http://www.ashraflaidi.com/forex-news/?a=2503
June 30, 2011 09:12 ET : Markets trade within a narrow range ahead of second round of Greek voting. German data comes on the weaker side, Trichet provides hawkish comments and GBP is the relative strength loser. Market turns to Canadian GDP and US Chicago PMI.
After the calm Asian session, the FX market is consolidating yesterdays gains. Equities, commodities and high yielding currencies trade near session highs.
German Retail Sales for May dropped to -2.8% from previous unchanged reading and German jobless reading came at -8K, slightly short of expected fall of -17K. Unemployment stayed at 7% as expected.
J. C. Trichet that spoke in Brussels earlier today reiterated that strong vigilance on inflation is warranted and ECB is ready to act in timely manner on inflation. Next ECB meeting is July 7th and rate increase is likely. This notion is supported by the Euro zone CPI figure for June estimated at 2.7% y/y which is above the ECBs 2% inflation target.
UK Nationwide HPI index for June came out flat and -1.1 y/y. Traders have been selling GBP against virtually everything. The Sterling is falling even against the weak USD and reached the psychologically important 1.60 level again. GBP is at decade lows against number of currencies (AUD, NZD, CHF).
Canada releases its GDP figures at 8:30 am ET. On a monthly basis GDP is expected to drop to -0.1% from previous reading of 0.3%. Year over year print is expected to decrease to 2.7% from previous 2.8%. Slowing US economy is likely to worsen Canadian growth figures as the US is a major Canadian trading partner.
US jobless claims fell 1k to 428k vs exp 420k. Later at 9:45 am ET Chicago PMI is due. Analysts expect fourth month of back to back deterioration. Headline is expected to show a decrease to 54.0 from previous 56.6.
EURUSD & USDJPY hit their targets from Thursday's PREMIUM TRADES
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Patrik Urban
Thursday, June 30, 2011
FXstreet.cz - forex komentář Patrika Urbana 30.6.2011
Forex - video komentář Patrika Urbana 30.6.2011 společnosti FXstreet.cz
Video najdete také v našem novém YouTube kanálu zde.
Patrik Urban
Forex trader FXstreet.cz
Video najdete také v našem novém YouTube kanálu zde.
Patrik Urban
Forex trader FXstreet.cz
Wednesday, June 29, 2011
Markets Nervously Await Greek Vote
Ahead of the Greek vote, most currency pairs are only marginally changed compared to yesterday’s NY close. The exceptions are commodity dollars that rallied strongly against the USD. Euro zone economic sentiments falls and Canadian consumer inflation surges higher.
Economic data did not have any impact today as market participants wait for Greek vote. UK Mortgage Approvals for May came in line with expectations at 46K, up slightly from previous 45K. The Euro Zone Economic Sentiment falls to 105.1 in June from 105.5 in May and Swiss KOF Economic Barometer printed 2.23 down from previous 2.3.
Canadian CPI for May came out much higher at 0.7% from previous 0.3%. Core inflation increased from 0.2% to 0.5% also significantly higher then expected 0.2%. On year over year basis prices increased 3.7%. The surge in inflation should underpin the CAD in near term as rate increases start to be expected.
Greek austerity measures have been broadly expected to pass. Equities, commodities and risk currencies benefited from this sentiment. However, situation continues to be difficult and tense. How will the austerity measures be actually implemented in light of such a strong opposition? What will happen when the results of the second round of bank stress tests are published on July 13th? Reports suggest that as many as 15 European banks may fail these tests.
New York session has only one significant data release. US Pending Home Sales for May are due at 10:00 am ET and are expected to improve significantly to 1.3% from previous drop to -11.6%. Later at 10:30 am ET Crude Oil Inventories could have an impact on oil price and consequently on the Canadian dollar.
Patrik Urban
Economic data did not have any impact today as market participants wait for Greek vote. UK Mortgage Approvals for May came in line with expectations at 46K, up slightly from previous 45K. The Euro Zone Economic Sentiment falls to 105.1 in June from 105.5 in May and Swiss KOF Economic Barometer printed 2.23 down from previous 2.3.
Canadian CPI for May came out much higher at 0.7% from previous 0.3%. Core inflation increased from 0.2% to 0.5% also significantly higher then expected 0.2%. On year over year basis prices increased 3.7%. The surge in inflation should underpin the CAD in near term as rate increases start to be expected.
Greek austerity measures have been broadly expected to pass. Equities, commodities and risk currencies benefited from this sentiment. However, situation continues to be difficult and tense. How will the austerity measures be actually implemented in light of such a strong opposition? What will happen when the results of the second round of bank stress tests are published on July 13th? Reports suggest that as many as 15 European banks may fail these tests.
New York session has only one significant data release. US Pending Home Sales for May are due at 10:00 am ET and are expected to improve significantly to 1.3% from previous drop to -11.6%. Later at 10:30 am ET Crude Oil Inventories could have an impact on oil price and consequently on the Canadian dollar.
Patrik Urban
Tuesday, June 28, 2011
GBP Drops After Disappointing Data and Comments from BoE
Traders have seen choppy trading since London session started with USD little changed against its counterparts. German Consumer Climate improves and UK current account deficit comes wider than expected. US session will bring data from housing and manufacturing sectors and latest news on consumer confidence.
German GFK consumer confidence survey for July improved slightly to 5.7 from 5.6 and marks a first advance after four consecutive months of losses. German June CPI is being released from various regions throughout the day with most parts seeing consumer inflation either 0.1% or slightly higher at 0.2%. Once compiled, the headline figure is due later today.
GBPUSD dropped to 1.5911 on lower rate hike expectation and fear of further QE after UK final Q1 GDP stayed unrevised at 0.5% and year over year figure was revised down from 1.8% to 1.6%. Current Account balance came out at GBP -9.7 bln, much wider than expected GBP -5.0 bln.
Inflation report hearing in front of parliamentary committee explained worries that members of BoE share. Among the most dovish were comments that economy continues to be too weak to withdraw stimulus and expressed concerns that further asset purchases may be warranted. It seems that calls for rate increase that we have seen in the past few months were premature.
New York session starts at 9:00 am ET when S&P CS composite index is due. The price of single family homes is expected to decrease by -3.9% from previous -3.6%. Should it come as expected, it would mark six months of negative results and more importantly 11 months of gradual back to back worsening.
Consumer Confidence for Jun is due at 10:00 am ET and it is expected unchanged at 60.8. At the same time Richmond Manufacturing Index will be released and it is expected to pick up to 2 from previous -6. In light of recent deterioration of manufacturing activity it is hard to image that this index would improve.
As the Greek parliament vote is getting closer, markets are likely to remain nervous. Choppy trading within a range is likely as players will hesitate to open new positions ahead of the decision.
Patrik Urban
German GFK consumer confidence survey for July improved slightly to 5.7 from 5.6 and marks a first advance after four consecutive months of losses. German June CPI is being released from various regions throughout the day with most parts seeing consumer inflation either 0.1% or slightly higher at 0.2%. Once compiled, the headline figure is due later today.
GBPUSD dropped to 1.5911 on lower rate hike expectation and fear of further QE after UK final Q1 GDP stayed unrevised at 0.5% and year over year figure was revised down from 1.8% to 1.6%. Current Account balance came out at GBP -9.7 bln, much wider than expected GBP -5.0 bln.
Inflation report hearing in front of parliamentary committee explained worries that members of BoE share. Among the most dovish were comments that economy continues to be too weak to withdraw stimulus and expressed concerns that further asset purchases may be warranted. It seems that calls for rate increase that we have seen in the past few months were premature.
New York session starts at 9:00 am ET when S&P CS composite index is due. The price of single family homes is expected to decrease by -3.9% from previous -3.6%. Should it come as expected, it would mark six months of negative results and more importantly 11 months of gradual back to back worsening.
Consumer Confidence for Jun is due at 10:00 am ET and it is expected unchanged at 60.8. At the same time Richmond Manufacturing Index will be released and it is expected to pick up to 2 from previous -6. In light of recent deterioration of manufacturing activity it is hard to image that this index would improve.
As the Greek parliament vote is getting closer, markets are likely to remain nervous. Choppy trading within a range is likely as players will hesitate to open new positions ahead of the decision.
Patrik Urban
Monday, June 27, 2011
French Banks to Reinvest Greek Debt; US Inflation Edges up
http://www.ashraflaidi.com/forex-news/?a=2491
June 27, 2011 09:18 ET : USD has been trading lower across the board since London open. Euro supported by news from China and France. Will SNB attempt to stop the freefall in EURCHF? Fed's preferred inflation indicator rises to highest since Aug 2010.
USD continued higher throughout the Asian session but currently trades lower across the board. An improvement in sentiment is pushing equities, commodities and higher yielding currencies higher.
The improvement can be attributed to Chinese premiers remarks that China will continue to invest in European debt. This is already a second announcement in a few days as China announced by the end of last week that it would buy Hungarian debt. The improved sentiment can also be attributed to news that French banks have an agreement with French government to reinvest Greek debt into longer maturities. French and German banks have the largest exposure to Greece. German banks have already shown interest in the French model.
EURCHF continues its freefall, reaching historical lows at 1.1816. At the beginning of April, this pair traded at 1.32 which promotes the speculation whether the SNB considers such a large and rapid move disorderly and whether it will try to slow the market down by intervening in the market. There have not been many comments from SNB officials lately and SNB holds a large long position from around 1.50 after unsuccessful interventions throughout 2009 and 2010.
US May personal income +0.3%, while personal consumption expenditure was flat (worst since Sept '09). PCE core prices (Fed's preferred inflation indicator) rose 1.2% y/y (highest since August). The combination of flat spending & rising inflation is not exactly what the Fed has wished for.
Traders should also pay attention to FOMC voting member Kocherlakota who speaks at 11:00 am in Montana. Audience questions are expected and Narayana Kocherlakota mentioned a few hawkish comments recently.
Patrik Urban
June 27, 2011 09:18 ET : USD has been trading lower across the board since London open. Euro supported by news from China and France. Will SNB attempt to stop the freefall in EURCHF? Fed's preferred inflation indicator rises to highest since Aug 2010.
USD continued higher throughout the Asian session but currently trades lower across the board. An improvement in sentiment is pushing equities, commodities and higher yielding currencies higher.
The improvement can be attributed to Chinese premiers remarks that China will continue to invest in European debt. This is already a second announcement in a few days as China announced by the end of last week that it would buy Hungarian debt. The improved sentiment can also be attributed to news that French banks have an agreement with French government to reinvest Greek debt into longer maturities. French and German banks have the largest exposure to Greece. German banks have already shown interest in the French model.
