahead of 78.27. Support lies at 77.44 ahead of 76.95.
GBPUSD NEUTRAL Focus is on 1.5877, a break below this level would trigger weakness towards 1.5825. Near-term resistance is at 1.6131.
USDCHF BULLISH Resistance is at 0.9151, a break above which would expose 0.9316. Near-term support lies at 0.8923.
AUDUSD NEUTRAL Break of 1.0102 opens 1.000 and 0.9909. Key resistance is at 1.0300.
USDCAD BULLISH Focus is on 1.0273, a break through which would expose 1.0365. Support lies at 1.0055.
EURCHF BULLISH Key resistance is at 1.2474, a clearance of this level would open 1.2646. Key support lies at 1.2131.
EURGBP BEARISH Support lies at 0.8456, a break below which would open 0.8394. Resistance is at 0.8612.
EURJPY NEUTRAL The cross tested 104.75, a clear break here would open 104.02 ahead of 103.32. Initial resistance is at 107.65 ahead of 108.25.
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 November 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Outlook remains bearish; Focus is on 1.3406 ahead of 1.3346. Resistance is at 1.3871.
USDJPY NEUTRAL Resistance is at 78.10 ahead of 78.27. Support lies at 77.44 ahead of 76.95.
GBPUSD NEUTRAL Focus is on 1.5877, a break below this level would trigger weakness towards 1.5825. Near-term resistance is at 1.6131.
USDCHF BULLISH Resistance is at 0.9151, a break above which would expose 0.9316. Near-term support lies at 0.8923.
AUDUSD NEUTRAL Break of 1.0102 opens 1.000 and 0.9909. Key resistance is at 1.0300.
USDCAD BULLISH Focus is on 1.0273, a break through which would expose 1.0365. Support lies at 1.0055.
EURCHF BULLISH Key resistance is at 1.2474, a clearance of this level would open 1.2646. Key support lies at 1.2131.
EURGBP BEARISH Support lies at 0.8456, a break below which would open 0.8394. Resistance is at 0.8612.
EURJPY NEUTRAL The cross tested 104.75, a clear break here would open 104.02 ahead of 103.32. Initial resistance is at 107.65 ahead of 108.25.
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.
14th of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
14 November 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Investors kept a wary eye on developments in Rome over the weekend but ultimately fears of a disorderly transition in power in Italy proved unfounded. On Saturday evening the Chamber of Deputies passed the 2012 budget law with 380 votes, a comfortable majority, and Prime Minister Berlusconi resigned later in the day. Although a new government is not in place, former EU Commissioner Mario Monti is widely tipped to lead a new technocratic government. Crucially, both the outgoing PdL and opposition have appeared to throw their weight behind Monti. The PdL said it hoped that there would be 'no politicians' in the new government and called for it to be formed in the coming days. The result should be a relief to markets - and any improvement in risk appetite would likely be reinforced by a successful Italian 5y auction on Monday.
Italy's challenges remain severe however, and investors will be closely watching bond yields to see if they can fall to more affordable levels. ECB Governing Council officials continue to refuse point-blank any calls for them to increase the pace of their bond purchases, though there is still room to move on interest rate cuts, which could yet prove another form of stimulus. Switzerland releases PPI numbers later today, and any hints of strong deflationary pressures could again prompt talk of floor-raising by the SNB. During the Asia session, EURUSD traded 1.3741-1.3815 and USDJPY 77.09-77.29.
EUR
Italian Prime Minister Berlusconi has formally resigned, after the Chamber of Deputies passed the 2012 budget with 380 votes. Mario Monti, former EU Commissioner, is expected to form a technocratic government within days with support from the major parties. Italy's President Napolitano has already asked Monti to form a new government, and Monti has already met with ECB President Mario Draghi to discuss Italy's situation.
Reports suggest that Mario Monti's tenure can last up to April 2013, Silvio Berlusconi's full term. This would also be a source of relief to markets, and contrasts sharply with the situation in Greece where new elections are due early next year. However, we would not rule out Italy accelerating its electoral calendar, especially if Monti's government lacks support on a sustained basis.
ECB's Stark said on Friday again that the central bank would not be buying government bonds. However, he said that the ECB has 'room for maneuver' on interest rates relative to other major economies. We expect another 25bp cut at the ECB's December meeting.
ECB's Weidmann said the EFSF should stick to the SPV/Insurance approach and said he did not favour pooling the Eurozone's SDR resources, calling it another form of monetary financing.
German Chancellor Merkel said she wanted a change in the EU charter earlier than scheduled - by the end of 2012 rather than mid-2013. Reuters reported a limited amendment to the Treaty was needed to allow 'greater influence over states that bust budget rules and agreed obligations on stability and consolidation'.
