DAILY MARKET COMMENTARY
24 February 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Break above 1.3322 has opened 1.3435 ahead of 1.3548. Support lies at 1.3187.
USDJPY BULLISH Next resistances are at 80.40 and 80.83. Support lies at 79.86.
GBPUSD NEUTRAL Resistances are at 1.5815 and 1.5881. Key downside trigger is at 1.5645 and next support is at 1.5582.
USDCHF NEUTRAL Support is at 0.8961 and 0.8862. Resistance is at 0.9149 ahead of 0.9207.
AUDUSD NEUTRAL Support lies at 1.0598 and 1.0570. Resistance is at 1.0756 ahead of 1.0845, the Feb. 8 key high.
USDCAD BEARISH Momentum is negative; support lies at 0.9924, a move below which would open the key low at 0.9892. Resistance is at 1.0020.
EURCHF NEUTRAL Resistance is at 1.2084 and support is at 1.2032, the month-to-date low.
EURGBP BULLISH Clearance of 0.8486 has opened 0.8562 ahead of 0.8598. Support lies at 0.8453.
EURJPY BULLISH Resistance is at 107.65 ahead of 108.16. Support is at 106.16.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
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Friday, February 24, 2012
24th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
24 February 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The Australian dollar fell towards the end of the Asia session after Fitch downgraded the ratings of three Australian banks. Earlier, AUD got a modest boost from parliamentary testimony by RBA Governor Stevens who painted a relatively upbeat picture of the economic outlook. Crucially, he stuck to previous guidance and did not suggest the RBA is poised to cut the cash rate. Looking to external risks, Stevens said China is getting on top of its problems around inflation and the property market. However, he sounded more cautious on Europe, noting anxiety over the sovereign debt crisis has not gone away, nor will it for some time.
EURNOK traded back above 7.50 overnight, having forcefully broken below a key support level at 7.48 yesterday. With approval in principle now granted for a new Greek aid program, and FX volatilities at multi-year lows, conditions look right for investors to add to risk positions for another week or so - especially in the run-up to the ECB's LTRO on Feb. 29. However, we recommend staying nimble given questions remain over how smoothly the PSI transaction will proceed, especially now that a credit event seems increasingly likely. Also we remain on guard for ratings actions over the coming weeks in response to the ECB's acquisition of de facto super-senior status. Overnight EURUSD traded in a 1.3316-1.3380 range, USDJPY 79.86-80.46.
EUR
The ECB does not appear to have concerns about the likely path of inflation in the Eurozone. ECB President Draghi said he sees no sign of inflationary pressures at the moment - rather 'quite the opposite'. ECB Governing Council member Liikanen echoed that view, and repeated that the ECB has never said there is an interest rate floor at 100bp - effectively implying that the ECB could cut the refi rate further if it felt this were needed.
In an interview with the Wall Street Journal Draghi warned against any watering down of fiscal consolidation targets as this 'would elicit an immediate reaction by the market'. The comments may dampen hopes the ECB would be in a position to influence governments to adopt more pro-growth policies to ease debt burdens rather than simply relying on austerity measures alone.
Draghi rejected the notion that sovereign bond markets might be adversely affected by the ECB's refusal to take losses on its Greek bond holdings. Instead he said the ECB's SMP holdings are small relative to the size of European bond markets. He said he was 'surprised' that the market showed no 'elation' after the new Greek program was approved on Monday.
On Thursday the Greek parliament approved the debt swap law, which contains legislation for retroactive collective action clauses. Finance Minister Venizelos said that 'Greece will be a different country after this transaction'.
German final Q4 GDP figures are due on Friday; we and the market are expecting a 0.2% quarterly decline.
JPY
Moody's kept the outlook on Japan's rating at 'stable', noting that credit-negative factors for Japan have not yet reached the critical mass needed to justify an actual downgrade. Moody's thinks increased purchases of JGBs announced by the BoJ last week will be temporary. However, the agency seemed conscious of the risk that these purchases might weaken the government's resolve to show greater fiscal prudence.
GBP
Two Bank of England MPC members sounded dovish. Fisher said he has an 'open mind' on whether more easing is needed. He repeated that the economic outlook is still 'incredibly uncertain', noting that 'if anything I feel slightly more comfortable about the inflation outlook than the outlook for growth'. He went on to describe a possible upward cost shock due to oil as 'the last thing we need at the moment'. Miles said the UK economic situation is still precarious and monetary policy therefore needs to be expansive.
The second estimate of Q4 UK GDP is due on Friday. Our UK economist is in line with consensus and expects the previous estimate to be confirmed at -0.2% q/q.
AUD
RBA Governor Stevens said the settings of monetary policy are 'about right for the moment'. He stuck to previous policy guidance and, crucially, did not suggest that a cut to the cash rate was in the pipeline. The OIS market was unmoved by the remarks and continues to price in 43bp of further easing over the next 12 months. However, AUD got a moderate boost from Stevens' relatively upbeat assessment of the economic outlook.
Stevens added that the recent bout of AUD strength is a bit 'odd' given that the terms of trade have already peaked. However he said he was not attracted to the idea of trying to prevent AUD from rising further, and said the RBA has carried out no intervention recently.
The Australian dollar fell 30 pips toward the end of the Asia session after Fitch downgraded the ratings of a number of Australian banks. There has been a lot of market interest in the funding costs of Australian banks recently on the grounds that if banks raise their lending rates, this could give the RBA greater freedom to lower the cash rate.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
24 February 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The Australian dollar fell towards the end of the Asia session after Fitch downgraded the ratings of three Australian banks. Earlier, AUD got a modest boost from parliamentary testimony by RBA Governor Stevens who painted a relatively upbeat picture of the economic outlook. Crucially, he stuck to previous guidance and did not suggest the RBA is poised to cut the cash rate. Looking to external risks, Stevens said China is getting on top of its problems around inflation and the property market. However, he sounded more cautious on Europe, noting anxiety over the sovereign debt crisis has not gone away, nor will it for some time.
EURNOK traded back above 7.50 overnight, having forcefully broken below a key support level at 7.48 yesterday. With approval in principle now granted for a new Greek aid program, and FX volatilities at multi-year lows, conditions look right for investors to add to risk positions for another week or so - especially in the run-up to the ECB's LTRO on Feb. 29. However, we recommend staying nimble given questions remain over how smoothly the PSI transaction will proceed, especially now that a credit event seems increasingly likely. Also we remain on guard for ratings actions over the coming weeks in response to the ECB's acquisition of de facto super-senior status. Overnight EURUSD traded in a 1.3316-1.3380 range, USDJPY 79.86-80.46.
EUR
The ECB does not appear to have concerns about the likely path of inflation in the Eurozone. ECB President Draghi said he sees no sign of inflationary pressures at the moment - rather 'quite the opposite'. ECB Governing Council member Liikanen echoed that view, and repeated that the ECB has never said there is an interest rate floor at 100bp - effectively implying that the ECB could cut the refi rate further if it felt this were needed.
In an interview with the Wall Street Journal Draghi warned against any watering down of fiscal consolidation targets as this 'would elicit an immediate reaction by the market'. The comments may dampen hopes the ECB would be in a position to influence governments to adopt more pro-growth policies to ease debt burdens rather than simply relying on austerity measures alone.
Draghi rejected the notion that sovereign bond markets might be adversely affected by the ECB's refusal to take losses on its Greek bond holdings. Instead he said the ECB's SMP holdings are small relative to the size of European bond markets. He said he was 'surprised' that the market showed no 'elation' after the new Greek program was approved on Monday.
On Thursday the Greek parliament approved the debt swap law, which contains legislation for retroactive collective action clauses. Finance Minister Venizelos said that 'Greece will be a different country after this transaction'.
German final Q4 GDP figures are due on Friday; we and the market are expecting a 0.2% quarterly decline.
JPY
Moody's kept the outlook on Japan's rating at 'stable', noting that credit-negative factors for Japan have not yet reached the critical mass needed to justify an actual downgrade. Moody's thinks increased purchases of JGBs announced by the BoJ last week will be temporary. However, the agency seemed conscious of the risk that these purchases might weaken the government's resolve to show greater fiscal prudence.
GBP
Two Bank of England MPC members sounded dovish. Fisher said he has an 'open mind' on whether more easing is needed. He repeated that the economic outlook is still 'incredibly uncertain', noting that 'if anything I feel slightly more comfortable about the inflation outlook than the outlook for growth'. He went on to describe a possible upward cost shock due to oil as 'the last thing we need at the moment'. Miles said the UK economic situation is still precarious and monetary policy therefore needs to be expansive.
The second estimate of Q4 UK GDP is due on Friday. Our UK economist is in line with consensus and expects the previous estimate to be confirmed at -0.2% q/q.
AUD
RBA Governor Stevens said the settings of monetary policy are 'about right for the moment'. He stuck to previous policy guidance and, crucially, did not suggest that a cut to the cash rate was in the pipeline. The OIS market was unmoved by the remarks and continues to price in 43bp of further easing over the next 12 months. However, AUD got a moderate boost from Stevens' relatively upbeat assessment of the economic outlook.
Stevens added that the recent bout of AUD strength is a bit 'odd' given that the terms of trade have already peaked. However he said he was not attracted to the idea of trying to prevent AUD from rising further, and said the RBA has carried out no intervention recently.
The Australian dollar fell 30 pips toward the end of the Asia session after Fitch downgraded the ratings of a number of Australian banks. There has been a lot of market interest in the funding costs of Australian banks recently on the grounds that if banks raise their lending rates, this could give the RBA greater freedom to lower the cash rate.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Thursday, February 23, 2012
23rd of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
23 February 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key bull trigger is at 1.3322 and next resistance is at 1.3435. Support lies at 1.3187 ahead of 1.3115
USDJPY BULLISH Next resistances are at 80.83 and 81.48. Support lies at 79.68.
GBPUSD NEUTRAL Resistances are at 1.5815 and 1.5881. Key downside trigger is at 1.5645 and next support is at 1.5582.
USDCHF BULLISH Resistance is at 0.9207 ahead of 0.9300. Key downside trigger is at 0.9066.
AUDUSD NEUTRAL Support lies at 1.0570 and 1.0527. Resistance is at 1.0686 ahead of 1.0756.
USDCAD BEARISH Initial support lies at 0.9955, a move below which would open 0.9924. Resistance is at 1.0052.
EURCHF NEUTRAL Resistance is at 1.2084 ahead of 1.2116. Key supports to watch are at 1.2032 and 1.2000.
EURGBP BULLISH Clearance of 0.8486 would open 0.8562 next. Support lies at 0.8379.
EURJPY BULLISH Break of 106.04 has opened resistances at 106.74 and 107.65. Support is at 105.05.
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 February 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key bull trigger is at 1.3322 and next resistance is at 1.3435. Support lies at 1.3187 ahead of 1.3115
USDJPY BULLISH Next resistances are at 80.83 and 81.48. Support lies at 79.68.
GBPUSD NEUTRAL Resistances are at 1.5815 and 1.5881. Key downside trigger is at 1.5645 and next support is at 1.5582.
USDCHF BULLISH Resistance is at 0.9207 ahead of 0.9300. Key downside trigger is at 0.9066.
AUDUSD NEUTRAL Support lies at 1.0570 and 1.0527. Resistance is at 1.0686 ahead of 1.0756.
USDCAD BEARISH Initial support lies at 0.9955, a move below which would open 0.9924. Resistance is at 1.0052.
EURCHF NEUTRAL Resistance is at 1.2084 ahead of 1.2116. Key supports to watch are at 1.2032 and 1.2000.
EURGBP BULLISH Clearance of 0.8486 would open 0.8562 next. Support lies at 0.8379.
EURJPY BULLISH Break of 106.04 has opened resistances at 106.74 and 107.65. Support is at 105.05.
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 February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
23 February 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The Asian session was relatively quiet as markets consolidated further. BoJ Governor Shirakawa said that the latest easing measures were supposed to boost sentiment temporarily and a rise in prices won't change policy. He also suggested that the BoJ will leave policy easy until the 1% inflation target is reached and that this view is backed by the 9-member board. Prime Minister Noda said that he wants more frequent talks with the BoJ governor to boost cooperation. More generally, with the news flow from the Eurozone largely exhausted for now the market reverted to data in search of risk drivers. On Wednesday the results were somewhat more disappointing as US housing numbers suffered revisions to the weaker side, especially the deep revision to the December numbers, and there is some sign of strain in the mortgage market as the mortgage purchase index fell another 2.9%w/w.
This is exactly the area of the US economy where the Fed has expressed significant concern, though even if further dips arise conventional QE may not be the right answer. Ahead on Thursday Germany IFO numbers will be a test of the Eurozone's economic resilience, especially now that the LTRO has had close to two months to make its impact felt on the economy - if any at all. At this stage we still dispute the notion that the ECB's liquidity steps can be a catalyst for renewed credit creation for the Eurozone household and corporate sectors, as banks are largely using the funds for their own refinancing needs and the marginal impact on the real economy is expected to be limited. In the same vein, the next 3-year LTRO may also be used for 'ring-fencing' purposes ahead of a potential credit event regarding Greece, and actually putting the funds to work remains several layers down the order of priority. In the US, initial claims are due and the market is looking for a slight rebound to 355k from last week's 348k. Our economists note that the upcoming reading could be affected by seasonal adjustment problems relating to the Presidents' Day holiday. Overnight EURUSD traded in a range 1.32312 1.326, USDJPY 80-07-80.35.
EUR
The euro came under slight pressure after some weaker Eurozone PMIs. The advance February numbers for the Eurozone composite indicator came in at 49 for manufacturing and 49.4 for services. Our European economist notes that German PMI components suggest the index should stabilize around 50-51. This is the message from the orders - purchases gap. Puzzlingly, all components were flat or up. The services PMI components suggest stabilization: new and outstanding business were both solidly up while business expectations slipped slightly
The Dutch Finance Minister said he is in favour of merging the firepower of the ESM and EFSF, broadly in line with German comments in the past.
EU Commissioner Rehn said the current Firewall for the Eurozone has been inadequate during the debt crisis and again stressed the ESM and EFSF should be 'used together'. Again he toed the Eurozone line by saying a Greek default would have 'dramatic' consequences.
German Chancellor Merkel said that she will maintain the pressure on Greece and the rest of the periphery. She noted that 'everyone must do their homework because otherwise this Europe can't hold together'.
US Treasury's Brainard said the economic recovery remains fragile, and the G20 countries must remain active. On Greece he said that the 'critical issue' is that the Eurozone establish a 'credible firewall', but warned that the US does not intend to seek more funding for the IMF this year, which would be a blow to the Eurozone's hopes for a smaller internal burden in the upcoming bailout.
According to Dow Jones, an IMF official said that the fund would avoid excessive 'risk-taking' in funding the Greek programme, supporting German Finance Minister Schaeuble's recent commentary that the Fund's contribution to the new package is likely to be limited to around EUR13bn (net new monies).
JPY
Overnight BoJ Governor Shirakawa said that the latest easing measures were supposed to boost sentiment temporarily and a rise in prices won't change policy. He also suggested that they will leave policy easy for longer until the 1% target is reached, a policy that is backed by the 9-member board. Prime Minister Noda said that he wants more frequent talks with the Governor in order to boost cooperation.
The Japanese Ministry of Finance continued its rhetoric, despite the strong rally in USDJPY. A senior official said there is nothing strange about USDJPY at 80, and the JPY weakening is due to the BoJ's timely easing and a better risk environment. They continued to state that a strong JPY has a strong negative impact on the Japanese economy.
GBP
BoE dove David Miles (who voted for 75bn of QE) said the UK economic situation is still precarious and monetary policy therefore needs to be expansive.
The BoE minutes for the February meeting revealed that the MPC voted 7-2 to increase the QE program by GBP50 bn. The dovish members Miles and Posen called for GBP75 bn however, which led to a slight sell-off in GBP. The MPC committee acknowledged that the macro environment had improved but argued that underlying problems in the Eurozone remain. Our analysts note that although the minutes are dovish, a group within the committee still believes that inflation will end up higher than the inflation report projections. As a consequence, 'a case can be made for maintaining the stance of policy at this meeting'. This group clearly did not have enough conviction in their view to vote against the majority however..
AUD
Australian Foreign Minister Kevin Rudd resigned, saying that he could not work with Prime Minister Gillard. The immediate impact on AUD is likely to be minimal but further strains on the incumbent government could have a longer term impact.