EURCHF continues its freefall, reaching historical lows at 1.1816. At the beginning of April, this pair traded at 1.32 which promotes the speculation whether the SNB considers such a large and rapid move disorderly and whether it will try to slow the market down by intervening in the market. There have not been many comments from SNB officials lately and SNB holds a large long position from around 1.50 after unsuccessful interventions throughout 2009 and 2010.
US May personal income +0.3%, while personal consumption expenditure was flat (worst since Sept '09). PCE core prices (Fed's preferred inflation indicator) rose 1.2% y/y (highest since August). The combination of flat spending & rising inflation is not exactly what the Fed has wished for.
Traders should also pay attention to FOMC voting member Kocherlakota who speaks at 11:00 am in Montana. Audience questions are expected and Narayana Kocherlakota mentioned a few hawkish comments recently.
Patrik Urban
Euro Consolidates Gains; Market turns to US Durable Goods
http://www.ashraflaidi.com/forex-news/?a=2486
June 24, 2011 08:01 ET : USD is mixed since London open. It is unchanged against EUR, up against CAD and weaker against the rest of the majors. German data improves slightly. Focus turns to US May Durable Goods Orders and final release of Q1 GDP.
EUR is consolidating gains from yesterdays New York rally after the news that Greek austerity package has been agreed upon. While the agreement is an important first step, keep in mind that this agreement has to be ratified by the parliament next week. By coincidence, the ratification process should take place during the fourth national strike this year which will last for two full days. The opposition to the austerity measures is significant so the possibility of political disruptions exists and should something unexpected occur, the common currency would likely drop.
German data came out positive this morning when German Ifo Business Climate in June rose to 114.5 from previous 114.3 and Current Assessment rose to 123.3 from 121.5.
BOE Governor King focused in his speech on Greece and needed Bank Capital reforms. The governor said that UK exposure to Greece is remarkably small and that the aim should be to make the financial system more resilient by imposing new Capital rules as it is impossible to prevent financial crises. As Mr. King did not speak directly about the UK economy, the GBP selling that often occurs during his speeches did not materialize.
Todays New York session has only one significant data release. US Durable Goods Orders for May are due at 8:30 am ET and are expected to improve significantly to 1% from previous drop to -3.6%. Core orders are expected to improve to 1% from previous -1.6%. Final release of Q1 GDP is expected at 1.9% but unless we see a major revision, reaction is likely to be muted as traders will find new information on goods orders more important.
Here's Ashraf's CNBC APPEARANCE regarding the SPR release http://video.cnbc.com/ gallery/ ?video=3000029548
Patrik Urban
June 24, 2011 08:01 ET : USD is mixed since London open. It is unchanged against EUR, up against CAD and weaker against the rest of the majors. German data improves slightly. Focus turns to US May Durable Goods Orders and final release of Q1 GDP.
EUR is consolidating gains from yesterdays New York rally after the news that Greek austerity package has been agreed upon. While the agreement is an important first step, keep in mind that this agreement has to be ratified by the parliament next week. By coincidence, the ratification process should take place during the fourth national strike this year which will last for two full days. The opposition to the austerity measures is significant so the possibility of political disruptions exists and should something unexpected occur, the common currency would likely drop.
German data came out positive this morning when German Ifo Business Climate in June rose to 114.5 from previous 114.3 and Current Assessment rose to 123.3 from 121.5.
BOE Governor King focused in his speech on Greece and needed Bank Capital reforms. The governor said that UK exposure to Greece is remarkably small and that the aim should be to make the financial system more resilient by imposing new Capital rules as it is impossible to prevent financial crises. As Mr. King did not speak directly about the UK economy, the GBP selling that often occurs during his speeches did not materialize.
Todays New York session has only one significant data release. US Durable Goods Orders for May are due at 8:30 am ET and are expected to improve significantly to 1% from previous drop to -3.6%. Core orders are expected to improve to 1% from previous -1.6%. Final release of Q1 GDP is expected at 1.9% but unless we see a major revision, reaction is likely to be muted as traders will find new information on goods orders more important.
Here's Ashraf's CNBC APPEARANCE regarding the SPR release http://video.cnbc.com/ gallery/ ?video=3000029548
Patrik Urban
FXstreet.cz - forex komentář Patrika Urbana 27.6.2011
Forex - video komentář Patrika Urbana 27.6.2011 společnosti FXstreet.cz
Video najdete také v našem novém YouTube kanálu zde.
Patrik Urban
Forex trader FXstreet.cz
Video najdete také v našem novém YouTube kanálu zde.
Patrik Urban
Forex trader FXstreet.cz
Thursday, June 23, 2011
USD Stronger Across The Board; Euro zone PMI disappoints
http://www.ashraflaidi.com/forex-news/?a=2482
June 23, 2011 08:12 ET : No change in sentiment took place as London traders continue to buy the greenback. No mention of QE3 in Bernankes press conference sent equities and riskier assets lower and helped to underpin the greenback. Fundamental data from Europe disappoint. Onto US housing data.
Data from Europe mostly disappointed today when French, German and Euro zone manufacturing PMI came short of expectations. German manufacturing PMI decreased in June to 54.9 from previous 57.7. Euro zone Manufacturing PMI slowed to 52.0 from 54.6.
As manufacturing PMI slows down in most developed countries around the world, hinting the possibility of another recession, it comes as a weak consolation that German services PMI increased to 58.3 from 56.1. Euro zone services PMI also disappointed when it printed 54.2 from previous 56.0.
CBI reported sales in the UK dropped sharply from 18 to -2 which is the worst reading since June 2010. The sterling lost close to 300 points over the past two days and currently sits at the psychological level 1.60. Clear break and daily close below this level would open way to 1.54.
The common currency has been sliding against most trading partners was further hit after Finnish PM said that risk of serious financial crisis and recession was very high and Slovakian PM announced that during a phone call, Greek PM said he cannot guarantee reforms will find support in Greek parliament. The situation continues to be serious as evidenced by further increase in price of 5 year Greed CDS. This CDS trades at 2025 bps, up 138 bps just today.
New York session starts at 8:30 am ET with Unemployment Claims that are expected unchanged at 414K. At 10:00 am ET New Home Sales May are expected to decrease slightly after three months of gains. Analysts predict 311K from previous reading of 323K. As long as we do not see a serious deterioration, USD should continue to appreciate.
Patrik Urban
June 23, 2011 08:12 ET : No change in sentiment took place as London traders continue to buy the greenback. No mention of QE3 in Bernankes press conference sent equities and riskier assets lower and helped to underpin the greenback. Fundamental data from Europe disappoint. Onto US housing data.
Data from Europe mostly disappointed today when French, German and Euro zone manufacturing PMI came short of expectations. German manufacturing PMI decreased in June to 54.9 from previous 57.7. Euro zone Manufacturing PMI slowed to 52.0 from 54.6.
As manufacturing PMI slows down in most developed countries around the world, hinting the possibility of another recession, it comes as a weak consolation that German services PMI increased to 58.3 from 56.1. Euro zone services PMI also disappointed when it printed 54.2 from previous 56.0.
CBI reported sales in the UK dropped sharply from 18 to -2 which is the worst reading since June 2010. The sterling lost close to 300 points over the past two days and currently sits at the psychological level 1.60. Clear break and daily close below this level would open way to 1.54.
The common currency has been sliding against most trading partners was further hit after Finnish PM said that risk of serious financial crisis and recession was very high and Slovakian PM announced that during a phone call, Greek PM said he cannot guarantee reforms will find support in Greek parliament. The situation continues to be serious as evidenced by further increase in price of 5 year Greed CDS. This CDS trades at 2025 bps, up 138 bps just today.
New York session starts at 8:30 am ET with Unemployment Claims that are expected unchanged at 414K. At 10:00 am ET New Home Sales May are expected to decrease slightly after three months of gains. Analysts predict 311K from previous reading of 323K. As long as we do not see a serious deterioration, USD should continue to appreciate.
Patrik Urban
Wednesday, June 22, 2011
MPC Minutes Send GBP sharply lower; All Eyes on FOMC
http://www.ashraflaidi.com/forex-news/?a=2479
June 22, 2011 09:24 ET : Now you know why our London morning IMT was titled "Sterling Fears Upcoming BoE Minutes". Indeed, the minutes did show one less hawk (see below). USD holding steady. Euro zone industrial orders disappointed. Critically important FOMC statement is later on today.
GBP was under pressure since London traders got to their desks. After the MPC meeting minutes were released, the Sterling dropped sharply. Vote was 7-2 from previous 6-3 (7 members voted for holding rates steady and 2 for rate increase). The minutes revealed a discussion about the possibility of QE extension should downside risk materialize and Adam Posen voted for GBP 50 bln increase in Asset Purchase Facility to GBP 250 bln. Recent QE comments and overall dovish stance would indicate that BoE will not be raising rates in the near future.
Other news from this morning include Swiss ZEW Economic Expectation index for June that dropped to -24.3 from previous -11.5 and Euro zone April Industrial Orders that increased to 0.7% from previous -1.5% but still came short of 1.1% expected.
The New York session will be all about FOMC. The rate decision and statement are both due at 12:30 pm ET and the press conference will start at 2:15 pm ET. The fed funds rate will stay between 0 and 0.25% and the highlight of the day will be the press conference. Traders can expect a significant volatility around these times.
The Fed will acknowledge slowing of the economy and deteriorating fundamentals. The job market has worsened with unemployment ticking back up, yet consumer inflation has been increasing steadily since November 2010. However, at this point additional round of QE is not probable. The Fed is likely to keep the main interest rate unchanged for extended period and to continue to reinvest maturing securities as not to shrink its balance sheet.
If there are no hints of QE3, equity markets will be disappointed and risk aversion will increase as there will not be any expectation of an additional liquidity injections to the financial markets. Falling equities and other types of riskier assets combined with ongoing uncertainty in Euro zone should support the USD over the near term. Should QE3 be hinted, that would be a different case entirely
Patrik Urban
June 22, 2011 09:24 ET : Now you know why our London morning IMT was titled "Sterling Fears Upcoming BoE Minutes". Indeed, the minutes did show one less hawk (see below). USD holding steady. Euro zone industrial orders disappointed. Critically important FOMC statement is later on today.
GBP was under pressure since London traders got to their desks. After the MPC meeting minutes were released, the Sterling dropped sharply. Vote was 7-2 from previous 6-3 (7 members voted for holding rates steady and 2 for rate increase). The minutes revealed a discussion about the possibility of QE extension should downside risk materialize and Adam Posen voted for GBP 50 bln increase in Asset Purchase Facility to GBP 250 bln. Recent QE comments and overall dovish stance would indicate that BoE will not be raising rates in the near future.
