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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New York Session – January 30, 2012 4:49 PM
The greenback is broadly higher as risk sentiment declined amid EU debt concerns and weak U.S. personal spending figures. The USD is firmer against all of its G10 counterparts except the Japanese yen which is outperforming as a haven. USD/JPY fell to lows that have not been seen since the Bank of Japan last intervened on October 31. Full text »
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Asia Session – January 30, 2012 1:33 AM
Greece remains the focus of investor sentiment, but a new potential headwind to more bail-out funds has been thrown into the mix. Over the weekend, the Financial Times sparked a flurry of chatter when it reported that the EU could be pushing to gain power to veto and change Greek budgets going forward. The news was met with stiff opposition in Athens, understandably so, with Greece’s Finance Minister Venizelos saying that the plan would force his country to choose between financial assistance and national dignity. Full text »
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Asia Session – January 27, 2012 1:49 AM
The greenback ended broadly higher yesterday as ongoing Greek-PSI negotiations quickly overshadowed Fed QE 3 optimism. As markets in Asia opened shop, U.K. newswires cited an anonymous senior Greek official as saying progress was being made and aimed at concluding a deal with the private sector soon, and that talks were likely to continue on Friday and probably into the weekend as well. Seemed a bit contradictory to me and price action in currency markets suggests the market may not be buying in either as EUR/USD trades pretty much unchanged from this same time yesterday. Full text »