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 February 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The Asian session was relatively quiet as markets consolidated further. BoJ Governor Shirakawa said that the latest easing measures were supposed to boost sentiment temporarily and a rise in prices won't change policy. He also suggested that the BoJ will leave policy easy until the 1% inflation target is reached and that this view is backed by the 9-member board. Prime Minister Noda said that he wants more frequent talks with the BoJ governor to boost cooperation. More generally, with the news flow from the Eurozone largely exhausted for now the market reverted to data in search of risk drivers. On Wednesday the results were somewhat more disappointing as US housing numbers suffered revisions to the weaker side, especially the deep revision to the December numbers, and there is some sign of strain in the mortgage market as the mortgage purchase index fell another 2.9%w/w.
This is exactly the area of the US economy where the Fed has expressed significant concern, though even if further dips arise conventional QE may not be the right answer. Ahead on Thursday Germany IFO numbers will be a test of the Eurozone's economic resilience, especially now that the LTRO has had close to two months to make its impact felt on the economy - if any at all. At this stage we still dispute the notion that the ECB's liquidity steps can be a catalyst for renewed credit creation for the Eurozone household and corporate sectors, as banks are largely using the funds for their own refinancing needs and the marginal impact on the real economy is expected to be limited. In the same vein, the next 3-year LTRO may also be used for 'ring-fencing' purposes ahead of a potential credit event regarding Greece, and actually putting the funds to work remains several layers down the order of priority. In the US, initial claims are due and the market is looking for a slight rebound to 355k from last week's 348k. Our economists note that the upcoming reading could be affected by seasonal adjustment problems relating to the Presidents' Day holiday. Overnight EURUSD traded in a range 1.32312 1.326, USDJPY 80-07-80.35.
EUR
The euro came under slight pressure after some weaker Eurozone PMIs. The advance February numbers for the Eurozone composite indicator came in at 49 for manufacturing and 49.4 for services. Our European economist notes that German PMI components suggest the index should stabilize around 50-51. This is the message from the orders - purchases gap. Puzzlingly, all components were flat or up. The services PMI components suggest stabilization: new and outstanding business were both solidly up while business expectations slipped slightly
The Dutch Finance Minister said he is in favour of merging the firepower of the ESM and EFSF, broadly in line with German comments in the past.
EU Commissioner Rehn said the current Firewall for the Eurozone has been inadequate during the debt crisis and again stressed the ESM and EFSF should be 'used together'. Again he toed the Eurozone line by saying a Greek default would have 'dramatic' consequences.
German Chancellor Merkel said that she will maintain the pressure on Greece and the rest of the periphery. She noted that 'everyone must do their homework because otherwise this Europe can't hold together'.
US Treasury's Brainard said the economic recovery remains fragile, and the G20 countries must remain active. On Greece he said that the 'critical issue' is that the Eurozone establish a 'credible firewall', but warned that the US does not intend to seek more funding for the IMF this year, which would be a blow to the Eurozone's hopes for a smaller internal burden in the upcoming bailout.
According to Dow Jones, an IMF official said that the fund would avoid excessive 'risk-taking' in funding the Greek programme, supporting German Finance Minister Schaeuble's recent commentary that the Fund's contribution to the new package is likely to be limited to around EUR13bn (net new monies).
JPY
Overnight BoJ Governor Shirakawa said that the latest easing measures were supposed to boost sentiment temporarily and a rise in prices won't change policy. He also suggested that they will leave policy easy for longer until the 1% target is reached, a policy that is backed by the 9-member board. Prime Minister Noda said that he wants more frequent talks with the Governor in order to boost cooperation.
The Japanese Ministry of Finance continued its rhetoric, despite the strong rally in USDJPY. A senior official said there is nothing strange about USDJPY at 80, and the JPY weakening is due to the BoJ's timely easing and a better risk environment. They continued to state that a strong JPY has a strong negative impact on the Japanese economy.
GBP
BoE dove David Miles (who voted for 75bn of QE) said the UK economic situation is still precarious and monetary policy therefore needs to be expansive.
The BoE minutes for the February meeting revealed that the MPC voted 7-2 to increase the QE program by GBP50 bn. The dovish members Miles and Posen called for GBP75 bn however, which led to a slight sell-off in GBP. The MPC committee acknowledged that the macro environment had improved but argued that underlying problems in the Eurozone remain. Our analysts note that although the minutes are dovish, a group within the committee still believes that inflation will end up higher than the inflation report projections. As a consequence, 'a case can be made for maintaining the stance of policy at this meeting'. This group clearly did not have enough conviction in their view to vote against the majority however..
AUD
Australian Foreign Minister Kevin Rudd resigned, saying that he could not work with Prime Minister Gillard. The immediate impact on AUD is likely to be minimal but further strains on the incumbent government could have a longer term impact.
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, February 21, 2012
21st of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
21 February 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key bull trigger is at 1.3322 and next resistance is at 1.3435. Support lies at 1.3115 ahead of 1.2974.
USDJPY BULLISH Resistance is at 79.89 and 80.24, the August 2011 high. Support lies at 78.80.
GBPUSD NEUTRAL Initial resistance is at 1.5886 ahead of key high at 1.5929. Supports are at 1.5790 and 1.5645.
USDCHF BULLISH Resistance is at 0.9207 ahead of 0.9300. Key downside trigger is at 0.9066.
AUDUSD BULLISH Focus is on 1.0845, a break above which would signal scope for gains towards 1.1081. Key support lies at 1.0629.
USDCAD BEARISH Key support is at 0.9892, the Oct. 27 low, a break here would open 0.9766. Resistance is at 0.9985.
EURCHF NEUTRAL Resistance is at 1.2116 ahead of key high of 1.2133. Support lies at 1.2063 ahead of 1.2032, the month-to-date low.
EURGBP BEARISH Near-term support is at 0.8307 ahead of 0.8278. Key resistance is at 0.8422.
EURJPY BULLISH Clearance of 105.70 has opened 106.04 ahead of 106.74. Support is at 104.42.
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 February 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Key bull trigger is at 1.3322 and next resistance is at 1.3435. Support lies at 1.3115 ahead of 1.2974.
USDJPY BULLISH Resistance is at 79.89 and 80.24, the August 2011 high. Support lies at 78.80.
GBPUSD NEUTRAL Initial resistance is at 1.5886 ahead of key high at 1.5929. Supports are at 1.5790 and 1.5645.
USDCHF BULLISH Resistance is at 0.9207 ahead of 0.9300. Key downside trigger is at 0.9066.
AUDUSD BULLISH Focus is on 1.0845, a break above which would signal scope for gains towards 1.1081. Key support lies at 1.0629.
USDCAD BEARISH Key support is at 0.9892, the Oct. 27 low, a break here would open 0.9766. Resistance is at 0.9985.
EURCHF NEUTRAL Resistance is at 1.2116 ahead of key high of 1.2133. Support lies at 1.2063 ahead of 1.2032, the month-to-date low.
EURGBP BEARISH Near-term support is at 0.8307 ahead of 0.8278. Key resistance is at 0.8422.
EURJPY BULLISH Clearance of 105.70 has opened 106.04 ahead of 106.74. Support is at 104.42.
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 February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
21 February 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORL
After marathon talks that extended well into Tuesday morning, a new bailout deal totalling the targeted EUR130 bn for Greece was finalised. Most of the deal's components had been well flagged to the market, but the mere fact that negotiations did not fall apart helped stabilise sentiment and allowed EURUSD to keep a steady footing above 1.32. Although a significant hurdle has been passed and a disorderly default on March 20 appears to have been avoided, several points remain unresolved. First, the terms on the PSI are slightly harsher than previously determined as private sector investors will need to accept higher nominal losses than previously agreed and at a lower coupon; it remains to be seen whether these terms alone would be enough to trigger CDS as the IIF appears to have stopped short of giving the deal its full endorsement. Second, the Greek government has reserved the right to enact collective action clauses as further measures will depend on private sector participation, though it is already clear that the Greek parliament will move towards relevant legislation in due course. Demands for a larger haircut on private sector holdings appeared to have held up the agreement on Monday, and Eurogroup chair Juncker stressed that a successful PSI is a 'recondition' for the successor aid programme.
The current calculations suggest that Greek debt will come down to 120.5% of GDP in 2020, broadly in line with the IMF's definition of 'sustainability' but IMF chair Lagarde said that the board would need to decide on the new package and the Fund's own contribution in the second week of March. In return, Greece has also won debt relief through a lowering the margin on the loans in the first bailout package to 150bp, while national central banks would also transfer profits to Greece, while Eurosystem holdings would not suffer any losses. A segregated account will be created for aid flows while the troika will enjoy a 'permanent presence' to oversee progress on the necessary reforms. Greek PM Papademos said he was 'happy' with the result and targeted restructuring to be completed by April. We note that the news overnight does remove short-term uncertainty and risk may find some support, but as has been the case so often with the Eurozone throughout the crisis, implementation has proven far harder and there will be new stumbling blocks ahead, not least the prospect of elections returning a government less in favour of today's agreements. Overnight EURUSD traded 1.3186-1.3293 and USDJPY 79.55-79.81.
EUR
After long talks extending well into Tuesday, the Eurogroup meeting finally signed off the second bailout package for Greece. The key terms include (1) a larger nominal loss on holdings by private investors (2) a lower coupon on the new bonds - weighted average is 3.65% over 30 years (3) a lower margin on bilateral loans from the first bailout package (4) profit transfers by NCBs on their investment portfolio holdings.
Greece is set to launch the bond swap tomorrow but the IIF sounded somewhat more hesitant on the deal, calling upon members to consider it 'carefully'. The IIF noted that the neal deal was 'broadly consistent' with earlier agreements, and bondholders will get a 'cash sweetener' in receiving 15% of bonds in the form of EFSF bills.
Depending on the take-up of the PSI, the Greek government will decide on imposing retroactive collective action clauses, though wires have already reported parliament will enact relevant legislation in any case. The new bonds will be governed by English law, which will be considered a form of protection against future unilateral legislation-induced restructuring by Greece.
Greece is expected to set up a 'segregated account' for the aid flows, and this account will be held under Greece's paying agent. Greece is also expected to 'introduce into its law a provision ensuring priority is granted to debt servicing payments', according to Reuters. Despite initial protests against the measure, a 'permanent presence' in Athens will be maintained by the troika.
IMF Managing Director Lagarde said that the board will deal with Greece in the 'second week of March' and did not guarantee commensurate participation upfront. She said that board discussion will be subject to "Greek prior actions" and the deal should also provide Greece with the space to restore competitiveness. The lack of growth measures and focus on austerity could derail the programme if growth continues to deteriorate at its current pace.
Eurogroup chair Juncker said the new deal will 'secure Greece's future in the Eurozone' and preserve Eurozone financial stability. However he warned that a 'successful PSI' is a precondition for the successor programme.
EFSF CEO Regling said the Facility will laregely fund the 2nd Greek bailout and it would also raise money in 'a cashless way', which is consistent with prior agreements reached in July. He also said the collateral enhancement component would be EUR35bn though usage has not been specified.
The ECB settled no purchases for the SMP last week as conditions remain stable for the sovereign bond market. However, this appears heavily dependent on stable outcomes out of Greece, which is far from guaranteed.
The EU offered some promising comments on Portugal, saying that the country is delivering and fiscal implementation has been satisfactory.
JPY
Regardless of the reasons behind the BoJ's sudden switch in attitude, the quantities involved in their potential asset purchases are significant and we expect aggressive deployment of the balance sheet to meet their inflation mandate.
Japanese Finance Minister Azumi said overnight that new agreements had not been reached on IMF funding. This is consistent with Lagarde's position during Eurogroup discussions on Tuesday as the IMF had not yet reached agreement upon its total exposure to the new Greek deal..
GBP
Public sector finances data is due on Tuesday, while MPC member Bean will later give a speech.
AUD
RBA Minutes released overnight noted that rate levels were 'appropriate' given the current economy outlook. In addition, inflation would 'provide scope for easing' if demand dropped materially. The RBA noted that Eurozone risks had diminished but remains concerned about developments in China.
Our economists note that overall the minutes showed a somewhat 'more conditional/less explicit easing bias'. Overall, our economists expect the RBA to hold rates, unless there's a renewed jump in unemployment (or developments in Europe deteriorate sharply). There is still a case for a further easing of policy modestly near term to offset higher bank lending rates and the tighter monetary conditions due to a higher AUD. But we are now less convinced the RBA agrees.
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 February 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORL
After marathon talks that extended well into Tuesday morning, a new bailout deal totalling the targeted EUR130 bn for Greece was finalised. Most of the deal's components had been well flagged to the market, but the mere fact that negotiations did not fall apart helped stabilise sentiment and allowed EURUSD to keep a steady footing above 1.32. Although a significant hurdle has been passed and a disorderly default on March 20 appears to have been avoided, several points remain unresolved. First, the terms on the PSI are slightly harsher than previously determined as private sector investors will need to accept higher nominal losses than previously agreed and at a lower coupon; it remains to be seen whether these terms alone would be enough to trigger CDS as the IIF appears to have stopped short of giving the deal its full endorsement. Second, the Greek government has reserved the right to enact collective action clauses as further measures will depend on private sector participation, though it is already clear that the Greek parliament will move towards relevant legislation in due course. Demands for a larger haircut on private sector holdings appeared to have held up the agreement on Monday, and Eurogroup chair Juncker stressed that a successful PSI is a 'recondition' for the successor aid programme.
The current calculations suggest that Greek debt will come down to 120.5% of GDP in 2020, broadly in line with the IMF's definition of 'sustainability' but IMF chair Lagarde said that the board would need to decide on the new package and the Fund's own contribution in the second week of March. In return, Greece has also won debt relief through a lowering the margin on the loans in the first bailout package to 150bp, while national central banks would also transfer profits to Greece, while Eurosystem holdings would not suffer any losses. A segregated account will be created for aid flows while the troika will enjoy a 'permanent presence' to oversee progress on the necessary reforms. Greek PM Papademos said he was 'happy' with the result and targeted restructuring to be completed by April. We note that the news overnight does remove short-term uncertainty and risk may find some support, but as has been the case so often with the Eurozone throughout the crisis, implementation has proven far harder and there will be new stumbling blocks ahead, not least the prospect of elections returning a government less in favour of today's agreements. Overnight EURUSD traded 1.3186-1.3293 and USDJPY 79.55-79.81.
EUR
After long talks extending well into Tuesday, the Eurogroup meeting finally signed off the second bailout package for Greece. The key terms include (1) a larger nominal loss on holdings by private investors (2) a lower coupon on the new bonds - weighted average is 3.65% over 30 years (3) a lower margin on bilateral loans from the first bailout package (4) profit transfers by NCBs on their investment portfolio holdings.
Greece is set to launch the bond swap tomorrow but the IIF sounded somewhat more hesitant on the deal, calling upon members to consider it 'carefully'. The IIF noted that the neal deal was 'broadly consistent' with earlier agreements, and bondholders will get a 'cash sweetener' in receiving 15% of bonds in the form of EFSF bills.
Depending on the take-up of the PSI, the Greek government will decide on imposing retroactive collective action clauses, though wires have already reported parliament will enact relevant legislation in any case. The new bonds will be governed by English law, which will be considered a form of protection against future unilateral legislation-induced restructuring by Greece.
Greece is expected to set up a 'segregated account' for the aid flows, and this account will be held under Greece's paying agent. Greece is also expected to 'introduce into its law a provision ensuring priority is granted to debt servicing payments', according to Reuters. Despite initial protests against the measure, a 'permanent presence' in Athens will be maintained by the troika.
IMF Managing Director Lagarde said that the board will deal with Greece in the 'second week of March' and did not guarantee commensurate participation upfront. She said that board discussion will be subject to "Greek prior actions" and the deal should also provide Greece with the space to restore competitiveness. The lack of growth measures and focus on austerity could derail the programme if growth continues to deteriorate at its current pace.
Eurogroup chair Juncker said the new deal will 'secure Greece's future in the Eurozone' and preserve Eurozone financial stability. However he warned that a 'successful PSI' is a precondition for the successor programme.
EFSF CEO Regling said the Facility will laregely fund the 2nd Greek bailout and it would also raise money in 'a cashless way', which is consistent with prior agreements reached in July. He also said the collateral enhancement component would be EUR35bn though usage has not been specified.