Other news from this morning include Swiss ZEW Economic Expectation index for June that dropped to -24.3 from previous -11.5 and Euro zone April Industrial Orders that increased to 0.7% from previous -1.5% but still came short of 1.1% expected.
The New York session will be all about FOMC. The rate decision and statement are both due at 12:30 pm ET and the press conference will start at 2:15 pm ET. The fed funds rate will stay between 0 and 0.25% and the highlight of the day will be the press conference. Traders can expect a significant volatility around these times.
The Fed will acknowledge slowing of the economy and deteriorating fundamentals. The job market has worsened with unemployment ticking back up, yet consumer inflation has been increasing steadily since November 2010. However, at this point additional round of QE is not probable. The Fed is likely to keep the main interest rate unchanged for extended period and to continue to reinvest maturing securities as not to shrink its balance sheet.
If there are no hints of QE3, equity markets will be disappointed and risk aversion will increase as there will not be any expectation of an additional liquidity injections to the financial markets. Falling equities and other types of riskier assets combined with ongoing uncertainty in Euro zone should support the USD over the near term. Should QE3 be hinted, that would be a different case entirely
Patrik Urban
Euro Ignores Disappointing Data; Focus Turns to US Housing
http://www.ashraflaidi.com/forex-news/?a=2476
June 21, 2011 09:07 ET : EUR ignores both disappointing German and EZ Data, BoEs Fisher dovish remarks, UK data slightly better then expected. Canadian Retail Sales Mixed, US housing data next.
USD continues to trade with a weak tone this morning not too far from yesterdays NY close. Euro moved lower after the German ZEW index for June dropped sharply to -9.0 (-1.7 expected) from previous 3.1. The economic sentiment has been declining for four straight months and turned negative after seven months of positive results. The severity of the decline is highlighted by the fact that this is the worst reading since January 2009. Ashraf's analysis told Twitter followers to FADE THE POOR ZEW DATA & stick with EURUSD longs at 1.4320-30s to target 1.44. We are now at 1.4390.
The Ezone Economic Sentiment showed similar results. The index printed -5.9 from previous 13.6 which is the first negative reading since March 2009. Despite these disappointing releases, the common currency has recovered its losses and trades at pre announcement levels.
As warned yesterday, the BOEs MPC member Paul Fisher pushed GBPUSD lower with his dovish remarks after London open. Mr. Fisher sees UK outlook as uncertain; sees risks from both inflation and weak growth and most importantly would consider more QE should CPI sink into deflation mid term.
Slightly better UK data helped GBP to recover its earlier losses after Public Sector Net Borrowing in May reached GBP 15.2B vs. GBP 16.1B expected and CBI Industrial Order Expectations reached 1 vs. -5 expected. Todays print is only second positive print since July 2008 and prints over 0 should indicate expectation of an increasing order volume.
New York session kicked off at 8:30 am ET with Canadian April Retail Sales +0.3% from -0.1%,with ex autos flat from -0.2% vs exp +0.3. expect the weakest print in six months that would show a decrease to 4.82M units from previous 5.05M.
US Existing Home Sales for May are due at 10:00 am ET. Analysts expect the weakest print in six months that would show a decrease to 4.82M units from previous 5.05M.
The important Greek confidence vote is expected to shake markets at 21:00 GMT. Media report that positive vote is likely which should underpin riskier assets.
If you are SUBSCRIBER to our PREMIUM INTERMARKET INSIGHTS, you would have heeded our long EURUSD calls from Thursday past 1.4380s as well as our latest upside targets in S&P500 and oil.
Premium subscribers click here to go DIRECTLY to today's charts/trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=443
Non-subscribers click here to have access:
http://ashraflaidi.com/ products/ sub01/
Patrik Urban
June 21, 2011 09:07 ET : EUR ignores both disappointing German and EZ Data, BoEs Fisher dovish remarks, UK data slightly better then expected. Canadian Retail Sales Mixed, US housing data next.
USD continues to trade with a weak tone this morning not too far from yesterdays NY close. Euro moved lower after the German ZEW index for June dropped sharply to -9.0 (-1.7 expected) from previous 3.1. The economic sentiment has been declining for four straight months and turned negative after seven months of positive results. The severity of the decline is highlighted by the fact that this is the worst reading since January 2009. Ashraf's analysis told Twitter followers to FADE THE POOR ZEW DATA & stick with EURUSD longs at 1.4320-30s to target 1.44. We are now at 1.4390.
The Ezone Economic Sentiment showed similar results. The index printed -5.9 from previous 13.6 which is the first negative reading since March 2009. Despite these disappointing releases, the common currency has recovered its losses and trades at pre announcement levels.
As warned yesterday, the BOEs MPC member Paul Fisher pushed GBPUSD lower with his dovish remarks after London open. Mr. Fisher sees UK outlook as uncertain; sees risks from both inflation and weak growth and most importantly would consider more QE should CPI sink into deflation mid term.
Slightly better UK data helped GBP to recover its earlier losses after Public Sector Net Borrowing in May reached GBP 15.2B vs. GBP 16.1B expected and CBI Industrial Order Expectations reached 1 vs. -5 expected. Todays print is only second positive print since July 2008 and prints over 0 should indicate expectation of an increasing order volume.
New York session kicked off at 8:30 am ET with Canadian April Retail Sales +0.3% from -0.1%,with ex autos flat from -0.2% vs exp +0.3. expect the weakest print in six months that would show a decrease to 4.82M units from previous 5.05M.
US Existing Home Sales for May are due at 10:00 am ET. Analysts expect the weakest print in six months that would show a decrease to 4.82M units from previous 5.05M.
The important Greek confidence vote is expected to shake markets at 21:00 GMT. Media report that positive vote is likely which should underpin riskier assets.
If you are SUBSCRIBER to our PREMIUM INTERMARKET INSIGHTS, you would have heeded our long EURUSD calls from Thursday past 1.4380s as well as our latest upside targets in S&P500 and oil.
Premium subscribers click here to go DIRECTLY to today's charts/trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=443
Non-subscribers click here to have access:
http://ashraflaidi.com/ products/ sub01/
Patrik Urban
FXstreet.cz - forex komentář Patrika Urbana 22.6.2011
Forex - video komentář Patrika Urbana 22.6.2011 společnosti FXstreet.cz
Video najdete také v našem novém YouTube kanálu zde.
Patrik Urban
Forex trader FXstreet.cz
Video najdete také v našem novém YouTube kanálu zde.
Patrik Urban
Forex trader FXstreet.cz
Tuesday, June 21, 2011
Decision on Next Tranche of Greek Aid in Early July; Sovereign AUD Support
http://www.ashraflaidi.com/forex-news/?a=2472
June 20, 2011 08:35 ET : During the Asian session, the greenback was able to recover a portion of its losses from Friday. London sees only a slight change in prices with the USD trading off its highs. Greek CDS continue to rise despite latest efforts. AUD could see support on Russian central bank diversification.
News from the EZ from this morning included German PPI for May that came out unchanged and reached 6.1% y/y and EZ Current Account deficit for April that widened to EUR 5.1B from previous EUR 3B.
The Greek debt saga continues as the decision on the next tranche of the aid will be contingent on Greece meeting all reform plans and austerity measures. Early July will bring voting whether the next tranche will be released. Markets do not seem to be too impressed with the latest developments as the Greek 5 year credit default swap continues to rise and is up 128 bps today.
AUD could be supported in the short term by the news that the Russian central bank will diversify about five billion of its USD reserves into the AUD. The support could be only psychological as this round of diversification should be completed over three to six months.
As there are no economic data releases due throughout the New York session today, we can expect that trading will be largely determined by three factors:
1. New developments in EZ debt crisis
2. Awaiting Wednesdays FOMC statement
3. Technicals
1. Announcement between French and German leaders last week that an agreement on financial aid for Greece has been reached sent EURUSD almost 300 points higher. If no new disturbing developments occur, euro should be underpinned in near term with a slight upside bias.
2. FOMC starts a meeting on Tuesday June 21st that will culminate on Wednesday by a statement that will shed light not only on the end of QE2 but also on the possibility of QE3 in any form. Investors will look for an assessment of the current situation and answers if the recent worsening of economic data is only temporary set back in underlying recovery or a beginning of another recession.
3. Technicals that traders should pay attention to:
GBPUSD 6210-6220 zone: resistance given by previous lows and matching 38.2% fib. ret. at 6216
NZDUSD 8110-8120 zone: strong resistance given by high from beginning of May and multiple lows throughout June. 61.2% fib. ret at 8120.
For more tradable idea, please see our latest "Intermarket Insights" of our Premium section. To become a Premium Subscriber, click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
June 20, 2011 08:35 ET : During the Asian session, the greenback was able to recover a portion of its losses from Friday. London sees only a slight change in prices with the USD trading off its highs. Greek CDS continue to rise despite latest efforts. AUD could see support on Russian central bank diversification.
News from the EZ from this morning included German PPI for May that came out unchanged and reached 6.1% y/y and EZ Current Account deficit for April that widened to EUR 5.1B from previous EUR 3B.
The Greek debt saga continues as the decision on the next tranche of the aid will be contingent on Greece meeting all reform plans and austerity measures. Early July will bring voting whether the next tranche will be released. Markets do not seem to be too impressed with the latest developments as the Greek 5 year credit default swap continues to rise and is up 128 bps today.
AUD could be supported in the short term by the news that the Russian central bank will diversify about five billion of its USD reserves into the AUD. The support could be only psychological as this round of diversification should be completed over three to six months.
As there are no economic data releases due throughout the New York session today, we can expect that trading will be largely determined by three factors:
1. New developments in EZ debt crisis
2. Awaiting Wednesdays FOMC statement
3. Technicals
1. Announcement between French and German leaders last week that an agreement on financial aid for Greece has been reached sent EURUSD almost 300 points higher. If no new disturbing developments occur, euro should be underpinned in near term with a slight upside bias.
2. FOMC starts a meeting on Tuesday June 21st that will culminate on Wednesday by a statement that will shed light not only on the end of QE2 but also on the possibility of QE3 in any form. Investors will look for an assessment of the current situation and answers if the recent worsening of economic data is only temporary set back in underlying recovery or a beginning of another recession.