JPY
Japan's nominal Q3 GDP was in line with consensus expectations at +1.4% q/q.
NZD
Retail sales volumes rose +2.2% q/q in Q3, which was the largest quarterly increase since Q4 2006. Despite the strong result, our analysts note that any move on the OCR is still unlikely this year, and he sticks to his view that the RBNZ will likely next hike in March 2012.
Finance Minister English said the NZD has been kept elevated by US and Chinese economic policies. He said he had hoped the NZD would weaken after New Zealand lost its triple-A rating, but he notes that markets have ignored the ratings downgrade.
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 November 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Investors kept a wary eye on developments in Rome over the weekend but ultimately fears of a disorderly transition in power in Italy proved unfounded. On Saturday evening the Chamber of Deputies passed the 2012 budget law with 380 votes, a comfortable majority, and Prime Minister Berlusconi resigned later in the day. Although a new government is not in place, former EU Commissioner Mario Monti is widely tipped to lead a new technocratic government. Crucially, both the outgoing PdL and opposition have appeared to throw their weight behind Monti. The PdL said it hoped that there would be 'no politicians' in the new government and called for it to be formed in the coming days. The result should be a relief to markets - and any improvement in risk appetite would likely be reinforced by a successful Italian 5y auction on Monday.
Italy's challenges remain severe however, and investors will be closely watching bond yields to see if they can fall to more affordable levels. ECB Governing Council officials continue to refuse point-blank any calls for them to increase the pace of their bond purchases, though there is still room to move on interest rate cuts, which could yet prove another form of stimulus. Switzerland releases PPI numbers later today, and any hints of strong deflationary pressures could again prompt talk of floor-raising by the SNB. During the Asia session, EURUSD traded 1.3741-1.3815 and USDJPY 77.09-77.29.
EUR
Italian Prime Minister Berlusconi has formally resigned, after the Chamber of Deputies passed the 2012 budget with 380 votes. Mario Monti, former EU Commissioner, is expected to form a technocratic government within days with support from the major parties. Italy's President Napolitano has already asked Monti to form a new government, and Monti has already met with ECB President Mario Draghi to discuss Italy's situation.
Reports suggest that Mario Monti's tenure can last up to April 2013, Silvio Berlusconi's full term. This would also be a source of relief to markets, and contrasts sharply with the situation in Greece where new elections are due early next year. However, we would not rule out Italy accelerating its electoral calendar, especially if Monti's government lacks support on a sustained basis.
ECB's Stark said on Friday again that the central bank would not be buying government bonds. However, he said that the ECB has 'room for maneuver' on interest rates relative to other major economies. We expect another 25bp cut at the ECB's December meeting.
ECB's Weidmann said the EFSF should stick to the SPV/Insurance approach and said he did not favour pooling the Eurozone's SDR resources, calling it another form of monetary financing.
German Chancellor Merkel said she wanted a change in the EU charter earlier than scheduled - by the end of 2012 rather than mid-2013. Reuters reported a limited amendment to the Treaty was needed to allow 'greater influence over states that bust budget rules and agreed obligations on stability and consolidation'.
JPY
Japan's nominal Q3 GDP was in line with consensus expectations at +1.4% q/q.
NZD
Retail sales volumes rose +2.2% q/q in Q3, which was the largest quarterly increase since Q4 2006. Despite the strong result, our analysts note that any move on the OCR is still unlikely this year, and he sticks to his view that the RBNZ will likely next hike in March 2012.
Finance Minister English said the NZD has been kept elevated by US and Chinese economic policies. He said he had hoped the NZD would weaken after New Zealand lost its triple-A rating, but he notes that markets have ignored the ratings downgrade.
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, November 09, 2011
9th of November 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
9 November 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
GBPUSD 1.6167 resistance
EURUSD NEUTRAL Initial support lies at 1.3681 ahead of 1.3609. Resistance is at 1.3871 ahead of 1.4003.
USDJPY NEUTRAL Resistance is at 77.79 ahead of 78.10. Support lies at 77.44 ahead of 76.95.
GBPUSD BULLISH Key resistance is at 1.6167; a break through which would open 1.6203. Support lies at 1.5980.
USDCHF BULLISH Resistance is at 0.9083; a break above which would open 0.9139. Near-term support lies at 0.8862.
AUDUSD NEUTRAL Resistance is at 1.0447, while support lies at 1.0203.
USDCAD NEUTRAL Support lies at 1.0055 ahead of 1.0021. Resistance is at 1.0229 ahead of 1.0273.
EURCHF BULLISH Key resistance is at 1.2474, a clearance of this level would open 1.2646. Support lies at 1.2321.