The ECB settled no purchases for the SMP last week as conditions remain stable for the sovereign bond market. However, this appears heavily dependent on stable outcomes out of Greece, which is far from guaranteed.
The EU offered some promising comments on Portugal, saying that the country is delivering and fiscal implementation has been satisfactory.
JPY
Regardless of the reasons behind the BoJ's sudden switch in attitude, the quantities involved in their potential asset purchases are significant and we expect aggressive deployment of the balance sheet to meet their inflation mandate.
Japanese Finance Minister Azumi said overnight that new agreements had not been reached on IMF funding. This is consistent with Lagarde's position during Eurogroup discussions on Tuesday as the IMF had not yet reached agreement upon its total exposure to the new Greek deal..
GBP
Public sector finances data is due on Tuesday, while MPC member Bean will later give a speech.
AUD
RBA Minutes released overnight noted that rate levels were 'appropriate' given the current economy outlook. In addition, inflation would 'provide scope for easing' if demand dropped materially. The RBA noted that Eurozone risks had diminished but remains concerned about developments in China.
Our economists note that overall the minutes showed a somewhat 'more conditional/less explicit easing bias'. Overall, our economists expect the RBA to hold rates, unless there's a renewed jump in unemployment (or developments in Europe deteriorate sharply). There is still a case for a further easing of policy modestly near term to offset higher bank lending rates and the tighter monetary conditions due to a higher AUD. But we are now less convinced the RBA agrees.
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, February 20, 2012
20th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
20 February 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Resistance is at 1.3291 ahead of bull trigger at 1.3322. Support lies at 1.3115 ahead of 1.2974.
USDJPY BULLISH Clearance of 79.53 has opened resistance at 80.24. Interim resistance is at 79.89 while support lies at 78.80.
GBPUSD NEUTRAL Key upside trigger is at 1.5929, a break here would open 1.6096 next. Supports are at 1.5790 and 1.5645.
USDCHF BULLISH Resistance is at 0.9300 ahead of 0.9339. Key support lies at 0.9066.
AUDUSD BULLISH Focus is on 1.0845, a break above which would signal scope for gains towards 1.1081. Support lies at 1.0689.
USDCAD BEARISH The pair is testing 0.9926; a clear break here would open 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Resistance is at 1.2116 ahead of key high of 1.2133. Support lies at 1.2063 ahead of 1.2032, the month-to-date low.
EURGBP BEARISH Near-term support is at 0.8278 ahead of 0.8255. Key resistance is at 0.8422.
EURJPY BULLISH Clear break above 105.70 would open 106.04 next. Support is at 103.44.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
20 February 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL Resistance is at 1.3291 ahead of bull trigger at 1.3322. Support lies at 1.3115 ahead of 1.2974.
USDJPY BULLISH Clearance of 79.53 has opened resistance at 80.24. Interim resistance is at 79.89 while support lies at 78.80.
GBPUSD NEUTRAL Key upside trigger is at 1.5929, a break here would open 1.6096 next. Supports are at 1.5790 and 1.5645.
USDCHF BULLISH Resistance is at 0.9300 ahead of 0.9339. Key support lies at 0.9066.
AUDUSD BULLISH Focus is on 1.0845, a break above which would signal scope for gains towards 1.1081. Support lies at 1.0689.
USDCAD BEARISH The pair is testing 0.9926; a clear break here would open 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Resistance is at 1.2116 ahead of key high of 1.2133. Support lies at 1.2063 ahead of 1.2032, the month-to-date low.
EURGBP BEARISH Near-term support is at 0.8278 ahead of 0.8255. Key resistance is at 0.8422.
EURJPY BULLISH Clear break above 105.70 would open 106.04 next. Support is at 103.44.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
20th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
20 February 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
China's unexpected weekend decision to cut the reserve ratio requirement by 50bp boosted risk appetite throughout the Asia session. The effect was magnified by the element of surprise. USDJPY scrambled higher to 79.89 but the rally was cut short when the Japanese trade deficit for January came in smaller than expected. Although China's stimulus measure in itself is limited in efficacy and comes amid signs of a slowdown, the PBoC's joining of the ranks of major central banks adding to easing will help to further stabilise economic conditions. Meanwhile expectations continue to build ahead of Monday's meeting of Eurozone Finance Ministers and the outcome of the meeting is likely to be a defining moment for how risk appetite evolves throughout the week. Germany's Finance Minister Schaeuble suggested a decision would be made on the 'whole program' on Monday and he backed away from the idea of a piecemeal step-by-step approval process that could drag on for several weeks. That's a promising development.
However, Eurogroup Chair Juncker indicated that much negotiation is still needed if full agreement is to be reached by Monday night. The Financial Times reported that the Greek parliament is to vote this week on adding CAC clauses into existing Greek bond contracts. This is likely to be seen as a preparatory step towards an enforced compulsory restructuring should voluntary participation levels disappoint. It also raises the risk that Greece will be downgraded again given S&P has already announced that if legislation is passed to insert such clauses then "we would lower the issue ratings on debt issues concerned to 'D' from 'CC'". In addition, any subsequent invocation of these CAC clauses would very likely cause CDS contracts to be triggered, although the decision on this point will rest with ISDA. In a further sign of progress towards a second rescue package for Greece, a Greek official announced that the debt swap for private investors would be launched by March 8, with the aim of concluding the transaction three days later. Overnight EURUSD traded in a range of1.3156-1.3238 and USDJPY 79.35-79.89.
EUR
The Financial Times reported that a decision on both the PSI deal and the new Greek bailout is likely at Monday's Eurogroup meeting. The article noted that "the new programme might still not be fully finalised, though, as a list of new prior actions could be imposed yet again". Meanwhile Dow Jones cited a Dutch Finance ministry report that Greece may only get the second bailout after elections in Greece have passed. It is clear that negotiations remain tense and there are many issues to resolve before the funds are finally released.
Governor Visco of the Italian central bank implied that Italian banks have even greater freedom to participate in the ECB's upcoming 3y LTRO on Feb. 29. He said the pool of eligible collateral available to Italian banks will increase by EUR 70-90 bn as a direct result of the ECB's decision to accept loans as collateral at refinancing operations.
Visco went on to express concern about credit contraction in Italy however, noting the 'very marked' decline in credit advanced to corporates in December, which continued at a more modest pace in January. He said it was 'crucial that the economy does not fall victim to credit asphyxiation'.
Overnight ECB's Asmussen said Greece is not a thread to the world economy, and said that he expected conditions for the second bailout to be completed by Monday. He also noted that the dollar would remain the world's most important reserve currency for the foreseeable future.
Austrian Finance Minister Fekter said that Eurozone officials will discuss an escrow account for the Greek bailout package. However, she said that this is for now being prepared 'on the technical level' and details would be discussed 'intensely' on Monday.
US Treasury Secretary Geithner said that the US will 'encourage' the IMF to support agreement on Greek economic reforms, but failed to commit to new funding for the IMF itself.
On Friday German President Wulff resigned, but we expect no market impact from this.
JPY
Bank of Japan Governor Shirakawa said that the BoJ has 'set a clear stance' and committed the central bank to 'strong monetary easing'. He also said that the BoJ will complete the planned asset purchases programme by year-end. Shirakawa denied there was political interference behind the BoJ's recent decisions.
Finance Minister Azumi stressed that the BoJ had 'effectively adopted an inflation target' and said both he and Shirakawa shared the inflation target view.
GBP
Bank of England MPC member Posen offered his interpretation of the latest quarterly inflation report in a speech on Friday. He would not be drawn on whether yet another round of QE was being considered. However he said that the inflation forecast, which assumes the QE target remains unchanged in future 'gets us close to target with the risks pretty balanced'. We note that his comments suggest some satisfaction with current policy settings - an unusual state of affairs for Posen who has been the most dovish member of the MPC for over a year.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
20 February 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
China's unexpected weekend decision to cut the reserve ratio requirement by 50bp boosted risk appetite throughout the Asia session. The effect was magnified by the element of surprise. USDJPY scrambled higher to 79.89 but the rally was cut short when the Japanese trade deficit for January came in smaller than expected. Although China's stimulus measure in itself is limited in efficacy and comes amid signs of a slowdown, the PBoC's joining of the ranks of major central banks adding to easing will help to further stabilise economic conditions. Meanwhile expectations continue to build ahead of Monday's meeting of Eurozone Finance Ministers and the outcome of the meeting is likely to be a defining moment for how risk appetite evolves throughout the week. Germany's Finance Minister Schaeuble suggested a decision would be made on the 'whole program' on Monday and he backed away from the idea of a piecemeal step-by-step approval process that could drag on for several weeks. That's a promising development.
However, Eurogroup Chair Juncker indicated that much negotiation is still needed if full agreement is to be reached by Monday night. The Financial Times reported that the Greek parliament is to vote this week on adding CAC clauses into existing Greek bond contracts. This is likely to be seen as a preparatory step towards an enforced compulsory restructuring should voluntary participation levels disappoint. It also raises the risk that Greece will be downgraded again given S&P has already announced that if legislation is passed to insert such clauses then "we would lower the issue ratings on debt issues concerned to 'D' from 'CC'". In addition, any subsequent invocation of these CAC clauses would very likely cause CDS contracts to be triggered, although the decision on this point will rest with ISDA. In a further sign of progress towards a second rescue package for Greece, a Greek official announced that the debt swap for private investors would be launched by March 8, with the aim of concluding the transaction three days later. Overnight EURUSD traded in a range of1.3156-1.3238 and USDJPY 79.35-79.89.
EUR
The Financial Times reported that a decision on both the PSI deal and the new Greek bailout is likely at Monday's Eurogroup meeting. The article noted that "the new programme might still not be fully finalised, though, as a list of new prior actions could be imposed yet again". Meanwhile Dow Jones cited a Dutch Finance ministry report that Greece may only get the second bailout after elections in Greece have passed. It is clear that negotiations remain tense and there are many issues to resolve before the funds are finally released.
Governor Visco of the Italian central bank implied that Italian banks have even greater freedom to participate in the ECB's upcoming 3y LTRO on Feb. 29. He said the pool of eligible collateral available to Italian banks will increase by EUR 70-90 bn as a direct result of the ECB's decision to accept loans as collateral at refinancing operations.
Visco went on to express concern about credit contraction in Italy however, noting the 'very marked' decline in credit advanced to corporates in December, which continued at a more modest pace in January. He said it was 'crucial that the economy does not fall victim to credit asphyxiation'.
Overnight ECB's Asmussen said Greece is not a thread to the world economy, and said that he expected conditions for the second bailout to be completed by Monday. He also noted that the dollar would remain the world's most important reserve currency for the foreseeable future.
Austrian Finance Minister Fekter said that Eurozone officials will discuss an escrow account for the Greek bailout package. However, she said that this is for now being prepared 'on the technical level' and details would be discussed 'intensely' on Monday.
US Treasury Secretary Geithner said that the US will 'encourage' the IMF to support agreement on Greek economic reforms, but failed to commit to new funding for the IMF itself.
On Friday German President Wulff resigned, but we expect no market impact from this.
JPY
Bank of Japan Governor Shirakawa said that the BoJ has 'set a clear stance' and committed the central bank to 'strong monetary easing'. He also said that the BoJ will complete the planned asset purchases programme by year-end. Shirakawa denied there was political interference behind the BoJ's recent decisions.
Finance Minister Azumi stressed that the BoJ had 'effectively adopted an inflation target' and said both he and Shirakawa shared the inflation target view.
GBP
Bank of England MPC member Posen offered his interpretation of the latest quarterly inflation report in a speech on Friday. He would not be drawn on whether yet another round of QE was being considered. However he said that the inflation forecast, which assumes the QE target remains unchanged in future 'gets us close to target with the risks pretty balanced'. We note that his comments suggest some satisfaction with current policy settings - an unusual state of affairs for Posen who has been the most dovish member of the MPC for over a year.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Thursday, February 16, 2012
16th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
16 February 2012 – 8:00 GMT
Thusday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL The pair is testing 1.3028; a clear break here would open 1.2973 ahead of 1.2891. Resistance is at 1.3216 ahead of 1.3291.
USDJPY BULLISH Resistances are at 78.76 and 78.98. Support is at 78.18.
GBPUSD NEUTRAL Supports are at 1.5642 and 1.5582. Resistance is at 1.5771 ahead of 1.5849.
USDCHF NEUTRAL Key upside trigger is at 0.9263, a clear break here would open 0.9339. Support lies at 0.9143 ahead of key low at 0.9066.
AUDUSD BULLISH Near-term resistance is at 1.0791 ahead of 1.0845. Support lies at 1.0629.
USDCAD BEARISH Key supports to watch are at 0.9926 and 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Near-term resistance is at 1.2116 ahead of key high of 1.2133. Support lies at 1.2054 ahead of 1.2032, the month-to-date low.
EURGBP BEARISH Decline through 0.8330 has opened supports at 0.8283 and 0.8265. Key resistance is at 0.8422.
EURJPY BULLISH Resistance is at 103.49 ahead of 104.32. Support is at 101.66.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
16 February 2012 – 8:00 GMT
Thusday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD NEUTRAL The pair is testing 1.3028; a clear break here would open 1.2973 ahead of 1.2891. Resistance is at 1.3216 ahead of 1.3291.
USDJPY BULLISH Resistances are at 78.76 and 78.98. Support is at 78.18.
GBPUSD NEUTRAL Supports are at 1.5642 and 1.5582. Resistance is at 1.5771 ahead of 1.5849.
USDCHF NEUTRAL Key upside trigger is at 0.9263, a clear break here would open 0.9339. Support lies at 0.9143 ahead of key low at 0.9066.
AUDUSD BULLISH Near-term resistance is at 1.0791 ahead of 1.0845. Support lies at 1.0629.
USDCAD BEARISH Key supports to watch are at 0.9926 and 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Near-term resistance is at 1.2116 ahead of key high of 1.2133. Support lies at 1.2054 ahead of 1.2032, the month-to-date low.
EURGBP BEARISH Decline through 0.8330 has opened supports at 0.8283 and 0.8265. Key resistance is at 0.8422.
EURJPY BULLISH Resistance is at 103.49 ahead of 104.32. Support is at 101.66.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
16th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
16 February 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro extended its weakness during the Asia session amid concern over the failure of Eurozone authorities to secure an aid package for Greece before bond redemptions are due. In comments made after the Eurogroup conference call, Jean Claude Juncker merely said 'decisions' would be made at next week's full meeting but it appears doubts remain over Greece's ability to deliver. The stop-gap solution seems to be to come up with enough funds to repay creditors only while withholding other forms of aid. A bridging loan to last the next month is being planned, though essentially this is only buying time for a fuller discussion on the merits of a longer-term plan.
The headlines were a wake-up call to a market that had grown complacent about the risks around the current negotiations. Nevertheless Juncker said that strong assurances had been received from Greece's political leaders and implied that full agreement is only a few short steps away. He specifically mentioned the need for mechanisms to ensure stronger surveillance and to prioritise the repayment of debt owed to creditor nations. Nevertheless, he said that these outstanding issues would be addressed and declared himself 'confident' that the finance ministers will 'take all the necessary decisions' when they next meet in person on Monday. Greek Finance Minister Venizelos added that the bond swap details would be announced on Monday provided final agreement is reached on the terms of a second rescue plan.
FOMC minutes from the January meeting revealed that 'a few' FOMC officials still cling to the belief that more asset purchases will be needed this year. We note however that mainstream thinking within the FOMC appears to have backed further away from this position, and would only consider additional easing if the US economic outlook darkens. Overnight Australian jobs figures were far better than expected and the unemployment rate dropped to 5.1%, though we expect Grece to remain the dominant driver. EURUSD traded 1.3007-1.3068 and USDJPY 78.36-78.53.
EUR
Eurozone Q4 GDP was slightly above consensus but still fell -0.3% q/q. Italy Q4 GDP was slightly softer though, at -0.7% q/q vs -0.6% cons.
ECB Governing Council Coene said the ECB has agreed it does not wish to make a profit from its transactions in Greek bonds. He said the plan is to return profits to national governments (who are shareholders in the ECB) and then "when the profit from past years is distributed, each government will determine what proportion is due to Greece". It is not clear if Coene is referring only to SMP portfolio profits, or whether a larger redistribution of profits made from other ECB operations and holdings is also being considered. ECB's Asmussen said that it is possible for the ECB to pass any profits made on their bond purchases to the national central banks (NCBs), who can then use them for Greek aid. He stressed once again that a direct contribution to a second Greek assistance package is not possible for the ECB.
