DAILY MARKET COMMENTARY
27 December 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Initial support lies at 1.2994 ahead of key low at 1.2946. Resistance is at 1.3091, today's intersection of the trendline drawn off the Oct. 27 high ahead of 1.3197.
USDJPY NEUTRAL Near-term directional triggers are at 78.29 and 77.69.
GBPUSD NEUTRAL Key upside trigger is at 1.5780 with interim resistance at 1.5728. Support lies at 1.5582 ahead of 1.5497.
USDCHF NEUTRAL Resistance is at 0.9415 ahead of key high of 0.9548. Support lies at 0.9307 ahead of 0.9235.
AUDUSD BULLISH Rise through 1.0219 would expose 1.0258. Support lies at 1.0052.
USDCAD BEARISH A break below 1.0168 ahead of key low of 1.0052. Resistance is at 1.0309 ahead of 1.0389.
EURCHF BEARISH Initial support lies at 1.2164, a break below which would expose 1.2123, the Oct. 3 key low. Resistance is at 1.2254.
EURGBP BEARISH Key support is at 0.8303, a decline through which would expose the year-to-date low of 0.8285. Resistance is at 0.8390.
EURJPY BEARISH Key support area is at 101.05/100.76, a violation of which would open the psychological support of 100.00. Resistance is at 102.54.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
+++ market trends - news - analysis - strategies and more! +++
Tuesday, December 27, 2011
27th of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
27 December 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Asian markets remained in a holiday mood overnight and FX flows were extremely light. News flow too was thin and Japanese economic data was second-tier and not market-moving. USDCNY fixed at a new low, but the adjustment on the previous fixing was minor, and the headline failed to attract much attention. EURUSD traded 1.3043-1.3077 and USDJPY 77.90-78.03. The minutes of the BoJ's Nov. 15-16 and Nov. 30 policy meetings were released together. The latter was an unscheduled meeting called to discuss the possibility of coordinated action on central bank swap lines - action which was subsequently taken later that day. The board emphasised that Japanese financial institutions were not having difficulty funding themselves in foreign currencies, but that "the possibility could not be ruled out" that Japan's financial system could be "adversely affected should conditions in global financial markets deteriorate further". US economic data is due in the form of house prices and the Conference Board Consumer Confidence reading. Impressed by the recent improvement in jobless claims and housing starts, our US economics team have raised their forecast for Q4 GDP to 3.0% annualised rate from 2.5% previously.
EUR
The ECB announced it settled only EUR0.019 bn worth of sovereign bond purchases in the week ended Friday, down from EUR3.361 bn the week before. This is the slowest pace of buying under the securities markets program since it was reactivated in early August. The total stock of bonds accumulated now stands at EUR211 bn, allowing for the maturation of some of the bonds purchased since the program began in May 2010.
JPY
Finance Minister Azumi said somewhat optimistically that the yen would return to levels reflecting the real state of the economy when the European and other crises are solved. He said the strong yen was partly to blame for Japan's export weakness in Q4.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
27 December 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Asian markets remained in a holiday mood overnight and FX flows were extremely light. News flow too was thin and Japanese economic data was second-tier and not market-moving. USDCNY fixed at a new low, but the adjustment on the previous fixing was minor, and the headline failed to attract much attention. EURUSD traded 1.3043-1.3077 and USDJPY 77.90-78.03. The minutes of the BoJ's Nov. 15-16 and Nov. 30 policy meetings were released together. The latter was an unscheduled meeting called to discuss the possibility of coordinated action on central bank swap lines - action which was subsequently taken later that day. The board emphasised that Japanese financial institutions were not having difficulty funding themselves in foreign currencies, but that "the possibility could not be ruled out" that Japan's financial system could be "adversely affected should conditions in global financial markets deteriorate further". US economic data is due in the form of house prices and the Conference Board Consumer Confidence reading. Impressed by the recent improvement in jobless claims and housing starts, our US economics team have raised their forecast for Q4 GDP to 3.0% annualised rate from 2.5% previously.
EUR
The ECB announced it settled only EUR0.019 bn worth of sovereign bond purchases in the week ended Friday, down from EUR3.361 bn the week before. This is the slowest pace of buying under the securities markets program since it was reactivated in early August. The total stock of bonds accumulated now stands at EUR211 bn, allowing for the maturation of some of the bonds purchased since the program began in May 2010.
JPY
Finance Minister Azumi said somewhat optimistically that the yen would return to levels reflecting the real state of the economy when the European and other crises are solved. He said the strong yen was partly to blame for Japan's export weakness in Q4.
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, December 23, 2011
23rd of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
23 December 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Initial support lies at 1.2994 ahead of key low at 1.2946. Resistance is at 1.3197.
USDJPY NEUTRAL Pair is trading in a narrow range with directional triggers at 78.29 and 77.49.
GBPUSD NEUTRAL Key resistance is at 1.5780 ahead of 1.5889. Support lies at 1.5497 ahead of 1.5465.
USDCHF NEUTRAL Support lies at 0.9235 ahead of 0.9176. Resistance is at 0.9415 ahead of key high of 0.9548.
AUDUSD NEUTRAL Resistance is at 1.0219 ahead of 1.0258. Support lies at 1.0052 ahead of 0.9895.
USDCAD BULLISH Near-term resistance is at 1.0309 ahead of 1.0389. Key support is at 1.0194.
EURCHF BEARISH Initial support lies at 1.2164 ahead of 1.2123, the Oct. 3 key low. Resistance is at 1.2254.
EURGBP BEARISH Support is at 0.8303, a decline through which would expose the year-to-date low of 0.8285. Resistance is at 0.8390.
EURJPY BEARISH Key support area is at 101.05/100.76, a violation of which would open the psychological support of 100.00. Resistance is at 102.54.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
23 December 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Initial support lies at 1.2994 ahead of key low at 1.2946. Resistance is at 1.3197.
USDJPY NEUTRAL Pair is trading in a narrow range with directional triggers at 78.29 and 77.49.
GBPUSD NEUTRAL Key resistance is at 1.5780 ahead of 1.5889. Support lies at 1.5497 ahead of 1.5465.
USDCHF NEUTRAL Support lies at 0.9235 ahead of 0.9176. Resistance is at 0.9415 ahead of key high of 0.9548.
AUDUSD NEUTRAL Resistance is at 1.0219 ahead of 1.0258. Support lies at 1.0052 ahead of 0.9895.
USDCAD BULLISH Near-term resistance is at 1.0309 ahead of 1.0389. Key support is at 1.0194.
EURCHF BEARISH Initial support lies at 1.2164 ahead of 1.2123, the Oct. 3 key low. Resistance is at 1.2254.
EURGBP BEARISH Support is at 0.8303, a decline through which would expose the year-to-date low of 0.8285. Resistance is at 0.8390.
EURJPY BEARISH Key support area is at 101.05/100.76, a violation of which would open the psychological support of 100.00. Resistance is at 102.54.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
23rd of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
23 December 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Flows were very light in Asia as markets gradually wind down for the holiday season.
The Wall Street Journal reports that the Fed is reconsidering the policy rate guidance it provided in August - when it signalled that rates would likely stay at zero until mid-2013. The article says the FOMC is poised to revamp its policy communication strategy at the Jan. 25 policy meeting, and could indicate that rates are likely to stay near zero until 2014 or beyond. The report cited FOMC members' fear of weak economic conditions as the reason to move to an even more dovish stance.
Also, a day after the ECB engaged in 'quasi-QE' via its 3-year refinancing operation, outgoing Executive Board member Bini-Smaghi stated in an interview with the Financial Times that quantitative easing should be an option for the ECB if deflation risks were to emerge. We note that the recent data prints out of Germany and the ECB's own inflation forecasts still suggest outright ECB QE (outside of the SMP mandate) is not on the horizon, but we have seen over the last two years that previous taboos in the Eurozone have been broken one by one, and the same could happen again.
In the US, Q3 GDP figures were revised lower to 1.8%y/y. The University of Michigan Index also came in weaker than expected at 68.0 (cons. 69.9). However, jobless claims were again lower than expected, creating a visible downtrend which suggests the US labour market may be in better shape than commonly assumed. On Friday, Canadian GDP is due and the US will have the durable goods and personal income and spending report for November.
EUR
In an interview with the Financial Times, the ECB's outgoing Executive Board member Bini-Smaghi said that he 'did not understand the quasi-religious discussion' over quantitative easing. He acknowledged that the US and the UK are adopting current measures because the central banks of these countries saw strong deflation risk, whereas this is so far not the case for the Eurozone. However, he also stated 'But if conditions changed and the need to further increase liquidity emerged, I would see no reason why such an instrument, tailor made for the specific characteristics of the euro area, should not be used.'
On the SMP programme, Bini-Smaghi refused to commit to any explicit form of action, such as purchase or yield targets. However, he called for 'constructive ambiguity' on the matter and noted that central banks still need to be mindful of their mandates. ECB President Draghi has stressed in the past that acting as a lender of last resort to governments is not in the ECB's mandate.
The Portuguese government announced that a Chinese State-Owned Enterprise had won the auction for its 21% stake in a major energy company. This is an example of how we believe China will chose to help the Eurozone - via strategic acquisition of assets rather than an increase in bond purchases or greater IMF support.
GBP
UK Q3 GDP was revised higher slightly to +0.6% q/q from +0.5% y/y. Our UK economist noted that this trend-like pace in Q3 comes after a very poor holiday and weather disrupted Q2. In fact, Q2 data was revised down from 0.1% to 0.0%. Forward-looking indicators point to a stagnant economy in Q4.
The UK current account deficit for Q3 was much wider than expected at GBP15.2 bn from GBP7.4 bn last, expanding to 4% of GDP. We note that the quarterly data is volatile and prone to revision and that the trend thus far has been for the trade deficit to narrow after the currency depreciation in 2008.
NZD
Moody's affirmed New Zealand's sovereign rating at AAA, outlook stable. The agency did observe though that the rating could face downward pressure if the upward trend in public debt was not corrected. We note that both S&P and Fitch already cut the rating one notch to AA+ on Sept 29.
Another earthquake, measuring 5.9, struck Christchurch during the Asia session. NZD briefly fell 20 pips but soon recovered fully.
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 December 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
Flows were very light in Asia as markets gradually wind down for the holiday season.
The Wall Street Journal reports that the Fed is reconsidering the policy rate guidance it provided in August - when it signalled that rates would likely stay at zero until mid-2013. The article says the FOMC is poised to revamp its policy communication strategy at the Jan. 25 policy meeting, and could indicate that rates are likely to stay near zero until 2014 or beyond. The report cited FOMC members' fear of weak economic conditions as the reason to move to an even more dovish stance.
Also, a day after the ECB engaged in 'quasi-QE' via its 3-year refinancing operation, outgoing Executive Board member Bini-Smaghi stated in an interview with the Financial Times that quantitative easing should be an option for the ECB if deflation risks were to emerge. We note that the recent data prints out of Germany and the ECB's own inflation forecasts still suggest outright ECB QE (outside of the SMP mandate) is not on the horizon, but we have seen over the last two years that previous taboos in the Eurozone have been broken one by one, and the same could happen again.
In the US, Q3 GDP figures were revised lower to 1.8%y/y. The University of Michigan Index also came in weaker than expected at 68.0 (cons. 69.9). However, jobless claims were again lower than expected, creating a visible downtrend which suggests the US labour market may be in better shape than commonly assumed. On Friday, Canadian GDP is due and the US will have the durable goods and personal income and spending report for November.
EUR
In an interview with the Financial Times, the ECB's outgoing Executive Board member Bini-Smaghi said that he 'did not understand the quasi-religious discussion' over quantitative easing. He acknowledged that the US and the UK are adopting current measures because the central banks of these countries saw strong deflation risk, whereas this is so far not the case for the Eurozone. However, he also stated 'But if conditions changed and the need to further increase liquidity emerged, I would see no reason why such an instrument, tailor made for the specific characteristics of the euro area, should not be used.'
On the SMP programme, Bini-Smaghi refused to commit to any explicit form of action, such as purchase or yield targets. However, he called for 'constructive ambiguity' on the matter and noted that central banks still need to be mindful of their mandates. ECB President Draghi has stressed in the past that acting as a lender of last resort to governments is not in the ECB's mandate.
The Portuguese government announced that a Chinese State-Owned Enterprise had won the auction for its 21% stake in a major energy company. This is an example of how we believe China will chose to help the Eurozone - via strategic acquisition of assets rather than an increase in bond purchases or greater IMF support.
GBP
UK Q3 GDP was revised higher slightly to +0.6% q/q from +0.5% y/y. Our UK economist noted that this trend-like pace in Q3 comes after a very poor holiday and weather disrupted Q2. In fact, Q2 data was revised down from 0.1% to 0.0%. Forward-looking indicators point to a stagnant economy in Q4.
The UK current account deficit for Q3 was much wider than expected at GBP15.2 bn from GBP7.4 bn last, expanding to 4% of GDP. We note that the quarterly data is volatile and prone to revision and that the trend thus far has been for the trade deficit to narrow after the currency depreciation in 2008.
NZD
Moody's affirmed New Zealand's sovereign rating at AAA, outlook stable. The agency did observe though that the rating could face downward pressure if the upward trend in public debt was not corrected. We note that both S&P and Fitch already cut the rating one notch to AA+ on Sept 29.
Another earthquake, measuring 5.9, struck Christchurch during the Asia session. NZD briefly fell 20 pips but soon recovered fully.
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, December 21, 2011
21st of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
21 December 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support lies at 1.2994 ahead of key low at 1.2946. Resistance is at 1.3146.
USDJPY NEUTRAL Key directional triggers are at 78.29 and 77.49.
GBPUSD NEUTRAL Resistance is at 1.5735 ahead of 1.5780, the Nov. 30 key high. Support lies at 1.5497 ahead of 1.5465.
USDCHF NEUTRAL Support lies at 0.9235 ahead of 0.9176. Resistance is at 0.9415 ahead of key high of 0.9548.
AUDUSD NEUTRAL Initial support lies at 1.0060 ahead of key low at 0.9861. Resistance is at 1.0182 ahead of 1.0258.
USDCAD BULLISH Resistance is at 1.0309, a move above which would expose 1.0389. Key support is at 1.0194.
EURCHF BEARISH Key supports to watch are at 1.2123 and 1.2012. Resistance is at 1.2254.
EURGBP BEARISH Break below 0.8356 has opened support at 0.8332 and then 0.8308. Resistance is at 0.8390.
EURJPY BEARISH Support lies at 101.38 ahead of 100.76, the year-to-date low. Resistance is at 102.49.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
21 December 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support lies at 1.2994 ahead of key low at 1.2946. Resistance is at 1.3146.
USDJPY NEUTRAL Key directional triggers are at 78.29 and 77.49.
GBPUSD NEUTRAL Resistance is at 1.5735 ahead of 1.5780, the Nov. 30 key high. Support lies at 1.5497 ahead of 1.5465.
USDCHF NEUTRAL Support lies at 0.9235 ahead of 0.9176. Resistance is at 0.9415 ahead of key high of 0.9548.
AUDUSD NEUTRAL Initial support lies at 1.0060 ahead of key low at 0.9861. Resistance is at 1.0182 ahead of 1.0258.
USDCAD BULLISH Resistance is at 1.0309, a move above which would expose 1.0389. Key support is at 1.0194.
EURCHF BEARISH Key supports to watch are at 1.2123 and 1.2012. Resistance is at 1.2254.
EURGBP BEARISH Break below 0.8356 has opened support at 0.8332 and then 0.8308. Resistance is at 0.8390.
EURJPY BEARISH Support lies at 101.38 ahead of 100.76, the year-to-date low. Resistance is at 102.49.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
21st of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
21 December 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Bank of Japan left policy entirely unchanged at its meeting overnight, as widely expected. Market focus is now fixed squarely on Europe again as the ECB gears up for the first of two three-year LTROs. By all accounts, the take up is expected to be strong and, if so, markets would likely interpret this as a positive development. Asian equities and the AUD in particular were stronger overnight, partly in anticipation of what the liquidity injection will mean for risk appetite. Not only will some of the funding be recycled back into government debt, but the release of abundant liquidity would also secure bank financing over the coming year. We still believe it is difficult to reconcile a government desire for banks to continue buying debt with the need for banks to reduce risk exposure associated with government debt, but it appears all parties involved want to use the tenders as a stop-gap while governments move forward with the fiscal compact in the Eurozone. In other news, economic data continues to surprise to the upside in the US, but also in Germany. New Zealand current account figures were also released overnight, which showed a wider than expected deterioration to -N$4.6bn. EURUSD traded 1.3072-1.3127 and USDJPY 77.76-77.91. The BoE minutes are also scheduled for release shortly before today's LTRO announcement.