3. Technicals that traders should pay attention to:
GBPUSD 6210-6220 zone: resistance given by previous lows and matching 38.2% fib. ret. at 6216
NZDUSD 8110-8120 zone: strong resistance given by high from beginning of May and multiple lows throughout June. 61.2% fib. ret at 8120.
For more tradable idea, please see our latest "Intermarket Insights" of our Premium section. To become a Premium Subscriber, click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Monday, June 20, 2011
Merkel/Sarkozy Help Spark a Risk Off Rally
http://www.ashraflaidi.com/forex-news/?a=2468
June 17, 2011 08:46 ET : Market sentiment sees a complete turnaround. USD sold across the board on the back of Merkel and Sarkozy meeting in Berlin. UoM Consumer Sentiment is next. See in our Thursday Premium piece how and why we called for longs in EURUSD, S&P500 but intermediate shorts in gold & silver.
Risk off sentiment continued in Asia which pushed EURUSD back towards 4130 level. Once the London session started, there was a 180 degrees change. USD is weaker across the board on the back of chancellor Merkel and president Sarkozy meeting in Berlin.
Both leaders agreed that they have the same position on Greece and that "private sector involvement in Greece must be voluntary. The German government wants private bondholders to share a part of the losses but it faced a strong opposition. While they both agree that a solution on the Greek issue is necessary and that there is a need to preserve the stability of the euro, not many concrete details have been revealed. Exactly how private entities will be made to voluntarily roll over their bond positions remains to be seen.
Chinese foreign minister also helped to improve the sentiment when he was quoted saying that China has been helping by buying Euro debt and that Europe overcoming its debt crisis is vitally important to China.
The FX market focused on Merkel/Sarkozy meeting and ignored the widening of EZ deficit that reached 2.9B in April worse than 2.2B in March.
New York session news schedule is light today. At 8:30 am ET Canadian Wholesale Sales for April are expected to drop to -0.3% from previous 0.1% followed at 9:55 am ET by US preliminary University of Michigan Consumer Sentiment index for June expected to improve slightly to 74.4 from previous 74.3. This index has experienced three months of straight gains but it is difficult to imagine consumers sentiment to continue to improve while fundamentals deteriorate.
The last news of the week is due at 10:00 am ET. The Leading Indicators index for May is expected to improve to 0.3% from previous -0.3%. Given that markets will still be absorbing the result of Consumer Sentiment released just five minutes earlier, the impact of this index is likely to be limited.
For the ENTRIES, STOPS & LIMITS in Thursday's trades, please see the link here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=441
To become a Premium Subscriber, click here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=441
Patrik Urban
June 17, 2011 08:46 ET : Market sentiment sees a complete turnaround. USD sold across the board on the back of Merkel and Sarkozy meeting in Berlin. UoM Consumer Sentiment is next. See in our Thursday Premium piece how and why we called for longs in EURUSD, S&P500 but intermediate shorts in gold & silver.
Risk off sentiment continued in Asia which pushed EURUSD back towards 4130 level. Once the London session started, there was a 180 degrees change. USD is weaker across the board on the back of chancellor Merkel and president Sarkozy meeting in Berlin.
Both leaders agreed that they have the same position on Greece and that "private sector involvement in Greece must be voluntary. The German government wants private bondholders to share a part of the losses but it faced a strong opposition. While they both agree that a solution on the Greek issue is necessary and that there is a need to preserve the stability of the euro, not many concrete details have been revealed. Exactly how private entities will be made to voluntarily roll over their bond positions remains to be seen.
Chinese foreign minister also helped to improve the sentiment when he was quoted saying that China has been helping by buying Euro debt and that Europe overcoming its debt crisis is vitally important to China.
The FX market focused on Merkel/Sarkozy meeting and ignored the widening of EZ deficit that reached 2.9B in April worse than 2.2B in March.
New York session news schedule is light today. At 8:30 am ET Canadian Wholesale Sales for April are expected to drop to -0.3% from previous 0.1% followed at 9:55 am ET by US preliminary University of Michigan Consumer Sentiment index for June expected to improve slightly to 74.4 from previous 74.3. This index has experienced three months of straight gains but it is difficult to imagine consumers sentiment to continue to improve while fundamentals deteriorate.
The last news of the week is due at 10:00 am ET. The Leading Indicators index for May is expected to improve to 0.3% from previous -0.3%. Given that markets will still be absorbing the result of Consumer Sentiment released just five minutes earlier, the impact of this index is likely to be limited.
For the ENTRIES, STOPS & LIMITS in Thursday's trades, please see the link here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=441
To become a Premium Subscriber, click here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=441
Patrik Urban
Greek Situation Pushes EUR Lower; UK Retail Sales Disappoint
http://www.ashraflaidi.com/forex-news/?a=2465
June 16, 2011 08:12 ET : EUR continues lower amid unceasing Greek worries. GBP punished after weak retail sales data. Market turns to US jobless claims, housing data and Philly Fed index.
London sees higher USD, except against JPY and CHF. The financial and political situation in Greece is worsening everyday and any credible solution seems nowhere to be found. News about Greek unemployment rate for Q1 shooting up to 15.9% from 14.2% in Q4 did not help. EZ employment rate for Q1 was unchanged; market expected an improvement to 0.2%. EZ annual CPI rate came in line with expectation at 2.7%.
UK retail sales disappointed with a 1.4% decline, vs expected -0.5%. This is the lowest reading since February 2010. GBP has lost about 70 points on the back of the news release.
Todays New York session starts at 8:30 am ET with a number of data releases. US May Building Permits are expected to decrease slightly to 550K from 563K and May Housing Starts are expected to increase to 545K from previous 523K. In light of the recent flood of disappointing economic figures, it is hard to imagine a positive surprise.
Current Account deficit in Q1 is expected to widen to 126B from previous 113B and Unemployment Claims are still stubbornly holding well above the 400K mark. This week Claims are expected at 421K.
At 10:00 am ET, the Philly Fed index that measures manufacturing activity in Philadelphia is expected to increase slightly in June from previous 3.9 to 7.1. Yesterday, the Empire State Manufacturing index came out significantly below expectation so disappointing print is somewhat likely. The severity of the decline is highlighted by the fact that over the past six months, Philly Fed index stayed around 20, in March it spiked to 43.4 and in May it dropped to 3.9. Manufacturing and other indices from many countries have shown decreasing values lately as a significant portion of economies around the world are slowing down.
Patrik Urban
June 16, 2011 08:12 ET : EUR continues lower amid unceasing Greek worries. GBP punished after weak retail sales data. Market turns to US jobless claims, housing data and Philly Fed index.
London sees higher USD, except against JPY and CHF. The financial and political situation in Greece is worsening everyday and any credible solution seems nowhere to be found. News about Greek unemployment rate for Q1 shooting up to 15.9% from 14.2% in Q4 did not help. EZ employment rate for Q1 was unchanged; market expected an improvement to 0.2%. EZ annual CPI rate came in line with expectation at 2.7%.
UK retail sales disappointed with a 1.4% decline, vs expected -0.5%. This is the lowest reading since February 2010. GBP has lost about 70 points on the back of the news release.
Todays New York session starts at 8:30 am ET with a number of data releases. US May Building Permits are expected to decrease slightly to 550K from 563K and May Housing Starts are expected to increase to 545K from previous 523K. In light of the recent flood of disappointing economic figures, it is hard to imagine a positive surprise.
Current Account deficit in Q1 is expected to widen to 126B from previous 113B and Unemployment Claims are still stubbornly holding well above the 400K mark. This week Claims are expected at 421K.
At 10:00 am ET, the Philly Fed index that measures manufacturing activity in Philadelphia is expected to increase slightly in June from previous 3.9 to 7.1. Yesterday, the Empire State Manufacturing index came out significantly below expectation so disappointing print is somewhat likely. The severity of the decline is highlighted by the fact that over the past six months, Philly Fed index stayed around 20, in March it spiked to 43.4 and in May it dropped to 3.9. Manufacturing and other indices from many countries have shown decreasing values lately as a significant portion of economies around the world are slowing down.
Patrik Urban
GBP Drops After Weak Jobs, US CPI, IP Next
http://www.ashraflaidi.com/forex-news/?a=2461
June 15, 2011 07:57 ET : London session sees USD stronger across the board. GBP drops after disappointing labor market data. EUR ignores decent Ezone industrial production amid ongoing Greek debt uncertainty. US Consumer inflation industrial production is next.
GBP drops after claimant count Change showed the largest increase since February 2010 standing at 19.7K vs. 7.1K expected. Unemployment rate stayed at 7.7% but the Average Earnings Index decreased from 2.4% to 1.8%. GBPUSD is currently about 120 points below London open.
EZ Industrial Production for April improved to 0.2% from previous unchanged reading. Market expected a contraction by 0.1%. The fact that the Euro ignored this news and continued lower, combined with ever increasing spread between German and EZ periphery bonds shows that the pressure on the Euro is building. The meeting of EZ finance ministers who failed to achieve anything significant did not inspire much confidence either.
New York session kicks off at 8:30 am ET with US May CPI expected to decrease from 0.4% to 0.2% which would be the lowest reading since 12/2010. Core CPI is expected to grow at steady pace at 0.2%. The annual CPI is expected to increase from 3.2% to 3.4%. As QE2 comes to an end, the various inflation measures become even more important because the inflation level may determine a course of future FED action.
TIC data has been declining for five straight months showing less interest that foreigners have in holding longer term US securities. On a net basis, capital flow is expected to show an improvement to 45.3B from previous weak print of 24B. TIC data is due at 9:00 am ET.
9:15 am ET May Industrial Production expected to increase to 0.2% after unchanged reading last month.
Low volatility that is often seen during New York afternoon could be stirred up at 3:45 pm ET when BoE's Mervyn King gives speech in London.
Patrik Urban
June 15, 2011 07:57 ET : London session sees USD stronger across the board. GBP drops after disappointing labor market data. EUR ignores decent Ezone industrial production amid ongoing Greek debt uncertainty. US Consumer inflation industrial production is next.
GBP drops after claimant count Change showed the largest increase since February 2010 standing at 19.7K vs. 7.1K expected. Unemployment rate stayed at 7.7% but the Average Earnings Index decreased from 2.4% to 1.8%. GBPUSD is currently about 120 points below London open.
EZ Industrial Production for April improved to 0.2% from previous unchanged reading. Market expected a contraction by 0.1%. The fact that the Euro ignored this news and continued lower, combined with ever increasing spread between German and EZ periphery bonds shows that the pressure on the Euro is building. The meeting of EZ finance ministers who failed to achieve anything significant did not inspire much confidence either.