China's central bank governor Zhou said BRIC countries are waiting for the right time to help Europe. He said China has not cut its reserves exposure to euro-denominated assets as a result of the crisis.
Late on Wednesday the Eurogroup released their post-conference call statement, noting that the Eurogroup will take 'necessary decisions' on Greece next Monday, while the troika has presented its Greek debt sustainability report. Crucially a EUR325mln cuts target had been 'identified' though they noted 'further considerations' were necessary.
ECB Governing Council member LIikanen said that lower rates were 'conceivable' but warned that ECB would face bigger risks and look into other measures for policy signalling. We expect the ECB to administer another 50bp in cuts this year to stave off economic risks.
JPY
USDJPY gave back some of its recent gains on the back of some worrisome Greek headlines, and upward progress appears to have stalled entirely. Japanese JGB yields fell to 11bp yesterday for the first time in over a year on the back of the BoJ's fresh round of easing. However, given the effective floor on yields is 10bp, the BoJ's ability to induce further yen weakness through conventional means is starting to reach its limits. For USDJPY to continue higher in a sustainable way we will need to see US yields climb materially, which they have so far refused to do.
GBP
The BoE released its quarterly inflation report and sees headline CPI at 1.8% in 2 years, in line with our Economists estimates. While the forecast has increased from the previous report, it is still below 2%, leaving some room for further QE if it is deemed appropriate. The forecasts suggest that inflation will be below target for a good period of the period however. In the press conference, Governor King said he did not believe that asset purchases exhibit diminishing returns.
January jobless claims rose more than expected at 6.9k (vs 3.0k cons). The claimant count rate remained unchanged at 5.0%. however. Average weekly earnings were also up marginally at 2.0%.
AUD
Australian jobs increased by 46.3k in January, far stronger than expected and the unemployment rate dropped to 5.1%.
Our ananlysts note that overall, while a strong print today, over several months, jobs & hours growth is still soft. But the unemployment rate is key, and is now edging down. With hiring intentions staying firm, likely stronger future jobs growth underline why we thought the unemployment rate wouldn't rise much. As for the RBA, our economists note that after having held in February on their forecast for a rise in unemployment to 5.5%, it seems unlikely they're going to now cut again unless the UR jumps 'meaningfully' or Q1 inflation surprises. As such we no longer look for easing up ahead and the AUD will likely sustain short-term support, barring adverse developments in Europe.
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 February 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro extended its weakness during the Asia session amid concern over the failure of Eurozone authorities to secure an aid package for Greece before bond redemptions are due. In comments made after the Eurogroup conference call, Jean Claude Juncker merely said 'decisions' would be made at next week's full meeting but it appears doubts remain over Greece's ability to deliver. The stop-gap solution seems to be to come up with enough funds to repay creditors only while withholding other forms of aid. A bridging loan to last the next month is being planned, though essentially this is only buying time for a fuller discussion on the merits of a longer-term plan.
The headlines were a wake-up call to a market that had grown complacent about the risks around the current negotiations. Nevertheless Juncker said that strong assurances had been received from Greece's political leaders and implied that full agreement is only a few short steps away. He specifically mentioned the need for mechanisms to ensure stronger surveillance and to prioritise the repayment of debt owed to creditor nations. Nevertheless, he said that these outstanding issues would be addressed and declared himself 'confident' that the finance ministers will 'take all the necessary decisions' when they next meet in person on Monday. Greek Finance Minister Venizelos added that the bond swap details would be announced on Monday provided final agreement is reached on the terms of a second rescue plan.
FOMC minutes from the January meeting revealed that 'a few' FOMC officials still cling to the belief that more asset purchases will be needed this year. We note however that mainstream thinking within the FOMC appears to have backed further away from this position, and would only consider additional easing if the US economic outlook darkens. Overnight Australian jobs figures were far better than expected and the unemployment rate dropped to 5.1%, though we expect Grece to remain the dominant driver. EURUSD traded 1.3007-1.3068 and USDJPY 78.36-78.53.
EUR
Eurozone Q4 GDP was slightly above consensus but still fell -0.3% q/q. Italy Q4 GDP was slightly softer though, at -0.7% q/q vs -0.6% cons.
ECB Governing Council Coene said the ECB has agreed it does not wish to make a profit from its transactions in Greek bonds. He said the plan is to return profits to national governments (who are shareholders in the ECB) and then "when the profit from past years is distributed, each government will determine what proportion is due to Greece". It is not clear if Coene is referring only to SMP portfolio profits, or whether a larger redistribution of profits made from other ECB operations and holdings is also being considered. ECB's Asmussen said that it is possible for the ECB to pass any profits made on their bond purchases to the national central banks (NCBs), who can then use them for Greek aid. He stressed once again that a direct contribution to a second Greek assistance package is not possible for the ECB.
China's central bank governor Zhou said BRIC countries are waiting for the right time to help Europe. He said China has not cut its reserves exposure to euro-denominated assets as a result of the crisis.
Late on Wednesday the Eurogroup released their post-conference call statement, noting that the Eurogroup will take 'necessary decisions' on Greece next Monday, while the troika has presented its Greek debt sustainability report. Crucially a EUR325mln cuts target had been 'identified' though they noted 'further considerations' were necessary.
ECB Governing Council member LIikanen said that lower rates were 'conceivable' but warned that ECB would face bigger risks and look into other measures for policy signalling. We expect the ECB to administer another 50bp in cuts this year to stave off economic risks.
JPY
USDJPY gave back some of its recent gains on the back of some worrisome Greek headlines, and upward progress appears to have stalled entirely. Japanese JGB yields fell to 11bp yesterday for the first time in over a year on the back of the BoJ's fresh round of easing. However, given the effective floor on yields is 10bp, the BoJ's ability to induce further yen weakness through conventional means is starting to reach its limits. For USDJPY to continue higher in a sustainable way we will need to see US yields climb materially, which they have so far refused to do.
GBP
The BoE released its quarterly inflation report and sees headline CPI at 1.8% in 2 years, in line with our Economists estimates. While the forecast has increased from the previous report, it is still below 2%, leaving some room for further QE if it is deemed appropriate. The forecasts suggest that inflation will be below target for a good period of the period however. In the press conference, Governor King said he did not believe that asset purchases exhibit diminishing returns.
January jobless claims rose more than expected at 6.9k (vs 3.0k cons). The claimant count rate remained unchanged at 5.0%. however. Average weekly earnings were also up marginally at 2.0%.
AUD
Australian jobs increased by 46.3k in January, far stronger than expected and the unemployment rate dropped to 5.1%.
Our ananlysts note that overall, while a strong print today, over several months, jobs & hours growth is still soft. But the unemployment rate is key, and is now edging down. With hiring intentions staying firm, likely stronger future jobs growth underline why we thought the unemployment rate wouldn't rise much. As for the RBA, our economists note that after having held in February on their forecast for a rise in unemployment to 5.5%, it seems unlikely they're going to now cut again unless the UR jumps 'meaningfully' or Q1 inflation surprises. As such we no longer look for easing up ahead and the AUD will likely sustain short-term support, barring adverse developments in Europe.
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, February 15, 2012
15th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
15 February 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Resistance is at 1.3291 ahead of 1.3322. Key near-term support lies at 1.3028.
USDJPY BULLISH Clearance of 78.29 had opened 78.76 ahead of 78.98. Support is at 78.29.
GBPUSD NEUTRAL Supports are at 1.5642 and 1.5582. Resistance is at 1.5771 ahead of 1.5849.
USDCHF NEUTRAL Key support lies at 0.9066; a decline through which would expose 0.8961. Resistance is at 0.9263 ahead of 0.9339.
AUDUSD BULLISH Near-term resistance is at 1.0791 ahead of 1.0845. Support lies at 1.0629.
USDCAD BEARISH Momentum conditions are bearish; two key supports to watch are at 0.9926 and 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Key near-term resistance is at 1.2133 ahead of 1.2149. Support lies at 1.2054 ahead of key low at 1.2032.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
EURJPY BULLISH Break above 103.29 has opened the way for 103.98 and then 104.32. Support is at 101.66.
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.
15 February 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Resistance is at 1.3291 ahead of 1.3322. Key near-term support lies at 1.3028.
USDJPY BULLISH Clearance of 78.29 had opened 78.76 ahead of 78.98. Support is at 78.29.
GBPUSD NEUTRAL Supports are at 1.5642 and 1.5582. Resistance is at 1.5771 ahead of 1.5849.
USDCHF NEUTRAL Key support lies at 0.9066; a decline through which would expose 0.8961. Resistance is at 0.9263 ahead of 0.9339.
AUDUSD BULLISH Near-term resistance is at 1.0791 ahead of 1.0845. Support lies at 1.0629.
USDCAD BEARISH Momentum conditions are bearish; two key supports to watch are at 0.9926 and 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Key near-term resistance is at 1.2133 ahead of 1.2149. Support lies at 1.2054 ahead of key low at 1.2032.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
EURJPY BULLISH Break above 103.29 has opened the way for 103.98 and then 104.32. Support is at 101.66.
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.
15th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
15 February 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
China's central bank governor Zhou said China would continue to invest in Eurozone sovereign bonds and would play a bigger role in solving Europe's crisis via both the IMF and the EFSF. As usual, the comments were short on specifics, but they helped the euro recover from yesterday's selloff, and carried AUD and NZD higher too. Zhou also expressed his wish that the euro will become a bigger and more important reserve currency. USDJPY held onto yesterday's gains but couldn't make much further headway despite closing above the 200-day moving average for the first time in 10 months. EURUSD traded 1.3080-1.3185 and USDJPY 77.36-78.66 since Tuesday's European close. There was no further news on yesterday's developments in Europe which had triggered concern over whether a second Greek rescue would ever happen.
The face-to-face meeting of Eurozone finance ministers which was planned for today (but which was cancelled yesterday) has not been reinstated, and the plan is still to hold a teleconference instead. Important decisions on Greek funding have been made via teleconference before, but it seems more likely that any decision to go ahead with a second Greek rescue will be deferred until Monday's regular monthly meeting of Eurozone finance ministers. The Wall Street Journal reported that a tentative agreement has been struck between US congressional negotiators on extending the payroll tax cuts and unemployment benefits through to the end of 2012 - both measures are due to expire on Feb. 29 unless extended. Ahead on Wednesday, headlines around the Eurogroup conference call are the key focus but macro releases are also due, including German and Eurozone GDP, the UK employment reports and the BoE Inflation Report, as well as the FOMC minutes.
EUR
ECB Governing Council Coene said the ECB has agreed it does not wish to make a profit from its transactions in Greek bonds. He said the plan is to return profits to national governments (who are shareholders in the ECB) and then "when the profit from past years is distributed, each government will determine what proportion is due to Greece". It is not clear if Coene is referring only to SMP portfolio profits, or whether a larger redistribution of profits made from other ECB operations and holdings is also being considered.
China's central bank governor Zhou said BRIC countries are waiting for the right time to help Europe. He said China has not cut its reserves exposure to euro-denominated assets as a result of the crisis.
On Tuesday afternoon, the Eurogroup meeting originally scheduled for Wednesday was called off, to be replaced by a conference call. Eurozone sources noted that a debt sustainability analysis was not complete, and there were fears the commitments from Greek leaders were 'not firm enough', according to Reuters. Eurogroup Chair Juncker later confirmed the news, noting that the political pledges were not yet received and further technical work with the Troika was needed in 'a number of areas'.
Very late during the US session, Greek New Democracy Party sources reported that their leader would give a written pledge on Wednesday to continue the reforms agreed with the Troika. The PASOK party is expected to do the same. Dow Jones also reported government officials as saying Greece has resolved 'outstanding issues' with the Eurogroup, but the decisions on the bailout are only expected next week.
German Finance Minister Schaeuble said he 'wanted to do everything to help Greece' but refused to rule out the worst-case scenario, noting that 'if everything fails', the Eurozone is much better prepared than two years ago. This is further confirmation that a Greek exit is now being considered as an option, but only under extreme circumstances.
Spanish banks borrowed EUR161.4 bn from the ECB in January, compared with EUR132.4 bn in December. The large increase in demand for ECB cash came after the December LTRO, indicating that either bank funding pressures are rising in Spain or they're heavily playing the sovereign carry trade. The latter effect would fit with the strong demand seen at the January auctions where Spain sold around 20% of its total planned 2012 issuance. If this argument holds, it provides further evidence of the ECB helping support the bond markets and signals a large take-up at the upcoming LTRO.
JPY
USDJPY held onto yesterday's gains but couldn't make any further headway despite closing above the 200-day moving average for the first time in 10 months. Japanese JGB yields fell to 11bp overnight for the first time in over a year on the back of the BoJ's fresh round of easing. However, given the effective floor on yields is 10bp, the BoJ's ability to induce further yen weakness through conventional means is starting to reach its limits. For USDJPY to continue higher in a sustainable way we will need to see US yields climb materially, which they have so far refused to do.
GBP
January CPI fell in line with consensus estimates at -0.5% m/m, +3.6% y/y. Our UK economist notes that UK inflation is now very solidly in a downtrend. The annual rate will continue to fall through this year, with the CPI expected to touch 2% by year-end.
The Bank of England is due to release its quarterly inflation report on Wednesday. The inflation guidance may give a better understanding of policy direction in the coming months, while markets will also take note of the growth forecasts. Our UK economist expects the MPC will acknowledge that conditions have improved since the November report, but also that it stands ready to expand the QE programme should the outlook deteriorate again.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
15 February 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
China's central bank governor Zhou said China would continue to invest in Eurozone sovereign bonds and would play a bigger role in solving Europe's crisis via both the IMF and the EFSF. As usual, the comments were short on specifics, but they helped the euro recover from yesterday's selloff, and carried AUD and NZD higher too. Zhou also expressed his wish that the euro will become a bigger and more important reserve currency. USDJPY held onto yesterday's gains but couldn't make much further headway despite closing above the 200-day moving average for the first time in 10 months. EURUSD traded 1.3080-1.3185 and USDJPY 77.36-78.66 since Tuesday's European close. There was no further news on yesterday's developments in Europe which had triggered concern over whether a second Greek rescue would ever happen.
The face-to-face meeting of Eurozone finance ministers which was planned for today (but which was cancelled yesterday) has not been reinstated, and the plan is still to hold a teleconference instead. Important decisions on Greek funding have been made via teleconference before, but it seems more likely that any decision to go ahead with a second Greek rescue will be deferred until Monday's regular monthly meeting of Eurozone finance ministers. The Wall Street Journal reported that a tentative agreement has been struck between US congressional negotiators on extending the payroll tax cuts and unemployment benefits through to the end of 2012 - both measures are due to expire on Feb. 29 unless extended. Ahead on Wednesday, headlines around the Eurogroup conference call are the key focus but macro releases are also due, including German and Eurozone GDP, the UK employment reports and the BoE Inflation Report, as well as the FOMC minutes.
EUR
ECB Governing Council Coene said the ECB has agreed it does not wish to make a profit from its transactions in Greek bonds. He said the plan is to return profits to national governments (who are shareholders in the ECB) and then "when the profit from past years is distributed, each government will determine what proportion is due to Greece". It is not clear if Coene is referring only to SMP portfolio profits, or whether a larger redistribution of profits made from other ECB operations and holdings is also being considered.
China's central bank governor Zhou said BRIC countries are waiting for the right time to help Europe. He said China has not cut its reserves exposure to euro-denominated assets as a result of the crisis.
On Tuesday afternoon, the Eurogroup meeting originally scheduled for Wednesday was called off, to be replaced by a conference call. Eurozone sources noted that a debt sustainability analysis was not complete, and there were fears the commitments from Greek leaders were 'not firm enough', according to Reuters. Eurogroup Chair Juncker later confirmed the news, noting that the political pledges were not yet received and further technical work with the Troika was needed in 'a number of areas'.
Very late during the US session, Greek New Democracy Party sources reported that their leader would give a written pledge on Wednesday to continue the reforms agreed with the Troika. The PASOK party is expected to do the same. Dow Jones also reported government officials as saying Greece has resolved 'outstanding issues' with the Eurogroup, but the decisions on the bailout are only expected next week.