EUR
The German IFO rose to 107.2 in December. The print confirms that the domestic economy remains on very solid footing despite what is going on in the periphery. However, this also means that the German sense of urgency remains subdued.
A Spanish bill auction was well received. The Tesoro sold EUR5.64 bn of bills, above the target once again. This indicates that better market conditions are helping to offload supply, although the recent success may also be due to the upcoming LTRO. Market expectations for the amount of liquidity allotted vary widely, but average around EUR 250 bn. Our European economists are looking for a take-up in the LTRO of around EUR320 bn. The result is due to be released at around 10:15 GMT.
Reuters reported that 10 Italian banks are now looking to use the 3-year operation and have requested, and obtained Italian State Guarantees on bank bonds to enable their use as collateral for the ECB tender. Similar schemes have been adopted by both Irish and Greek governments to allow their banks to access cheaper ECB funding. Although banks can obtain funding this way, this does increase the ECB's exposure to the government's overall credit position.
Eurogroup chair Juncker said that Europe does not give the impression abroad that it is doing everything possible to save the euro. However, he warned that there is no political alternative to reducing debt. The comments come amid concerns that national austerity programmes are damaging growth prospects, with the IMF announcing it was bringing forward financing earmarked for Ireland, though the fiscal targets remain unchanged.
Fitch has put several Eurozone banks on downgrade watch after their corresponding sovereigns were hit with similar warnings. The agency warned that it was 'not expected' to resolve France's negative outlook until 2013.
European Union President Van Rompuy confirmed that the next EU leaders summit will be on January 30th. This date had been moved several times until today's announcements. He said that the summit will focus on jobs, and the need to 'take strong action on employment'.
GBP
Moody's warned that the UK's headroom to maintain its AAA rating had diminished, citing the Eurozone's current economic and financial troubles. It said that the UK's rating may be less able to absorb shocks, though the agency said this was merely an annual review of the ratings itself and not outright action being taken. The UK Treasury welcomed the statement.
The Bank of England will likely remain dovish in its December MPC meeting minutes due on Wednesday. We expect the vote on both policy decisions to remain unanimous.
JPY
The Bank of Japan kept its policy rate unchanged at 0-0.1%, and made no adjustments to either its asset purchase or lending programs.
R&I ratings, Japan's domestic credit rating agency, cut the long term sovereign rating one notch to AA+ from AAA. USDJPY only climbed 5 pips in response. R&I warned on Nov. 30 that the rating was vulnerable, so today's move was not a surprise. Moody's, S&P, and Fitch have rated Japan below triple-A for over a decade.
NZD
New Zealand's current account deficit in the third quarter widened to NZ$4.6bn, much larger than market expectations of NZ$3.8bn. The 12m to Q3 deficit also widened to $8.68bn (cons. NZ$7.95bn).
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 December 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Bank of Japan left policy entirely unchanged at its meeting overnight, as widely expected. Market focus is now fixed squarely on Europe again as the ECB gears up for the first of two three-year LTROs. By all accounts, the take up is expected to be strong and, if so, markets would likely interpret this as a positive development. Asian equities and the AUD in particular were stronger overnight, partly in anticipation of what the liquidity injection will mean for risk appetite. Not only will some of the funding be recycled back into government debt, but the release of abundant liquidity would also secure bank financing over the coming year. We still believe it is difficult to reconcile a government desire for banks to continue buying debt with the need for banks to reduce risk exposure associated with government debt, but it appears all parties involved want to use the tenders as a stop-gap while governments move forward with the fiscal compact in the Eurozone. In other news, economic data continues to surprise to the upside in the US, but also in Germany. New Zealand current account figures were also released overnight, which showed a wider than expected deterioration to -N$4.6bn. EURUSD traded 1.3072-1.3127 and USDJPY 77.76-77.91. The BoE minutes are also scheduled for release shortly before today's LTRO announcement.
EUR
The German IFO rose to 107.2 in December. The print confirms that the domestic economy remains on very solid footing despite what is going on in the periphery. However, this also means that the German sense of urgency remains subdued.
A Spanish bill auction was well received. The Tesoro sold EUR5.64 bn of bills, above the target once again. This indicates that better market conditions are helping to offload supply, although the recent success may also be due to the upcoming LTRO. Market expectations for the amount of liquidity allotted vary widely, but average around EUR 250 bn. Our European economists are looking for a take-up in the LTRO of around EUR320 bn. The result is due to be released at around 10:15 GMT.
Reuters reported that 10 Italian banks are now looking to use the 3-year operation and have requested, and obtained Italian State Guarantees on bank bonds to enable their use as collateral for the ECB tender. Similar schemes have been adopted by both Irish and Greek governments to allow their banks to access cheaper ECB funding. Although banks can obtain funding this way, this does increase the ECB's exposure to the government's overall credit position.
Eurogroup chair Juncker said that Europe does not give the impression abroad that it is doing everything possible to save the euro. However, he warned that there is no political alternative to reducing debt. The comments come amid concerns that national austerity programmes are damaging growth prospects, with the IMF announcing it was bringing forward financing earmarked for Ireland, though the fiscal targets remain unchanged.
Fitch has put several Eurozone banks on downgrade watch after their corresponding sovereigns were hit with similar warnings. The agency warned that it was 'not expected' to resolve France's negative outlook until 2013.
European Union President Van Rompuy confirmed that the next EU leaders summit will be on January 30th. This date had been moved several times until today's announcements. He said that the summit will focus on jobs, and the need to 'take strong action on employment'.
GBP
Moody's warned that the UK's headroom to maintain its AAA rating had diminished, citing the Eurozone's current economic and financial troubles. It said that the UK's rating may be less able to absorb shocks, though the agency said this was merely an annual review of the ratings itself and not outright action being taken. The UK Treasury welcomed the statement.
The Bank of England will likely remain dovish in its December MPC meeting minutes due on Wednesday. We expect the vote on both policy decisions to remain unanimous.
JPY
The Bank of Japan kept its policy rate unchanged at 0-0.1%, and made no adjustments to either its asset purchase or lending programs.
R&I ratings, Japan's domestic credit rating agency, cut the long term sovereign rating one notch to AA+ from AAA. USDJPY only climbed 5 pips in response. R&I warned on Nov. 30 that the rating was vulnerable, so today's move was not a surprise. Moody's, S&P, and Fitch have rated Japan below triple-A for over a decade.
NZD
New Zealand's current account deficit in the third quarter widened to NZ$4.6bn, much larger than market expectations of NZ$3.8bn. The 12m to Q3 deficit also widened to $8.68bn (cons. NZ$7.95bn).
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, December 20, 2011
20th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
20 December 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Pair is consolidating above 1.2946; a move below this would open 1.2867, the Jan. 10 key low. Resistance is at 1.3146.
USDJPY NEUTRAL Pair is trading sideways with directional triggers at 78.29 and 77.49.
GBPUSD BEARISH Initial support lies at 1.5465 ahead of key low at 1.5409. Resistance is at 1.5630.
USDCHF BULLISH Tough support lies at 0.9331; as long as this level holds, watch out for a break above 0.9548 to expose 0.9602.
AUDUSD BEARISH Key support lies at 0.9861; a break below this would expose 0.9833. Resistance is at 1.0045.
USDCAD BULLISH Key resistance is at 1.0424, a violation of which would open 1.0474. Support is at 1.0298.
EURCHF BEARISH Momentum is negative; two key supports to watch are at 1.2123 and 1.2012. Resistance is at 1.2254.
EURGBP BEARISH Key support area is at 0.8373/56; a break below this would expose 0.8332 next. Resistance is at 0.8426.
EURJPY BEARISH The cross is consolidating above 100.76; a break below this would open the psychological level of 100.00. Resistance is at 102.49.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
20 December 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Pair is consolidating above 1.2946; a move below this would open 1.2867, the Jan. 10 key low. Resistance is at 1.3146.
USDJPY NEUTRAL Pair is trading sideways with directional triggers at 78.29 and 77.49.
GBPUSD BEARISH Initial support lies at 1.5465 ahead of key low at 1.5409. Resistance is at 1.5630.
USDCHF BULLISH Tough support lies at 0.9331; as long as this level holds, watch out for a break above 0.9548 to expose 0.9602.
AUDUSD BEARISH Key support lies at 0.9861; a break below this would expose 0.9833. Resistance is at 1.0045.
USDCAD BULLISH Key resistance is at 1.0424, a violation of which would open 1.0474. Support is at 1.0298.
EURCHF BEARISH Momentum is negative; two key supports to watch are at 1.2123 and 1.2012. Resistance is at 1.2254.
EURGBP BEARISH Key support area is at 0.8373/56; a break below this would expose 0.8332 next. Resistance is at 0.8426.
EURJPY BEARISH The cross is consolidating above 100.76; a break below this would open the psychological level of 100.00. Resistance is at 102.49.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
20th of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
20 December 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Eurozone's finance ministers' conference call managed to secure fresh resources for the IMF, though again there was a distinct lack of unanimity. Only four non-Eurozone nations agreed to participate. It had been hoped that the fund's resources could be boosted to EUR200 bn but instead only EUR150 bn was pledged. The IMF said it 'welcomed' the 'substantial' boost to its resources, though there are some strict conditions attached to prevent the impression that the funding lines via Eurozone national central banks is simply debt monetization by stealth. The Eurozone financial leadership yet again failed to agree upon an expansion in resources for the combined EFSF and ESM, which still stands at EUR500bn amid stiff German opposition. The RBA minutes produced little in the way of surprises. The Japanese government again announced plans to boost its FX intervention capacity, but there was no currency reaction. EURUSD traded 1.2988-1.3020 and USDJPY 77.92-78.06. The Riksbank policy decision is due.
EUR
The Eurozone's 17 finance ministers agreed to provide EUR150 bn for the IMF, while the Czech Republic, Denmark, Sweden and Poland will also provide supplementary financing. The allocations will go into the IMF's general fund, and may in principle be used to fund future IMF rescues, though not exclusively those inside the Eurozone.
The Bundesbank said Germany is set for a long upswing as the expansive monetary policy should support growth.. It sees inflation at 1.8% in 2012 and 1.5% in 2013.
ECB member Noyer said that the restoration of confidence will be a difficult and lengthy task. He said it is important the ECB continues to ensure price stability, and that its interventions relate only to the preservation of medium-term price stability. Large-scale government bond purchases are seen as well beyond the ECB's role as lender of last resort however.
In his testimony before the European parliament ECB President Draghi affirmed his belief in the euro, and said he had 'no doubts whatsoever over its strength, its permanence and irreversibility'. He again clearly underlined opposition to monetary financing, while warning that banks are not only short of funding but also capital. Investors will be watching the take-up of Thursday's three-year LTRO closely to see whether fresh ECB funding for banks may be large enough to alleviate sovereign stress.
ECB Executive Board member Bini-Smaghi said the ECB had never been 'dogmatic' about interest rates. He also said that the size of bond purchases needs to be determined from 'time to time', but acknowledged the need for financial stability, as without it there wouldn't be any price stability.
On Tuesday the German IFO survey is out. The market is looking for a slight decline in the business climate print to 106.0, from 106.6 last month. We are below consensus and look for a dip to 105.5 The GfK survey and producer price numbers will also be released.
GBP
UK consumer confidence rebounded in November off October's record low. Although it came in above expectations at 40 (cons. 36), sterling was slow to benefit.
BoE MPC member Fisher said that downside risks to the UK economy arising from the Eurozone are bigger than those due to inflation. He said the situation is potentially more dangerous than in 2008. He also said that deflation is also a bigger risk than inflation staying high.
The Bank of England will likely remain dovish in its December MPC meeting minutes due on Wednesday. We expect the vote on both policy decisions to remain unanimous.
Rightmove housing prices showed another sequential decline, of 2.7%m/m. However, prices remain 1.5% up on an annualised basis.
JPY
Finance Minister Azumi announced plans to increase Japan's FX intervention firepower by raising the amount of bill issuance that can be used to fund intervention operations. The newly-proposed ceiling is JPY 195 trn, up from JPY 165 trn currently, although parliamentary approval will be needed before the change can take effect. If successful, this will be the third time since 2010 that the limit has been raised. The latest move suggests Japan has every intention of continuing its policy of sporadic FX intervention, although the yen did not react to the announcement.
Azumi added that Japan intends to diversify some of its FX reserves into CNY bonds, noting that there are advantages to both Japan and China if they hold each other's bonds. The Nikkei newspaper had earlier reported that Japan intends to buy up to $10 bn worth of CNY bonds, on a phased basis. We note that this amounts to less than 0.1% of Japan's total FX reserves, and we agree with Azumi that these purchases are not likely to affect the USD.
AUD
The minutes were released from the Dec. 6 RBA policy meeting where the cash rate was cut by 25 bp. The Board seemed anxious about the sovereign debt crisis in Europe, and were extremely uncertain over how it would be resolved. Our Australian economists think the RBA is in a 'wait and see' mode as far as the need for further rate cuts is concerned, and they stick to their view that a further 25 bp cut will likely materialize in February.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
20 December 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Eurozone's finance ministers' conference call managed to secure fresh resources for the IMF, though again there was a distinct lack of unanimity. Only four non-Eurozone nations agreed to participate. It had been hoped that the fund's resources could be boosted to EUR200 bn but instead only EUR150 bn was pledged. The IMF said it 'welcomed' the 'substantial' boost to its resources, though there are some strict conditions attached to prevent the impression that the funding lines via Eurozone national central banks is simply debt monetization by stealth. The Eurozone financial leadership yet again failed to agree upon an expansion in resources for the combined EFSF and ESM, which still stands at EUR500bn amid stiff German opposition. The RBA minutes produced little in the way of surprises. The Japanese government again announced plans to boost its FX intervention capacity, but there was no currency reaction. EURUSD traded 1.2988-1.3020 and USDJPY 77.92-78.06. The Riksbank policy decision is due.
EUR
The Eurozone's 17 finance ministers agreed to provide EUR150 bn for the IMF, while the Czech Republic, Denmark, Sweden and Poland will also provide supplementary financing. The allocations will go into the IMF's general fund, and may in principle be used to fund future IMF rescues, though not exclusively those inside the Eurozone.
The Bundesbank said Germany is set for a long upswing as the expansive monetary policy should support growth.. It sees inflation at 1.8% in 2012 and 1.5% in 2013.
ECB member Noyer said that the restoration of confidence will be a difficult and lengthy task. He said it is important the ECB continues to ensure price stability, and that its interventions relate only to the preservation of medium-term price stability. Large-scale government bond purchases are seen as well beyond the ECB's role as lender of last resort however.
In his testimony before the European parliament ECB President Draghi affirmed his belief in the euro, and said he had 'no doubts whatsoever over its strength, its permanence and irreversibility'. He again clearly underlined opposition to monetary financing, while warning that banks are not only short of funding but also capital. Investors will be watching the take-up of Thursday's three-year LTRO closely to see whether fresh ECB funding for banks may be large enough to alleviate sovereign stress.
ECB Executive Board member Bini-Smaghi said the ECB had never been 'dogmatic' about interest rates. He also said that the size of bond purchases needs to be determined from 'time to time', but acknowledged the need for financial stability, as without it there wouldn't be any price stability.
On Tuesday the German IFO survey is out. The market is looking for a slight decline in the business climate print to 106.0, from 106.6 last month. We are below consensus and look for a dip to 105.5 The GfK survey and producer price numbers will also be released.
GBP
UK consumer confidence rebounded in November off October's record low. Although it came in above expectations at 40 (cons. 36), sterling was slow to benefit.
BoE MPC member Fisher said that downside risks to the UK economy arising from the Eurozone are bigger than those due to inflation. He said the situation is potentially more dangerous than in 2008. He also said that deflation is also a bigger risk than inflation staying high.
The Bank of England will likely remain dovish in its December MPC meeting minutes due on Wednesday. We expect the vote on both policy decisions to remain unanimous.