EURGBP BEARISH Near-term support lies at 0.8548, a break below which would open the key low from Sept. 12 of 0.8530. Resistance is at 0.8656.
EURJPY BULLISH Resistance is at 108.25, a break above which would open 109.24. Key support lies at 106.50.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
9 November 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
GBPUSD 1.6167 resistance
EURUSD NEUTRAL Initial support lies at 1.3681 ahead of 1.3609. Resistance is at 1.3871 ahead of 1.4003.
USDJPY NEUTRAL Resistance is at 77.79 ahead of 78.10. Support lies at 77.44 ahead of 76.95.
GBPUSD BULLISH Key resistance is at 1.6167; a break through which would open 1.6203. Support lies at 1.5980.
USDCHF BULLISH Resistance is at 0.9083; a break above which would open 0.9139. Near-term support lies at 0.8862.
AUDUSD NEUTRAL Resistance is at 1.0447, while support lies at 1.0203.
USDCAD NEUTRAL Support lies at 1.0055 ahead of 1.0021. Resistance is at 1.0229 ahead of 1.0273.
EURCHF BULLISH Key resistance is at 1.2474, a clearance of this level would open 1.2646. Support lies at 1.2321.
EURGBP BEARISH Near-term support lies at 0.8548, a break below which would open the key low from Sept. 12 of 0.8530. Resistance is at 0.8656.
EURJPY BULLISH Resistance is at 108.25, a break above which would open 109.24. Key support lies at 106.50.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
9th of November 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
9 November 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
News that Italian Prime Minister Berlusconi could resign soon and the expected establishment of a technocratic government in Greece has helped sooth market nerves somewhat. A lower CPI number in China and hopes of looser policy ahead in the world's second largest economy has also helped sentiment, though we continue to note that there are several variables in play. Compared to Greece at present, there is a lack of clarity in Italy over who could succeed Berlusconi and the prospect of further uncertainty in the run-up to elections, while a change of government does not automatically mean a country's fiscal problems would go away. The market will be keeping a close eye on Italian bond yields, the 10-year spread over Germany is still hovering close to 500bp and the parliamentary vote on new austerity measures is not due until next week. Elsewhere, EURCHF gave back some of its recent gains after SNB Vice-Chair Jordan sounded as though there are no immediate plans to lift the exchange rate floor above 1.20. He cited "enormous deflationary pressure" as a precondition for additional policy easing, and added that it would be wrong to engage in competitive devaluation. Although the recent barrage of comments in Switzerland suggests the stage is being set for some sort of auction, the SNB appears to be acknowledging that there are constraints to action and we believe the instability over politics in several Eurozone countries have led to a cautious approach. Ahead today, Riksbank minutes and industrial production numbers are due in Sweden, while Fed Chairman Bernanke will be speaking at a Fed conference on small businesses. Overnight EURUSD traded in a range of 1.3815-1.3859 and USDJPY traded 77.54-77.79.
EUR
At the end of a bilateral meeting between the two, Italy's President Napolitano announced that Prime Minister Berlusconi will resign after the new budget law is approved. Our analysts note that this could happen as early as Nov. 15. The news came after Berlusconi's government earlier won a parliamentary vote with the help of abstentions, but failed to command an overall majority of seats. The euro climbed 70 pips on the resignation news, and risk appetite in general got a boost. The Eurozone bond markets were closed for the evening at the time the headlines hit.
Attention now shifts to what form a new Italian administration might take. Berlusconi has already expressed his opposition to a technocratic government, but our analysts do not rule out the possibility.
Italy's Opposition Leader Bersani said there is a real risk that Italy loses market access in the coming days.
Meanwhile in Greece, negotiations are still ongoing over the make-up of the new government, and in particular who will be prime minister. Newswire reports suggest that former ECB Vice President Papademos is emerging as a favourite for the post.
ECB Executive Board member Stark said Europe needs 'bold steps toward fiscal union'.
A Greek minister revealed that Europe has asked Greece to produce a letter pledging to implement the rescue deal agreed in outline on Oct. 27. The letter is to be signed by Prime Minister Papandreou, Opposition Leader Samaras, Central Bank Governor Provopoulos, and whoever the new prime and finance ministers will be.
A Kremlin aid noted that Russia EFSF contribution would be more likely if ECB can participate, but he voiced doubts as to whether the EFSF can gather the planned $1tn.
Bank of Canada Governor Carney said that deleveraging by European banks could trigger sharp swings in global liquidity and that this "will soon be felt" in the real economy.