New York session kicks off at 8:30 am ET with US May CPI expected to decrease from 0.4% to 0.2% which would be the lowest reading since 12/2010. Core CPI is expected to grow at steady pace at 0.2%. The annual CPI is expected to increase from 3.2% to 3.4%. As QE2 comes to an end, the various inflation measures become even more important because the inflation level may determine a course of future FED action.
TIC data has been declining for five straight months showing less interest that foreigners have in holding longer term US securities. On a net basis, capital flow is expected to show an improvement to 45.3B from previous weak print of 24B. TIC data is due at 9:00 am ET.
9:15 am ET May Industrial Production expected to increase to 0.2% after unchanged reading last month.
Low volatility that is often seen during New York afternoon could be stirred up at 3:45 pm ET when BoE's Mervyn King gives speech in London.
Patrik Urban
UKCPI as expected, US Retail Sales Next
http://www.ashraflaidi.com/forex-news/?a=2457
June 14, 2011 08:15 ET : Markets are yet again trading within a narrow range, near their London open levels. UK consumer inflation data came as expected. Market turns to US Retail Sales and PPI.
GBP is little changed after May CPI came out in line with expectations at 0.2% m/m and 4.5% y/y. It may be a bit premature but inflation seems to be leveling off and over the past four months prices have been stable. Monthly core CPI came out unchanged and annual core CPI was slightly lower at 3.3% vs. previous 3.7%.
The deterioration of US data is set to continue at 8:30 ET when US Advanced Retail Sales are due. They are expected to contract by 0.3% from previous growth of 0.5%. The last time Retail Sales experienced a monthly contraction was in July 2010. Core Retail Sales are expected to drop to 0.3% from previous 0.6%. Retail Sales are often used to gauge the health of the consumers. Because the US economy is reliant on a consumer spending, any contraction implies worsening data down the road.
Annual May PPI, also due at 8:30 am ET is expected to drop sharply to 0.1% from previous 0.8%. If producer prices come as expected it would be the smallest increase since August 2010.
Greek, Portuguese and Irish 10 year government bonds yields have all hit their Euro lifetime highs today. Underlying worries are ongoing and a complete risk off sentiment is only one step away. Should equities fall, USD and JPY would benefit.
Patrik Urban
June 14, 2011 08:15 ET : Markets are yet again trading within a narrow range, near their London open levels. UK consumer inflation data came as expected. Market turns to US Retail Sales and PPI.
GBP is little changed after May CPI came out in line with expectations at 0.2% m/m and 4.5% y/y. It may be a bit premature but inflation seems to be leveling off and over the past four months prices have been stable. Monthly core CPI came out unchanged and annual core CPI was slightly lower at 3.3% vs. previous 3.7%.
The deterioration of US data is set to continue at 8:30 ET when US Advanced Retail Sales are due. They are expected to contract by 0.3% from previous growth of 0.5%. The last time Retail Sales experienced a monthly contraction was in July 2010. Core Retail Sales are expected to drop to 0.3% from previous 0.6%. Retail Sales are often used to gauge the health of the consumers. Because the US economy is reliant on a consumer spending, any contraction implies worsening data down the road.
Annual May PPI, also due at 8:30 am ET is expected to drop sharply to 0.1% from previous 0.8%. If producer prices come as expected it would be the smallest increase since August 2010.
Greek, Portuguese and Irish 10 year government bonds yields have all hit their Euro lifetime highs today. Underlying worries are ongoing and a complete risk off sentiment is only one step away. Should equities fall, USD and JPY would benefit.
Patrik Urban
Consolidation of Last Weeks Moves; Some Levels to Watch
http://www.ashraflaidi.com/forex-news/?a=2454
June 13, 2011 09:40 ET : FX market continues to trade mostly within narrow ranges. The USD is on the weaker side with the exception of the NZD that collapsed a full cent after an earthquake hit New Zealands Christchurch yesterday. A high volatility is also seen in EURCHF that fell right to the psychological 1.20 level. Multiple currency pairs trade near key levels.
London is open today but the rest of the most important European financial centers are closed for holiday. The only data released during the London session was Italian Industrial Production for April that improved from 0.7% to 1.0%, well above market expectations of 0.2%.
There are no economic data releases scheduled for todays New York session. Even Trichets speech at the School of Economics in London due at 10:00 am ET is not likely to have any impact on the market. Under these circumstances, technical studies and overall market sentiment become more relevant.
Some technically significant areas to pay attention to:
EURUSD trades near 50% fib. retracement of the run from 3968 to 4695 at 4331. This support level is a significant one because it coincides with 5/20 highs and also with 6/1 lows. Euro experienced a considerable depreciation last week and waiting for signs that would confirm whether the move signaled a start of a new trend or only a liquidation of existing longs might be sensible.
GBPUSD zone between 6209 and 6165. The upward sloping trendline from 12/2010 could provide support around the 6165 area. This zone also coincides with 4/18 low. 6209 is 38.2% fib. ret.
USDCAD 9980 level. USDCAD has been trading with an upward bias. Should price break to the upside, it is likely to stall at 9980 level which is given by multiple lows/highs and also by 38.2% fib. ret. of the fall from 0852 to 9446. Risk off environment and higher lows pattern seen on the daily chart would indicate that upside break is likely.
USDCHF 8555-8565 zone. EURCHF lost almost 150 points since yesterdays open. This fall pulled USDCHF lower. If USDCHF is able to recover, zone around 8560 should provide resistance as 38.2% fib. ret. is at 8563 and 5/5 lows are at 8555.
Patrik Urban
June 13, 2011 09:40 ET : FX market continues to trade mostly within narrow ranges. The USD is on the weaker side with the exception of the NZD that collapsed a full cent after an earthquake hit New Zealands Christchurch yesterday. A high volatility is also seen in EURCHF that fell right to the psychological 1.20 level. Multiple currency pairs trade near key levels.
London is open today but the rest of the most important European financial centers are closed for holiday. The only data released during the London session was Italian Industrial Production for April that improved from 0.7% to 1.0%, well above market expectations of 0.2%.
There are no economic data releases scheduled for todays New York session. Even Trichets speech at the School of Economics in London due at 10:00 am ET is not likely to have any impact on the market. Under these circumstances, technical studies and overall market sentiment become more relevant.
Some technically significant areas to pay attention to:
EURUSD trades near 50% fib. retracement of the run from 3968 to 4695 at 4331. This support level is a significant one because it coincides with 5/20 highs and also with 6/1 lows. Euro experienced a considerable depreciation last week and waiting for signs that would confirm whether the move signaled a start of a new trend or only a liquidation of existing longs might be sensible.
GBPUSD zone between 6209 and 6165. The upward sloping trendline from 12/2010 could provide support around the 6165 area. This zone also coincides with 4/18 low. 6209 is 38.2% fib. ret.
USDCAD 9980 level. USDCAD has been trading with an upward bias. Should price break to the upside, it is likely to stall at 9980 level which is given by multiple lows/highs and also by 38.2% fib. ret. of the fall from 0852 to 9446. Risk off environment and higher lows pattern seen on the daily chart would indicate that upside break is likely.
USDCHF 8555-8565 zone. EURCHF lost almost 150 points since yesterdays open. This fall pulled USDCHF lower. If USDCHF is able to recover, zone around 8560 should provide resistance as 38.2% fib. ret. is at 8563 and 5/5 lows are at 8555.
Patrik Urban
Thursday, June 16, 2011
GBP Awaits NESR Fcst, CAD Jobs Figs Mixed
http://www.ashraflaidi.com/forex-news/?a=2450
June 10, 2011 08:49 ET : London traders tried to reverse the trend towards a stronger USD seen during the Asian session. USD is currently mixed, stronger against the EUR and AUD and weaker or unchanged against the rest of the majors. GBPUSD is bid despite disappointing Industrial production data. Federal budget deficit data is due later today.
GBP experienced a high volatility after UK April Industrial Production printed -1.7% from previous 0.2% marking the largest decline since August 09. GBPUSD has since recovered most of the losses and currently stands firmly above session lows.
CAD May employment number came out slightly above expectation at 22.3K but weaker than previous 58.3K. Relatively low employment contrasts with unemployment print that showed 7.4% from previous 7.6%. The unemployment has been decreasing each month for the past five months.
At 10:00 am ET, NIESR releases its estimate of UK GDP. The previous reading stood at 0.3%. US monthly budget statement at 2:00 pm. Budget deficit is expected to widen to $150 bln from $136 bln.
Unless these releases shock the market with truly unexpected result, any impact is likely to be limited and short lived. Market dynamics are likely to be determined by overall sentiment and squaring of positions ahead of the weekend.
Stocks are weak but see what the trades in the Premium section are indicating for today and next week. "Adding Oil to our Trade" http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=439
Patrik Urban
June 10, 2011 08:49 ET : London traders tried to reverse the trend towards a stronger USD seen during the Asian session. USD is currently mixed, stronger against the EUR and AUD and weaker or unchanged against the rest of the majors. GBPUSD is bid despite disappointing Industrial production data. Federal budget deficit data is due later today.
GBP experienced a high volatility after UK April Industrial Production printed -1.7% from previous 0.2% marking the largest decline since August 09. GBPUSD has since recovered most of the losses and currently stands firmly above session lows.
CAD May employment number came out slightly above expectation at 22.3K but weaker than previous 58.3K. Relatively low employment contrasts with unemployment print that showed 7.4% from previous 7.6%. The unemployment has been decreasing each month for the past five months.
At 10:00 am ET, NIESR releases its estimate of UK GDP. The previous reading stood at 0.3%. US monthly budget statement at 2:00 pm. Budget deficit is expected to widen to $150 bln from $136 bln.
Unless these releases shock the market with truly unexpected result, any impact is likely to be limited and short lived. Market dynamics are likely to be determined by overall sentiment and squaring of positions ahead of the weekend.
Stocks are weak but see what the trades in the Premium section are indicating for today and next week. "Adding Oil to our Trade" http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=439
Patrik Urban
Awaiting Trichet; US Trade, Jobless Data
http://www.ashraflaidi.com/forex-news/?a=2446
June 9, 2011 08:05 ET : After ECB and BoE announced their decisions to keep rates steady, main focus turns to the press conference at 8:30 am EDT, where J. C. Trichet will determine Euros fate for the short term. Traders should also pay attention to FOMC voter Plosser who speaks at 2:00pm. See how you can trade ahead/after the ECB conference.
The main focus today is clearly the press conference at 8:30 am where the head of ECB, J. C. Trichet could signal next month rate increase. Much has been written about the importance of the phrase strong vigilance. To recap: should Trichet use these words, euro is likely to gain on rate hike expectations, should he omit these words, the euro is likely to take a hit as inflation hawks would be disappointed.