Rightmove housing prices showed another sequential decline, of 2.7%m/m. However, prices remain 1.5% up on an annualised basis.
JPY
Finance Minister Azumi announced plans to increase Japan's FX intervention firepower by raising the amount of bill issuance that can be used to fund intervention operations. The newly-proposed ceiling is JPY 195 trn, up from JPY 165 trn currently, although parliamentary approval will be needed before the change can take effect. If successful, this will be the third time since 2010 that the limit has been raised. The latest move suggests Japan has every intention of continuing its policy of sporadic FX intervention, although the yen did not react to the announcement.
Azumi added that Japan intends to diversify some of its FX reserves into CNY bonds, noting that there are advantages to both Japan and China if they hold each other's bonds. The Nikkei newspaper had earlier reported that Japan intends to buy up to $10 bn worth of CNY bonds, on a phased basis. We note that this amounts to less than 0.1% of Japan's total FX reserves, and we agree with Azumi that these purchases are not likely to affect the USD.
AUD
The minutes were released from the Dec. 6 RBA policy meeting where the cash rate was cut by 25 bp. The Board seemed anxious about the sovereign debt crisis in Europe, and were extremely uncertain over how it would be resolved. Our Australian economists think the RBA is in a 'wait and see' mode as far as the need for further rate cuts is concerned, and they stick to their view that a further 25 bp cut will likely materialize in February.
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, December 19, 2011
19th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
19 December 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Key support is at 1.2946; a break below this would open 1.2867, the Jan. 10 low. Resistance is at 1.3084.
USDJPY NEUTRAL Near-term directional triggers are at 78.29 and 77.49.
GBPUSD BEARISH Key downside trigger is at 1.5409 with interim support at 1.5434. Initial resistance is at 1.5557.
USDCHF BULLISH Pressure is on support at 0.9331; as long as this holds, watch out for a break above 0.9548 ahead of 0.9602.
AUDUSD BEARISH Focus is on 0.9861; a break below this would expose 0.9833. Resistance is at 0.9993.
USDCAD BULLISH Key upside trigger is at 1.0424, a violation of which would open 1.0474. Support is at 1.0298.
EURCHF BEARISH Initial support is at 1.2123, key low from Oct. 3. A break below this would open 1.2012, Sept. 19 low. Resistance is at 1.2398.
EURGBP BEARISH Tough support lies at 0.8356; a break below this would expose 0.8332. Resistance is at 0.8426.
EURJPY BEARISH The cross is consolidating above key support at 100.76; a break below this would open the psychological level of 100.00. Resistance is at 102.99.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
19 December 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Key support is at 1.2946; a break below this would open 1.2867, the Jan. 10 low. Resistance is at 1.3084.
USDJPY NEUTRAL Near-term directional triggers are at 78.29 and 77.49.
GBPUSD BEARISH Key downside trigger is at 1.5409 with interim support at 1.5434. Initial resistance is at 1.5557.
USDCHF BULLISH Pressure is on support at 0.9331; as long as this holds, watch out for a break above 0.9548 ahead of 0.9602.
AUDUSD BEARISH Focus is on 0.9861; a break below this would expose 0.9833. Resistance is at 0.9993.
USDCAD BULLISH Key upside trigger is at 1.0424, a violation of which would open 1.0474. Support is at 1.0298.
EURCHF BEARISH Initial support is at 1.2123, key low from Oct. 3. A break below this would open 1.2012, Sept. 19 low. Resistance is at 1.2398.
EURGBP BEARISH Tough support lies at 0.8356; a break below this would expose 0.8332. Resistance is at 0.8426.
EURJPY BEARISH The cross is consolidating above key support at 100.76; a break below this would open the psychological level of 100.00. Resistance is at 102.99.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
19th of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
19 December 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
North Korean media announced that leader Kim Jong-il died over the weekend, sending USDJPY briefly higher. Officials from Japan and the Republic of Korea stressed that both countries remain on their guard, although the yen recovered when fears of an immediate military reaction receded. Although Kim Jong-il had already picked his third son Kim Jong-un as the next head of state, a smooth leadership transition is by no means guaranteed, and we remain cautious on the yen in the immediate future given the headline risk.
Late on Friday, Fitch put the ratings of several Eurozone countries on review and lowered the outlook on France to 'negative' from 'stable'. We note that S&P already has France's rating on review and, Fitch's move does not break new ground. However, Fitch also warned that a comprehensive solution for the Eurozone debt crisis is 'beyond reach' - a comment which may reinforce market concerns that an elegant solution to the crisis may not be politically possible. Moody's downgraded Belgium by two notches to Aa3 after keeping it on review for two months. Although the market is better prepared for further ratings action, the risk of more bad news on this front before the year-end is likely to keep investors on the edge. The Riksbank is scheduled to announce its policy decision later this week, while GDP figures are due in several countries.
EUR
Fitch put six Eurozone countries ratings watch negative and also lowered the outlook on France to negative. The countries affected were Belgium, Italy, Spain, Slovenia, Cyprus and Ireland. This comes on the back of S&P announcing a review of 15 of the 17 Eurozone countries two weeks ago. The market is continuing to watch for any S&P decision for France, as S&P had previously noted it would make a decision as soon as the European Union summit concluded.
Moody's lowered Belgium's rating from Aa1 to Aa3, with a negative outlook. The agency warned that risks from deterioration in funding conditions would hurt Belgium and the government's efforts to push through fiscal consolidation.
In a Financial Times interview, ECB President Draghi again indicated his opposition to ramping up ECB bond purchases. He also broached the subject of Eurozone exit - he said that leaving would not help the exiting country given that inflationary pressures would be unleashed, and given austerity measures would still need to be introduced. He also rejected the suggestion that it would be good for the remaining Eurozone countries if a weak country were to leave. His rationale is that a Eurozone exit by a single country would amount to a "substantial breach of the existing treaty", and once that line is crossed "you never know how it ends really". ECB President Draghi is due to speak again at 15:30 GMT today.
ECB Executive Board member Bini-Smaghi said the ECB had never been 'dogmatic' about interest rates. He also said that the size of bond purchases needs to be determined from 'time to time', but acknowledged the need for financial stability, as without it there wouldn't be any price stability.
ECB Executive Board Member Stark explained his reasons for resigning this year in an interview. He expressed dissatisfaction with state of the monetary union and its direction. He stressed "It's a fundamental orientation of this monetary union, to forbid the monetary financing of government debt through the ECB. He also said that the ECB's bond buying program is limited in its scope, and that the bank cannot indefinitely increase its balance sheet.
GBP
UK Deputy Prime Minister Clegg described recent comments from France on the UK's economy as 'unacceptable' and called for the rhetoric to be calmed. However, he warned that Britain could be 'isolated' from Europe due to recent decisions at the European Union Summit.
Ahead this week, the Bank of England will likely remain dovish in its December MPC meeting minutes due on Wednesday. We expect the vote on both policy decisions to remain unanimous.
Markets are also likely to focus on November public finance data. The government revised up its forecast for the fiscal deficit from ?122bn to ?127bn for the current fiscal year in the Autumn Statement. We agree with its new forecasts.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
19 December 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
North Korean media announced that leader Kim Jong-il died over the weekend, sending USDJPY briefly higher. Officials from Japan and the Republic of Korea stressed that both countries remain on their guard, although the yen recovered when fears of an immediate military reaction receded. Although Kim Jong-il had already picked his third son Kim Jong-un as the next head of state, a smooth leadership transition is by no means guaranteed, and we remain cautious on the yen in the immediate future given the headline risk.
Late on Friday, Fitch put the ratings of several Eurozone countries on review and lowered the outlook on France to 'negative' from 'stable'. We note that S&P already has France's rating on review and, Fitch's move does not break new ground. However, Fitch also warned that a comprehensive solution for the Eurozone debt crisis is 'beyond reach' - a comment which may reinforce market concerns that an elegant solution to the crisis may not be politically possible. Moody's downgraded Belgium by two notches to Aa3 after keeping it on review for two months. Although the market is better prepared for further ratings action, the risk of more bad news on this front before the year-end is likely to keep investors on the edge. The Riksbank is scheduled to announce its policy decision later this week, while GDP figures are due in several countries.
EUR
Fitch put six Eurozone countries ratings watch negative and also lowered the outlook on France to negative. The countries affected were Belgium, Italy, Spain, Slovenia, Cyprus and Ireland. This comes on the back of S&P announcing a review of 15 of the 17 Eurozone countries two weeks ago. The market is continuing to watch for any S&P decision for France, as S&P had previously noted it would make a decision as soon as the European Union summit concluded.
Moody's lowered Belgium's rating from Aa1 to Aa3, with a negative outlook. The agency warned that risks from deterioration in funding conditions would hurt Belgium and the government's efforts to push through fiscal consolidation.
In a Financial Times interview, ECB President Draghi again indicated his opposition to ramping up ECB bond purchases. He also broached the subject of Eurozone exit - he said that leaving would not help the exiting country given that inflationary pressures would be unleashed, and given austerity measures would still need to be introduced. He also rejected the suggestion that it would be good for the remaining Eurozone countries if a weak country were to leave. His rationale is that a Eurozone exit by a single country would amount to a "substantial breach of the existing treaty", and once that line is crossed "you never know how it ends really". ECB President Draghi is due to speak again at 15:30 GMT today.
ECB Executive Board member Bini-Smaghi said the ECB had never been 'dogmatic' about interest rates. He also said that the size of bond purchases needs to be determined from 'time to time', but acknowledged the need for financial stability, as without it there wouldn't be any price stability.
ECB Executive Board Member Stark explained his reasons for resigning this year in an interview. He expressed dissatisfaction with state of the monetary union and its direction. He stressed "It's a fundamental orientation of this monetary union, to forbid the monetary financing of government debt through the ECB. He also said that the ECB's bond buying program is limited in its scope, and that the bank cannot indefinitely increase its balance sheet.
GBP
UK Deputy Prime Minister Clegg described recent comments from France on the UK's economy as 'unacceptable' and called for the rhetoric to be calmed. However, he warned that Britain could be 'isolated' from Europe due to recent decisions at the European Union Summit.
Ahead this week, the Bank of England will likely remain dovish in its December MPC meeting minutes due on Wednesday. We expect the vote on both policy decisions to remain unanimous.
Markets are also likely to focus on November public finance data. The government revised up its forecast for the fiscal deficit from ?122bn to ?127bn for the current fiscal year in the Autumn Statement. We agree with its new forecasts.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Friday, December 16, 2011
16th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
16 December 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.2946; a break below would open key support at 1.2867, Jan. 10 low. Resistance comes in at 1.3176.
USDJPY NEUTRAL Key directional triggers are at 78.29 and 77.49.
GBPUSD BEARISH Break below 1.5409 would expose key low at 1.5272 from Oct. 6. Initial resistance is at 1.5589.
USDCHF BULLISH As long as support at 0.9331 holds, watch out for a break above 0.9548 ahead of 0.9602. Key support lies at 0.9331.
AUDUSD BEARISH Decline through 0.9861 would expose 0.9833. Resistance is at 1.0045.
USDCAD BULLISH Near-term resistance is at 1.0356; a move above this would open 1.0424. Support is at 1.0282.
EURCHF BEARISH Break below 1.2226 has opened 1.2123 ahead of 1.2012. Resistance is at 1.2398.
EURGBP BEARISH Key support lies at 0.8356; a break below this would expose 0.8332. Resistance is at 0.8426.
EURJPY BEARISH Tough support is at 100.76, a break below this would open the psychological level of 100.00. Resistance is at 102.99.
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 December 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Support lies at 1.2946; a break below would open key support at 1.2867, Jan. 10 low. Resistance comes in at 1.3176.
USDJPY NEUTRAL Key directional triggers are at 78.29 and 77.49.
GBPUSD BEARISH Break below 1.5409 would expose key low at 1.5272 from Oct. 6. Initial resistance is at 1.5589.
USDCHF BULLISH As long as support at 0.9331 holds, watch out for a break above 0.9548 ahead of 0.9602. Key support lies at 0.9331.
AUDUSD BEARISH Decline through 0.9861 would expose 0.9833. Resistance is at 1.0045.
USDCAD BULLISH Near-term resistance is at 1.0356; a move above this would open 1.0424. Support is at 1.0282.
EURCHF BEARISH Break below 1.2226 has opened 1.2123 ahead of 1.2012. Resistance is at 1.2398.
EURGBP BEARISH Key support lies at 0.8356; a break below this would expose 0.8332. Resistance is at 0.8426.
EURJPY BEARISH Tough support is at 100.76, a break below this would open the psychological level of 100.00. Resistance is at 102.99.
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 December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
16 December 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The EUR has traded back above 1.30 amid tight ranges as activity winds down towards the holiday season. Nonetheless there still wasn't much reason to be cheerful - IMF Chairman Lagarde said that the global economic outlook is gloomy, and no region and country is immune. She said that all countries must take action to improve growth. Earlier, EURCHF fell 1 big-figure after the SNB offered no change in policy at today's meeting. The statement was largely a repeat of the September one and they do not appear to see the inflation outlook as having deteriorated enough to justify action at this point. The bottom of the outlook is now seen at -0.8% in Q1 compared to -0.5% in Q2.
For EURCHF, the situation is pretty much unchanged from before the statement: the threat of moving the floor higher at some point remains very much alive. Elsewhere risk appetite stabilised, the euro remains around the 1.30 level. Reuters cited EU diplomats as saying another EU summit is expected to be held Feb. 7-8 in Brussels. This could be the growth summit which has been mentioned in recent days, although further details were lacking. The US remains somewhat of a bright spot though, as yesterday's labour market figures showed jobless claims falling sharply to the lowest level in more than three years, to 366k. The current account deficit also shrank to below 3% of GDP, showing that US rebalancing is continuing. However, this implies weaker domestic consumption and with UK retail sales numbers also disappointing to the downside yesterday, emerging markets will struggle to find alternative growth sources and this will remain a drag on sentiment heading into the next year. EURUSD traded in a range of 1.3013-1.3044, USDJPY 77.80-77.91. Ahead today CPI is due in the US. Our economists note that the 0.1% decline in the overall CPI that we forecast for November (cons: +0.1%) reflects another fall in energy prices.
EUR
Reuters cited EU diplomats as saying another EU summit is expected to be held Feb. 7-8 in Brussels. This could be the growth summit which has been mentioned in recent days, although further details were lacking.
Yesterday's Spanish auction passed successfully. The Tesoro allotted around 6bn euros in total, well above the original target level. Our fixed income strategists note that this puts Spain's funding back in line with the 2011 target of EUR94 bn. This was Spain's last bond auction in 2011
Eurozone manufacturing PMI for December came in at 46.9, better than expectations for 46.0, and after 46.4 in November. The services sector PMI came in at 48.3, better than expectations for 47.0 and after 47.5 in November. The composite measure was 47.9, ahead of expectations for 46.5, and after 47.0 in November.
Late during the US session, Fitch downgraded five big European commercial banks by one notch each, pointing to 'stronger headwinds facing the banking industry as a whole'.
German Chancellor Angela Merkel spoke to the bundestag. She said that Europe has embarked on an irreversible process to fiscal union. She added that the UK is still an important partner in the EU despite refusing to back fiscal integration. She also said there are no quick, easy solutions to the crisis, which will last years.
IMF Chief Lagarde said that all countries must work together to resolve Europe's debt crisis. She said that it was important for countries to face the issues, and 'not being in denial'. She also called for patience to allow individual countries to allow the democratic process to run its course.
GBP
UK November retail sales fell to -0.4% m/m and +0.7% y/y, from October's revised +1.0% and +1.1% (preliminary +0.6% and +0.9%) and against forecasts for -0.3% and +0.4%. Clothing and footwear sales improved by 1.1% m/m but were still only 0.1% better on the year. Food sales were down 0.8% m/m and were down 0.6% on the year.
CHF
EURCHF fell 1 big-figure after the SNB offered no change in policy at today's meeting. The statement was largely a repeat of the September one and clearly they do not see the inflation outlook as having deteriorated enough to justify action at this point. The bottom of the outlook is now seen at -0.8% in Q1 compared to -0.5% in Q2. For EURCHF, the situation is pretty much unchanged from before the statement: the threat of moving the floor higher at some point remains very much alive
SNB Chairman Hildebrand said the central bank doesn't see any "sustained" drop in prices, but rather "temporarily negative" inflation rates. These comments explain why they did not take action. He blames deflation in October-November on import prices, but reiterates that the SNB stands ready to act if necessary "at any time".
