DAILY MARKET COMMENTARY
4 May 2012 – 8:00 GMT
Friday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH A break below 1.3058 would trigger further weakness towards 1.2995. Resistance is at 1.3241.
USDJPY BEARISH Significant support area is at 79.64/53. Resistance is at 80.71, the mid-point of recent sell-off.
GBPUSD BULLISH A move above 1.6248 would reinforce the bullish conditions and open the way to 1.6302. Near-term support lies at 1.6112 ahead of 1.6054.
USDCHF BULLISH Key resistance is at 0.9252, while support lies at 0.9043.
AUDUSD BEARISH The pair is currently testing the critical support area at 1.0260/26, a break through which would open 1.0119. Resistance is at 1.0355.
USDCAD BEARISH Support is at 0.9829, a break here would expose 0.9800. Resistance is at 0.9927.
EURCHF NEUTRAL Resistance is at 1.2070, while support lies at 1.2000.
EURGBP BEARISH Trend and momentum tools are pointing south; there is scope for a move towards 0.8068. Near-term resistance is at 0.8163.
EURJPY BEARISH Initial support is at 104.61; a decline through the level would reinforce the bearish conditions and open 104.24. Resistance is at 106.55.
SCHEDULE
Please visit our Economic Calendar for a for a schedule of market news and events: http://www.fibosignals.com/5585/calendar.html.
A. White
Analyst at Fibosignals.com
DISCLAIMER: Fibosignals.com’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. Fibosignals.com assumes no responsibility or liability from gains or losses incurred by the information herein contained. Opinions, conclusions and other information expressed in this message are not given or endorsed by Fibosignals.com unless otherwise indicated by an authorized representative.
+++ market trends - news - analysis - strategies and more! +++
Friday, May 04, 2012
4th of May 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
4 May 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The RBA's quarterly Statement on Monetary Policy provided further colour on the decision to cut the cash rate by 50 bp on Tuesday. End-2012 forecasts for both core inflation and GDP were modestly downgraded. This came as a minor relief to FX investors, some of whom had feared such a large rate reduction might need substantial forecast downgrades in order to justify it. AUDUSD climbed 20 pips afterwards but eventually gave back all gains. Our analysts team note though that the bank's assessment of domestic growth now appears to be much less upbeat. They also expect next week's budget to confirm suspicions that a very significant amount of fiscal drag is in the pipeline over the coming 12 months. Consequently they now expect another 50 bp of RBA by Q3, up from 25 bp previously. They also lower their year-end forecast for AUDUSD to 1.00 from 1.05.
USDJPY came off its highs on the weaker than anticipated 53.5 April ISM non-manufacturing print, which reflected declines in the key new orders (to 53.5 from 58.8) and employment (to 54.2 from 56.7) sub-indices. Cable shrugged off the soggy services PMI for April of 53.3, as the forward-looking components improved - reinforcing our view that there will be no further QE from the BoE this month. The stage is now set for today's US employment data for April. Here, we would stress that the below-consensus ADP figure of 119k has not altered the above-consensus 170k payrolls forecast of our US economics team. Risks, however, would appear to be skewed to the downside, given the tendency for below-trend April readings in the BLS series with four-week sample periods like this year. Any undershoot on April payrolls compared to the 160k market consensus (89k-210k range), in the context of the weak March results, would certainly put the dollar on the back foot.
EUR
The ECB left rates unchanged as expected. Draghi did not meet dovish market expectations in his press conference and the euro gained as he said the ECB "did not discuss any specific move in interest rates". He said that despite the recent weakness in economic data, ECB's baseline scenario has not changed and it continues to foresee a "gradual recovery in the course of the year".
Draghi stressed that the impact of the LTROs is not fading away yet, noting that the positive effects on credit supply, deposit bases at banks and key stress indicators in the financial markets are still evident.
Regarding Spain, Draghi said that the ECB has "full confidence" that "action will be taken" by Spanish authorities to shore up the banking system and reduce the fiscal deficit. Draghi also stated that Italy has achieved "remarkable fiscal consolidation" and the "government should be encouraged for its efforts".
Spain sold a total EUR2.51 bn in Thursday's auction. Yields were understandably higher than previous auctions, but bid-covers were reasonable, and the event passed with little impact on the FX markets. France sold EUR7.4 bn of bonds, at the top of its target range, amid solid demand. The successful auction led to a rally in OATs and 10-year yields subsequently dropped by 5 bp.
GBP
Nationwide house prices fell in April by 0.2% m/m (consensus: 0.5%, prior: -1.0%) mainly due to the end of the tax break for first-time home buyers. In y/y terms, house prices fell 0.9% (consensus: -0.3%, prior: -0.9%).