As expected, the Bank of England kept rates steady at 0.5% and held its Asset Purchase Facility unchanged at 200B. UK trade balance for April came out slightly better at -7.4B vs. -7.5B expected.
The ECB also kept rates steady at 1.25% but today, the press conference is even more important than the actual rate decision. Because of the press conference today, traders will not pay much attention to other news. However, headlines coming from Europe continue to point out the internal struggle that EZ is experiencing. Gerhard Schick, a policy expert who represents German Green party, has told German newspaper that the ECB must accept the reality of a Greek debt restructuring. On any other day, Euro would be punished for such a headline. But not today.
New York session starts with busy schedule today. First and foremost, ECBs press conference starts at 8:30 am EDT. Today, all other news will be secondary: US trade deficit due at 8:30am EDT is expected to reach 48.8B from previous 48.2B and unemployment claims are expected at 424K compared to previous 422K.
for PRE-ECB TRADING IDEAS & CHARTS, see our latest premium piece http://ashraflaidi.com/ products/ sub01/ access/ ?a=438
At 2:00 pm voting FOMC member Plosser speaks about the US economy at annual conference in London. Plosser has made many hawkish comments in the past and even last weeks disappointing NFP numbers did not alter his view that monetary policy could be tightened by the end of the year.
To become a subscriber, click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
June 9, 2011 08:05 ET : After ECB and BoE announced their decisions to keep rates steady, main focus turns to the press conference at 8:30 am EDT, where J. C. Trichet will determine Euros fate for the short term. Traders should also pay attention to FOMC voter Plosser who speaks at 2:00pm. See how you can trade ahead/after the ECB conference.
The main focus today is clearly the press conference at 8:30 am where the head of ECB, J. C. Trichet could signal next month rate increase. Much has been written about the importance of the phrase strong vigilance. To recap: should Trichet use these words, euro is likely to gain on rate hike expectations, should he omit these words, the euro is likely to take a hit as inflation hawks would be disappointed.
As expected, the Bank of England kept rates steady at 0.5% and held its Asset Purchase Facility unchanged at 200B. UK trade balance for April came out slightly better at -7.4B vs. -7.5B expected.
The ECB also kept rates steady at 1.25% but today, the press conference is even more important than the actual rate decision. Because of the press conference today, traders will not pay much attention to other news. However, headlines coming from Europe continue to point out the internal struggle that EZ is experiencing. Gerhard Schick, a policy expert who represents German Green party, has told German newspaper that the ECB must accept the reality of a Greek debt restructuring. On any other day, Euro would be punished for such a headline. But not today.
New York session starts with busy schedule today. First and foremost, ECBs press conference starts at 8:30 am EDT. Today, all other news will be secondary: US trade deficit due at 8:30am EDT is expected to reach 48.8B from previous 48.2B and unemployment claims are expected at 424K compared to previous 422K.
for PRE-ECB TRADING IDEAS & CHARTS, see our latest premium piece http://ashraflaidi.com/ products/ sub01/ access/ ?a=438
At 2:00 pm voting FOMC member Plosser speaks about the US economy at annual conference in London. Plosser has made many hawkish comments in the past and even last weeks disappointing NFP numbers did not alter his view that monetary policy could be tightened by the end of the year.
To become a subscriber, click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
German Data Disappoints, Moody's Thinks about UK Rating
http://www.ashraflaidi.com/forex-news/?a=2443
June 8, 2011 09:02 ET : Risk aversion is back and USD is stronger against most counter parts after a downbeat statement from FED chairman Bernanke yesterday. Euro is on the weak side after German data disappointed. Market turns to the Beige book and later in the afternoon to the RBNZ rate decision. Moody's issues cautionary note on UK outlook.
German trade balance in April came out weaker at 12B compared to previous 15.1B which was worse than expected 14B. Industrial production in Europes biggest economy fell in April -0.6% from previous +1.2%. This reading marks the fourth consecutive month of deterioration. EZ Q1 GDP was confirmed at 0.8% and 2.5% y/y.
High volatility was seen across GBP pairs when Moodys senior analyst Sarah Carlson told MNI the UK could lose its prized AAA rating. Moodys spokesman subsequently clarified that UK downgrade is not Moodys central scenario. Recall earlier this week, Chancellor Osborne said he rejected calls for a Plan B to scale back his deficit-reduction plan. Meanwhile. the IMF cautioned over UK growth and employment outlook, but still recommended the BoE should raise rates. Our Premium service did point to rising Short Sterling interest contracts, pointing to eroding chances of UK rate hike.
OPEC decision has been postponed to about 14:00 GMT. Ashraf will make CHANGES TO THE US CRUDE TRADE in today's Premum "Intermarket Insights" later this afternoon.
At 2:00 pm the Federal Reserve releases its Beige Book report. Beige Book provides evidence supplied by Federal Reserve banks regarding their district economic conditions and is used in upcoming FOMC rate decision on June 22nd.
New York session will close at 5:00 pm when the RBNZ announces their rate decision. The cash rate is expected to hold rates steady at 2.5%
Patrik Urban
June 8, 2011 09:02 ET : Risk aversion is back and USD is stronger against most counter parts after a downbeat statement from FED chairman Bernanke yesterday. Euro is on the weak side after German data disappointed. Market turns to the Beige book and later in the afternoon to the RBNZ rate decision. Moody's issues cautionary note on UK outlook.
German trade balance in April came out weaker at 12B compared to previous 15.1B which was worse than expected 14B. Industrial production in Europes biggest economy fell in April -0.6% from previous +1.2%. This reading marks the fourth consecutive month of deterioration. EZ Q1 GDP was confirmed at 0.8% and 2.5% y/y.
High volatility was seen across GBP pairs when Moodys senior analyst Sarah Carlson told MNI the UK could lose its prized AAA rating. Moodys spokesman subsequently clarified that UK downgrade is not Moodys central scenario. Recall earlier this week, Chancellor Osborne said he rejected calls for a Plan B to scale back his deficit-reduction plan. Meanwhile. the IMF cautioned over UK growth and employment outlook, but still recommended the BoE should raise rates. Our Premium service did point to rising Short Sterling interest contracts, pointing to eroding chances of UK rate hike.
OPEC decision has been postponed to about 14:00 GMT. Ashraf will make CHANGES TO THE US CRUDE TRADE in today's Premum "Intermarket Insights" later this afternoon.
At 2:00 pm the Federal Reserve releases its Beige Book report. Beige Book provides evidence supplied by Federal Reserve banks regarding their district economic conditions and is used in upcoming FOMC rate decision on June 22nd.
New York session will close at 5:00 pm when the RBNZ announces their rate decision. The cash rate is expected to hold rates steady at 2.5%
Patrik Urban
Falling USD Awaits Bernanke, Euro up on Retail Sales
http://www.ashraflaidi.com/forex-news/?a=2440
June 7, 2011 07:55 ET : London session sees USD weaker across the board. Euro supported not only by Chinese comments but also by stronger EZ Retail Sales and higher German Factory Orders. RBA kept rates unchanged. ALl eyes on Bernanke's speech in US evening for clues on the economy & latest round of Fed policy easing.
The RBA held rates steady at 4.75% as expected last night. The rate statement was somewhat milder, stating that monetary policy was appropriate. After the initial 80 pip spike down, the Aussie was able to recover about half of the losses since London open.
The euro was bid after Chinese official warned of the risk of excessive holdings of USD assets. This statement was later labeled as personal view only.
70-pip gains realised in the EURUSD longs from yesterday's premium piece with the 1.4620-1.480 targets been hit (high was 1.4683). Click here to subscribe http://ashraflaidi.com/ products/ sub01/
EZ April Retail Sales came out stronger at 0.9% than expected 0.4%. This print marks a significant improvement after previous -0.9% which was revised higher from -1.0%. German Factory Orders also surprised to the upside as they improved from -2.7% to 2.8%. Market expected only an improvement to 2.1%
GBP continues to be bid and does not pay attention to May Halifax House Price index that disappointed at 0.1% vs. 0.4% expected.
There are no significant US economic data releases today. Market only awaits IBD/TIPP Economic Optimism index at 10:00 am EDT that is expected to decrease slightly from 42.8 to 42.1 and April Consumer Credit data released at 3:00 pm expected to decrease from 6B to 5.2B. Consumer debt level can be used to gauge lenders confidence. Lower reading therefore implies not only consumers unwillingness to spend but also lenders reluctance to lend.
Traders should also pay attention to speech given by Ben Bernanke, who will speak about the US economic outlook at the International Monetary conference in Atlanta at 3:45 pm.
Patrik Urban
June 7, 2011 07:55 ET : London session sees USD weaker across the board. Euro supported not only by Chinese comments but also by stronger EZ Retail Sales and higher German Factory Orders. RBA kept rates unchanged. ALl eyes on Bernanke's speech in US evening for clues on the economy & latest round of Fed policy easing.
The RBA held rates steady at 4.75% as expected last night. The rate statement was somewhat milder, stating that monetary policy was appropriate. After the initial 80 pip spike down, the Aussie was able to recover about half of the losses since London open.
The euro was bid after Chinese official warned of the risk of excessive holdings of USD assets. This statement was later labeled as personal view only.
70-pip gains realised in the EURUSD longs from yesterday's premium piece with the 1.4620-1.480 targets been hit (high was 1.4683). Click here to subscribe http://ashraflaidi.com/ products/ sub01/
EZ April Retail Sales came out stronger at 0.9% than expected 0.4%. This print marks a significant improvement after previous -0.9% which was revised higher from -1.0%. German Factory Orders also surprised to the upside as they improved from -2.7% to 2.8%. Market expected only an improvement to 2.1%
GBP continues to be bid and does not pay attention to May Halifax House Price index that disappointed at 0.1% vs. 0.4% expected.
There are no significant US economic data releases today. Market only awaits IBD/TIPP Economic Optimism index at 10:00 am EDT that is expected to decrease slightly from 42.8 to 42.1 and April Consumer Credit data released at 3:00 pm expected to decrease from 6B to 5.2B. Consumer debt level can be used to gauge lenders confidence. Lower reading therefore implies not only consumers unwillingness to spend but also lenders reluctance to lend.
Traders should also pay attention to speech given by Ben Bernanke, who will speak about the US economic outlook at the International Monetary conference in Atlanta at 3:45 pm.