German Finance Minister Schaeuble said he 'wanted to do everything to help Greece' but refused to rule out the worst-case scenario, noting that 'if everything fails', the Eurozone is much better prepared than two years ago. This is further confirmation that a Greek exit is now being considered as an option, but only under extreme circumstances.
Spanish banks borrowed EUR161.4 bn from the ECB in January, compared with EUR132.4 bn in December. The large increase in demand for ECB cash came after the December LTRO, indicating that either bank funding pressures are rising in Spain or they're heavily playing the sovereign carry trade. The latter effect would fit with the strong demand seen at the January auctions where Spain sold around 20% of its total planned 2012 issuance. If this argument holds, it provides further evidence of the ECB helping support the bond markets and signals a large take-up at the upcoming LTRO.
JPY
USDJPY held onto yesterday's gains but couldn't make any further headway despite closing above the 200-day moving average for the first time in 10 months. Japanese JGB yields fell to 11bp overnight for the first time in over a year on the back of the BoJ's fresh round of easing. However, given the effective floor on yields is 10bp, the BoJ's ability to induce further yen weakness through conventional means is starting to reach its limits. For USDJPY to continue higher in a sustainable way we will need to see US yields climb materially, which they have so far refused to do.
GBP
January CPI fell in line with consensus estimates at -0.5% m/m, +3.6% y/y. Our UK economist notes that UK inflation is now very solidly in a downtrend. The annual rate will continue to fall through this year, with the CPI expected to touch 2% by year-end.
The Bank of England is due to release its quarterly inflation report on Wednesday. The inflation guidance may give a better understanding of policy direction in the coming months, while markets will also take note of the growth forecasts. Our UK economist expects the MPC will acknowledge that conditions have improved since the November report, but also that it stands ready to expand the QE programme should the outlook deteriorate again.
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, February 14, 2012
14th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
14 February 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Initial resistance is at 1.3322 ahead of 1.3386. Support lies at 1.3156.
USDJPY BULLISH Break above 77.81 would open 78.29, the Nov. 29 key high. Initial support is at 77.02.
GBPUSD BULLISH Resistance is at 1.5886, a move above which would open 1.5947. Key near-term support lies at 1.5730.
USDCHF NEUTRAL Key support lies at 0.9066; a decline through which would expose 0.8961. Resistance is at 0.9201 ahead of 0.9263.
AUDUSD BULLISH Near-term resistance is at 1.0791 ahead of 1.0845. Support lies at 1.0640.
USDCAD BEARISH Initial support is at 0.9926, a break here would open the key low at 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Support lies at 1.2084, a move below which would expose 1.2053. Key near-term resistance is at 1.2133 ahead of 1.2149.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
EURJPY BULLISH Next resistances are at 103.29 and 103.98. Support is at 101.66.
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.
14 February 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Initial resistance is at 1.3322 ahead of 1.3386. Support lies at 1.3156.
USDJPY BULLISH Break above 77.81 would open 78.29, the Nov. 29 key high. Initial support is at 77.02.
GBPUSD BULLISH Resistance is at 1.5886, a move above which would open 1.5947. Key near-term support lies at 1.5730.
USDCHF NEUTRAL Key support lies at 0.9066; a decline through which would expose 0.8961. Resistance is at 0.9201 ahead of 0.9263.
AUDUSD BULLISH Near-term resistance is at 1.0791 ahead of 1.0845. Support lies at 1.0640.
USDCAD BEARISH Initial support is at 0.9926, a break here would open the key low at 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Support lies at 1.2084, a move below which would expose 1.2053. Key near-term resistance is at 1.2133 ahead of 1.2149.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
EURJPY BULLISH Next resistances are at 103.29 and 103.98. Support is at 101.66.
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.
14th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
14 February 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The BoJ unexpectedly followed in the Fed's footsteps and effectively set an inflation target of +1% y/y at today's policy meeting. It also increased its target for asset purchases to help meet this new inflation objective. The asset purchase program was created in October 2010, and the ceiling on its stock of purchases has been raised twice before - but only in increments of JPY5 trn. Today however, the facility's ceiling rose a further JPY10 trn and the aim is to spend all of this exclusively on JGB purchases before year-end.
Moody's downgraded six Eurozone sovereigns overnight: Italy, Spain, Portugal, Malta, Slovakia, and Slovenia. The Aaa ratings of France, Austria, and the UK were affirmed but the outlook on each of these ratings was lowered to negative from stable. Cable dropped 60 pips over the course of the Asia session on the back of this news.
EUR
Moody's downgraded the rating of six Eurozone sovereigns, and lowered the outlooks of two more. Spain was cut two notches, while Italy only fell a single notch and so avoided crossing into Baa territory. Although the outlook on the French and Austrian ratings were cut to negative, this compares favourably with the actual ratings downgrades that both sovereigns suffered at the hands of S&P a month ago. Given France has kept her Moody's triple-A rating at least, the EFSF's own Aaa rating seems safe for now.
ECB reported bond settlements under the SMP at EUR59 mn in week to Feb.10. This is the lightest week of ECB activity since the week ended Dec. 23 and the second-lightest week for buying since Italy and Spain were first included in SMP portfolio in August.
JPY
The BoJ unexpectedly set an inflation target of +1% y/y at today's policy meeting. It also increased its target for asset purchases to help meet this new inflation objective. The asset purchase program was created in October 2010, and the ceiling on its stock of purchases has been raised twice before - but only in increments of JPY5 trn. Today however, the facility's ceiling rose a further JPY10 trn and the aim is to spend all of this exclusively on JGB purchases before year-end.
This is a significant amount of additional easing, and with the BoJ's preferred measure of core inflation currently running at only -0.1% y/y investors are bound to expect further bouts of monetary accommodation down the road. USDJPY climbed 30 pips - a relatively energetic reaction to what is usually a mundane BoJ policy announcement. Separately, the BoJ's long-running Rinban operations were left unchanged and so JGB purchases under that program will continue at a pace of JPY21.6 trn per year.
GBP
Moody's affirmed the UK's Aaa rating, but lowered the outlook to negative from stable. This suggests a one-third chance that the UK may lose its Aaa status in the next 12-18 months. We note that this is not the first ratings action the UK has seen in recent years. On May 21, 2009, S&P also lowered the outlook to negative, only to raise it back to stable over a year later on Oct. 26, 2010. The rating itself was not downgraded during this time. This is however the first time negative aspersions have been cast on the UK's rating since the Eurozone debt crisis erupted.
The Bank of England is due to release its quarterly inflation report on Wednesday. The inflation guidance may give a better understanding of policy direction in the coming months, while markets will also take note of the growth forecasts. Our UK economist expects the MPC will acknowledge that conditions have improved since the November report, but also that it stands ready to expand the QE programme should the outlook deteriorate again.
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 February 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The BoJ unexpectedly followed in the Fed's footsteps and effectively set an inflation target of +1% y/y at today's policy meeting. It also increased its target for asset purchases to help meet this new inflation objective. The asset purchase program was created in October 2010, and the ceiling on its stock of purchases has been raised twice before - but only in increments of JPY5 trn. Today however, the facility's ceiling rose a further JPY10 trn and the aim is to spend all of this exclusively on JGB purchases before year-end.
Moody's downgraded six Eurozone sovereigns overnight: Italy, Spain, Portugal, Malta, Slovakia, and Slovenia. The Aaa ratings of France, Austria, and the UK were affirmed but the outlook on each of these ratings was lowered to negative from stable. Cable dropped 60 pips over the course of the Asia session on the back of this news.
EUR
Moody's downgraded the rating of six Eurozone sovereigns, and lowered the outlooks of two more. Spain was cut two notches, while Italy only fell a single notch and so avoided crossing into Baa territory. Although the outlook on the French and Austrian ratings were cut to negative, this compares favourably with the actual ratings downgrades that both sovereigns suffered at the hands of S&P a month ago. Given France has kept her Moody's triple-A rating at least, the EFSF's own Aaa rating seems safe for now.
ECB reported bond settlements under the SMP at EUR59 mn in week to Feb.10. This is the lightest week of ECB activity since the week ended Dec. 23 and the second-lightest week for buying since Italy and Spain were first included in SMP portfolio in August.
JPY
The BoJ unexpectedly set an inflation target of +1% y/y at today's policy meeting. It also increased its target for asset purchases to help meet this new inflation objective. The asset purchase program was created in October 2010, and the ceiling on its stock of purchases has been raised twice before - but only in increments of JPY5 trn. Today however, the facility's ceiling rose a further JPY10 trn and the aim is to spend all of this exclusively on JGB purchases before year-end.
This is a significant amount of additional easing, and with the BoJ's preferred measure of core inflation currently running at only -0.1% y/y investors are bound to expect further bouts of monetary accommodation down the road. USDJPY climbed 30 pips - a relatively energetic reaction to what is usually a mundane BoJ policy announcement. Separately, the BoJ's long-running Rinban operations were left unchanged and so JGB purchases under that program will continue at a pace of JPY21.6 trn per year.
GBP
Moody's affirmed the UK's Aaa rating, but lowered the outlook to negative from stable. This suggests a one-third chance that the UK may lose its Aaa status in the next 12-18 months. We note that this is not the first ratings action the UK has seen in recent years. On May 21, 2009, S&P also lowered the outlook to negative, only to raise it back to stable over a year later on Oct. 26, 2010. The rating itself was not downgraded during this time. This is however the first time negative aspersions have been cast on the UK's rating since the Eurozone debt crisis erupted.
The Bank of England is due to release its quarterly inflation report on Wednesday. The inflation guidance may give a better understanding of policy direction in the coming months, while markets will also take note of the growth forecasts. Our UK economist expects the MPC will acknowledge that conditions have improved since the November report, but also that it stands ready to expand the QE programme should the outlook deteriorate again.
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, February 13, 2012
13th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
13 February 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Initial resistance is at 1.3322 ahead of 1.3386. Support lies at 1.3156.
USDJPY BULLISH Break above 77.81 would open 78.29, the Nov. 29 key high. Initial support is at 77.02.
GBPUSD BULLISH Resistance is at 1.5886, a move above which would open 1.5947. Key near-term support lies at 1.5730.
USDCHF NEUTRAL Key support lies at 0.9066; a decline through which would expose 0.8961. Resistance is at 0.9201 ahead of 0.9263.
AUDUSD BULLISH Momentum is positive; near-term resistance is at 1.0791 ahead of 1.0845. Support lies at 1.0640.
USDCAD BEARISH Initial support is at 0.9926, a break here would open the key low at 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Support lies at 1.2084, a move below which would expose 1.2053. Key near-term resistance is at 1.2133 ahead of 1.2149.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
13 February 2012 – 8:00 GMT
Monday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Initial resistance is at 1.3322 ahead of 1.3386. Support lies at 1.3156.
USDJPY BULLISH Break above 77.81 would open 78.29, the Nov. 29 key high. Initial support is at 77.02.
GBPUSD BULLISH Resistance is at 1.5886, a move above which would open 1.5947. Key near-term support lies at 1.5730.
USDCHF NEUTRAL Key support lies at 0.9066; a decline through which would expose 0.8961. Resistance is at 0.9201 ahead of 0.9263.
AUDUSD BULLISH Momentum is positive; near-term resistance is at 1.0791 ahead of 1.0845. Support lies at 1.0640.
USDCAD BEARISH Initial support is at 0.9926, a break here would open the key low at 0.9892. Resistance is at 1.0052, a prior low.
EURCHF NEUTRAL Support lies at 1.2084, a move below which would expose 1.2053. Key near-term resistance is at 1.2133 ahead of 1.2149.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
13th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
13 February 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Greek parliament voted in favour of a new package of austerity measures by 199 votes to 74 early on Monday morning. There were 27 abstentions. The euro got a moderate boost once the count got underway, but we saw no follow-through after the result was announced. In a sign of heightened political discord, 45 of the 300 lawmakers were expelled from their political parties for breaking ranks and voting against party lines. Safe passage of the legislation will go some way to alleviating market concerns after five Greek ministers resigned in protest on Friday. It should also provide a positive backdrop to the two upcoming meetings of Eurozone finance ministers on Feb. 15 and Feb. 20.
However, while this austerity vote is designed to help secure a second EU/IMF program for Greece, it is not in itself sufficient. The IMF has already said it also needs to see 'near universal' participation in any private sector debt restructuring before another round of funding can be considered. We doubt a purely voluntary approach will achieve a take-up approaching such levels, which is one reason why we maintain our bearish view on the euro. The private sector involvement negotiations have yet to reach a final conclusion and the IIF has not provided a recent update on the situation. With the prospect of a disorderly Greek default rising as March 20 approaches, investors may start to pull back from the recent rally, though we acknowledge that growth continues to surprise to the upside in general. Ahead this week, the focus will be on policymaker positions: the BoJ and Riksbank will hold policy meetings, while the Bank of England and Federal Reserve release their quarterly inflation report and meeting minutes, respectively. Macro activity surveys will also be released.
EUR
Greek Prime Minister Papademos warned 'a disorderly default would throw the country into a disastrous adventure. It would create conditions of uncontrollable economic chaos and social eruption'.
S&P announced late on Friday that a 'Selective Default' rating would be applied to Greece if collective action clauses (CACs) were implemented directly. However, the agency also warned that if parliament passed legislation to the same effect, an outright 'Default' rating would be applied.
IIF Chief Dallara has urged Greek lawmakers to back reforms. He called on them to 'understand what is at stake' and also called on the ECB to accept a haircut, noting that 'it is important that everyone shares a fair part of the burden'. Nonetheless he acknowledged time is running out ahead of the March 20 major bond redemption.
JPY
Japan's GDP contracted quite sharply in Q4, after having rebounded in Q3. The market had been expecting a decline in economic output, but the -0.6% q/q print was well below the -0.3% q/q expected by consensus. This theoretically raises the risk of a monetary policy response from the BoJ at Tuesday's policy decision. However, we note that the BoJ's stock of short-dated assets purchased to date is still well below the targets set by previous bouts of easing. This means there is little urgency in raising these targets further, and the signalling effect of doing so would likely have little impact on the yen.
GBP
The Bank of England is due to release its quarterly inflation report on Wednesday. The inflation guidance may give a better understanding of policy direction in the coming months, while markets will also take note of the growth forecasts. Our UK economist expects the MPC will acknowledge that conditions have improved since the November report, but also that it stands ready to expand the QE programme should the outlook deteriorate again.
AUD
Several commercial banks in Australia have raised their lending rates in recent days, and another did so overnight. In principle, this provides a little more room for the RBA to ease further. The RBA decided to remain on hold last week, but our Australian economics team expects a 25bp rate cut in May - the final cut in the current easing cycle.
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 February 2012 – 8:00 GMT
Monday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Greek parliament voted in favour of a new package of austerity measures by 199 votes to 74 early on Monday morning. There were 27 abstentions. The euro got a moderate boost once the count got underway, but we saw no follow-through after the result was announced. In a sign of heightened political discord, 45 of the 300 lawmakers were expelled from their political parties for breaking ranks and voting against party lines. Safe passage of the legislation will go some way to alleviating market concerns after five Greek ministers resigned in protest on Friday. It should also provide a positive backdrop to the two upcoming meetings of Eurozone finance ministers on Feb. 15 and Feb. 20.
However, while this austerity vote is designed to help secure a second EU/IMF program for Greece, it is not in itself sufficient. The IMF has already said it also needs to see 'near universal' participation in any private sector debt restructuring before another round of funding can be considered. We doubt a purely voluntary approach will achieve a take-up approaching such levels, which is one reason why we maintain our bearish view on the euro. The private sector involvement negotiations have yet to reach a final conclusion and the IIF has not provided a recent update on the situation. With the prospect of a disorderly Greek default rising as March 20 approaches, investors may start to pull back from the recent rally, though we acknowledge that growth continues to surprise to the upside in general. Ahead this week, the focus will be on policymaker positions: the BoJ and Riksbank will hold policy meetings, while the Bank of England and Federal Reserve release their quarterly inflation report and meeting minutes, respectively. Macro activity surveys will also be released.
EUR
Greek Prime Minister Papademos warned 'a disorderly default would throw the country into a disastrous adventure. It would create conditions of uncontrollable economic chaos and social eruption'.
S&P announced late on Friday that a 'Selective Default' rating would be applied to Greece if collective action clauses (CACs) were implemented directly. However, the agency also warned that if parliament passed legislation to the same effect, an outright 'Default' rating would be applied.