The services PMI slipped to 53.3 in April from 55.3 in March, below market expectations of 54.2. Though worse than anticipated, some of the forward-looking indicators such as business expectations and outstanding business improved, suggesting that the growth moderation could be short-lived.
AUD
Our analysts team now expect the RBA's cash rate to trough at 3.25%, down from 3.5% previously. They anticipate next week's budget will introduce a considerable fiscal drag, and this makes it more likely that the RBA will supply more easing to compensate.
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.
4 May 2012 – 8:00 GMT
Friday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
The RBA's quarterly Statement on Monetary Policy provided further colour on the decision to cut the cash rate by 50 bp on Tuesday. End-2012 forecasts for both core inflation and GDP were modestly downgraded. This came as a minor relief to FX investors, some of whom had feared such a large rate reduction might need substantial forecast downgrades in order to justify it. AUDUSD climbed 20 pips afterwards but eventually gave back all gains. Our analysts team note though that the bank's assessment of domestic growth now appears to be much less upbeat. They also expect next week's budget to confirm suspicions that a very significant amount of fiscal drag is in the pipeline over the coming 12 months. Consequently they now expect another 50 bp of RBA by Q3, up from 25 bp previously. They also lower their year-end forecast for AUDUSD to 1.00 from 1.05.
USDJPY came off its highs on the weaker than anticipated 53.5 April ISM non-manufacturing print, which reflected declines in the key new orders (to 53.5 from 58.8) and employment (to 54.2 from 56.7) sub-indices. Cable shrugged off the soggy services PMI for April of 53.3, as the forward-looking components improved - reinforcing our view that there will be no further QE from the BoE this month. The stage is now set for today's US employment data for April. Here, we would stress that the below-consensus ADP figure of 119k has not altered the above-consensus 170k payrolls forecast of our US economics team. Risks, however, would appear to be skewed to the downside, given the tendency for below-trend April readings in the BLS series with four-week sample periods like this year. Any undershoot on April payrolls compared to the 160k market consensus (89k-210k range), in the context of the weak March results, would certainly put the dollar on the back foot.
EUR
The ECB left rates unchanged as expected. Draghi did not meet dovish market expectations in his press conference and the euro gained as he said the ECB "did not discuss any specific move in interest rates". He said that despite the recent weakness in economic data, ECB's baseline scenario has not changed and it continues to foresee a "gradual recovery in the course of the year".
Draghi stressed that the impact of the LTROs is not fading away yet, noting that the positive effects on credit supply, deposit bases at banks and key stress indicators in the financial markets are still evident.
Regarding Spain, Draghi said that the ECB has "full confidence" that "action will be taken" by Spanish authorities to shore up the banking system and reduce the fiscal deficit. Draghi also stated that Italy has achieved "remarkable fiscal consolidation" and the "government should be encouraged for its efforts".
Spain sold a total EUR2.51 bn in Thursday's auction. Yields were understandably higher than previous auctions, but bid-covers were reasonable, and the event passed with little impact on the FX markets. France sold EUR7.4 bn of bonds, at the top of its target range, amid solid demand. The successful auction led to a rally in OATs and 10-year yields subsequently dropped by 5 bp.
GBP
Nationwide house prices fell in April by 0.2% m/m (consensus: 0.5%, prior: -1.0%) mainly due to the end of the tax break for first-time home buyers. In y/y terms, house prices fell 0.9% (consensus: -0.3%, prior: -0.9%).
The services PMI slipped to 53.3 in April from 55.3 in March, below market expectations of 54.2. Though worse than anticipated, some of the forward-looking indicators such as business expectations and outstanding business improved, suggesting that the growth moderation could be short-lived.
AUD
Our analysts team now expect the RBA's cash rate to trough at 3.25%, down from 3.5% previously. They anticipate next week's budget will introduce a considerable fiscal drag, and this makes it more likely that the RBA will supply more easing to compensate.
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, May 03, 2012
3rd of May 2012 - Technical Forex Market Overview
DAILY MARKET COMMENTARY
3 May 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH The first target support is at 1.3105, a break below this level would open 1.3058. Near-term resistance is at 1.3241.
USDJPY BEARISH Support is offered by the significant area at 79.64/53, a break below would expose 79.14. Resistance is at 80.71.
GBPUSD BULLISH Resistance is at 1.6248; a break above would reinforce the bull trend and expose 1.6302. Near-term support lies at 1.6112 ahead of 1.6054.
USDCHF NEUTRAL Key resistance is at 0.9252, while support lies at 0.9043 ahead of 0.9002.
AUDUSD BEARISH The pair is approaching the important support area at 1.0260/26. Resistance is at 1.0430.
USDCAD BEARISH Near-term support lies at 0.9800; a break here would be an important bearish event and extend weakness towards 0.9766. Resistance is at 0.9905.