CHF
EURCHF fell a quick big figure after SNB Vice-Chair Jordan cited "enormous deflationary pressure" as a precondition for additional measures, and added that it would be wrong to engage in competitive devaluation. Earlier, Jordan had echoed the thoughts of other members, stating that the central bank is committed to defending the EURCHF floor to fulfill its price stability mandate and views the franc as overvalued at current levels. However, he said that the floor isn't without risks, and could involve high costs.
GBP
September industrial production remained unchanged m/m at +0.0%. Manufacturing output rose +0.2% vs consensus +0.1%. According to the ONS, today's data will have only a marginal downward impact on Q3 GDP, which stands at +0.5% q/q.
JPY
Japanese Finance Minister Jun Azumi admitted that he was targeting USDJPY back to 80 during last week's intervention. Such comments appear to be inconsistent with the original Japanese position to target speculative positions only and avoid outright targets.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
9 November 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
News that Italian Prime Minister Berlusconi could resign soon and the expected establishment of a technocratic government in Greece has helped sooth market nerves somewhat. A lower CPI number in China and hopes of looser policy ahead in the world's second largest economy has also helped sentiment, though we continue to note that there are several variables in play. Compared to Greece at present, there is a lack of clarity in Italy over who could succeed Berlusconi and the prospect of further uncertainty in the run-up to elections, while a change of government does not automatically mean a country's fiscal problems would go away. The market will be keeping a close eye on Italian bond yields, the 10-year spread over Germany is still hovering close to 500bp and the parliamentary vote on new austerity measures is not due until next week. Elsewhere, EURCHF gave back some of its recent gains after SNB Vice-Chair Jordan sounded as though there are no immediate plans to lift the exchange rate floor above 1.20. He cited "enormous deflationary pressure" as a precondition for additional policy easing, and added that it would be wrong to engage in competitive devaluation. Although the recent barrage of comments in Switzerland suggests the stage is being set for some sort of auction, the SNB appears to be acknowledging that there are constraints to action and we believe the instability over politics in several Eurozone countries have led to a cautious approach. Ahead today, Riksbank minutes and industrial production numbers are due in Sweden, while Fed Chairman Bernanke will be speaking at a Fed conference on small businesses. Overnight EURUSD traded in a range of 1.3815-1.3859 and USDJPY traded 77.54-77.79.
EUR
At the end of a bilateral meeting between the two, Italy's President Napolitano announced that Prime Minister Berlusconi will resign after the new budget law is approved. Our analysts note that this could happen as early as Nov. 15. The news came after Berlusconi's government earlier won a parliamentary vote with the help of abstentions, but failed to command an overall majority of seats. The euro climbed 70 pips on the resignation news, and risk appetite in general got a boost. The Eurozone bond markets were closed for the evening at the time the headlines hit.
Attention now shifts to what form a new Italian administration might take. Berlusconi has already expressed his opposition to a technocratic government, but our analysts do not rule out the possibility.
Italy's Opposition Leader Bersani said there is a real risk that Italy loses market access in the coming days.
Meanwhile in Greece, negotiations are still ongoing over the make-up of the new government, and in particular who will be prime minister. Newswire reports suggest that former ECB Vice President Papademos is emerging as a favourite for the post.
ECB Executive Board member Stark said Europe needs 'bold steps toward fiscal union'.
A Greek minister revealed that Europe has asked Greece to produce a letter pledging to implement the rescue deal agreed in outline on Oct. 27. The letter is to be signed by Prime Minister Papandreou, Opposition Leader Samaras, Central Bank Governor Provopoulos, and whoever the new prime and finance ministers will be.
A Kremlin aid noted that Russia EFSF contribution would be more likely if ECB can participate, but he voiced doubts as to whether the EFSF can gather the planned $1tn.
Bank of Canada Governor Carney said that deleveraging by European banks could trigger sharp swings in global liquidity and that this "will soon be felt" in the real economy.
CHF
EURCHF fell a quick big figure after SNB Vice-Chair Jordan cited "enormous deflationary pressure" as a precondition for additional measures, and added that it would be wrong to engage in competitive devaluation. Earlier, Jordan had echoed the thoughts of other members, stating that the central bank is committed to defending the EURCHF floor to fulfill its price stability mandate and views the franc as overvalued at current levels. However, he said that the floor isn't without risks, and could involve high costs.
GBP
September industrial production remained unchanged m/m at +0.0%. Manufacturing output rose +0.2% vs consensus +0.1%. According to the ONS, today's data will have only a marginal downward impact on Q3 GDP, which stands at +0.5% q/q.
JPY
Japanese Finance Minister Jun Azumi admitted that he was targeting USDJPY back to 80 during last week's intervention. Such comments appear to be inconsistent with the original Japanese position to target speculative positions only and avoid outright targets.
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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