New York Session – February 8, 2012 4:13 PM
The buck traded slightly firmer today but remains vulnerable to event risk ahead of key central bank meetings tomorrow and as details emerge regarding a Greek debt and austerity deal. The USD is also showing technical signs of weakness as the Dollar Index trades below the 100-day sma. It was a relatively quiet day in the FX markets as prices consolidated ahead of tomorrow’s BoE and ECB meetings. There was little economic data released out of North America with the only data of note being weekly U.S. MBA mortgage applications which rose 7.5% (prior -2.9%) and Canada’s January housing starts which declined slightly to 197.9k from the prior 199.9k. The Loonie is weaker with USD/CAD retesting the 200-day SMA as resistance. Full text »
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Asia Session – February 8, 2012 1:19 AM
It was a fairly quiet day on the FX front, but a slew of
earnings announcements kept equity investors on their toes. Before the open,
BHP surprised the market by announcing a drop in first-half profits of 5.5%,
causing the stock to slide around 0.6%. In Japan, Toyota shares were lifted
after the company upgraded its fiscal-year earnings outlook.
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New York Session – February 7, 2012 4:17 PM
The buck reversed earlier gains after Bernanke downplayed recent labor data and the euro rose amid hopes that Greek debt and austerity negotiations are in the final stages. With no top tier economic data released out of the U.S., it was headlines once again that drove price action. Fed Chairman Ben Bernanke testified before the Senate Budget Committee and cautioned that the current unemployment rate “no doubt understates the weakness of the labor market”, noting the reduction in the labor force due to those that are discouraged. The dovish comments boosted market sentiment as it was interpreted that further accommodation is still under consideration (See more in our Fundamental Update: The Beveridge Curve and Bernanke’s comments). The prospect of QE3 put pressure on the US dollar with the greenback declining against all of the G10 currencies except for the yen. Full text »
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Asia Session – February 7, 2012 1:45 AM
The RBA
surprised the market by leaving rates unchanged at 4.25%. As expected it was a
very close call, but the bank left the door open for possible future rate cuts;
opting to adopt the wait-and-see approach.
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New York Session – February 6, 2012 4:18 PM
With no economic data releases today, the market refocused its attention on Greece and price action was driven mostly by headlines out of Europe. Risk sentiment fell slightly and the dollar was mostly firmer as several EU officials spoke today. German Chancellor Angela Merkel said that “time is running out” in Greek talks and noted that the whole euro area is dependent on the outcome of Greek talks. Both she and French President Sarkozy said that there will be no additional aid for Greece without meeting the Troika’s austerity terms. Merkel and Sarkozy or “Merkozy” said that they are working to avoid a Greek default while Greece’s Reppas said that the country is working with the Troika to meet its commitments. EU President Van Rompuy also spoke and his comments weighed on the euro as he admitted that fixing Greece is taking longer than expected and that he cannot promise a solution. EUR/USD traded slightly lower amid all of the official rhetoric and remained within its recent range markets wait for something more definitive. Full text »
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London Session – February 6, 2012 12:41 PM
London Session: Investors take advantage of positive risk sentiment Full text »
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Asia Session – February 6, 2012 1:17 AM
Australian retail sales surprised the market on the downside, coming in at -0.1% for December (consensus +0.2%m/m). The aussie was sent around 20 pips lower immediately following the release, with investors pricing in an increased chance for a rate cut tomorrow. Also, Australian interbank futures suggest that traders are pricing in around a 55% chance of a rate cut, up from 50.8% before the retail sales figure, but down from 62.8% at the beginning of the month. Nevertheless, according to Bloomberg 24 of 27 economists still expect the RBA to cut the cash rate from 4.25% to 4.00%. Full text »
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New York Session – February 2, 2012 4:22 PM
Markets were relatively quiet ahead of tomorrow’s employment report and the dollar traded slightly firmer amid Fed Chairman Ben Bernanke’s testimony in Washington. The Fed Chairman warned of fiscal policy risks and called for close monitoring of economic developments. On the Fed’s mandates, he said that inflation looks “very well controlled” but that the Fed wants more progress on unemployment. When questioned on the topic of QE, Bernanke only noted that the policy is similar to the usual policy of cutting rates. Economic data released this morning showed that U.S. weekly initial jobless claims fell by 12k to 367k from the prior 379k (cons. 371k). The data was better than expected and showed that the labor market is slowly progressing but at a sluggish pace. Sentiment is mixed as markets have now shifted focus to tomorrow’s BLS report. Full text »
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New York Session – February 1, 2012 4:14 PM
The greenback was broadly weaker as overall risk sentiment extended to the upside following stronger than expected global manufacturing PMI’s in Asia and Europe overnight. Markets shrugged of softer private payrolls data with ADP showing the addition of 170K jobs in Jan. (cons. 182K) and even though the Jan. ISM manufacturing reading missed the consensus, it expanded to the highest level since May with a print of 54.1 from the previous 53.1 (cons. 54.5). The details of the report were strong with backlog of orders rising above the key 50 threshold to 52.5 from 48.0. December construction spending was also a bright spot with a monthly increase of 1.5% (cons. 0.5%). Amid the improving sentiment, the Dollar Index was rejected from the top of its daily ichimoku cloud and Tenkan line which we have previously noted as a key technical level. Full text »
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New York Session – January 31, 2012 4:13 PM
The dollar is trading mixed and risk sentiment fell off the highs seen early in the session after weaker than expected U.S. economic data and renewed concerns about Greece. There has been a lack of positive news on Greek PSI despite officials having continually expressed their optimism on the progress of the debt talks and their expectations that a deal will be reached soon. Greek Finance Minister Venizelos warned that time is of the essence and that the Greek Parliament needs to vote on the debt swap terms by February 13. He also noted that private sector creditors could take a loss of more than 70% of the NPV of their bonds. The euro was under pressure and traded lower against most of the majors with EUR/USD tumbling to session lows around the 200-hour sma. Full text »
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