EURCHF NEUTRAL Resistance is at 1.2070, while support lies at 1.2000.
EURGBP BEARISH Trend conditions remain bearish, support focus is on 0.8068. Resistance is at 0.8163.
EURJPY BEARISH The cross is under pressure, targets the key support offered at 104.61/24. Resistance is at 106.55.
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.
3 May 2012 – 8:00 GMT
Thursday
_____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
TECHNICAL DATA
EURUSD BEARISH The first target support is at 1.3105, a break below this level would open 1.3058. Near-term resistance is at 1.3241.
USDJPY BEARISH Support is offered by the significant area at 79.64/53, a break below would expose 79.14. Resistance is at 80.71.
GBPUSD BULLISH Resistance is at 1.6248; a break above would reinforce the bull trend and expose 1.6302. Near-term support lies at 1.6112 ahead of 1.6054.
USDCHF NEUTRAL Key resistance is at 0.9252, while support lies at 0.9043 ahead of 0.9002.
AUDUSD BEARISH The pair is approaching the important support area at 1.0260/26. Resistance is at 1.0430.
USDCAD BEARISH Near-term support lies at 0.9800; a break here would be an important bearish event and extend weakness towards 0.9766. Resistance is at 0.9905.
EURCHF NEUTRAL Resistance is at 1.2070, while support lies at 1.2000.
EURGBP BEARISH Trend conditions remain bearish, support focus is on 0.8068. Resistance is at 0.8163.
EURJPY BEARISH The cross is under pressure, targets the key support offered at 104.61/24. Resistance is at 106.55.
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.
3rd of May 2012 - Fundamental Forex Market Overview
DAILY MARKET COMMENTARY
3 May 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Expectations are building that today's ECB press conference could see the central bank turn significantly more dovish., with euro negative consequences. Wednesday's series of worrisome Eurozone data prints would certainly seem to warrant a rhetorical shift. It has also not gone unnoticed that President Draghi endorsed the concept of a "growth compact" in parliamentary testimony last week for the first time. Investors have also remarked on the meeting's location - in Barcelona for a change - in the expectation that this will somehow concentrate minds on the gravity of the situation facing the periphery, thus provoking a more dovish outcome.
These observations are not without merit, but market speculation of a possible rate cut - either to the deposit rate or to the refi rate itself - does seem to be wide of the mark. Our European economics team think it is unlikely that any rate adjustments will be made, and economists surveyed by Bloomberg are unanimous in their expectation that the refi rate will remain at 1%. However, we also note that collective bargaining negotiations over unionized pay are still ongoing in Germany, and these could ultimately yield wage increases of well above the prevailing inflation rate. Awareness of this on the Governing Council could help push the rhetoric needle out of the "deeply dovish" zone, and back towards "merely dovish". Given that a rate adjustment is so unlikely investors will be particularly alert for any hint of an upcoming policy response, whether that would come via a rate adjustment or by means of further 3y LTROs.
Before the ECB meeting, the focus will temporarily come to rest on Spain where an auction of bonos is scheduled. Our analysts note that this auction coincides with heavy Spanish redemptions and coupon payments, freeing up plenty cash that could be ploughed back in to help absorb today's supply. In the US, the ADP estimate of private sector payrolls disappointed at only +119k (cons. +170k). USDJPY dropped 20 pips on that. Our analysts note though that ADP has been an unreliable indicator of the official change in private payrolls as reported by the Bureau of Labour Statistics (BLS). They have also noticed that, for April data in particular over the past two years, ADP has significantly underestimated the official BLS reading. So, our economists stick to their BLS nonfarm payrolls forecast of +180k (cons. +167k). After three weeks of higher initial jobless claims, Thursday's update will be even more closely watched than usual - although the ECB press conference which begins at the same time will provide some distraction.
EUR
The euro came under pressure on Wednesday after a series of poor data prints out of the Eurozone. Eurozone manufacturing PMI fell to 45.9 (cons. 46.0), a 34-month low. Readings in the periphery were more concerning however: Spanish manufacturing PMI fell to 43.6 from 44.5, while the output sub-component dropped to 41.7. Italian PMI was well below expectations at 43.8, down from 47.9 in March. German and French numbers were also marked down - France to 46.9 and Germany to 46.2 - an indication that the economic weakness is not just affecting the periphery.
German unemployment increased by 19K (cons -10K), pushing the unemployment rate to 6.8%, still close to all-time lows. The Italian unemployment rate increased for the fifth consecutive month, jumping to 9.8% from 9.4% in March (it was 8.3% in July). As a consequence, euro area unemployment nudged up to 10.9% from 10.8 in February, the 9th consecutive increase.