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 December 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The EUR has traded back above 1.30 amid tight ranges as activity winds down towards the holiday season. Nonetheless there still wasn't much reason to be cheerful - IMF Chairman Lagarde said that the global economic outlook is gloomy, and no region and country is immune. She said that all countries must take action to improve growth. Earlier, EURCHF fell 1 big-figure after the SNB offered no change in policy at today's meeting. The statement was largely a repeat of the September one and they do not appear to see the inflation outlook as having deteriorated enough to justify action at this point. The bottom of the outlook is now seen at -0.8% in Q1 compared to -0.5% in Q2.
For EURCHF, the situation is pretty much unchanged from before the statement: the threat of moving the floor higher at some point remains very much alive. Elsewhere risk appetite stabilised, the euro remains around the 1.30 level. Reuters cited EU diplomats as saying another EU summit is expected to be held Feb. 7-8 in Brussels. This could be the growth summit which has been mentioned in recent days, although further details were lacking. The US remains somewhat of a bright spot though, as yesterday's labour market figures showed jobless claims falling sharply to the lowest level in more than three years, to 366k. The current account deficit also shrank to below 3% of GDP, showing that US rebalancing is continuing. However, this implies weaker domestic consumption and with UK retail sales numbers also disappointing to the downside yesterday, emerging markets will struggle to find alternative growth sources and this will remain a drag on sentiment heading into the next year. EURUSD traded in a range of 1.3013-1.3044, USDJPY 77.80-77.91. Ahead today CPI is due in the US. Our economists note that the 0.1% decline in the overall CPI that we forecast for November (cons: +0.1%) reflects another fall in energy prices.
EUR
Reuters cited EU diplomats as saying another EU summit is expected to be held Feb. 7-8 in Brussels. This could be the growth summit which has been mentioned in recent days, although further details were lacking.
Yesterday's Spanish auction passed successfully. The Tesoro allotted around 6bn euros in total, well above the original target level. Our fixed income strategists note that this puts Spain's funding back in line with the 2011 target of EUR94 bn. This was Spain's last bond auction in 2011
Eurozone manufacturing PMI for December came in at 46.9, better than expectations for 46.0, and after 46.4 in November. The services sector PMI came in at 48.3, better than expectations for 47.0 and after 47.5 in November. The composite measure was 47.9, ahead of expectations for 46.5, and after 47.0 in November.
Late during the US session, Fitch downgraded five big European commercial banks by one notch each, pointing to 'stronger headwinds facing the banking industry as a whole'.
German Chancellor Angela Merkel spoke to the bundestag. She said that Europe has embarked on an irreversible process to fiscal union. She added that the UK is still an important partner in the EU despite refusing to back fiscal integration. She also said there are no quick, easy solutions to the crisis, which will last years.
IMF Chief Lagarde said that all countries must work together to resolve Europe's debt crisis. She said that it was important for countries to face the issues, and 'not being in denial'. She also called for patience to allow individual countries to allow the democratic process to run its course.
GBP
UK November retail sales fell to -0.4% m/m and +0.7% y/y, from October's revised +1.0% and +1.1% (preliminary +0.6% and +0.9%) and against forecasts for -0.3% and +0.4%. Clothing and footwear sales improved by 1.1% m/m but were still only 0.1% better on the year. Food sales were down 0.8% m/m and were down 0.6% on the year.
CHF
EURCHF fell 1 big-figure after the SNB offered no change in policy at today's meeting. The statement was largely a repeat of the September one and clearly they do not see the inflation outlook as having deteriorated enough to justify action at this point. The bottom of the outlook is now seen at -0.8% in Q1 compared to -0.5% in Q2. For EURCHF, the situation is pretty much unchanged from before the statement: the threat of moving the floor higher at some point remains very much alive
SNB Chairman Hildebrand said the central bank doesn't see any "sustained" drop in prices, but rather "temporarily negative" inflation rates. These comments explain why they did not take action. He blames deflation in October-November on import prices, but reiterates that the SNB stands ready to act if necessary "at any time".
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, December 14, 2011
14th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
14 December 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Break below key supports at 1.3146 and 1.3047 has reinforced the bear trend. Next supports are at 1.2962 and 1.2867. Resistance is at 1.3237.
USDJPY NEUTRAL Key resistance is at 78.11 a break above this would open 78.29; key support lies at 77.49.
GBPUSD BEARISH Yesterday's sharp move broke through 1.5459 to open 1.5423, key low from Nov. 25. Next support is at 1.5272. Initial resistance is at 1.5630.
USDCHF BULLISH Rise through 0.9401 signals extension of gains towards 0.9506, Feb. 22 high. Next resistance is at 0.9602, Feb 17 high. Support lies at 0.9165.
AUDUSD BEARISH Key supports to watch are at 0.9938 and 0.9833. Resistance is at 1.0163.
USDCAD BULLISH Focus is on resistance at 1.0364, a break above which would open 1.0413, the 76.4% retracement of the decline from 1.0524 to 1.0052. Support is at 1.0168.
EURCHF NEUTRAL A clear break above 1.2474 would favour extension of gains towards 1.2646. Key support lies at 1.2226.
EURGBP BEARISH Trend is bearish; next support is at 0.8384 ahead of 0.8356. Resistance is at 0.8555.
EURJPY BEARISH Key support lies at 100.76, the low from Oct. 4. Resistance is at 102.99.
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 December 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Break below key supports at 1.3146 and 1.3047 has reinforced the bear trend. Next supports are at 1.2962 and 1.2867. Resistance is at 1.3237.
USDJPY NEUTRAL Key resistance is at 78.11 a break above this would open 78.29; key support lies at 77.49.
GBPUSD BEARISH Yesterday's sharp move broke through 1.5459 to open 1.5423, key low from Nov. 25. Next support is at 1.5272. Initial resistance is at 1.5630.
USDCHF BULLISH Rise through 0.9401 signals extension of gains towards 0.9506, Feb. 22 high. Next resistance is at 0.9602, Feb 17 high. Support lies at 0.9165.
AUDUSD BEARISH Key supports to watch are at 0.9938 and 0.9833. Resistance is at 1.0163.
USDCAD BULLISH Focus is on resistance at 1.0364, a break above which would open 1.0413, the 76.4% retracement of the decline from 1.0524 to 1.0052. Support is at 1.0168.
EURCHF NEUTRAL A clear break above 1.2474 would favour extension of gains towards 1.2646. Key support lies at 1.2226.
EURGBP BEARISH Trend is bearish; next support is at 0.8384 ahead of 0.8356. Resistance is at 0.8555.
EURJPY BEARISH Key support lies at 100.76, the low from Oct. 4. Resistance is at 102.99.
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 December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
14 December 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro's slide south continued overnight amid fresh doubts over the summit's results and implementation strategy. While a headline that the German Chancellor was ruling out raising the upper limits of ESM funding (according to coalition sources) led to some selling, the move was largely option barrier and stop-loss related initially. The news itself is not new but underscored just one of the many aspects of the deal which remains of concern to market. The second problem is more immediate, as the governments which have signed up to the plan are now expressing doubts over the ratification process and whether parliamentary backing could be secured. This threatens a drawn-out process for fiscal consolidation which markets may not have much appetite for.
The rebound in periphery bond yields yesterday is a clear sign of such risks, especially has more downgrades loom across Europe. A second wave of selling came with a disappointing reaction to the FOMC's statement, which contained very little new information and certainly no sign of new easing. Despite speculation of significant changes in communications strategy, the statement merely repeated that "exceptionally low" rates will last through to at least mid-2013. Our US economists note that there was a small change to the wording on inflation; they now say "Inflation has moderated since earlier in the year, and longer-term inflation expectations have remained stable" compared with the previous statement that said inflation "appears to have moderated". Ahead today, Norges Bank will meet to set it's policy rate and the market consensus is for a 25bp cut. While the decision will be close, the ECB's move last week, along with a deterioration in Norwegian data may be enough to sway the decision. External forces have also deteriorated significantly since the last meeting, which will be one of the main points of discussion by Governor Olsen. EURUSD traded 1.3016-1.3052 and USDJPY 77.94-78.04.
EUR
The euro came under heavy pressure once again in the European session. While a headline that the German Chancellor was ruling out raising the upper limits of ESM funding (according to coalition sources) led to some selling, the move was largely option barrier and stop-loss related. The news itself is not new and Merkel has previously voiced her opposition on this subject. This move spilled over into other markets however and sentiment quickly moved back risk averse territory.
The issue of Greek PSI appears to be in trouble once again. Dow Jones reported that the Greek government and private creditors continue to disagree on the proposed 50% bond haircut and it is tough to see how a 90% participation rate will be achieved. The exclusion of PSI in any future bailout was in itself an implicit admission that the PSI idea does not work well, in our view.
EU and IMF officials will meet with Greek Prime Minister Papademos on December 16 as part of the next review. The outcome of this review will be significant, with several large redemptions due in Greece in Q1.
The Bundesbank gave some clarity on the IMF potential agreement. In a letter to the German finance ministry, it said that it is only prepared to provide a bilateral credit line to the IMF if the IMF directly asks for it, and this could only be used by the IMF's General Resources Account. The maximum size would bt EUR 45 bn which would be offered provided that other states make their contributions.
The EFSF sold 1.97 bn euros of new 3-month bills with a bid to cover ratio of 3.2 at an average yield of 0.2222%. Overall it can be viewed as reasonably successful. Similarly, a Spanish auction was well received, where a total of just under 5 bn euros of 12 and 18-month bills were taken by the market. Sources noted that Japan bought about EUR260m of the debt sale, around 13% of total. This was slightly higher than their reported take-up of 10% for the last EFSF bond auction.
German Chancellor Merkel will give a statement to the German parliament tomorrow on the fiscal compact.
Eurozone industrial production is due today, markets are looking for a 2.0% sequential decline in October.
GBP
November CPI came in at +4.8% y/y in November from +5.0% y/y in October, inline with forecasts. The RPI reading was 5.2%, from October's 5.4%. The ONS reported that the biggest downward pressures on inflation came from food (+4.0% y/y, from +5.0% y/y in October); transport (+7.2% from 7.7%); clothing (+2.8% from 3.6%); furniture (5.0% from 5.7%). The biggest upward influences were from alcohol & tobacco, +9.7% from +9.1%.
Our analysts note that this inflation data is unlikely to have any material impact on monetary policy. The MPC expects inflation to fall sharply next year once the effects of energy cost increases and the VAT effect drop out of the comparison.
BoE MPC member Spencer Dale noted that there is scope to increase the bond buying program if nececssary. He said inflation will fall sharply in 2012 and will be below 3% in March next year. He said the Eurozone's crisis is casting a shadow over UK prospects in 2012. Near-term growth has weakened very materially, and funding constraints could lead to tighter credit conditions.
CHF
Swiss PPI is due today, in the last key data print before the December policy assessment. We and the market are looking for a 0.2%m/m decline, in a further sign of escalation in deflation risks.
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 December 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro's slide south continued overnight amid fresh doubts over the summit's results and implementation strategy. While a headline that the German Chancellor was ruling out raising the upper limits of ESM funding (according to coalition sources) led to some selling, the move was largely option barrier and stop-loss related initially. The news itself is not new but underscored just one of the many aspects of the deal which remains of concern to market. The second problem is more immediate, as the governments which have signed up to the plan are now expressing doubts over the ratification process and whether parliamentary backing could be secured. This threatens a drawn-out process for fiscal consolidation which markets may not have much appetite for.
The rebound in periphery bond yields yesterday is a clear sign of such risks, especially has more downgrades loom across Europe. A second wave of selling came with a disappointing reaction to the FOMC's statement, which contained very little new information and certainly no sign of new easing. Despite speculation of significant changes in communications strategy, the statement merely repeated that "exceptionally low" rates will last through to at least mid-2013. Our US economists note that there was a small change to the wording on inflation; they now say "Inflation has moderated since earlier in the year, and longer-term inflation expectations have remained stable" compared with the previous statement that said inflation "appears to have moderated". Ahead today, Norges Bank will meet to set it's policy rate and the market consensus is for a 25bp cut. While the decision will be close, the ECB's move last week, along with a deterioration in Norwegian data may be enough to sway the decision. External forces have also deteriorated significantly since the last meeting, which will be one of the main points of discussion by Governor Olsen. EURUSD traded 1.3016-1.3052 and USDJPY 77.94-78.04.
EUR
The euro came under heavy pressure once again in the European session. While a headline that the German Chancellor was ruling out raising the upper limits of ESM funding (according to coalition sources) led to some selling, the move was largely option barrier and stop-loss related. The news itself is not new and Merkel has previously voiced her opposition on this subject. This move spilled over into other markets however and sentiment quickly moved back risk averse territory.
The issue of Greek PSI appears to be in trouble once again. Dow Jones reported that the Greek government and private creditors continue to disagree on the proposed 50% bond haircut and it is tough to see how a 90% participation rate will be achieved. The exclusion of PSI in any future bailout was in itself an implicit admission that the PSI idea does not work well, in our view.
EU and IMF officials will meet with Greek Prime Minister Papademos on December 16 as part of the next review. The outcome of this review will be significant, with several large redemptions due in Greece in Q1.
The Bundesbank gave some clarity on the IMF potential agreement. In a letter to the German finance ministry, it said that it is only prepared to provide a bilateral credit line to the IMF if the IMF directly asks for it, and this could only be used by the IMF's General Resources Account. The maximum size would bt EUR 45 bn which would be offered provided that other states make their contributions.
The EFSF sold 1.97 bn euros of new 3-month bills with a bid to cover ratio of 3.2 at an average yield of 0.2222%. Overall it can be viewed as reasonably successful. Similarly, a Spanish auction was well received, where a total of just under 5 bn euros of 12 and 18-month bills were taken by the market. Sources noted that Japan bought about EUR260m of the debt sale, around 13% of total. This was slightly higher than their reported take-up of 10% for the last EFSF bond auction.
German Chancellor Merkel will give a statement to the German parliament tomorrow on the fiscal compact.
Eurozone industrial production is due today, markets are looking for a 2.0% sequential decline in October.
GBP
November CPI came in at +4.8% y/y in November from +5.0% y/y in October, inline with forecasts. The RPI reading was 5.2%, from October's 5.4%. The ONS reported that the biggest downward pressures on inflation came from food (+4.0% y/y, from +5.0% y/y in October); transport (+7.2% from 7.7%); clothing (+2.8% from 3.6%); furniture (5.0% from 5.7%). The biggest upward influences were from alcohol & tobacco, +9.7% from +9.1%.
Our analysts note that this inflation data is unlikely to have any material impact on monetary policy. The MPC expects inflation to fall sharply next year once the effects of energy cost increases and the VAT effect drop out of the comparison.
BoE MPC member Spencer Dale noted that there is scope to increase the bond buying program if nececssary. He said inflation will fall sharply in 2012 and will be below 3% in March next year. He said the Eurozone's crisis is casting a shadow over UK prospects in 2012. Near-term growth has weakened very materially, and funding constraints could lead to tighter credit conditions.
CHF
Swiss PPI is due today, in the last key data print before the December policy assessment. We and the market are looking for a 0.2%m/m decline, in a further sign of escalation in deflation risks.
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, December 13, 2011
13th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
13 December 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURGBP clears 0.8486 support
EURUSD BEARISH The pair targets 1.3212; a break here would open 1.3146 next. Near-term resistance is at 1.3386.
USDJPY NEUTRAL The near-term bull and bear triggers are at 78.29 and 76.58 respectively.
GBPUSD BEARISH Support lies at 1.5526 ahead of 1.5459. Key resistance is at 1.5780.
USDCHF BULLISH Recovery through 0.9331 signals scope for further gains towards 0.9401. Support lies at 0.9176.
AUDUSD NEUTRAL Resistance is at 1.0225 ahead of 1.0380. Support lies at 1.0048.
USDCAD NEUTRAL Resistance is at 1.0288, while support lies at 1.0168.
EURCHF BULLISH The cross is consolidating below the key resistance at 1.2474 a break above which would open 1.2646. Key support lies at 1.2226.
EURGBP BEARISH The break of 0.8486 has exposed 0.8456 the 61.8% retrace of the rally from 0.8068 to 0.9084. Resistance is at 0.8554.