Patrik Urban
EUR Consolidates, CAD Data Next & Negative UK Econ Studies
http://www.ashraflaidi.com/forex-news/?a=2437
June 6, 2011 07:42 ET : Quiet trading that started in Asia continues into the London session. Currencies trade in narrow ranges near highs/lows reached on Friday after the disappointing labor market figures. EUR did not react to the slight increase in PPI. Market awaits Canadian data.
EZ April Producer Price Index increased slightly from previous 0.8% to 0.9%. Year over year reading came out at 6.7% vs. 6.6% expected which marked a decrease from previous 6.8%. EUR ignored this data and continued to consolidate Fridays gains.
Euro was equally uninspired by Social Democrats defeat of the ruling Socialist party in yesterdays Portugal election. Pledges that newly elected Social Democrats will honor austerity measures should provide support for the Euro over the short term.
New York session starts at 8:30 am EDT with Canadian April Building Permits that are expected to fall significantly from 17.2% to -2.3% followed at 10:00 am by Canadian Ivey PMI for May. Market is expecting an increase from 57.7 to 59.1. CAD has been lagging not only against EUR, GBP or AUD last week but also against the weak greenback. Negative surprise would therefore likely see a further depreciation of the loonie.
In the absence of US data, the market may react to a speech by Treasury Secretary Geithner who speaks at the International Monetary conference in Atlanta at 1:15 pm.
GBP has been unfazed by negative press commentary on the UK economy, raising the question on whether QE2 will be unavoidable. UK chancellor George Osborne has denied that a plan B is needed after several economists stated that the economy was too fragile to withstand his drastic spending cuts program. Nonetheless, Monday's Telegraph showed that 50 different economists back Osborne's spending cuts. Separately, the Sunday Times reported a study by Morgan Stanely that a double dip in UK housing was likely this year and next, trapping 1.3m homeowners in negative equity. MS's study also sees house declining 3% and another 7% in 2011 and 2012 respectively, erasing the the 10% gains made over the past 2 years,
Trading during this week is likely to be driven by interest rates decisions by RBA on Tuesday, RBNZ on Wednesday and BoE and ECB on Thursday. Analysts expect all central banks to hold rates steady.
Kile Morrison & Patrik Urban
June 6, 2011 07:42 ET : Quiet trading that started in Asia continues into the London session. Currencies trade in narrow ranges near highs/lows reached on Friday after the disappointing labor market figures. EUR did not react to the slight increase in PPI. Market awaits Canadian data.
EZ April Producer Price Index increased slightly from previous 0.8% to 0.9%. Year over year reading came out at 6.7% vs. 6.6% expected which marked a decrease from previous 6.8%. EUR ignored this data and continued to consolidate Fridays gains.
Euro was equally uninspired by Social Democrats defeat of the ruling Socialist party in yesterdays Portugal election. Pledges that newly elected Social Democrats will honor austerity measures should provide support for the Euro over the short term.
New York session starts at 8:30 am EDT with Canadian April Building Permits that are expected to fall significantly from 17.2% to -2.3% followed at 10:00 am by Canadian Ivey PMI for May. Market is expecting an increase from 57.7 to 59.1. CAD has been lagging not only against EUR, GBP or AUD last week but also against the weak greenback. Negative surprise would therefore likely see a further depreciation of the loonie.
In the absence of US data, the market may react to a speech by Treasury Secretary Geithner who speaks at the International Monetary conference in Atlanta at 1:15 pm.
GBP has been unfazed by negative press commentary on the UK economy, raising the question on whether QE2 will be unavoidable. UK chancellor George Osborne has denied that a plan B is needed after several economists stated that the economy was too fragile to withstand his drastic spending cuts program. Nonetheless, Monday's Telegraph showed that 50 different economists back Osborne's spending cuts. Separately, the Sunday Times reported a study by Morgan Stanely that a double dip in UK housing was likely this year and next, trapping 1.3m homeowners in negative equity. MS's study also sees house declining 3% and another 7% in 2011 and 2012 respectively, erasing the the 10% gains made over the past 2 years,
Trading during this week is likely to be driven by interest rates decisions by RBA on Tuesday, RBNZ on Wednesday and BoE and ECB on Thursday. Analysts expect all central banks to hold rates steady.
Kile Morrison & Patrik Urban
UK PMI Sends GBP Lower; All Eyes On NFP
London session has been calm with traders sitting on their hands, waiting for “the mother of all releases” NFP. USD is mixed, down against EUR that is partially supported by higher PMI, CHF and JPY and up against other majors, especially GBP that was sold after disappointing PMI.
EURUSD continues to trade near session highs as EZ May final services PMI came out at 56 vs. 55.4 expected. UK services PMI for May deteriorated from 54.3 to 53.8 while analysts expected an improvement to 54.4. Both indicators marked a third straight monthly decline.
New York session kicks off with eagerly awaited Non farm payrolls and unemployment figures for May; both due at 8:30 am EDT. NFP is expected at 194K, down from previous 244K and unemployment rate is expected to stay unchanged at 9%.
Payrolls have been increasing for the past three months. However, given the poor ADP result from Wednesday and eight straight weeks of unemployment claims above 400K a weak NFP print would not come as a big surprise. ADP proved to be not so reliable when it comes to predicting the actual NFP number. However, it can help to predict the direction that NFP is likely to take.
Over the past few days analysts were trying to outdo one another by providing lower and lower NFP estimates. Because weak print is broadly expected, only a slight deterioration or a reading in line with expectation could actually be perceived as USD positive. Traders should also be aware of a “whipsaw” effect that frequently occurs after NFP release.
Patrik Urban
EURUSD continues to trade near session highs as EZ May final services PMI came out at 56 vs. 55.4 expected. UK services PMI for May deteriorated from 54.3 to 53.8 while analysts expected an improvement to 54.4. Both indicators marked a third straight monthly decline.
New York session kicks off with eagerly awaited Non farm payrolls and unemployment figures for May; both due at 8:30 am EDT. NFP is expected at 194K, down from previous 244K and unemployment rate is expected to stay unchanged at 9%.
Payrolls have been increasing for the past three months. However, given the poor ADP result from Wednesday and eight straight weeks of unemployment claims above 400K a weak NFP print would not come as a big surprise. ADP proved to be not so reliable when it comes to predicting the actual NFP number. However, it can help to predict the direction that NFP is likely to take.
Over the past few days analysts were trying to outdo one another by providing lower and lower NFP estimates. Because weak print is broadly expected, only a slight deterioration or a reading in line with expectation could actually be perceived as USD positive. Traders should also be aware of a “whipsaw” effect that frequently occurs after NFP release.
Patrik Urban
Reversal in sentiment sends USD lower
http://www.ashraflaidi.com/forex-news/?a=2428
June 2, 2011 08:05 ET : Markets are trading as if somebody had a risk switch. After risk off day yesterday, London traders see a complete reversal and trade with risk on sentiment. Stronger than exp UK construction PMI did not prevent further GBP declines following comments from BoE member.
The only news released during the London session today was May Construction PMI from the UK that came slightly ahead of expectation at 54 from previous 53.3. Short sterling futures contract pushing to highest since Oct after BoE's FIsher said he would consider voting for another round of quantitative easing if the economy deteriorated.
New York session will start with unemployment claims due at 8:30 am EDT that are expected to increase slightly from 424K to 427K. Since the first week of April, claims have stayed above 400K which confirms an ongoing, poor situation in the US labor market. 10:00 am April factory orders are expected to drop from previous 3.4% to -0.3%.
CAD traders will want to pay attention to crude oil inventories data due at 11:00 am that is expected to decrease from 0.6M to -1.7M barrels. Over the past few months, inventories mostly surprised to the upside. Even though USD is being sold across the board it held up against the CAD.
Given that EU, IMF and ECB inspectors will issue a joint statement on Greece on Friday and the important NFP report, markets are unlikely to break out significantly out of the recent ranges. However, considering that the ADP report disappointed and that expectations for the NFP continue to be lowered, USD negative bias is likely.
JOIN ASHRAF IN LONDON NEXT TUESDAY in his talk to the Market Technicians Association. More detail on how to register free:
http://ashraflaidi.com/ t/ ?h2423
Patrik Urban
June 2, 2011 08:05 ET : Markets are trading as if somebody had a risk switch. After risk off day yesterday, London traders see a complete reversal and trade with risk on sentiment. Stronger than exp UK construction PMI did not prevent further GBP declines following comments from BoE member.
The only news released during the London session today was May Construction PMI from the UK that came slightly ahead of expectation at 54 from previous 53.3. Short sterling futures contract pushing to highest since Oct after BoE's FIsher said he would consider voting for another round of quantitative easing if the economy deteriorated.
New York session will start with unemployment claims due at 8:30 am EDT that are expected to increase slightly from 424K to 427K. Since the first week of April, claims have stayed above 400K which confirms an ongoing, poor situation in the US labor market. 10:00 am April factory orders are expected to drop from previous 3.4% to -0.3%.
CAD traders will want to pay attention to crude oil inventories data due at 11:00 am that is expected to decrease from 0.6M to -1.7M barrels. Over the past few months, inventories mostly surprised to the upside. Even though USD is being sold across the board it held up against the CAD.
Given that EU, IMF and ECB inspectors will issue a joint statement on Greece on Friday and the important NFP report, markets are unlikely to break out significantly out of the recent ranges. However, considering that the ADP report disappointed and that expectations for the NFP continue to be lowered, USD negative bias is likely.
JOIN ASHRAF IN LONDON NEXT TUESDAY in his talk to the Market Technicians Association. More detail on how to register free:
http://ashraflaidi.com/ t/ ?h2423
Patrik Urban
Wednesday, June 15, 2011
GBP Drops after Disappointing PMI; CHF Surges, ADP, ISM Next
http://www.ashraflaidi.com/forex-news/?a=2424
June 1, 2011 07:49 ET : GBP is the worst performer after falling manufacturing PMI & record low mortgage lending. CHF surges higher across the board after Swiss April retail sales come at 7.5% y/y from previous -0.2%. This is the highest print since April 2008 and the impact is likely to last as traders expected only a slight improvement to 1.9%. Market shift interest to US ADP & manuf ISM.
London sessions relative strength loser is GBP after May manufacturing PMI printed 52.1, down from previous 54.4 and below expectations of 54.2. Today marks four consecutive monthly declines and the worst reading since December 2009. April mortgage approvals also disappointed when they came out at 45K vs. exp. 48K and this reading is the worst since December 2010. It seems that market got a little ahead of itself when it started to price in early rate hikes.
New York session will kick off at 8:15 am EDT with May ADP which is expected to decrease slightly from 179K to 177K followed at 10:00 am by ISM Manufacturing survey that is also expected to worsen from 60.4 to 58.4. Both indicators have shown three months of straight declines.