IIF Chief Dallara has urged Greek lawmakers to back reforms. He called on them to 'understand what is at stake' and also called on the ECB to accept a haircut, noting that 'it is important that everyone shares a fair part of the burden'. Nonetheless he acknowledged time is running out ahead of the March 20 major bond redemption.
JPY
Japan's GDP contracted quite sharply in Q4, after having rebounded in Q3. The market had been expecting a decline in economic output, but the -0.6% q/q print was well below the -0.3% q/q expected by consensus. This theoretically raises the risk of a monetary policy response from the BoJ at Tuesday's policy decision. However, we note that the BoJ's stock of short-dated assets purchased to date is still well below the targets set by previous bouts of easing. This means there is little urgency in raising these targets further, and the signalling effect of doing so would likely have little impact on the yen.
GBP
The Bank of England is due to release its quarterly inflation report on Wednesday. The inflation guidance may give a better understanding of policy direction in the coming months, while markets will also take note of the growth forecasts. Our UK economist expects the MPC will acknowledge that conditions have improved since the November report, but also that it stands ready to expand the QE programme should the outlook deteriorate again.
AUD
Several commercial banks in Australia have raised their lending rates in recent days, and another did so overnight. In principle, this provides a little more room for the RBA to ease further. The RBA decided to remain on hold last week, but our Australian economics team expects a 25bp rate cut in May - the final cut in the current easing cycle.
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, February 10, 2012
10th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
10 February 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Break above 1.3386 would open 1.3435. Support lies at 1.3089.
USDJPY BULLISH Clearance of 77.42 has put focus on 77.75; a break here would open 78.29, the Nov. 29 key high. Initial support is at 77.02.
GBPUSD BULLISH Resistance is at 1.5886, a move above which would open 1.5947. Support lies at 1.5730.
USDCHF NEUTRAL Key support lies at 0.9066; a decline through which would expose 0.8961. Resistance is at 0.9263 ahead of 0.9339.
AUDUSD BULLISH Near-term resistance is at 1.0791 ahead of 1.0845. Key support is at 1.0672.
USDCAD BEARISH Initial support is at 0.9926 ahead of key low at 0.9892. Resistance is at 1.0034.
EURCHF BEARISH Support lies at 1.2086, a move below which would expose 1.2053. Key near-term resistance is at 1.2133.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
EURJPY BULLISH Rally through 102.54 has opened resistances at 103.98 and 104.32. Support is at 101.66.
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.
10 February 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Break above 1.3386 would open 1.3435. Support lies at 1.3089.
USDJPY BULLISH Clearance of 77.42 has put focus on 77.75; a break here would open 78.29, the Nov. 29 key high. Initial support is at 77.02.
GBPUSD BULLISH Resistance is at 1.5886, a move above which would open 1.5947. Support lies at 1.5730.
USDCHF NEUTRAL Key support lies at 0.9066; a decline through which would expose 0.8961. Resistance is at 0.9263 ahead of 0.9339.
AUDUSD BULLISH Near-term resistance is at 1.0791 ahead of 1.0845. Key support is at 1.0672.
USDCAD BEARISH Initial support is at 0.9926 ahead of key low at 0.9892. Resistance is at 1.0034.
EURCHF BEARISH Support lies at 1.2086, a move below which would expose 1.2053. Key near-term resistance is at 1.2133.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
EURJPY BULLISH Rally through 102.54 has opened resistances at 103.98 and 104.32. Support is at 101.66.
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.
10th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
10 February 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Eurogroup was not impressed with the inter-party agreement from Athens and late after the Eurogroup meeting yesterday Greek PM Venizelos was sent back to Athens with demands for deeper cuts. It appears that the EU finance ministers are not prepared to sign off the deal until they get a stronger sense that Greece will actually push through with its pledges. Lawmakers there are supposed to vote on the new austerity measures over the weekend and an "implementation law" is supposed to be considered in the next 10-15 days, according to local sources. Eurogroup chair Juncker stated on Thursday that there is now another week for new cuts to be found and he hoped the Eurogroup would be able to sign off on the plans at a new meeting next Wednesday - another deadline markets will need to contend with. In the background, the PSI deal is still running, but the ECB's participation has been of greater focus and now it appears they would not be able to calculate their own participation until Greece reaches agreement with other troika members. This only adds to potential uncertainty up ahead. While the ECB offered no change in policy, Draghi initially refused to be drawn into discussions on the subject, he later revealed his thoughts on the legality of transferring ECB holdings to the EFSF. President Draghi's post-decision conference revealed the ECB's stance on several issues.
On the macro front, little has changed and the bank remains in data-watch mode. Draghi stressed that while economic data has stabilised there are downside risks and it is too early to fully assess the impact of the 3y LTROs. On the subject of the LTROs themselves, Draghi dismissed the idea that there was any stigma attached and said that their use should be seen as a commercial or business decision only. The easing of collateral requirements further - allowing several countries' national central banks to accept credit claims as collateral, may help with overall LTRO volumes, though at a cost to the ECB's balance sheet risks. EURUSD traded 1.3251 - 1.3291, USDJPY77.54-77.75.
EUR
While the ECB offered no change in policy, President Draghi's conference revealed the ECB's stance on several issues. On the macro front, little has changed and the bank remains in data-watch mode. Draghi stressed that while economic data has stabilised there are downside risks and it is too early to fully assess the impact of the 3y LTROs. On the subject of the LTROs themselves, Draghi dismissed the idea that there was any stigma attached and set that their use should be seen as a commercial or business decision only.
The large elephant in the room was of course the ECB's stance on Greece and the majority of questions were directed to this. While Draghi initially refused to be drawn into discussions on the subject, he later revealed his thoughts on the legality of transferring ECB holdings to the EFSF. He stated that swapping the bonds with the EFSF for any loss would simply be debt monetisation but then noted that "if you consider the EFSF is governments, so if the ECB gives money to governments that's monetary financing. If the ECB distributes part of its profits to its member countries as part of the key, capital key, that's not monetary financing." While this quote can be interpreted in many ways it at least leaves the door open for ECB involvement in the debt swap, provided it is done at cost or better.
Following December's announcement of widening collateral eligibility, the ECB published details on the new criteria, which have been established for the national central banks of 7 countries (France, Italy, Spain, Cyprus, Ireland, Portugal, Austria). BoI Director General Saccomani said that the new rules with give Italian banks the chance to increase borrowing by up to EUR70 bn.
Any hopes of a major announcement from the Eurogroup faded on Thursday afternoon., Greek PM Papademos' office said talks with the troika ended 'successfully' but Dutch and German officials then hit the wires to downplay hopes of a final decision. Finally German Finance Minister Schaeuble announced that there will be no deal announced at the Thursday meeting, since the current deal does not fulfil conditions. He added that it is still not clear whether the deal can successfully reduce the debt burden to 120% of GDP., which is what the troika requirements have previously stated.
Eurogroup Chair Juncker said overnight that a new programme will provide a comprehensive blueprint for Greece's debt sustainability. The bailout may comprise of EUR100bn in new loans, and EUR30bn to encourage the debt swap. In addition, he said new proposals on governance and monitoring were required but no decisions were being made. A new Eurogroup meeting has been announced for next Wednesday to approve the programme.
JPY
In figures released overnight, domestic CGPI was softer than expected at -0.1%m/m, 0.5%y/y. Growth and price concerns remain strong - Japanese Finance Minister Azumi warned that Japan will intervene in FX as appropriate, and need to seek other countries' cooperation but won't hesitate to act solo to counter speculation. Current FX levels do not reflect fundamentals.
Prime Minister Noda said JPY rise since last summer putting downward pressure on economy, government and BoJ need to work closely together.
BoJ Governor Shirakawa said that there is currently no policy gap between the BoJ-government, and all central banks share goals of price stability but use differing terms and policy frameworks.
GBP
As expected, the Bank of England delivered an additional GBP50bn in the quantitative easing programme. In the statement, Governor King noted that there were some more positive signs and a gradual strengthening of output should be supported by a gentle recovery in household real incomes but issues in the Eurozone remain the big concern. He also referred to the continued credit squeeze in the UK domestic market. The pound earlier found some support from better than expected trade and industrial production data and the reaction to the QE announcement was relatively muted.
UK December industrial output rose +0.5% m/m vs +0.2% consensus. Our UK economist notes that the outperformance was driven by manufacturing output, which jumped 1% on the month - higher than the 0.2% expected by markets. UK December trade data also beat expectations, with the deficit at GBP7 bn vs GBP8.6 bn cons and GBP8.9 bn last. Our analysts note that this is December data and we already have the preliminary Q4 GDP print. Normally, a big surprise in the monthly print raises the scope for a revision to the GDP outturn, but the ONS has stated that the impact of the IP data on GDP is small.
AUD
The AUD took a knock overnight as the RBA's Statement on Monetary Policy was interpreted as dovish. Our economists note the Central Bank warned the global outlook "remains clouded". A disorderly outcome to debt problems in Europe (and contagion to our trading partners) remains the major downside risk to the global economy. However, this risk has reduced "somewhat". Although risks around the US are more balanced. Asia and China are "skewed slightly to the downside". The RBA also noted uncertainty surrounding "significant structural change", with a "once-in-a-century investment boom in resources", but "high real exchange rate". We continue to look for 25bp in additional easing up ahead, somewhat more optimistic than market expectations.
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.
10 February 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Eurogroup was not impressed with the inter-party agreement from Athens and late after the Eurogroup meeting yesterday Greek PM Venizelos was sent back to Athens with demands for deeper cuts. It appears that the EU finance ministers are not prepared to sign off the deal until they get a stronger sense that Greece will actually push through with its pledges. Lawmakers there are supposed to vote on the new austerity measures over the weekend and an "implementation law" is supposed to be considered in the next 10-15 days, according to local sources. Eurogroup chair Juncker stated on Thursday that there is now another week for new cuts to be found and he hoped the Eurogroup would be able to sign off on the plans at a new meeting next Wednesday - another deadline markets will need to contend with. In the background, the PSI deal is still running, but the ECB's participation has been of greater focus and now it appears they would not be able to calculate their own participation until Greece reaches agreement with other troika members. This only adds to potential uncertainty up ahead. While the ECB offered no change in policy, Draghi initially refused to be drawn into discussions on the subject, he later revealed his thoughts on the legality of transferring ECB holdings to the EFSF. President Draghi's post-decision conference revealed the ECB's stance on several issues.
On the macro front, little has changed and the bank remains in data-watch mode. Draghi stressed that while economic data has stabilised there are downside risks and it is too early to fully assess the impact of the 3y LTROs. On the subject of the LTROs themselves, Draghi dismissed the idea that there was any stigma attached and said that their use should be seen as a commercial or business decision only. The easing of collateral requirements further - allowing several countries' national central banks to accept credit claims as collateral, may help with overall LTRO volumes, though at a cost to the ECB's balance sheet risks. EURUSD traded 1.3251 - 1.3291, USDJPY77.54-77.75.
EUR
While the ECB offered no change in policy, President Draghi's conference revealed the ECB's stance on several issues. On the macro front, little has changed and the bank remains in data-watch mode. Draghi stressed that while economic data has stabilised there are downside risks and it is too early to fully assess the impact of the 3y LTROs. On the subject of the LTROs themselves, Draghi dismissed the idea that there was any stigma attached and set that their use should be seen as a commercial or business decision only.
The large elephant in the room was of course the ECB's stance on Greece and the majority of questions were directed to this. While Draghi initially refused to be drawn into discussions on the subject, he later revealed his thoughts on the legality of transferring ECB holdings to the EFSF. He stated that swapping the bonds with the EFSF for any loss would simply be debt monetisation but then noted that "if you consider the EFSF is governments, so if the ECB gives money to governments that's monetary financing. If the ECB distributes part of its profits to its member countries as part of the key, capital key, that's not monetary financing." While this quote can be interpreted in many ways it at least leaves the door open for ECB involvement in the debt swap, provided it is done at cost or better.
Following December's announcement of widening collateral eligibility, the ECB published details on the new criteria, which have been established for the national central banks of 7 countries (France, Italy, Spain, Cyprus, Ireland, Portugal, Austria). BoI Director General Saccomani said that the new rules with give Italian banks the chance to increase borrowing by up to EUR70 bn.
Any hopes of a major announcement from the Eurogroup faded on Thursday afternoon., Greek PM Papademos' office said talks with the troika ended 'successfully' but Dutch and German officials then hit the wires to downplay hopes of a final decision. Finally German Finance Minister Schaeuble announced that there will be no deal announced at the Thursday meeting, since the current deal does not fulfil conditions. He added that it is still not clear whether the deal can successfully reduce the debt burden to 120% of GDP., which is what the troika requirements have previously stated.
Eurogroup Chair Juncker said overnight that a new programme will provide a comprehensive blueprint for Greece's debt sustainability. The bailout may comprise of EUR100bn in new loans, and EUR30bn to encourage the debt swap. In addition, he said new proposals on governance and monitoring were required but no decisions were being made. A new Eurogroup meeting has been announced for next Wednesday to approve the programme.
JPY
In figures released overnight, domestic CGPI was softer than expected at -0.1%m/m, 0.5%y/y. Growth and price concerns remain strong - Japanese Finance Minister Azumi warned that Japan will intervene in FX as appropriate, and need to seek other countries' cooperation but won't hesitate to act solo to counter speculation. Current FX levels do not reflect fundamentals.
Prime Minister Noda said JPY rise since last summer putting downward pressure on economy, government and BoJ need to work closely together.
BoJ Governor Shirakawa said that there is currently no policy gap between the BoJ-government, and all central banks share goals of price stability but use differing terms and policy frameworks.
GBP
As expected, the Bank of England delivered an additional GBP50bn in the quantitative easing programme. In the statement, Governor King noted that there were some more positive signs and a gradual strengthening of output should be supported by a gentle recovery in household real incomes but issues in the Eurozone remain the big concern. He also referred to the continued credit squeeze in the UK domestic market. The pound earlier found some support from better than expected trade and industrial production data and the reaction to the QE announcement was relatively muted.
UK December industrial output rose +0.5% m/m vs +0.2% consensus. Our UK economist notes that the outperformance was driven by manufacturing output, which jumped 1% on the month - higher than the 0.2% expected by markets. UK December trade data also beat expectations, with the deficit at GBP7 bn vs GBP8.6 bn cons and GBP8.9 bn last. Our analysts note that this is December data and we already have the preliminary Q4 GDP print. Normally, a big surprise in the monthly print raises the scope for a revision to the GDP outturn, but the ONS has stated that the impact of the IP data on GDP is small.
AUD
The AUD took a knock overnight as the RBA's Statement on Monetary Policy was interpreted as dovish. Our economists note the Central Bank warned the global outlook "remains clouded". A disorderly outcome to debt problems in Europe (and contagion to our trading partners) remains the major downside risk to the global economy. However, this risk has reduced "somewhat". Although risks around the US are more balanced. Asia and China are "skewed slightly to the downside". The RBA also noted uncertainty surrounding "significant structural change", with a "once-in-a-century investment boom in resources", but "high real exchange rate". We continue to look for 25bp in additional easing up ahead, somewhat more optimistic than market expectations.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
Thursday, February 09, 2012
9th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
9 February 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Break above 1.3386 would open 1.3435. Support lies at 1.3089.
USDJPY BULLISH Next resistances are at 77.42 and 77.75. Initial support is at 76.71.
GBPUSD BULLISH Resistance is at 1.5947, a rally through which would open 1.6096. Support lies at 1.5789.
USDCHF NEUTRAL Pair is testing the key support area of 0.9115/066, a decline through which would expose 0.8961. Resistance is at 0.9263 ahead of 0.9339.
AUDUSD BULLISH Break above 1.0845 would expose 1.1007. Key support is at 1.0672.
USDCAD BEARISH Key support lies at 0.9892, a decline through this would signal scope for deeper pull back towards 0.9766/25. Resistance is at 1.0034.
EURCHF BEARISH Support lies at 1.2054, a move below which would expose 1.2032. Initial resistance is at 1.2133.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
EURJPY BULLISH Pressure is on 102.54; a rally through which would open 103.98. Support is at 100.38.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
9 February 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Break above 1.3386 would open 1.3435. Support lies at 1.3089.