EURJPY BEARISH A push below 103.01 would open the key support at 102.49. Resistance is at 104.53.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
13 December 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURGBP clears 0.8486 support
EURUSD BEARISH The pair targets 1.3212; a break here would open 1.3146 next. Near-term resistance is at 1.3386.
USDJPY NEUTRAL The near-term bull and bear triggers are at 78.29 and 76.58 respectively.
GBPUSD BEARISH Support lies at 1.5526 ahead of 1.5459. Key resistance is at 1.5780.
USDCHF BULLISH Recovery through 0.9331 signals scope for further gains towards 0.9401. Support lies at 0.9176.
AUDUSD NEUTRAL Resistance is at 1.0225 ahead of 1.0380. Support lies at 1.0048.
USDCAD NEUTRAL Resistance is at 1.0288, while support lies at 1.0168.
EURCHF BULLISH The cross is consolidating below the key resistance at 1.2474 a break above which would open 1.2646. Key support lies at 1.2226.
EURGBP BEARISH The break of 0.8486 has exposed 0.8456 the 61.8% retrace of the rally from 0.8068 to 0.9084. Resistance is at 0.8554.
EURJPY BEARISH A push below 103.01 would open the key support at 102.49. Resistance is at 104.53.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
13th of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
13 December 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
EURUSD continued its post-summit slide as the market has reverted to the conclusion that not enough has been done. Although some stability measures for financial markets have been welcome, the summit agreements themselves raise plenty of new questions, to which the market is not convinced that the answers would be favourable, such as the ratification process and the relevant democratic mandates by individual EU governments. In addition, investors are also querying whether enough has been done to avoid some major downgrades in the coming weeks and months from all the ratings agencies.
French President Sarkozy appears to be resigned to the fact that his country will lose the coveted AAA rating, which would immediately translate into new questions for the costs of the Eurozone's bailout mechanisms as the underlying guarantees come under strain. Yesterday's gains in Eurozone periphery yields is another warning that the battle to tackle sovereign debt is far from over, and the countries at risk must not count on any immediate reduction in borrowing costs to alleviate the strains of austerity. Ahead today, attention will turn to the Fed. We expect the last meeting of the year to be more about communication policy rather than underlying economics, which in general have remained favourable. We may have to wait until the minutes are released later in the month to get the full details however. EURUSD traded 1.3162-1.3203 and USDJPY 77.84-77.96.
EUR
Fitch said it is too early to judge effectiveness of fiscal compact due to uncertainty in implementation. It added that the ECB is the only truly credible firewall against liquidity and solvency crises in Europe. Earlier, risk assets came under pressure after Moody's reported that the EU summit on Thursday night did not produce the decisive initiatives that had been hoped for. The absence of clear measures to stabilize the credit markets meant that the eurozone remains vulnerable to further shocks, and they would therefore revisit the ratings of all EU sovereigns in Q1 2012.
French President Sarkozy said overnight that the loss of AAA status 'could be overcome' and he would respond 'with a cool head' if it happened. He said it would be 'one more difficulty, but not insurmountable'. S&P warned recently that France could face a 2-notch downgrade.
The Wall Street Journal reported that Fed Chairman Bernanke recently urged the ECB's President Mario Draghi to respond aggressively to the Eurozone crisis.
German Chancellor Merkel will give a statement to the German parliament tomorrow on the fiscal compact. Today EU's Van Rompuy and Barroso will be hosting debate on the EU summit in the EU parliament.
The ECB bought just EUR635 mn of bonds under the SMP last week, well below expectations and a clear sign that the ECB is waiting for European politicians to fully address the underlying problems before any structural change in their policy.
Greek Finance Minister Venizelos says that he hopes to have completed the PSI talks by the end of January.
The European bond markets came under further pressure on Monday, although volumes were low. An Italian 12m auction was relatively well received however, with the yield coming below the market at 5.95%. Germany and Spain will also tap the markets this week in the final major bond supply week of the year.
The ZEW survey is out in Germany today. The market is looking for another decline to 31.0.
GBP
Elsewhere UK Prime Minister David Cameron defended his decision to veto treaty changes at last weeks EU Summit in front of parliament but nonetheless faced strong criticism from the opposition. Domestically, there is concern over the stability of the ruling coalition, as Deputy Prime Minister Nick Clegg called the outcome of the summit 'bad for Britain' which could leave the country marginalized. Cameron reiterated previous comments that IMF funds 'can't be used to support the euro'. We view these as important as they are far more in line with the US/Canadian line on the purpose of the IMF than the recent EU talk. Some may see this as signs of an even deeper rift between UK and Eurozone than already is obvious.
Ahead today CPI is due in the UK and the market is looking for a 0.2%m/m gain in prices, though the annualised figure could fall to 4.8%. RPI is expected to come in at 5.1%, down from 5.4%. The numbers are less relevant given the BoE is already engaging in fresh QE.
AUD
The November NAB survey of business conditions increased to +1.0, from October's -0.4 print. Business confidence was flat at 2.0%, but stronger than the August low of -8.8. Our economists note that overall, recent trends in business conditions suggest the economy's momentum is tracking sideways at a modest pace, though on the positive side sentiment has held well despite the Eurozone's issues.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
13 December 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
EURUSD continued its post-summit slide as the market has reverted to the conclusion that not enough has been done. Although some stability measures for financial markets have been welcome, the summit agreements themselves raise plenty of new questions, to which the market is not convinced that the answers would be favourable, such as the ratification process and the relevant democratic mandates by individual EU governments. In addition, investors are also querying whether enough has been done to avoid some major downgrades in the coming weeks and months from all the ratings agencies.
French President Sarkozy appears to be resigned to the fact that his country will lose the coveted AAA rating, which would immediately translate into new questions for the costs of the Eurozone's bailout mechanisms as the underlying guarantees come under strain. Yesterday's gains in Eurozone periphery yields is another warning that the battle to tackle sovereign debt is far from over, and the countries at risk must not count on any immediate reduction in borrowing costs to alleviate the strains of austerity. Ahead today, attention will turn to the Fed. We expect the last meeting of the year to be more about communication policy rather than underlying economics, which in general have remained favourable. We may have to wait until the minutes are released later in the month to get the full details however. EURUSD traded 1.3162-1.3203 and USDJPY 77.84-77.96.
EUR
Fitch said it is too early to judge effectiveness of fiscal compact due to uncertainty in implementation. It added that the ECB is the only truly credible firewall against liquidity and solvency crises in Europe. Earlier, risk assets came under pressure after Moody's reported that the EU summit on Thursday night did not produce the decisive initiatives that had been hoped for. The absence of clear measures to stabilize the credit markets meant that the eurozone remains vulnerable to further shocks, and they would therefore revisit the ratings of all EU sovereigns in Q1 2012.
French President Sarkozy said overnight that the loss of AAA status 'could be overcome' and he would respond 'with a cool head' if it happened. He said it would be 'one more difficulty, but not insurmountable'. S&P warned recently that France could face a 2-notch downgrade.
The Wall Street Journal reported that Fed Chairman Bernanke recently urged the ECB's President Mario Draghi to respond aggressively to the Eurozone crisis.
German Chancellor Merkel will give a statement to the German parliament tomorrow on the fiscal compact. Today EU's Van Rompuy and Barroso will be hosting debate on the EU summit in the EU parliament.
The ECB bought just EUR635 mn of bonds under the SMP last week, well below expectations and a clear sign that the ECB is waiting for European politicians to fully address the underlying problems before any structural change in their policy.
Greek Finance Minister Venizelos says that he hopes to have completed the PSI talks by the end of January.
The European bond markets came under further pressure on Monday, although volumes were low. An Italian 12m auction was relatively well received however, with the yield coming below the market at 5.95%. Germany and Spain will also tap the markets this week in the final major bond supply week of the year.
The ZEW survey is out in Germany today. The market is looking for another decline to 31.0.
GBP
Elsewhere UK Prime Minister David Cameron defended his decision to veto treaty changes at last weeks EU Summit in front of parliament but nonetheless faced strong criticism from the opposition. Domestically, there is concern over the stability of the ruling coalition, as Deputy Prime Minister Nick Clegg called the outcome of the summit 'bad for Britain' which could leave the country marginalized. Cameron reiterated previous comments that IMF funds 'can't be used to support the euro'. We view these as important as they are far more in line with the US/Canadian line on the purpose of the IMF than the recent EU talk. Some may see this as signs of an even deeper rift between UK and Eurozone than already is obvious.
Ahead today CPI is due in the UK and the market is looking for a 0.2%m/m gain in prices, though the annualised figure could fall to 4.8%. RPI is expected to come in at 5.1%, down from 5.4%. The numbers are less relevant given the BoE is already engaging in fresh QE.
AUD
The November NAB survey of business conditions increased to +1.0, from October's -0.4 print. Business confidence was flat at 2.0%, but stronger than the August low of -8.8. Our economists note that overall, recent trends in business conditions suggest the economy's momentum is tracking sideways at a modest pace, though on the positive side sentiment has held well despite the Eurozone's issues.
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, December 12, 2011
12th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
12 December 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support lies at 1.3259 ahead of key low at 1.3212. Resistance is at 1.3487.
USDJPY NEUTRAL Near-term directional triggers are at 78.29 and 76.58.
GBPUSD NEUTRAL Key resistance is at 1.5780 ahead of 1.5889. Support lies at 1.5561 ahead of 1.5526.
USDCHF BULLISH Momentum is positive; the pair approaches key resistance at 0.9331 a break above which would open 0.9401 next. Support lies at 0.9112.
AUDUSD BULLISH Resistance is at 1.0380 ahead of 1.0447. Support lies at 1.0048.
USDCAD BEARISH As long as resistance at 1.0344 is intact, watch for a move below 1.0041 to open 0.9975.
EURCHF BULLISH The cross is consolidating below the key resistance at 1.2474 a break above which would open 1.2646. Key support lies at 1.2226.
EURGBP BEARISH Momentum is negative; key supports to watch are at 0.8486 and 0.8456 the 61.8% retrace of the rally from 0.8068 to 0.9084. Resistance is at 0.8620.
EURJPY BEARISH Support lies at 103.01 ahead of key support at 102.49. Resistance is at 104.53.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12 December 2011 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Near-term support lies at 1.3259 ahead of key low at 1.3212. Resistance is at 1.3487.
USDJPY NEUTRAL Near-term directional triggers are at 78.29 and 76.58.
GBPUSD NEUTRAL Key resistance is at 1.5780 ahead of 1.5889. Support lies at 1.5561 ahead of 1.5526.
USDCHF BULLISH Momentum is positive; the pair approaches key resistance at 0.9331 a break above which would open 0.9401 next. Support lies at 0.9112.
AUDUSD BULLISH Resistance is at 1.0380 ahead of 1.0447. Support lies at 1.0048.
USDCAD BEARISH As long as resistance at 1.0344 is intact, watch for a move below 1.0041 to open 0.9975.
EURCHF BULLISH The cross is consolidating below the key resistance at 1.2474 a break above which would open 1.2646. Key support lies at 1.2226.
EURGBP BEARISH Momentum is negative; key supports to watch are at 0.8486 and 0.8456 the 61.8% retrace of the rally from 0.8068 to 0.9084. Resistance is at 0.8620.
EURJPY BEARISH Support lies at 103.01 ahead of key support at 102.49. Resistance is at 104.53.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12th of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
12 December 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro did not manage to sustain its Friday strength but at this stage the Eurozone's leaders would probably be content that the market is not selling off en masse and this week's bond supply can simply pass without incident. There were no major developments over the weekend, though financing for the IMF appears to be taking shape with major central banks in Europe ready to increase their commitments, though as ECB President Draghi warned last week, the legalities still need to be resolved.
The ECB itself will be keeping a close eye on the banking system to gauge the effect of its announcements at last week's policy meeting. Taking into account the ECB's 'menu' for the banks and the EU decisions, perhaps markets have less reason to fear immediate financial market disruptions but it remains clear that deep structural reforms lay ahead, and the growth outlook within the new 'austerity union' will be challenging. The ECB has taken this into account in its rates decisions but the inflation outlook suggests they do not have as much room for manoeuvre as previously anticipated. What's more, several ECB Governing Council members appeared to disagree with even the most recent cuts and a market in search of far greater stimulus from balance sheet deployment to rate cuts will need to manage their expectations. In addition, the ECB appears to be unimpressed by potential IMF calls upon their cash, though Draghi has conceded that this discussion may be out of his hands for the time being.
The week ahead will be a good opportunity to assess the market's verdict on Europe, with the last week of major bond issuance in the Eurozone before the holiday season kicks in. Spain, Italy and Germany are the only countries which have not hit their 2011 supply quotas yet and will tap the market for around EUR12bn. Overnight Chinese and Australian trade data both showed some deceleration, but as expected under current circumstances. Ahead this week, the FOMC and Norges Bank meet, though the SNB move will dominate markets and we look for the EURCHF target to be raised to 1.25.
EUR
This week we visited clients in the Middle East. There has been much speculation about accounts in the region propping up the euro over the last few months. But with a couple of exceptions, we found most Middle East managers to be cautious on the euro. Though clients have not significantly reduced their Eurozone holdings, they have rotated away from peripheral to core bond markets, suggesting the euro is still at risk to selling out of the region if AAA European countries are downgraded. That keeps us bearish on the euro. Please see http://www.ubs.com/fx for details.
Early on Friday the European Commission released their communiqué on the Summit's agreements. Firstly, unanimity was not achieved with the UK choosing to remain outside the protocol. Hungary, Sweden and the Czech Republic have expressed reservations in different ways and have stayed their decision, though it is expected they will join at some point.
Germany appears to have blocked key points which could have rallied markets, with the issue of providing the ESM with a banking license a key point of contention. This had appeared on the initial draft but was swiftly deemed as 'out of the question' by the senior Eurozone sources. Automatic sanctions will apply for countries that break the new fiscal rules, which was a key demand of Germany and ultimately welcomed by Chancellor Merkel.
In the statement itself, Eurozone leaders merely said the ESM will adhere to IMF principles and be deployed in 2012 with 15% of paid-in capital to outstanding ESM issuance, but they are still counting on the ESFS to deliver the goods for now. One area which could represent somewhat of a concession by Germany was on the PSI, which looks like will be removed from the permanent mechanism. The Greek PSI was deemed 'unique and exceptional'.
Merkel said summit leaders didn't discuss the ECB's role or policy, and that there was no discussion of ECB independence. She said that EUR200bn will be loaned to the IMF, and regretted the UK's refusal to sign up to the summit's decisions. Reports overnight suggest the Bundesbank is ready to increase its IMF line to EUR45bn. Bundesbank executive board member Dombret said the funds would not be exclusively for the Eurozone as it would contravene Bundesbank and IMF rules.
On Friday, the euro and risk assets pushed higher after sources told Reuters that China is to set up an investment vehicle comprising two funds, one focused on Europe and one on the US, with total size of $300 bn. In our view, this is a future diversification effort similar in magnitude to previous and existing funds and not a dramatic new development, nor a Eurozone rescue. China has been talking about some form of stabilisation fund for a while and we believe it refers to this rather than anything specifically related to the Eurozone.
A Bundesbank spokesman says EU summit decisions to strengthen existing treaties are a step in the right direction. The bank also later said that it is "fundamentally open" to bilateral loans to IMF and is talking to the German government over modality of loans. It said however that the loans must not be earmarked for Eurozone and it is important to observe IMF rules in use of funds.
ECB's Stark said in a paper over the weekend that more involvement from the IMF in the Eurozone would be 'an act of desperation' and did not welcome such a step. He said the Eurozone needed 'a quantum leap' and a European Finance Ministry. The summit did not explicitly called for the establishment of such institutions amid the need for treaty change but the ECB has been demanding such a step since the crisis began.
Bundesbank President Jens Weidmann welcomed the new accords, but again stressed it was up to governments to resolve the crisis, and not with the ECB. He again stressed that 'financing of sovereign debt through central banks is and remains forbidden by treaty'.
Germany, Italy and Spain will tap markets this week for around EUR12bn in the final major bond supply week of the year.
GBP
UK Prime Minister David Cameron will face MPs today after vetoing the new EU treaty last week.. He said this treaty will not be presented to the UK parliament, as financial services need to be protected. Domestically, there is concern over the stability of the ruling coalition, as Deputy Prime Minister Nick Clegg called the outcome of the summit 'bad for Britain' which could leave the country marginalised.