GBP
Manufacturing PMI fell to 50.5 after a downwardly-revised 51.9 in March. Most of the components of the report were weak with new orders at the lowest levels since November and exports at the lowest level since May 2009. The all-important Services PMI is due on Thursday.
Governor King said that inflation in the UK is too high and that the recovery is proving slower than hoped. Somewhat ominously he added that the crisis is "far from over" and that an escalation of the sovereign debt crisis inside the Eurozone may endanger UK banks.
NZD
New Zealand's unemployment rate unexpectedly jumped to 6.7% (cons. 6.3%, prev. 6.4%) prompting a sharp kiwi selloff. A closer look at the data showed a large jump in the participation rate too, which went some way towards explaining the higher unemployment rate, and NZDUSD eventually steadied.
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.
3 May 2012 – 8:00 GMT
Thursday
____________________________________________________________________
Market Analysis Desk
Foreign Exchange Research: www.fibosignals.com/5585/resources.html
_____________________________________________________________________
FUNDAMENTAL ANALYSIS at 0800 GMT
WORLD
Expectations are building that today's ECB press conference could see the central bank turn significantly more dovish., with euro negative consequences. Wednesday's series of worrisome Eurozone data prints would certainly seem to warrant a rhetorical shift. It has also not gone unnoticed that President Draghi endorsed the concept of a "growth compact" in parliamentary testimony last week for the first time. Investors have also remarked on the meeting's location - in Barcelona for a change - in the expectation that this will somehow concentrate minds on the gravity of the situation facing the periphery, thus provoking a more dovish outcome.
These observations are not without merit, but market speculation of a possible rate cut - either to the deposit rate or to the refi rate itself - does seem to be wide of the mark. Our European economics team think it is unlikely that any rate adjustments will be made, and economists surveyed by Bloomberg are unanimous in their expectation that the refi rate will remain at 1%. However, we also note that collective bargaining negotiations over unionized pay are still ongoing in Germany, and these could ultimately yield wage increases of well above the prevailing inflation rate. Awareness of this on the Governing Council could help push the rhetoric needle out of the "deeply dovish" zone, and back towards "merely dovish". Given that a rate adjustment is so unlikely investors will be particularly alert for any hint of an upcoming policy response, whether that would come via a rate adjustment or by means of further 3y LTROs.
Before the ECB meeting, the focus will temporarily come to rest on Spain where an auction of bonos is scheduled. Our analysts note that this auction coincides with heavy Spanish redemptions and coupon payments, freeing up plenty cash that could be ploughed back in to help absorb today's supply. In the US, the ADP estimate of private sector payrolls disappointed at only +119k (cons. +170k). USDJPY dropped 20 pips on that. Our analysts note though that ADP has been an unreliable indicator of the official change in private payrolls as reported by the Bureau of Labour Statistics (BLS). They have also noticed that, for April data in particular over the past two years, ADP has significantly underestimated the official BLS reading. So, our economists stick to their BLS nonfarm payrolls forecast of +180k (cons. +167k). After three weeks of higher initial jobless claims, Thursday's update will be even more closely watched than usual - although the ECB press conference which begins at the same time will provide some distraction.
EUR
The euro came under pressure on Wednesday after a series of poor data prints out of the Eurozone. Eurozone manufacturing PMI fell to 45.9 (cons. 46.0), a 34-month low. Readings in the periphery were more concerning however: Spanish manufacturing PMI fell to 43.6 from 44.5, while the output sub-component dropped to 41.7. Italian PMI was well below expectations at 43.8, down from 47.9 in March. German and French numbers were also marked down - France to 46.9 and Germany to 46.2 - an indication that the economic weakness is not just affecting the periphery.
German unemployment increased by 19K (cons -10K), pushing the unemployment rate to 6.8%, still close to all-time lows. The Italian unemployment rate increased for the fifth consecutive month, jumping to 9.8% from 9.4% in March (it was 8.3% in July). As a consequence, euro area unemployment nudged up to 10.9% from 10.8 in February, the 9th consecutive increase.
GBP
Manufacturing PMI fell to 50.5 after a downwardly-revised 51.9 in March. Most of the components of the report were weak with new orders at the lowest levels since November and exports at the lowest level since May 2009. The all-important Services PMI is due on Thursday.
Governor King said that inflation in the UK is too high and that the recovery is proving slower than hoped. Somewhat ominously he added that the crisis is "far from over" and that an escalation of the sovereign debt crisis inside the Eurozone may endanger UK banks.
NZD
New Zealand's unemployment rate unexpectedly jumped to 6.7% (cons. 6.3%, prev. 6.4%) prompting a sharp kiwi selloff. A closer look at the data showed a large jump in the participation rate too, which went some way towards explaining the higher unemployment rate, and NZDUSD eventually steadied.
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.