USDJPY BULLISH Next resistances are at 77.42 and 77.75. Initial support is at 76.71.
GBPUSD BULLISH Resistance is at 1.5947, a rally through which would open 1.6096. Support lies at 1.5789.
USDCHF NEUTRAL Pair is testing the key support area of 0.9115/066, a decline through which would expose 0.8961. Resistance is at 0.9263 ahead of 0.9339.
AUDUSD BULLISH Break above 1.0845 would expose 1.1007. Key support is at 1.0672.
USDCAD BEARISH Key support lies at 0.9892, a decline through this would signal scope for deeper pull back towards 0.9766/25. Resistance is at 1.0034.
EURCHF BEARISH Support lies at 1.2054, a move below which would expose 1.2032. Initial resistance is at 1.2133.
EURGBP BEARISH Initial support lies at 0.8330 ahead of 0.8283. Key resistance is at 0.8422.
EURJPY BULLISH Pressure is on 102.54; a rally through which would open 103.98. Support is at 100.38.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
9th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
9 February 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Greek negotiations appear to be moving into the final stages as Eurogroup chairman Jean-Claude Juncker announced that a press conference is scheduled for 18.00CET on Thursday, after the Eurogroup meets. The Greek Finance Minister is due to travel to Brussels today to agree on terms, but he admitted that there are still outstanding issues ahead of today's discussions. However, the Greek government noted that the only sticking point is on pension reform, which needs to be resolved by Greece's political parties. While progress has clearly been made, negotiations remain tense and further complications to the deal have emerged.
The ECB's involvement in the debt swap remains a crucial element in the process and while we expect no major policy announcements in today's meeting, Draghi's press conference may provide new information on the ECB's official stance. The timing of Juncker's announcement suggests that the major announcements may come after the ECB meeting however. The euro's price action suggests that all of the potential 'good news' out of the Eurozone, including PSI talks and the ECB's involvement in the upcoming debt swap, have all been priced in. Risk assets have also rallied accordingly so there will be a lot of pressure on regional leaders to deliver the necessary results. Resolving the current quarter's worth of Greece-related deliberations will buy the ECB significant time to focus more on policy calibration as it seeks to maintain the slightly better than expected growth momentum seen so far this year.
Elsewhere, the BoE is expected to extend its asset purchase program with consensus estimates of GBP50 bn. Our analysts are in line with consensus but stresses downside risks to that assessment given the moderation in data and gilt market imbalance concerns. Overnight EURUSD traded in a range 1.3216-1.3305, USDJPY 77.02-77.23.
EUR
The Greek negotiations appear to be moving into the final stages as Eurogroup chairman Jean-Claude Juncker announced that a press conference is scheduled for 18.00CET on Thursday. The ECB's involvement in the debt swap remains a crucial element in the process and while we expect no major policy announcements, Draghi's press conference may provide new information on the ECB's official stance.
Releases of the draft agreement suggest the Greek government has agreed to a 20% cut in the minimum wage, delivering another 1.5% of GDP in cuts, further labour reform and bank recapitalisations. EUR300mln of the fiscal adjustment is expected to come from pensions savings, though this appears to the one outstanding issue between the main parties domestically.
A Greek government official said overnight that the country has 15 days to close a EUR300mln budget gap, but loan talks have concluded and most issues 'have been covered'. Greek Finance Minister Venizelos said that he hoped 'the Eurogroup meeting will convene and that it will take a positive decision for the programme'.
Some headlines from the negotiations started to hit the wires on Wednesday. A Eurozone official was quoted as saying that the Greek bond swap 'sweeteners' were likely to be EUR 30 bn in EFSF bonds, of maturity one or two years. On the issue of funding, the source said that the EFSF would raise the funds over a period of time. A Greek Government source cited a draft bailout memo to the IMF, saying that Greek GDP is seen as contracting by 4-5% in 2012.
German Deputy Finance Minister Steffen poured some cold water on the optimism however saying talks between Greece and private sector investors is still difficult and we have achieved worryingly little progress on Greece since 2010. He added that he wants to know from Greece what the result from the talks with creditors is. .
The Irish finance minister said that if the ECB offers discount on Greek bonds, it will strengthen Ireland's efforts for concessions .This is a new development and somewhat goes against the idea of Greek ring fencing. If the ECB decides against any involvement there are questions of seniority but ECB action is now also coming under question by the other bailed-out nations.LCH has reduced the additional margin requirement on some Ireland bonds to 25%; was 35% before
Bloomberg reported that France's debt will rise to 89.1% of GDP in 2012 including ESM - which would add EUR6.5 bn to it in 2012. The euro slipped slightly on this headline, though the move was marginal.
JPY
In figures released overnight, Machine Orders came in at -7.1% (cons. -5.0%). The annualised figure was at 6.3%, vs. cons. 8.5%. Consumer confidence came in at 40.0 (cons. 38.5).
Finance Minister Noda said JPY rise since last summer putting downward pressure on economy, government and BoJ need to work closely together.
BoJ Governor Shirakawa said that the central bank would be reviewing asset purchase figures by checking economy, though we note there are precious few sources of potential stimulus at this stage.
GBP
The Bank of England is expected to deliver an addition GBP50bn in the quantitative easing programme. In addition, industrial production and trade figures will also be released.
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 February 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The Greek negotiations appear to be moving into the final stages as Eurogroup chairman Jean-Claude Juncker announced that a press conference is scheduled for 18.00CET on Thursday, after the Eurogroup meets. The Greek Finance Minister is due to travel to Brussels today to agree on terms, but he admitted that there are still outstanding issues ahead of today's discussions. However, the Greek government noted that the only sticking point is on pension reform, which needs to be resolved by Greece's political parties. While progress has clearly been made, negotiations remain tense and further complications to the deal have emerged.
The ECB's involvement in the debt swap remains a crucial element in the process and while we expect no major policy announcements in today's meeting, Draghi's press conference may provide new information on the ECB's official stance. The timing of Juncker's announcement suggests that the major announcements may come after the ECB meeting however. The euro's price action suggests that all of the potential 'good news' out of the Eurozone, including PSI talks and the ECB's involvement in the upcoming debt swap, have all been priced in. Risk assets have also rallied accordingly so there will be a lot of pressure on regional leaders to deliver the necessary results. Resolving the current quarter's worth of Greece-related deliberations will buy the ECB significant time to focus more on policy calibration as it seeks to maintain the slightly better than expected growth momentum seen so far this year.
Elsewhere, the BoE is expected to extend its asset purchase program with consensus estimates of GBP50 bn. Our analysts are in line with consensus but stresses downside risks to that assessment given the moderation in data and gilt market imbalance concerns. Overnight EURUSD traded in a range 1.3216-1.3305, USDJPY 77.02-77.23.
EUR
The Greek negotiations appear to be moving into the final stages as Eurogroup chairman Jean-Claude Juncker announced that a press conference is scheduled for 18.00CET on Thursday. The ECB's involvement in the debt swap remains a crucial element in the process and while we expect no major policy announcements, Draghi's press conference may provide new information on the ECB's official stance.
Releases of the draft agreement suggest the Greek government has agreed to a 20% cut in the minimum wage, delivering another 1.5% of GDP in cuts, further labour reform and bank recapitalisations. EUR300mln of the fiscal adjustment is expected to come from pensions savings, though this appears to the one outstanding issue between the main parties domestically.
A Greek government official said overnight that the country has 15 days to close a EUR300mln budget gap, but loan talks have concluded and most issues 'have been covered'. Greek Finance Minister Venizelos said that he hoped 'the Eurogroup meeting will convene and that it will take a positive decision for the programme'.
Some headlines from the negotiations started to hit the wires on Wednesday. A Eurozone official was quoted as saying that the Greek bond swap 'sweeteners' were likely to be EUR 30 bn in EFSF bonds, of maturity one or two years. On the issue of funding, the source said that the EFSF would raise the funds over a period of time. A Greek Government source cited a draft bailout memo to the IMF, saying that Greek GDP is seen as contracting by 4-5% in 2012.
German Deputy Finance Minister Steffen poured some cold water on the optimism however saying talks between Greece and private sector investors is still difficult and we have achieved worryingly little progress on Greece since 2010. He added that he wants to know from Greece what the result from the talks with creditors is. .
The Irish finance minister said that if the ECB offers discount on Greek bonds, it will strengthen Ireland's efforts for concessions .This is a new development and somewhat goes against the idea of Greek ring fencing. If the ECB decides against any involvement there are questions of seniority but ECB action is now also coming under question by the other bailed-out nations.LCH has reduced the additional margin requirement on some Ireland bonds to 25%; was 35% before
Bloomberg reported that France's debt will rise to 89.1% of GDP in 2012 including ESM - which would add EUR6.5 bn to it in 2012. The euro slipped slightly on this headline, though the move was marginal.
JPY
In figures released overnight, Machine Orders came in at -7.1% (cons. -5.0%). The annualised figure was at 6.3%, vs. cons. 8.5%. Consumer confidence came in at 40.0 (cons. 38.5).
Finance Minister Noda said JPY rise since last summer putting downward pressure on economy, government and BoJ need to work closely together.
BoJ Governor Shirakawa said that the central bank would be reviewing asset purchase figures by checking economy, though we note there are precious few sources of potential stimulus at this stage.
GBP
The Bank of England is expected to deliver an addition GBP50bn in the quantitative easing programme. In addition, industrial production and trade figures will also be released.
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, February 08, 2012
8th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
8 February 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Clearance of 1.3234 has opened 1.3386 ahead of 1.3435. Support lies at 1.3089.
USDJPY NEUTRAL Support lies at 76.75 ahead of 76.49. Resistance is at 77.15 ahead of 77.42.
GBPUSD BULLISH Break above 1.5883 has opened the resistance at 1.5947 ahead of 1.6096. Support lies at 1.5789.
USDCHF NEUTRAL Pair is testing the key support area of 0.9115/066, a decline through which would expose 0.8961. Resistance is at 0.9263 ahead of 0.9339.
AUDUSD BULLISH Next resistances are at 1.1007 and 1.1081, July 27 2011 high. Support lies at 1.0672.
USDCAD BEARISH Focus is on 0.9892, a decline through this would signal scope for losses towards 0.9766/25. Resistance is at 1.0034.
EURCHF BEARISH Support lies at 1.2032 ahead of 1.2000 and resistance is at 1.2109.
EURGBP BEARISH Initial support lies at 0.8255 ahead of key low at 0.8222. Resistance is at 0.8385.
EURJPY BULLISH Focus is on 102.21/54 area; a rally through which would open 103.98. Support is at 100.38.
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.
8 February 2012 – 8:00 GMT
Wednesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH Clearance of 1.3234 has opened 1.3386 ahead of 1.3435. Support lies at 1.3089.
USDJPY NEUTRAL Support lies at 76.75 ahead of 76.49. Resistance is at 77.15 ahead of 77.42.
GBPUSD BULLISH Break above 1.5883 has opened the resistance at 1.5947 ahead of 1.6096. Support lies at 1.5789.
USDCHF NEUTRAL Pair is testing the key support area of 0.9115/066, a decline through which would expose 0.8961. Resistance is at 0.9263 ahead of 0.9339.
AUDUSD BULLISH Next resistances are at 1.1007 and 1.1081, July 27 2011 high. Support lies at 1.0672.
USDCAD BEARISH Focus is on 0.9892, a decline through this would signal scope for losses towards 0.9766/25. Resistance is at 1.0034.
EURCHF BEARISH Support lies at 1.2032 ahead of 1.2000 and resistance is at 1.2109.
EURGBP BEARISH Initial support lies at 0.8255 ahead of key low at 0.8222. Resistance is at 0.8385.
EURJPY BULLISH Focus is on 102.21/54 area; a rally through which would open 103.98. Support is at 100.38.
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.
8th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
8 February 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro is trading on a firm note as markets are somewhat more optimistic that several outstanding issues on Greece are close to resolution. Firstly, late into the session on Tuesday a Greek government spokesperson finally announced that political leaders would meet on Wednesday to respond to the bailout proposals by noon. It appears that a tentative deal has been secured with the troika, though some individual points on how the cuts are going to be achieved remain outstanding. More importantly, press reports suggest that the ECB is close to agreeing terms on participating in the Greek debt swap. The Wall Street Journal reported that the central bank will swap its holdings at purchase cost with the EFSF, so it won't take a loose.
Crucially, national central banks will not participate as this may be perceived as resembling fiscal transfers, which currently remain barred in the Eurozone on a legal basis. These central banks are holding Greek bonds in their investment portfolios. Despite some provisioning having been made they will be expected to receive full repayment. These plans are contingent upon resolution of private sector involvement, and investors will likely grill the ECB on details during Thursday's post-decision press conference. Elsewhere, consumer credit numbers in the US were also buoyant, rising by over $19bn in December, after a $20.4bn gain in November.
Our analysts note that this is the largest back-to-back gain since 2001, with figures largely led by non-revolving credit. These figures suggest that credit demand is remerging from the household sector in the US and may prove crucial in driving business expectations up ahead. The JOLTS labour survey out of the US also points to slight gains in job openings as employment conditions continue to improve, consistent with the latest BLS statistics. Ahead today, we expect more details to surface on Wednesday on how Greece is going to proceed on the bailout and the PSI, but all parties involved must realise that the clock is ticking, and with each passing hour the odds of some destabilising unilateral step will rise. EURUSD traded 1.3242-1.3286 overnight, USDJPY traded 76.76-77.15. The data calendar is relatively light today.
EUR
The euro suffered somewhat after German industrial output in December fell by 2.9% m/m vs 0.0% consensus. Our European economist notes that the positive surprises in leading indicators are yet to be reflected in hard data. It's still too early to say if activity is improving. In y/y terms, German IP looks unlikely to drop deep into negative territory.
Dow Jones reported that the meeting between Greece's party chiefs has been pushed back for a second time to Wednesday. Greek officials cited 'technical details' for the delay but based on commentary throughout the day there is clearly significant outstanding disagreement.
Greek conservative leaders Samaras said that he is still opposed to cuts in pensions, which would deepen the recession. He noted that the document on the reform package is still being awaited and the details are needed before he decides to back the measures. German media reported overnight that despite reports of a deal, the troika believes Greece's government has 'immense problems' and is unable to carry out already-approved reforms, citing the draft report of the three institutions providing financing.
According to the wall Street Journal, the ECB is now willing to exchange Greek bonds with the EFSF, but will not take any losses on the exchange. Sources note the exchange will contribute to Greece's debt reduction though it is dependent on the PSI being completed. National Central Banks of the Eurozone will not participate, probably to obviate fears of legal challenges surrounding the perception of a fiscal transfer.
German Chancellor Merkel said she rejected a Greek exit of the Eurozone and that question 'doesn't arise'. She warned that such a step would be of 'incalculable impact', but also warned that current situation is very complicated and there is a lack of 'transparency' on the part of domestic leaders.
The IIF's representatives have left the Greek PM's office after talks on the PSI. No deal was announced, but key leaders of talks have stated that fresh negotiations with private-sector creditors will continue in Paris.
The ECB reported it provided Italian banks with EUR202.6 bln of funding in January, down from EUR209.995 bln in December. analysts note that banks are all saying that most of the ECB funds have not been used for the lending/carry trade, rather just kept as liquidity buffers for forthcoming bond maturities. Customer funding is OK, with deposits and retail bonds flat since the summer. ECB use will likely go up materially in February because of the 3 years LTRO and banks may become more aggressive in carry trades provided there is clarity on both Greece and EBA methodology.
CHF
SNB's Jordan verbally defended the SNB's 1.20 floor when he gave a speech to the Swiss-American Chamber of Commerce. EURCHF rallied 20 pips into the meeting, as the usual speculation of a EURCHF floor rise circulated around markets, but Jordan barely changed his line from a recent FT interview. He said the SNB is firmly committed to the 1.20 floor, can buy unlimited quantities of foreign currency and will take additional steps if warranted.
Jordan stressed that the 'commitment to the floor applies at any time, from the moment the market opens in Sydney on Monday to when it closes in new York on Friday'. This suggests that the SNB are currently on 24-hour watch for EURCHF price action and ready to deploy at a moment's notice.
The Swiss unemployment rate came in at 3.4% (cons. 3.5%).
JPY
Overnight Japan's trade balance came in at -Yen145.8bn, worse than expectations of -?135bn. The current account balance on annualised basis was down -74.7%, coming in at Yen303.5bn. The whole figure for 2011 was Yen9.62tln, the weakest in 15 years and the largest y/y fall on record.