The will decide on policy on Thursday. We expect rates to remain at zero but the EURCHF policy floor will be raised to 1.25. This is not a consensus call given the exceptional circumstances but price we believe deflationary pressures are strong enough to justify such a step.
CHF
The will decide on policy on Thursday. We expect rates to remain at zero but the EURCHF policy floor will be raised to 1.25. This is not a consensus call given the exceptional circumstances but price we believe deflationary pressures are strong enough to justify such a step.
The key data release for the week will be PPI figures for November, due the day before the rate decision. A sharp decline in export prices would prove further justification for the SNB to shift policy.
.
AUD
The Trade Balance for October came in at AUD1.596bn vs. AUD2.25bn the previous month, as imports increased but export prices were weaker for iron ore, one of Australia's key exports to China. Chinese trade figures were also released overnight, which showed import growth slowed modestly from 28.7%y/y in October to 22.1%y/y in USD terms, stronger than expected. However, commodity imports were generally resilient from China so there isn't that much risk of a massive deceleration for Australia just yet.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
12 December 2011 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro did not manage to sustain its Friday strength but at this stage the Eurozone's leaders would probably be content that the market is not selling off en masse and this week's bond supply can simply pass without incident. There were no major developments over the weekend, though financing for the IMF appears to be taking shape with major central banks in Europe ready to increase their commitments, though as ECB President Draghi warned last week, the legalities still need to be resolved.
The ECB itself will be keeping a close eye on the banking system to gauge the effect of its announcements at last week's policy meeting. Taking into account the ECB's 'menu' for the banks and the EU decisions, perhaps markets have less reason to fear immediate financial market disruptions but it remains clear that deep structural reforms lay ahead, and the growth outlook within the new 'austerity union' will be challenging. The ECB has taken this into account in its rates decisions but the inflation outlook suggests they do not have as much room for manoeuvre as previously anticipated. What's more, several ECB Governing Council members appeared to disagree with even the most recent cuts and a market in search of far greater stimulus from balance sheet deployment to rate cuts will need to manage their expectations. In addition, the ECB appears to be unimpressed by potential IMF calls upon their cash, though Draghi has conceded that this discussion may be out of his hands for the time being.
The week ahead will be a good opportunity to assess the market's verdict on Europe, with the last week of major bond issuance in the Eurozone before the holiday season kicks in. Spain, Italy and Germany are the only countries which have not hit their 2011 supply quotas yet and will tap the market for around EUR12bn. Overnight Chinese and Australian trade data both showed some deceleration, but as expected under current circumstances. Ahead this week, the FOMC and Norges Bank meet, though the SNB move will dominate markets and we look for the EURCHF target to be raised to 1.25.
EUR
This week we visited clients in the Middle East. There has been much speculation about accounts in the region propping up the euro over the last few months. But with a couple of exceptions, we found most Middle East managers to be cautious on the euro. Though clients have not significantly reduced their Eurozone holdings, they have rotated away from peripheral to core bond markets, suggesting the euro is still at risk to selling out of the region if AAA European countries are downgraded. That keeps us bearish on the euro. Please see http://www.ubs.com/fx for details.
Early on Friday the European Commission released their communiqué on the Summit's agreements. Firstly, unanimity was not achieved with the UK choosing to remain outside the protocol. Hungary, Sweden and the Czech Republic have expressed reservations in different ways and have stayed their decision, though it is expected they will join at some point.
Germany appears to have blocked key points which could have rallied markets, with the issue of providing the ESM with a banking license a key point of contention. This had appeared on the initial draft but was swiftly deemed as 'out of the question' by the senior Eurozone sources. Automatic sanctions will apply for countries that break the new fiscal rules, which was a key demand of Germany and ultimately welcomed by Chancellor Merkel.
In the statement itself, Eurozone leaders merely said the ESM will adhere to IMF principles and be deployed in 2012 with 15% of paid-in capital to outstanding ESM issuance, but they are still counting on the ESFS to deliver the goods for now. One area which could represent somewhat of a concession by Germany was on the PSI, which looks like will be removed from the permanent mechanism. The Greek PSI was deemed 'unique and exceptional'.
Merkel said summit leaders didn't discuss the ECB's role or policy, and that there was no discussion of ECB independence. She said that EUR200bn will be loaned to the IMF, and regretted the UK's refusal to sign up to the summit's decisions. Reports overnight suggest the Bundesbank is ready to increase its IMF line to EUR45bn. Bundesbank executive board member Dombret said the funds would not be exclusively for the Eurozone as it would contravene Bundesbank and IMF rules.
On Friday, the euro and risk assets pushed higher after sources told Reuters that China is to set up an investment vehicle comprising two funds, one focused on Europe and one on the US, with total size of $300 bn. In our view, this is a future diversification effort similar in magnitude to previous and existing funds and not a dramatic new development, nor a Eurozone rescue. China has been talking about some form of stabilisation fund for a while and we believe it refers to this rather than anything specifically related to the Eurozone.
A Bundesbank spokesman says EU summit decisions to strengthen existing treaties are a step in the right direction. The bank also later said that it is "fundamentally open" to bilateral loans to IMF and is talking to the German government over modality of loans. It said however that the loans must not be earmarked for Eurozone and it is important to observe IMF rules in use of funds.
ECB's Stark said in a paper over the weekend that more involvement from the IMF in the Eurozone would be 'an act of desperation' and did not welcome such a step. He said the Eurozone needed 'a quantum leap' and a European Finance Ministry. The summit did not explicitly called for the establishment of such institutions amid the need for treaty change but the ECB has been demanding such a step since the crisis began.
Bundesbank President Jens Weidmann welcomed the new accords, but again stressed it was up to governments to resolve the crisis, and not with the ECB. He again stressed that 'financing of sovereign debt through central banks is and remains forbidden by treaty'.
Germany, Italy and Spain will tap markets this week for around EUR12bn in the final major bond supply week of the year.
GBP
UK Prime Minister David Cameron will face MPs today after vetoing the new EU treaty last week.. He said this treaty will not be presented to the UK parliament, as financial services need to be protected. Domestically, there is concern over the stability of the ruling coalition, as Deputy Prime Minister Nick Clegg called the outcome of the summit 'bad for Britain' which could leave the country marginalised.
The will decide on policy on Thursday. We expect rates to remain at zero but the EURCHF policy floor will be raised to 1.25. This is not a consensus call given the exceptional circumstances but price we believe deflationary pressures are strong enough to justify such a step.
CHF
The will decide on policy on Thursday. We expect rates to remain at zero but the EURCHF policy floor will be raised to 1.25. This is not a consensus call given the exceptional circumstances but price we believe deflationary pressures are strong enough to justify such a step.
The key data release for the week will be PPI figures for November, due the day before the rate decision. A sharp decline in export prices would prove further justification for the SNB to shift policy.
.
AUD
The Trade Balance for October came in at AUD1.596bn vs. AUD2.25bn the previous month, as imports increased but export prices were weaker for iron ore, one of Australia's key exports to China. Chinese trade figures were also released overnight, which showed import growth slowed modestly from 28.7%y/y in October to 22.1%y/y in USD terms, stronger than expected. However, commodity imports were generally resilient from China so there isn't that much risk of a massive deceleration for Australia just yet.
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, December 09, 2011
9th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
9 December 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Momentum is negative; support lies at 1.3259 ahead of key low at 1.3212. Resistance is at 1.3487.
USDJPY NEUTRAL Support lies at 77.01 ahead of the key low of 76.58. Resistance is at 77.86 ahead of 78.11.
GBPUSD NEUTRAL Key resistance is at 1.5780 ahead of 1.5883. Support lies at 1.5561 ahead of 1.5526.
USDCHF BULLISH Key resistance is at 0.9331; a break above which would open 0.9401 next. Support lies at 0.9112.
AUDUSD BULLISH Initial resistance is at 1.0205 ahead of 1.0380. Support lies at 0.9943.
USDCAD BEARISH As long as resistance at 1.0344 is intact, watch for a move below 1.0041 to open 0.9975.
EURCHF BULLISH Key resistance is at 1.2474; a break above which would open 1.2646. Support lies at 1.2322 ahead of 1.2226.
EURGBP BEARISH Key supports to watch are at 0.8486 and 0.8456 the 61.8% retrace of the rally from 0.8068 to 0.9084. Resistance is at 0.8620.
EURJPY BEARISH Momentum is negative; support lies at 103.01 ahead of key support at 102.49. Resistance is at 104.53.
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 December 2011 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Momentum is negative; support lies at 1.3259 ahead of key low at 1.3212. Resistance is at 1.3487.
USDJPY NEUTRAL Support lies at 77.01 ahead of the key low of 76.58. Resistance is at 77.86 ahead of 78.11.
GBPUSD NEUTRAL Key resistance is at 1.5780 ahead of 1.5883. Support lies at 1.5561 ahead of 1.5526.
USDCHF BULLISH Key resistance is at 0.9331; a break above which would open 0.9401 next. Support lies at 0.9112.
AUDUSD BULLISH Initial resistance is at 1.0205 ahead of 1.0380. Support lies at 0.9943.
USDCAD BEARISH As long as resistance at 1.0344 is intact, watch for a move below 1.0041 to open 0.9975.
EURCHF BULLISH Key resistance is at 1.2474; a break above which would open 1.2646. Support lies at 1.2322 ahead of 1.2226.
EURGBP BEARISH Key supports to watch are at 0.8486 and 0.8456 the 61.8% retrace of the rally from 0.8068 to 0.9084. Resistance is at 0.8620.
EURJPY BEARISH Momentum is negative; support lies at 103.01 ahead of key support at 102.49. Resistance is at 104.53.
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 December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
9 December 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Eurozone leaders are releasing a statement on their agreements after marathon talks on Thursday and so far the market looks underwhelmed. First, the treaty will be for the Eurozone alone, with the UK and Hungary choosing to stay out. In addition, Germany appears to have blocked key points which could have rallied markets, with the issue of providing the ESM with a banking license a key point of contention. This had appeared on the initial draft but was swiftly deemed as 'out of the question' by the senior Eurozone sources.
In the statement itself, Eurozone leaders merely said the ESM will adhere to IMF principles and be deployed in 2012 with 15% of paid-in capital to outstanding ESM issuance, but they are still counting on the EFSF to deliver the goods for now. One area which could represent somewhat of a concession by Germany was on the PSI, which looks like will be removed from the permanent mechanism. The Greek PSI was deemed 'unique and exceptional'. Sweden and the Czech republic said they would need to consult with their parliaments before agreeing to join the 'fiscal stability union', but a dual-track European Union now appears certain.
The headlines so far will probably negate any positives attained from the ECB decisions yesterday, which were already discouraging to a market which was clearly looking for renewed bond purchases. However, the ECB did introduce extraordinary measures to ring-fence the banking sector and ensure their funding and debt-rolling needs are met beyond the immediate future, which should at least provide a floor for the sector. For the market though relying on the ECB is clearly not enough and there will be hopes that more agreements can be met on the ESM itself today, but investors will not be holding their breath.
We expect the EUR to continue to slide but surely the immediate priority would be to prevent government yields from spiralling if the sense of disappointment escalates. The removal of the PSI from the ESM accords should help in this respect, but the ECB should take note that the SMP may yet need to be called upon in size, whether they like it or not. Ahead today we expect more headlines to filter through from Brussels. Overnight Chinese CPI came in lower than expected, which would be of some relief to Emerging Markets, and today the US U. of Michigan index will be out. EURUSD traded 1.3309-1.3372 and USDJPY 77.56-77.74.
EUR
The ECB cut its benchmark refinancing rate by 25bp to 1%, in line with market expectations. Draghi disappointed markets in noting the decision was not unanimous and a 50bp cut was not discussed. We expect another 50bp to be administered next year.
The ECB will conduct two longer-term refinancing operations (LTROs) with a maturity of 36 months and the option of early repayment after one year. Extended maturity LTROs were expected by markets but the ECB's decisions were initially perceived as very generous.
The ECB decided to discontinue for the time being, as of the maintenance period starting on 14 December 2011, the fine-tuning operations carried out on the last day of each maintenance period. Our Fixed Income Strategists note this refers to the overnight liquidity drains that are carried out by the ECB at the end of every reserve maintenance period (i.e. once per month). These were responsible for a typical spike in the EONIA fixing.
The ECB will also reduce the reserve ratio, which is currently 2%, to 1% as of the reserve maintenance period starting on 18 January 2012. As a consequence of the full allotment policy applied in the ECB's main refinancing operations and the way banks are using this option, the system of reserve requirements is not needed to the same extent as under normal circumstances to steer money market conditions.
Finally, to increase collateral availability by (i) reducing the rating threshold for certain asset-backed securities (ABS) and (ii) allowing national central banks (NCBs), as a temporary solution, to accept as collateral additional performing credit claims (i.e. bank loans) that satisfy specific eligibility criteria. These two measures will take effect as soon as the relevant legal acts have been published. These measures were a surprise to some extent, and ECB President Mario Draghi was very clear in citing bank refinancing risks up ahead as the reason for their adoption. The EBA announced EUR125bn in recapitalizations would be needed across the Eurozone.
ECB President Draghi, however, said that markets had misinterpreted his comments on 'other measures', which were perceived as more aggressive bond purchases. He outlined the 'fiscal compact', and refused to comment on the SMP itself but repeatedly called for the spirit of the Eurozone's treaties to be respected.
Despite multiple reports of financing for the IMF via the ECB, Draghi said that the issue is legally complex, so in theory did not rule this out. However, he said that the ECB financing Eurozone countries via the IMF would violate the spirit of the treaties. This suggests the ECB is opposed to such lines, though given funding may come from national central banks (technically) because the ECB is not an IMF member, the move may yet be possible.
The ECB has put its 2012 HICP forecast at 1.5%-2.5%. Clearly this is not low enough to justify deflation expectations, which may dampen ECB enthusiasm for more cuts by the central bank. The decision to ease by 25bp was not unanimous, with differences over timing, and 50bp cuts were not discussed. German CPI is out today.
Late on Thursday Reuters reported that Germany was going to reject some measures, such as a banking license for the ESM, and allowing it to run with the EFSF concurrently. This news directly contracted earlier draft statements which stated the exact opposite. It is clear further talks on Friday will be aimed at resolving these key outstanding issues.
After key talks on Thursday it was clear that the European Union as a whole would not be willing to sign up to a 'fiscal stability union'. The statement came early on Friday from Eurozone heads, which pledged to keep annual structural deficits below 0.5% of GDP and put in place for ex-ante debt issuance plans.
The ESM will be deployed in July 2012 and the size of the EFSF/ESM cap of EUR500bn will be reassessed in March 2012. However, the 15% ratio of paid-in capital to ESM issuance will be maintained, and there is still no word on whether it would receive a banking license.
There are clear risks of a dual-track EU emerging as the UK and Hungary will not sign up to the deal, while Sweden and the Czech Republic have said they will need to consult with their parliaments. Talks will continue today, leaving more time for fresh initiatives but the market's expectations have been lowered.
GBP
After summit talks David Cameron said what is on offer is not in Britain's interests. He said this treaty will not be presented to the UK parliament, as financial services need to be protected.
The Bank of England has kept policy rates and the asset purchase target unchanged.
Trade figures and PPI are due out of the UK on Friday.
JPY
3Q GDP growth was revised down to +5.6% annualized q/q from 1st estimate of +6.0%. (Consensus; +5.2% and UBSe +5.1%). This result is slightly stronger than expected. Also, 2Q GDP was also revised down to -2.0% annualized qoq from -1.3%.
Our analysts note the main drivers for 3Q revisions were capex (-0.4% qoq from +1.1%), consumption(+0.7% qoq from +1.0%), and net export (0.6pt contribution from 0.4pt). For more details, refer to the table attached.
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 December 2011 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Eurozone leaders are releasing a statement on their agreements after marathon talks on Thursday and so far the market looks underwhelmed. First, the treaty will be for the Eurozone alone, with the UK and Hungary choosing to stay out. In addition, Germany appears to have blocked key points which could have rallied markets, with the issue of providing the ESM with a banking license a key point of contention. This had appeared on the initial draft but was swiftly deemed as 'out of the question' by the senior Eurozone sources.
In the statement itself, Eurozone leaders merely said the ESM will adhere to IMF principles and be deployed in 2012 with 15% of paid-in capital to outstanding ESM issuance, but they are still counting on the EFSF to deliver the goods for now. One area which could represent somewhat of a concession by Germany was on the PSI, which looks like will be removed from the permanent mechanism. The Greek PSI was deemed 'unique and exceptional'. Sweden and the Czech republic said they would need to consult with their parliaments before agreeing to join the 'fiscal stability union', but a dual-track European Union now appears certain.
The headlines so far will probably negate any positives attained from the ECB decisions yesterday, which were already discouraging to a market which was clearly looking for renewed bond purchases. However, the ECB did introduce extraordinary measures to ring-fence the banking sector and ensure their funding and debt-rolling needs are met beyond the immediate future, which should at least provide a floor for the sector. For the market though relying on the ECB is clearly not enough and there will be hopes that more agreements can be met on the ESM itself today, but investors will not be holding their breath.
We expect the EUR to continue to slide but surely the immediate priority would be to prevent government yields from spiralling if the sense of disappointment escalates. The removal of the PSI from the ESM accords should help in this respect, but the ECB should take note that the SMP may yet need to be called upon in size, whether they like it or not. Ahead today we expect more headlines to filter through from Brussels. Overnight Chinese CPI came in lower than expected, which would be of some relief to Emerging Markets, and today the US U. of Michigan index will be out. EURUSD traded 1.3309-1.3372 and USDJPY 77.56-77.74.
EUR
The ECB cut its benchmark refinancing rate by 25bp to 1%, in line with market expectations. Draghi disappointed markets in noting the decision was not unanimous and a 50bp cut was not discussed. We expect another 50bp to be administered next year.
The ECB will conduct two longer-term refinancing operations (LTROs) with a maturity of 36 months and the option of early repayment after one year. Extended maturity LTROs were expected by markets but the ECB's decisions were initially perceived as very generous.
The ECB decided to discontinue for the time being, as of the maintenance period starting on 14 December 2011, the fine-tuning operations carried out on the last day of each maintenance period. Our Fixed Income Strategists note this refers to the overnight liquidity drains that are carried out by the ECB at the end of every reserve maintenance period (i.e. once per month). These were responsible for a typical spike in the EONIA fixing.
The ECB will also reduce the reserve ratio, which is currently 2%, to 1% as of the reserve maintenance period starting on 18 January 2012. As a consequence of the full allotment policy applied in the ECB's main refinancing operations and the way banks are using this option, the system of reserve requirements is not needed to the same extent as under normal circumstances to steer money market conditions.
Finally, to increase collateral availability by (i) reducing the rating threshold for certain asset-backed securities (ABS) and (ii) allowing national central banks (NCBs), as a temporary solution, to accept as collateral additional performing credit claims (i.e. bank loans) that satisfy specific eligibility criteria. These two measures will take effect as soon as the relevant legal acts have been published. These measures were a surprise to some extent, and ECB President Mario Draghi was very clear in citing bank refinancing risks up ahead as the reason for their adoption. The EBA announced EUR125bn in recapitalizations would be needed across the Eurozone.
ECB President Draghi, however, said that markets had misinterpreted his comments on 'other measures', which were perceived as more aggressive bond purchases. He outlined the 'fiscal compact', and refused to comment on the SMP itself but repeatedly called for the spirit of the Eurozone's treaties to be respected.
Despite multiple reports of financing for the IMF via the ECB, Draghi said that the issue is legally complex, so in theory did not rule this out. However, he said that the ECB financing Eurozone countries via the IMF would violate the spirit of the treaties. This suggests the ECB is opposed to such lines, though given funding may come from national central banks (technically) because the ECB is not an IMF member, the move may yet be possible.
The ECB has put its 2012 HICP forecast at 1.5%-2.5%. Clearly this is not low enough to justify deflation expectations, which may dampen ECB enthusiasm for more cuts by the central bank. The decision to ease by 25bp was not unanimous, with differences over timing, and 50bp cuts were not discussed. German CPI is out today.
Late on Thursday Reuters reported that Germany was going to reject some measures, such as a banking license for the ESM, and allowing it to run with the EFSF concurrently. This news directly contracted earlier draft statements which stated the exact opposite. It is clear further talks on Friday will be aimed at resolving these key outstanding issues.
After key talks on Thursday it was clear that the European Union as a whole would not be willing to sign up to a 'fiscal stability union'. The statement came early on Friday from Eurozone heads, which pledged to keep annual structural deficits below 0.5% of GDP and put in place for ex-ante debt issuance plans.
The ESM will be deployed in July 2012 and the size of the EFSF/ESM cap of EUR500bn will be reassessed in March 2012. However, the 15% ratio of paid-in capital to ESM issuance will be maintained, and there is still no word on whether it would receive a banking license.
There are clear risks of a dual-track EU emerging as the UK and Hungary will not sign up to the deal, while Sweden and the Czech Republic have said they will need to consult with their parliaments. Talks will continue today, leaving more time for fresh initiatives but the market's expectations have been lowered.
GBP
After summit talks David Cameron said what is on offer is not in Britain's interests. He said this treaty will not be presented to the UK parliament, as financial services need to be protected.
The Bank of England has kept policy rates and the asset purchase target unchanged.
Trade figures and PPI are due out of the UK on Friday.
JPY
3Q GDP growth was revised down to +5.6% annualized q/q from 1st estimate of +6.0%. (Consensus; +5.2% and UBSe +5.1%). This result is slightly stronger than expected. Also, 2Q GDP was also revised down to -2.0% annualized qoq from -1.3%.
Our analysts note the main drivers for 3Q revisions were capex (-0.4% qoq from +1.1%), consumption(+0.7% qoq from +1.0%), and net export (0.6pt contribution from 0.4pt). For more details, refer to the table attached.
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, December 07, 2011
7th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
7 December 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
USDCHF 0.9331 resistance
EURUSD BEARISH Support lies at 1.3428, a break below which would open 1.3259. Resistance is at 1.3548.
USDJPY BULLISH Resistance is at 78.11 ahead of 78.29. Key support lies at 77.30.
GBPUSD BEARISH Support lies at 1.5561, a decline through which would open 1.5526. Resistance is at 1.5726.
USDCHF BULLISH The pair approaches the key resistance of 0.9331; a break above which would open 0.9401 next. Support lies at 0.9112.
AUDUSD BULLISH Rally through 1.0328 would open 1.0447. Support lies at 1.0151.
USDCAD BEARISH Pressure is on 1.0079, a clear break below which would expose 1.0041 and then 0.9975. Resistance is at 1.0223.
EURCHF BULLISH The cross is consolidating below 1.2474; a break above which would be a key bullish event and open 1.2646. Support lies at 1.2226.
EURGBP NEUTRAL The near-term directional triggers are at 0.8620 and 0.8519.
EURJPY NEUTRAL Support lies at 103.34 ahead of 102.49 while resistance is at 105.00 and then 105.70.
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.
7 December 2011 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
USDCHF 0.9331 resistance
EURUSD BEARISH Support lies at 1.3428, a break below which would open 1.3259. Resistance is at 1.3548.
USDJPY BULLISH Resistance is at 78.11 ahead of 78.29. Key support lies at 77.30.
GBPUSD BEARISH Support lies at 1.5561, a decline through which would open 1.5526. Resistance is at 1.5726.
USDCHF BULLISH The pair approaches the key resistance of 0.9331; a break above which would open 0.9401 next. Support lies at 0.9112.
AUDUSD BULLISH Rally through 1.0328 would open 1.0447. Support lies at 1.0151.
USDCAD BEARISH Pressure is on 1.0079, a clear break below which would expose 1.0041 and then 0.9975. Resistance is at 1.0223.
EURCHF BULLISH The cross is consolidating below 1.2474; a break above which would be a key bullish event and open 1.2646. Support lies at 1.2226.
EURGBP NEUTRAL The near-term directional triggers are at 0.8620 and 0.8519.
EURJPY NEUTRAL Support lies at 103.34 ahead of 102.49 while resistance is at 105.00 and then 105.70.
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.
7th of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
7 December 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro managed to recover further overnight as markets prepare for the opening of the EU Summit tomorrow. More details on what will be proposed surfaced yesterday and the new focus appears to be on the financial firepower of the Eurozone's current rescue mechanisms, in addition to the pursuit of changes in the Eurozone's treaties and institutional framework. Combining ESM and EFSF is being planned, though given the same level of guarantees, investors may question the efficacy of these proposals. US Treasury Secretary Geithner was in Europe rallying the Eurozone authorities and pledged to support the German-French scheme for greater fiscal integration. However, he dismissed suggestions that the Fed could also play a role in crisis resolution.
Nevertheless, the slow-drip of new schemes of tweaks of current measures continue to grab the headlines. Multiple sources have reported that the European Union is now contemplating turning the ESM into a 'credit institution' which would enable it to access ECB funding. This was mulled for the EFSF in the past but Germany expressed explicit opposition and the ECB itself was relatively cool on the idea. However, given the ESM operates under different treatise and funding mechanism, there is clearly room for maneuver. According to draft reports from EU President Van Rompuy's office, fast-track approval of Treaty reform would be made, and not require all parliamentary approval in member states. He also seeks to change decision-making within the ESM which would involve less 'unanimous decision' making, which appears to be the current framework.
Ahead today, the ECB will be holding a 3m dollar auction and investors will look at the take-up closely, especially in the wake of central banks' coordinated action to calm funding markets. Activity data across Europe will also be out, and Germany will be looking to build on a strong factory orders print this week in industrial production numbers. The same figures are also out for Norway and UK. On the policy front, the RNBZ decision is due at 2000 GMT..
EUR
In the wake of the S&P downgrade of Eurozone outlooks, the EFSF has also been put on credit watch negative due to quality of the guarantees in doubt. S&P warns that the EFSF may lose 1-2 notches from its current AAA status.
French Finance Minister Baroin ruled out new austerity measures in the wake of the ratings decision. He said that France would not need to inject new capital into the banking system, and the decision by S&P did not take into account the decisions made on Monday. He said the summit this week would be 'decisive'. Press reports note that French President Sarkozy has told the ruling UMP coalition that the situation is 'serious' and that France 'needs to pull together'.
Austrian Finance Minister Fekter said she firmly believed the Austrian AAA is not in danger, and said the S&P warning is directed at Europe rather than individual countries. The EUR also rallied briefly after Fitch said French fundamentals support AAA rating despite the euro crisis, but capacity to absorb future shocks have been largely exhausted.
German Finance Minister Schauble said that collective action clauses would likely remain in ESM, which is somewhat contradictory to earlier reports suggesting an avoidance of fresh private sector haircuts. The Economics Minister said the German Economy itself is 'absolutely intact' and had 'no difficulties on financial markets'.
The Slovakian Finance Minister said his country also wanted private sector involvement in the ESM, but said it was not 'necessarily needed'. He warned that pushing for PSI could risk any agreement, in a subtle warning to Germany.
EU President Van Rompuy said there is a need to ensure 'bigger resources' for the IMF via bilateral loans to deal with the Eurozone crisis, and there will be a review of the EUR500bn ceiling of the Eurozone's permanent bailout fund. His announcement that the ESM may also be 'given features of a credit institution' is a significant step as this would open up the way to give ECB funding to the ESM.
A Japanese Ministry of Finance official said that despite the ratings warnings, Japan's stance on EFSF remains unchanged and the country will continue to invest in the vehicle as long as France and Germany continue to guarantee payment.
A group of US senators will meet with the IMF chief Christine Lagarde on Wednesday to discuss the crisis. There will be some focus on the US position as the Senate is crafting a bill to limit the US' participation and overall exposure to the Eurozone.
GBP
The Bank of England announced the establishment of an 'extended collateral term repo facility'. The central bank announced this facility will be used to mitigate risks from short-term sterling liquidity shortages and provide extra liquidity to the banking system against collateral.
The facility appears similar to the SLS established during the financial crisis, though the SLS itself targeted long-term maturities while the ECTR appears to be pre-emptive in nature and will focus on the short-end.
CHF
CPI figures came in lower than expected overnight, with sequential inflation falling by 0.2%m/m and annualized inflation dropping to -0.5%. The September forecasts from the SNB had assumed CPI to hit this level in Q2 next year, and it is clear that deflationary pressures are escalating at a faster pace than expected.
Swiss unemployment came in at 3.1%, the highest since April.
The SNB also released November reserve figures, which have fallen to CHF229.3bn at the end of November. The SNB attributed the decline from CHF245bn the previous month to FX swaps rolling off..
CAD
The Bank of Canada chose to keep rates on hold at 1% in Tuesday's decision. The note that on balance recent indicators have been stronger than October projections, and both the household and business sector have been robust. The result was certainly less dovish than expected, and the BoC already views there is 'considerable stimulus' and rates are at historical lows, so there was a lower necessity to act.
AUD
Australian GDP came in stronger than expected, coming at 1.0% q/q and 2.5% y/y. The breakdown was firm as well, as savings rates increased and business investment was robust. However, housing was soft.
Our economists note that looking ahead, with the strength in capital expenditure likely to continue, the outlook for the RBA cash rate (UBSe -25bp in February) depends on the balance of exports - and how much they slow into 1H12 on a weaker global growth - against how much the consumer and housing sectors respond to a less hawkish RBA and lower lending rates. We continue to favour AUD on the crosses heading into 2012.
NZD
The RBNZ is expected to keep rates on hold at 2.50% at their upcoming meeting. The market is not looking for any shift in the immediate future, though our economists note that the central bank could yet mention the prospects of interest rate cuts, which would pressure the NZD further.
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.
7 December 2011 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro managed to recover further overnight as markets prepare for the opening of the EU Summit tomorrow. More details on what will be proposed surfaced yesterday and the new focus appears to be on the financial firepower of the Eurozone's current rescue mechanisms, in addition to the pursuit of changes in the Eurozone's treaties and institutional framework. Combining ESM and EFSF is being planned, though given the same level of guarantees, investors may question the efficacy of these proposals. US Treasury Secretary Geithner was in Europe rallying the Eurozone authorities and pledged to support the German-French scheme for greater fiscal integration. However, he dismissed suggestions that the Fed could also play a role in crisis resolution.
Nevertheless, the slow-drip of new schemes of tweaks of current measures continue to grab the headlines. Multiple sources have reported that the European Union is now contemplating turning the ESM into a 'credit institution' which would enable it to access ECB funding. This was mulled for the EFSF in the past but Germany expressed explicit opposition and the ECB itself was relatively cool on the idea. However, given the ESM operates under different treatise and funding mechanism, there is clearly room for maneuver. According to draft reports from EU President Van Rompuy's office, fast-track approval of Treaty reform would be made, and not require all parliamentary approval in member states. He also seeks to change decision-making within the ESM which would involve less 'unanimous decision' making, which appears to be the current framework.
Ahead today, the ECB will be holding a 3m dollar auction and investors will look at the take-up closely, especially in the wake of central banks' coordinated action to calm funding markets. Activity data across Europe will also be out, and Germany will be looking to build on a strong factory orders print this week in industrial production numbers. The same figures are also out for Norway and UK. On the policy front, the RNBZ decision is due at 2000 GMT..
EUR
In the wake of the S&P downgrade of Eurozone outlooks, the EFSF has also been put on credit watch negative due to quality of the guarantees in doubt. S&P warns that the EFSF may lose 1-2 notches from its current AAA status.
French Finance Minister Baroin ruled out new austerity measures in the wake of the ratings decision. He said that France would not need to inject new capital into the banking system, and the decision by S&P did not take into account the decisions made on Monday. He said the summit this week would be 'decisive'. Press reports note that French President Sarkozy has told the ruling UMP coalition that the situation is 'serious' and that France 'needs to pull together'.
Austrian Finance Minister Fekter said she firmly believed the Austrian AAA is not in danger, and said the S&P warning is directed at Europe rather than individual countries. The EUR also rallied briefly after Fitch said French fundamentals support AAA rating despite the euro crisis, but capacity to absorb future shocks have been largely exhausted.
German Finance Minister Schauble said that collective action clauses would likely remain in ESM, which is somewhat contradictory to earlier reports suggesting an avoidance of fresh private sector haircuts. The Economics Minister said the German Economy itself is 'absolutely intact' and had 'no difficulties on financial markets'.