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.
8 February 2012 – 8:00 GMT
Wednesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
The euro is trading on a firm note as markets are somewhat more optimistic that several outstanding issues on Greece are close to resolution. Firstly, late into the session on Tuesday a Greek government spokesperson finally announced that political leaders would meet on Wednesday to respond to the bailout proposals by noon. It appears that a tentative deal has been secured with the troika, though some individual points on how the cuts are going to be achieved remain outstanding. More importantly, press reports suggest that the ECB is close to agreeing terms on participating in the Greek debt swap. The Wall Street Journal reported that the central bank will swap its holdings at purchase cost with the EFSF, so it won't take a loose.
Crucially, national central banks will not participate as this may be perceived as resembling fiscal transfers, which currently remain barred in the Eurozone on a legal basis. These central banks are holding Greek bonds in their investment portfolios. Despite some provisioning having been made they will be expected to receive full repayment. These plans are contingent upon resolution of private sector involvement, and investors will likely grill the ECB on details during Thursday's post-decision press conference. Elsewhere, consumer credit numbers in the US were also buoyant, rising by over $19bn in December, after a $20.4bn gain in November.
Our analysts note that this is the largest back-to-back gain since 2001, with figures largely led by non-revolving credit. These figures suggest that credit demand is remerging from the household sector in the US and may prove crucial in driving business expectations up ahead. The JOLTS labour survey out of the US also points to slight gains in job openings as employment conditions continue to improve, consistent with the latest BLS statistics. Ahead today, we expect more details to surface on Wednesday on how Greece is going to proceed on the bailout and the PSI, but all parties involved must realise that the clock is ticking, and with each passing hour the odds of some destabilising unilateral step will rise. EURUSD traded 1.3242-1.3286 overnight, USDJPY traded 76.76-77.15. The data calendar is relatively light today.
EUR
The euro suffered somewhat after German industrial output in December fell by 2.9% m/m vs 0.0% consensus. Our European economist notes that the positive surprises in leading indicators are yet to be reflected in hard data. It's still too early to say if activity is improving. In y/y terms, German IP looks unlikely to drop deep into negative territory.
Dow Jones reported that the meeting between Greece's party chiefs has been pushed back for a second time to Wednesday. Greek officials cited 'technical details' for the delay but based on commentary throughout the day there is clearly significant outstanding disagreement.
Greek conservative leaders Samaras said that he is still opposed to cuts in pensions, which would deepen the recession. He noted that the document on the reform package is still being awaited and the details are needed before he decides to back the measures. German media reported overnight that despite reports of a deal, the troika believes Greece's government has 'immense problems' and is unable to carry out already-approved reforms, citing the draft report of the three institutions providing financing.
According to the wall Street Journal, the ECB is now willing to exchange Greek bonds with the EFSF, but will not take any losses on the exchange. Sources note the exchange will contribute to Greece's debt reduction though it is dependent on the PSI being completed. National Central Banks of the Eurozone will not participate, probably to obviate fears of legal challenges surrounding the perception of a fiscal transfer.
German Chancellor Merkel said she rejected a Greek exit of the Eurozone and that question 'doesn't arise'. She warned that such a step would be of 'incalculable impact', but also warned that current situation is very complicated and there is a lack of 'transparency' on the part of domestic leaders.
The IIF's representatives have left the Greek PM's office after talks on the PSI. No deal was announced, but key leaders of talks have stated that fresh negotiations with private-sector creditors will continue in Paris.
The ECB reported it provided Italian banks with EUR202.6 bln of funding in January, down from EUR209.995 bln in December. analysts note that banks are all saying that most of the ECB funds have not been used for the lending/carry trade, rather just kept as liquidity buffers for forthcoming bond maturities. Customer funding is OK, with deposits and retail bonds flat since the summer. ECB use will likely go up materially in February because of the 3 years LTRO and banks may become more aggressive in carry trades provided there is clarity on both Greece and EBA methodology.
CHF
SNB's Jordan verbally defended the SNB's 1.20 floor when he gave a speech to the Swiss-American Chamber of Commerce. EURCHF rallied 20 pips into the meeting, as the usual speculation of a EURCHF floor rise circulated around markets, but Jordan barely changed his line from a recent FT interview. He said the SNB is firmly committed to the 1.20 floor, can buy unlimited quantities of foreign currency and will take additional steps if warranted.
Jordan stressed that the 'commitment to the floor applies at any time, from the moment the market opens in Sydney on Monday to when it closes in new York on Friday'. This suggests that the SNB are currently on 24-hour watch for EURCHF price action and ready to deploy at a moment's notice.
The Swiss unemployment rate came in at 3.4% (cons. 3.5%).
JPY
Overnight Japan's trade balance came in at -Yen145.8bn, worse than expectations of -?135bn. The current account balance on annualised basis was down -74.7%, coming in at Yen303.5bn. The whole figure for 2011 was Yen9.62tln, the weakest in 15 years and the largest y/y fall on record.
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, February 07, 2012
7th of February 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
7 February 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH As long as support at 1.3026 holds, look for a move above 1.3234, the Jan. 27 key high, to expose 1.3386.
USDJPY BEARISH Two key supports are at 76.04 and 75.35. Resistance is at 77.15.
GBPUSD BULLISH Focus is on 1.5883, a break above which would open 1.5947. Support lies at 1.5699.
USDCHF NEUTRAL Support lies at 0.9115 ahead of 0.9066, the Nov. 30 key low. Resistance is at 0.9339 ahead of 0.9396.
AUDUSD BULLISH Clearance of 1.0794 has opened the way for further gains towards 1.1007 and 1.1081, July 27 2011 high. Support lies at 1.0672.
USDCAD BEARISH Focus is on 0.9892, a decline through this would signal scope for losses towards 0.9725. Resistance is at 1.0034.
EURCHF BEARISH Support lies at 1.2032 ahead of 1.2000 and resistance is at 1.2086.
EURGBP BEARISH Initial support lies at 0.8255 ahead of key low at 0.8222. Resistance is at 0.8344.
EURJPY BULLISH Clearance of 100.89 would open 101.58. Support is at 99.25.
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.
7 February 2012 – 8:00 GMT
Tuesday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BULLISH As long as support at 1.3026 holds, look for a move above 1.3234, the Jan. 27 key high, to expose 1.3386.
USDJPY BEARISH Two key supports are at 76.04 and 75.35. Resistance is at 77.15.
GBPUSD BULLISH Focus is on 1.5883, a break above which would open 1.5947. Support lies at 1.5699.
USDCHF NEUTRAL Support lies at 0.9115 ahead of 0.9066, the Nov. 30 key low. Resistance is at 0.9339 ahead of 0.9396.
AUDUSD BULLISH Clearance of 1.0794 has opened the way for further gains towards 1.1007 and 1.1081, July 27 2011 high. Support lies at 1.0672.
USDCAD BEARISH Focus is on 0.9892, a decline through this would signal scope for losses towards 0.9725. Resistance is at 1.0034.
EURCHF BEARISH Support lies at 1.2032 ahead of 1.2000 and resistance is at 1.2086.
EURGBP BEARISH Initial support lies at 0.8255 ahead of key low at 0.8222. Resistance is at 0.8344.
EURJPY BULLISH Clearance of 100.89 would open 101.58. Support is at 99.25.
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.
7th of February 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
7 February 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
AUD was the stand-out performer overnight, breaking through 1.08 as the RBA surprised investors and left its cash rate on hold at 4.25%. There was a unanimous consensus for a 25bp cut so the move was very surprising. The board noted that policy was appropriate 'for the moment'. This suggests the bank still has an easing bias and will 'adjust the cash rate as necessary to foster sustainable growth and low inflation'. Our analysts continue to see a modest trimming of the cash rate over the coming months given the continued uncertainty around Greece, mixed domestic data and the high AUD.
The currency is now at stretched levels and we would look to fade any move higher from here, in fact on Monday we entered a trade recommendation to go short AUD via a 3m AUD put /USD call option, taking advantage of the recent decline in volatility.
The news wires were quiet on Greece overnight and the EUR managed to recover some lost ground during the US session but the commentary from the Eurozone remains rather gloomy. After talks, German Chancellor Merkel and French President Sarkozy both expressed frustration with the state of PSI and troika talks on Greece, as the Greek PM had to postpone domestic talks on reform to meet the troika's demands. EU leaders have expressed dismay at the slow pace of implementing changes, but also expressed the view that allowing Greece to default or exit the Eurozone would also be unacceptable.
The focus on Tuesday will be on final headlines from domestic parties in Greece and the various agreements made to obtain support for further troika funding. Details for the PSI and OSI will also be sought, but the IIF and Greece have missed so many deadlines over the past few weeks that markets are not particularly attuned to fresh news on this front, given the mathematics involved have been communicated in advance.
Today, industrial production data out of Germany is due, while policymaker commentary by Thomas Jordan may attract some attention, particularly after his comments last week reaffirming the central bank's resolve in defending the Eurozone. Fed Chairman Bernanke's testimony to the Senate Budget Committee should not differ from his House testimony, though a more upbeat tone can be expected in the wake of the latest unemployment report. Overnight EURUSD traded 1.3089-1.3141 and USDJPY 76.50-76.79.
EUR
German industry orders in December rose by +1.7% m/m vs consensus. Our analysts note that the data is driven by foreign orders (+4.3% m/m), while domestic orders declined by 1.4%. The German economy ministry said the Dec orders were not driven by big ticket items. Yet, it probably contained some correction from a very weak November (-4.9%). On total, Q4 order intake was 1.4% down from Q3. So still significant weakening on the cards, but no drop-off as suggested by November data.
Talks between domestic parties in Greece were postponed until Tuesday as the search for an accord before trika negotiations continue. Many parties involved acknowledged that reforms in Greece were behind schedule. However, the Greek EU Commissioner Maria Damanaki said that Greece can 'stay in euro' if reforms are implemented and internal devaluation was 'preferable' to an outright euro exit. She also called for the ECB to act as a lender of last resort. Greek unions have called a general strike for Tuesday.
The Greek Finance Minister said that negotiations with the troika were very tough and negotiations remain difficult. He warned that new issues were arising despite progress in talks.
According to the PASOK party in Greece, Greek Prime Minister has instructed the country's Finance Ministry to 'document the costs' of a Eurozone exit. So far no top leader in Europe has been willing to countenance a Greek exit. On Monday German Chancellor Merkel warned that Germany 'would not accept' a Greek default.
After talks with French President Sarkozy, Merkel remarked that 'couldn't understand' why a few more days were needed and warned that 'time is running out'. Sarkozy sounded more upbeat, noting that an agreement 'has never been so close, neither for private nor public creditors'. The mention of public creditors suggests that the ECB will be part of the final agreements.
EU President Van Rompuy acknowledged that solving the crisis was taking longer than expected, and Greek reform implementation was taking longer than expected. However, he said he 'couldn't promise' a solution for the country.
IMF Chief Economist Olivier Blanchard said that the haircut on Greek debt will be 'very large', and warned that Greece would not be able to return to financial markets for a long time.
German industrial production data are the key release on Tuesday, though markets will be keen to look for fresh initiatives out of Greece..
AUD
The RBA surprised markets by leaving rates on hold at 4.25%. There was a unanimous consensus for a 25bp cut so the move was surprising and the board noted that policy was appropriate "for the moment". This suggests the bank still has an easing bias and will "adjust the cash rate as necessary to foster sustainable growth and low inflation". Our analysts continue to see a modest trimming of the cash rate over the coming months given the continued uncertainty around Greece, mixed domestic data and the high AUD.
Australian retail sales were softer than expectations, coming in at -0.1%m/m (cons. +0.2%). Our economists note the retail trend has clearly weakened, with flat values in the last 3 months, after previously showing some pick-up.
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 February 2012 – 8:00 GMT
Tuesday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
USD
AUD was the stand-out performer overnight, breaking through 1.08 as the RBA surprised investors and left its cash rate on hold at 4.25%. There was a unanimous consensus for a 25bp cut so the move was very surprising. The board noted that policy was appropriate 'for the moment'. This suggests the bank still has an easing bias and will 'adjust the cash rate as necessary to foster sustainable growth and low inflation'. Our analysts continue to see a modest trimming of the cash rate over the coming months given the continued uncertainty around Greece, mixed domestic data and the high AUD.
The currency is now at stretched levels and we would look to fade any move higher from here, in fact on Monday we entered a trade recommendation to go short AUD via a 3m AUD put /USD call option, taking advantage of the recent decline in volatility.
The news wires were quiet on Greece overnight and the EUR managed to recover some lost ground during the US session but the commentary from the Eurozone remains rather gloomy. After talks, German Chancellor Merkel and French President Sarkozy both expressed frustration with the state of PSI and troika talks on Greece, as the Greek PM had to postpone domestic talks on reform to meet the troika's demands. EU leaders have expressed dismay at the slow pace of implementing changes, but also expressed the view that allowing Greece to default or exit the Eurozone would also be unacceptable.
The focus on Tuesday will be on final headlines from domestic parties in Greece and the various agreements made to obtain support for further troika funding. Details for the PSI and OSI will also be sought, but the IIF and Greece have missed so many deadlines over the past few weeks that markets are not particularly attuned to fresh news on this front, given the mathematics involved have been communicated in advance.
Today, industrial production data out of Germany is due, while policymaker commentary by Thomas Jordan may attract some attention, particularly after his comments last week reaffirming the central bank's resolve in defending the Eurozone. Fed Chairman Bernanke's testimony to the Senate Budget Committee should not differ from his House testimony, though a more upbeat tone can be expected in the wake of the latest unemployment report. Overnight EURUSD traded 1.3089-1.3141 and USDJPY 76.50-76.79.
EUR
German industry orders in December rose by +1.7% m/m vs consensus. Our analysts note that the data is driven by foreign orders (+4.3% m/m), while domestic orders declined by 1.4%. The German economy ministry said the Dec orders were not driven by big ticket items. Yet, it probably contained some correction from a very weak November (-4.9%). On total, Q4 order intake was 1.4% down from Q3. So still significant weakening on the cards, but no drop-off as suggested by November data.
Talks between domestic parties in Greece were postponed until Tuesday as the search for an accord before trika negotiations continue. Many parties involved acknowledged that reforms in Greece were behind schedule. However, the Greek EU Commissioner Maria Damanaki said that Greece can 'stay in euro' if reforms are implemented and internal devaluation was 'preferable' to an outright euro exit. She also called for the ECB to act as a lender of last resort. Greek unions have called a general strike for Tuesday.
The Greek Finance Minister said that negotiations with the troika were very tough and negotiations remain difficult. He warned that new issues were arising despite progress in talks.
According to the PASOK party in Greece, Greek Prime Minister has instructed the country's Finance Ministry to 'document the costs' of a Eurozone exit. So far no top leader in Europe has been willing to countenance a Greek exit. On Monday German Chancellor Merkel warned that Germany 'would not accept' a Greek default.
After talks with French President Sarkozy, Merkel remarked that 'couldn't understand' why a few more days were needed and warned that 'time is running out'. Sarkozy sounded more upbeat, noting that an agreement 'has never been so close, neither for private nor public creditors'. The mention of public creditors suggests that the ECB will be part of the final agreements.
EU President Van Rompuy acknowledged that solving the crisis was taking longer than expected, and Greek reform implementation was taking longer than expected. However, he said he 'couldn't promise' a solution for the country.
IMF Chief Economist Olivier Blanchard said that the haircut on Greek debt will be 'very large', and warned that Greece would not be able to return to financial markets for a long time.
German industrial production data are the key release on Tuesday, though markets will be keen to look for fresh initiatives out of Greece..
AUD
The RBA surprised markets by leaving rates on hold at 4.25%. There was a unanimous consensus for a 25bp cut so the move was surprising and the board noted that policy was appropriate "for the moment". This suggests the bank still has an easing bias and will "adjust the cash rate as necessary to foster sustainable growth and low inflation". Our analysts continue to see a modest trimming of the cash rate over the coming months given the continued uncertainty around Greece, mixed domestic data and the high AUD.
Australian retail sales were softer than expectations, coming in at -0.1%m/m (cons. +0.2%). Our economists note the retail trend has clearly weakened, with flat values in the last 3 months, after previously showing some pick-up.
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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