The Slovakian Finance Minister said his country also wanted private sector involvement in the ESM, but said it was not 'necessarily needed'. He warned that pushing for PSI could risk any agreement, in a subtle warning to Germany.
EU President Van Rompuy said there is a need to ensure 'bigger resources' for the IMF via bilateral loans to deal with the Eurozone crisis, and there will be a review of the EUR500bn ceiling of the Eurozone's permanent bailout fund. His announcement that the ESM may also be 'given features of a credit institution' is a significant step as this would open up the way to give ECB funding to the ESM.
A Japanese Ministry of Finance official said that despite the ratings warnings, Japan's stance on EFSF remains unchanged and the country will continue to invest in the vehicle as long as France and Germany continue to guarantee payment.
A group of US senators will meet with the IMF chief Christine Lagarde on Wednesday to discuss the crisis. There will be some focus on the US position as the Senate is crafting a bill to limit the US' participation and overall exposure to the Eurozone.
GBP
The Bank of England announced the establishment of an 'extended collateral term repo facility'. The central bank announced this facility will be used to mitigate risks from short-term sterling liquidity shortages and provide extra liquidity to the banking system against collateral.
The facility appears similar to the SLS established during the financial crisis, though the SLS itself targeted long-term maturities while the ECTR appears to be pre-emptive in nature and will focus on the short-end.
CHF
CPI figures came in lower than expected overnight, with sequential inflation falling by 0.2%m/m and annualized inflation dropping to -0.5%. The September forecasts from the SNB had assumed CPI to hit this level in Q2 next year, and it is clear that deflationary pressures are escalating at a faster pace than expected.
Swiss unemployment came in at 3.1%, the highest since April.
The SNB also released November reserve figures, which have fallen to CHF229.3bn at the end of November. The SNB attributed the decline from CHF245bn the previous month to FX swaps rolling off..
CAD
The Bank of Canada chose to keep rates on hold at 1% in Tuesday's decision. The note that on balance recent indicators have been stronger than October projections, and both the household and business sector have been robust. The result was certainly less dovish than expected, and the BoC already views there is 'considerable stimulus' and rates are at historical lows, so there was a lower necessity to act.
AUD
Australian GDP came in stronger than expected, coming at 1.0% q/q and 2.5% y/y. The breakdown was firm as well, as savings rates increased and business investment was robust. However, housing was soft.
Our economists note that looking ahead, with the strength in capital expenditure likely to continue, the outlook for the RBA cash rate (UBSe -25bp in February) depends on the balance of exports - and how much they slow into 1H12 on a weaker global growth - against how much the consumer and housing sectors respond to a less hawkish RBA and lower lending rates. We continue to favour AUD on the crosses heading into 2012.
NZD
The RBNZ is expected to keep rates on hold at 2.50% at their upcoming meeting. The market is not looking for any shift in the immediate future, though our economists note that the central bank could yet mention the prospects of interest rate cuts, which would pressure the NZD further.
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, December 06, 2011
6th of December 2011 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
6 December 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Focus is on 1.3259, a break here would open the key low of 1.3212. Resistance is at 1.3487.
USDJPY BULLISH Resistance is at 78.29, a move above which would expose 78.83. Support lies at 77.49.
GBPUSD BEARISH Support lies at 1.5526 ahead of 1.5459. Resistance is at 1.5726.
USDCHF BULLISH Resistance is at 0.9252, a clearance of which would expose 0.9331, the key high from Nov. 25. Support lies at 0.9112.
AUDUSD BULLISH Break above 1.0272 would expose 1.0328. Support lies at 1.0151 ahead of 1.0074.
USDCAD NEUTRAL Resistance is at 1.0223 ahead of 1.0364 whereas support lies at 1.0121 ahead of 1.0079.
EURCHF BULLISH Key resistance is at 1.2474; a break above which would be a key bullish event and open 1.2646. Support lies at 1.2226.
EURGBP NEUTRAL The near-term directional triggers are at 0.8620 and 0.8519.
EURJPY NEUTRAL Support lies at 103.34 ahead of 102.49 while resistance is at 105.00 and then 105.70.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
6 December 2011 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH Focus is on 1.3259, a break here would open the key low of 1.3212. Resistance is at 1.3487.
USDJPY BULLISH Resistance is at 78.29, a move above which would expose 78.83. Support lies at 77.49.
GBPUSD BEARISH Support lies at 1.5526 ahead of 1.5459. Resistance is at 1.5726.
USDCHF BULLISH Resistance is at 0.9252, a clearance of which would expose 0.9331, the key high from Nov. 25. Support lies at 0.9112.
AUDUSD BULLISH Break above 1.0272 would expose 1.0328. Support lies at 1.0151 ahead of 1.0074.
USDCAD NEUTRAL Resistance is at 1.0223 ahead of 1.0364 whereas support lies at 1.0121 ahead of 1.0079.
EURCHF BULLISH Key resistance is at 1.2474; a break above which would be a key bullish event and open 1.2646. Support lies at 1.2226.
EURGBP NEUTRAL The near-term directional triggers are at 0.8620 and 0.8519.
EURJPY NEUTRAL Support lies at 103.34 ahead of 102.49 while resistance is at 105.00 and then 105.70.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
6th of December 2011 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
6 December 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
After the market close on Monday, Standard & Poor's took the surprise decision to put 15 Eurozone countries on credit-watch negative. Initially the fear was only the AAA countries would be put on watch but given the 'systemic risks' of the current crisis, the ratings agency chose to act on the entire currency union. The timing is interesting and S&P has acknowledged this, and pledged to come to a conclusion as soon as possible after this week's EU summit. France seems particularly at risk, as it was put into the category of countries that could see more than a 1-notch downgrade. Although the news does not fundamentally alter the markets' current views on the Eurozone's standings, explicit downgrades will call into question the efficacy of a host of European mechanisms for crisis resolution and adds a degree of urgency to upcoming discussions. The news has cut short the risk-rally on Monday where investors were hopeful for a comprehensive solution to be presented by France and Germany ahead of the Eurozone summit.
Ahead on Tuesday, US Treasury Secretary Tim Geithner will be meeting Eurozone leaders to give a final push to current talks, and to stress that most economies globally see the Eurozone crisis as the biggest risk to growth. The RBA stressed as much in their decision to cut rates by 25bp overnight. The Bank of Canada will also decide rates today.
In other releases on Monday, the non-manufacturing ISM came in sharply lower than expectations at 52.0 and factory orders showed a larger-than-expected contraction of 0.4% (cons. -0.3%). Swiss CPI will also be a closely-watched release as deflationary signs could encourage further expectations of a higher EURCHF floor. Asian equity markets are soft and European equities are expected to open lower, though not sharply. EURUSD traded in a range of 1.3362-1.3404 and USDJPY 77.60-77.85.
EUR
Standard & Poor's (S&P) has put the long-term ratings of 15 ratings on Credit Watch Negative. The news was leaked to various news sources earlier during the US sessions, though markets initially anticipated only the ratings of the core AAA countries to be at risk. The move may help the Eurozone redouble efforts to achieve a solution, as any downgrades to either France or Germany would put the EFSF's ratings at risk.
Greece is not affected by the S&P decision, and Cyprus only saw its short-term debt put on Credit Watch Negative. S&P has said that the review would be concluded as soon as possible after the EU summit scheduled for December 8th and 9th. France is particularly at risk here - S&P said that one-notch downgrades could be limited to Austria, Belgium, Finland, Germany, Holland and Luxembourg, while up to two notches for others.
German Chancellor Merkel and French President Sarkozy agreed on a 'master plan' to strengthen the Eurozone. Their proposals, according to press reports, included 'penalties for governments that fail to keep their deficits under control' and the early launch of the ESM. French President Sarkozy said the treaty changes would need to be agreed in March and ratified after June.
The leaders have also responded to S&P's decision, noting that today's proposals boost stability, competitiveness and growth, and said both countries and European partners are 'united in their determination' to take all measures to stabilize the Eurozone.
French Finance Minister Baroin ruled out new austerity measures in the wake of the ratings decision. He said that France would not need to inject new capital into the banking system, and the decision by S&P did not take into account the decisions made on Monday. He said the summit this week would be 'decisive'.
Italy's cabinet announced sweeping austerity measures which would result in new savings of up to EUR30bn. Bond markets cheered the news and the 10-year yield fell to below 6%. The measures would still need to pass the Italian parliament but at present the Monti government appears to enjoy enough support.
Italian PM Monti warned that 'if Italy were not capable of reversing the negative spiral of growth in debt and restoring confidence', the survival of the Euro would be at risk.
Although the need for treaty changes have been accepted, Reuters reports that several non-Eurozone states have asked for these plans to be dropped. Stronger fiscal union can be achieved through existing legislation, though this does not appear to be the path Germany and France are pursuing heading into the summit.
Ireland is expected to announce further austerity measures today as the 2012 budget continues to be released.
Eurozone GDP figures are due on Tuesday, we are looking for 0.2%q/q growth, 1.4% annualized.
GBP
Services PMI for November was released at 52.1 (cons. 50.5, prev. 51.3). Although the headline was better than expected, sub-components such as employment and new orders were weaker.
The Bank of England will decide on policy this week. We expect no change in the asset purchase programme, though developments in the Eurozone will have a greater bearing on the UK's domestic conditions, from macro to financial stability.
CHF
CPI figures will be due in Switzerland on Tuesday. We expect a 0.1% m/m print but this is a volatile set and a negative numbers would support the notion that deflation risks are rising. We expect a policy floor lift to 1.25 at the December policy meeting.
CAD
The Bank of Canada will decide on policy on Tuesday. Our economists believe the Bank will leave the overnight rate target unchanged at 1.00%. Despite Q3 domestic economic growth which exceeded the Bank's projections (from October Monetary Policy Report), concern has increased regarding the economic outlook due to external factors, primarily potential fallout from the European sovereign debt crisis.
AUD
The RBA cut rates by 25bp to 4.25% overnight, in line with market expectations. We were looking for an unchanged result. The RBA noted that global growth is moderating, especially Chinese growth, and there was scope for a 'modest cut' in the cash rate. Lower commodity prices had taken the pressure off inflation, which has also given the RBA some more room for maneuver. We now expect rates to bottom at 4.0% (vs. 4.25% prior).
In other data releases, the current account deficit narrowed to 1.5% of GDP, broadly in line with expectations. However, weaker demand and exports look set to dampen growth. Our economists note that over the past two days 1.7 percentage points of GDP growth have been ripped from the quarter from inventories and public demand - for which we get no monthly partial data through the quarter.
The upshot is that we have cut our Q3 GDP growth forecast (due tomorrow) to 0.7% from 1.2%, a broadly 'trend' pace of growth rather than 'above-trend', as previously expected. This would see the y/y pace lift to 1.8% from 1.4%.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
6 December 2011 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
After the market close on Monday, Standard & Poor's took the surprise decision to put 15 Eurozone countries on credit-watch negative. Initially the fear was only the AAA countries would be put on watch but given the 'systemic risks' of the current crisis, the ratings agency chose to act on the entire currency union. The timing is interesting and S&P has acknowledged this, and pledged to come to a conclusion as soon as possible after this week's EU summit. France seems particularly at risk, as it was put into the category of countries that could see more than a 1-notch downgrade. Although the news does not fundamentally alter the markets' current views on the Eurozone's standings, explicit downgrades will call into question the efficacy of a host of European mechanisms for crisis resolution and adds a degree of urgency to upcoming discussions. The news has cut short the risk-rally on Monday where investors were hopeful for a comprehensive solution to be presented by France and Germany ahead of the Eurozone summit.
Ahead on Tuesday, US Treasury Secretary Tim Geithner will be meeting Eurozone leaders to give a final push to current talks, and to stress that most economies globally see the Eurozone crisis as the biggest risk to growth. The RBA stressed as much in their decision to cut rates by 25bp overnight. The Bank of Canada will also decide rates today.
In other releases on Monday, the non-manufacturing ISM came in sharply lower than expectations at 52.0 and factory orders showed a larger-than-expected contraction of 0.4% (cons. -0.3%). Swiss CPI will also be a closely-watched release as deflationary signs could encourage further expectations of a higher EURCHF floor. Asian equity markets are soft and European equities are expected to open lower, though not sharply. EURUSD traded in a range of 1.3362-1.3404 and USDJPY 77.60-77.85.
EUR
Standard & Poor's (S&P) has put the long-term ratings of 15 ratings on Credit Watch Negative. The news was leaked to various news sources earlier during the US sessions, though markets initially anticipated only the ratings of the core AAA countries to be at risk. The move may help the Eurozone redouble efforts to achieve a solution, as any downgrades to either France or Germany would put the EFSF's ratings at risk.
Greece is not affected by the S&P decision, and Cyprus only saw its short-term debt put on Credit Watch Negative. S&P has said that the review would be concluded as soon as possible after the EU summit scheduled for December 8th and 9th. France is particularly at risk here - S&P said that one-notch downgrades could be limited to Austria, Belgium, Finland, Germany, Holland and Luxembourg, while up to two notches for others.
German Chancellor Merkel and French President Sarkozy agreed on a 'master plan' to strengthen the Eurozone. Their proposals, according to press reports, included 'penalties for governments that fail to keep their deficits under control' and the early launch of the ESM. French President Sarkozy said the treaty changes would need to be agreed in March and ratified after June.
The leaders have also responded to S&P's decision, noting that today's proposals boost stability, competitiveness and growth, and said both countries and European partners are 'united in their determination' to take all measures to stabilize the Eurozone.
French Finance Minister Baroin ruled out new austerity measures in the wake of the ratings decision. He said that France would not need to inject new capital into the banking system, and the decision by S&P did not take into account the decisions made on Monday. He said the summit this week would be 'decisive'.
Italy's cabinet announced sweeping austerity measures which would result in new savings of up to EUR30bn. Bond markets cheered the news and the 10-year yield fell to below 6%. The measures would still need to pass the Italian parliament but at present the Monti government appears to enjoy enough support.
Italian PM Monti warned that 'if Italy were not capable of reversing the negative spiral of growth in debt and restoring confidence', the survival of the Euro would be at risk.
Although the need for treaty changes have been accepted, Reuters reports that several non-Eurozone states have asked for these plans to be dropped. Stronger fiscal union can be achieved through existing legislation, though this does not appear to be the path Germany and France are pursuing heading into the summit.
Ireland is expected to announce further austerity measures today as the 2012 budget continues to be released.
Eurozone GDP figures are due on Tuesday, we are looking for 0.2%q/q growth, 1.4% annualized.
GBP
Services PMI for November was released at 52.1 (cons. 50.5, prev. 51.3). Although the headline was better than expected, sub-components such as employment and new orders were weaker.
The Bank of England will decide on policy this week. We expect no change in the asset purchase programme, though developments in the Eurozone will have a greater bearing on the UK's domestic conditions, from macro to financial stability.
CHF
CPI figures will be due in Switzerland on Tuesday. We expect a 0.1% m/m print but this is a volatile set and a negative numbers would support the notion that deflation risks are rising. We expect a policy floor lift to 1.25 at the December policy meeting.
CAD
The Bank of Canada will decide on policy on Tuesday. Our economists believe the Bank will leave the overnight rate target unchanged at 1.00%. Despite Q3 domestic economic growth which exceeded the Bank's projections (from October Monetary Policy Report), concern has increased regarding the economic outlook due to external factors, primarily potential fallout from the European sovereign debt crisis.
AUD
The RBA cut rates by 25bp to 4.25% overnight, in line with market expectations. We were looking for an unchanged result. The RBA noted that global growth is moderating, especially Chinese growth, and there was scope for a 'modest cut' in the cash rate. Lower commodity prices had taken the pressure off inflation, which has also given the RBA some more room for maneuver. We now expect rates to bottom at 4.0% (vs. 4.25% prior).
In other data releases, the current account deficit narrowed to 1.5% of GDP, broadly in line with expectations. However, weaker demand and exports look set to dampen growth. Our economists note that over the past two days 1.7 percentage points of GDP growth have been ripped from the quarter from inventories and public demand - for which we get no monthly partial data through the quarter.
The upshot is that we have cut our Q3 GDP growth forecast (due tomorrow) to 0.7% from 1.2%, a broadly 'trend' pace of growth rather than 'above-trend', as previously expected. This would see the y/y pace lift to 1.8% from 1.4%.
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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