Should ADP shock the market either positively or negatively it is reasonable to assume lasting impact for the rest of the week as traders will expect Fridays NFP to show similar weakness. While the correlation between ADP and NFP is not perfect (over the past 20 observations the correlation is 0.6), the direction of ADP usually correctly predicts the direction of NFP.
Premium subscribers to our Intermarket Insights will see that +70 pips gain was realized on our 87.20-60 target in AUDJPY longs from yesterday's entry btwn 86.50-86.90. The stop was at 86.10. Here is the link to yesterday's premium piece: http://ashraflaidi.com/ products/ sub01/ access/ ?a=434
Kyle Morrison & Patrick Urban
June 1, 2011 07:49 ET : GBP is the worst performer after falling manufacturing PMI & record low mortgage lending. CHF surges higher across the board after Swiss April retail sales come at 7.5% y/y from previous -0.2%. This is the highest print since April 2008 and the impact is likely to last as traders expected only a slight improvement to 1.9%. Market shift interest to US ADP & manuf ISM.
London sessions relative strength loser is GBP after May manufacturing PMI printed 52.1, down from previous 54.4 and below expectations of 54.2. Today marks four consecutive monthly declines and the worst reading since December 2009. April mortgage approvals also disappointed when they came out at 45K vs. exp. 48K and this reading is the worst since December 2010. It seems that market got a little ahead of itself when it started to price in early rate hikes.
New York session will kick off at 8:15 am EDT with May ADP which is expected to decrease slightly from 179K to 177K followed at 10:00 am by ISM Manufacturing survey that is also expected to worsen from 60.4 to 58.4. Both indicators have shown three months of straight declines.
Should ADP shock the market either positively or negatively it is reasonable to assume lasting impact for the rest of the week as traders will expect Fridays NFP to show similar weakness. While the correlation between ADP and NFP is not perfect (over the past 20 observations the correlation is 0.6), the direction of ADP usually correctly predicts the direction of NFP.
Premium subscribers to our Intermarket Insights will see that +70 pips gain was realized on our 87.20-60 target in AUDJPY longs from yesterday's entry btwn 86.50-86.90. The stop was at 86.10. Here is the link to yesterday's premium piece: http://ashraflaidi.com/ products/ sub01/ access/ ?a=434
Kyle Morrison & Patrick Urban
New Greek Aid Package in the Works; Swiss GDP disappoints
http://www.ashraflaidi.com/forex-news/?a=2420
May 31, 2011 08:16 ET : Positive sentiment supports riskier assets started at the beginning of the Asian session, continuing to weigh on USD across the board with the exception of AUD, CHF and JPY. Canada Rate Decision Exp unchanged at 1.0%
Euro support came largely from news that Germany is willing to drop its push for an early rescheduling of Greek bonds so new aid package could be delivered before Greece runs out of cash in mid July.
CHF is the relative strength loser after Q1 GDP came out at 0.3% which is the worst reading since December 2009. Market expected 0.7%. Yearly growth slowed from 3.0% to 2.4%.
News from the EZ did not provide any element of surprise when German unemployment change for May came out at -8K, worse than expected -30K and unemployment rate that came in line with expectations at 7.0%. EZ CPI y/y in May was slightly lower at 2.7% vs. expected 2.8%. EZ unemployment in April came unchanged and as expected 9.9%
The upcoming session will bring Canadian consumer inflation data from April in form of RMPI (Raw Materials Price Index) released at 8:30 am EDT which is expected to moderate to 3.7% after jumping to 5.7% month earlier. The impact is likely to be limited as CAD traders will be waiting for 9:00 am EDT when BOC announces their decision on the Overnight Rate. BOC is expected to keep rates unchanged at 1%. The overnight rate has been at 1% since September 2010.
Recent US fundamental releases largely weak. Todays releases include Chicago PMI for May released at 9:45 am EDT expected to mark fourth decline in a row, this time to 63.8 from previous 67.6 and May Consumer Confidence, released at 10:00 am EDT expected to improve slightly to 66.3 from last 65.4. Given the improved sentiment, if US data does disappoint, the risk of prolonged USD pulbacks remain considerable.
8 NEW TRADES including YEN CROSSES, US Crude & updated trades on EURUSD, SP500 and FTSE100: Premium Members Direct Access Here: http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=434
Patrik Urban
May 31, 2011 08:16 ET : Positive sentiment supports riskier assets started at the beginning of the Asian session, continuing to weigh on USD across the board with the exception of AUD, CHF and JPY. Canada Rate Decision Exp unchanged at 1.0%
Euro support came largely from news that Germany is willing to drop its push for an early rescheduling of Greek bonds so new aid package could be delivered before Greece runs out of cash in mid July.
CHF is the relative strength loser after Q1 GDP came out at 0.3% which is the worst reading since December 2009. Market expected 0.7%. Yearly growth slowed from 3.0% to 2.4%.
News from the EZ did not provide any element of surprise when German unemployment change for May came out at -8K, worse than expected -30K and unemployment rate that came in line with expectations at 7.0%. EZ CPI y/y in May was slightly lower at 2.7% vs. expected 2.8%. EZ unemployment in April came unchanged and as expected 9.9%
The upcoming session will bring Canadian consumer inflation data from April in form of RMPI (Raw Materials Price Index) released at 8:30 am EDT which is expected to moderate to 3.7% after jumping to 5.7% month earlier. The impact is likely to be limited as CAD traders will be waiting for 9:00 am EDT when BOC announces their decision on the Overnight Rate. BOC is expected to keep rates unchanged at 1%. The overnight rate has been at 1% since September 2010.
Recent US fundamental releases largely weak. Todays releases include Chicago PMI for May released at 9:45 am EDT expected to mark fourth decline in a row, this time to 63.8 from previous 67.6 and May Consumer Confidence, released at 10:00 am EDT expected to improve slightly to 66.3 from last 65.4. Given the improved sentiment, if US data does disappoint, the risk of prolonged USD pulbacks remain considerable.
8 NEW TRADES including YEN CROSSES, US Crude & updated trades on EURUSD, SP500 and FTSE100: Premium Members Direct Access Here: http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=434
Patrik Urban
Quiet Markets Await Canadian GDP
http://www.ashraflaidi.com/forex-news/?a=2417
May 30, 2011 08:10 ET : Trading during the London session has been calm as prices continue to hover around levels seen at Fridays close. Traders in the UK are enjoying a long weekend in observance of the Spring holiday and US banks will be closed today in observance of Memorial Day. Liquidity will therefore be poor and prices are likely to remain within narrow ranges with unexpected and erratic bouts of volatility. The only economic releases today are GDP and current account balance data from Canada.
Under the weight of weak US data, USD started to slide against most currencies last week. It seemed as if the market became tired of Greek problems and needed something new to focus on. However, headlines describing dire situation in Greece continue to appear frequently and
the risk of yet another sentiment reversal is high. Latest news from Greece describe the possibility of an outside intervention in the economy, including tax collection and privatization of state assets in exchange for new bail-out loans.
March Canada GDP expected to improve to 0.2% from that surprisingly poor reading in Feb 0.2% and current account deficit is expected to narrow from previous 11B to 2.9B. Both news come out at 8:30 am EDT.
During the past week, USDCAD was stuck in narrow 9750-9810 range. Even
when the greenback was being sold against all other majors, it held up against the CAD. Break and close below 9750 would open a way to area around 9670 which is not only a support given by previous highs but also by 38.2% fib. ret. of the rise from 9443 to 9813. Should price break above the recent range, key target would be resistance at 9975.
Technical picture would suggest higher probability of a break lower as
Stochastic (9,3,3) and Williams %R (14) are both in an overbought
territory with MACD converging and about to give a bearish crossover
signal.
Patrik Urban
May 30, 2011 08:10 ET : Trading during the London session has been calm as prices continue to hover around levels seen at Fridays close. Traders in the UK are enjoying a long weekend in observance of the Spring holiday and US banks will be closed today in observance of Memorial Day. Liquidity will therefore be poor and prices are likely to remain within narrow ranges with unexpected and erratic bouts of volatility. The only economic releases today are GDP and current account balance data from Canada.
Under the weight of weak US data, USD started to slide against most currencies last week. It seemed as if the market became tired of Greek problems and needed something new to focus on. However, headlines describing dire situation in Greece continue to appear frequently and
the risk of yet another sentiment reversal is high. Latest news from Greece describe the possibility of an outside intervention in the economy, including tax collection and privatization of state assets in exchange for new bail-out loans.
March Canada GDP expected to improve to 0.2% from that surprisingly poor reading in Feb 0.2% and current account deficit is expected to narrow from previous 11B to 2.9B. Both news come out at 8:30 am EDT.
During the past week, USDCAD was stuck in narrow 9750-9810 range. Even
when the greenback was being sold against all other majors, it held up against the CAD. Break and close below 9750 would open a way to area around 9670 which is not only a support given by previous highs but also by 38.2% fib. ret. of the rise from 9443 to 9813. Should price break above the recent range, key target would be resistance at 9975.
Technical picture would suggest higher probability of a break lower as
Stochastic (9,3,3) and Williams %R (14) are both in an overbought
territory with MACD converging and about to give a bearish crossover
signal.
Patrik Urban
USD under pressure, PCE index and housing data next
After a significant USD weakening seen during the Asian session, the
greenback was able to recover a portion of its losses. Even though the
USD trades off its lows, it stays under pressure.
GBP was boosted when monthly UK Nationwide house prices increased
significantly from -0.2% to +0.3%. Market is still waiting for
preliminary reading of German monthly CPI figures. Analysts predict a
slight decrease from 0.2% to 0.1%.
Beginning of Friday’s US session will shed light on the health of the
US consumer. Personal Spending is expected to decrease from 0.6% to
0.5% and Personal Income is anticipated to worsen from 0.5% to 0.4%.
Because consumer spending accounts for majority of economic activity
in the US, any deterioration would signify weakness in future data
releases.
Fed’s preferred inflation gauge, the Core PCE Price Index will also be
released at 8:30 am EDT. Market expects an increase from 0.1% to 0.2%.
Today, this release will be even more important than usual as higher
print could reduce the rumors about QE3 that started to circulate
after disappointing GDP figures. So far, the Fed has been clear that
QE3 is not likely to happen. Continued reinvestment of maturing bonds
is, however, one of the options that Fed has.
At 10:00 am EDT the National Association of Realtors will release its
monthly Pending Home Sales figures. Market expects significant
worsening from previous 5.1% to -0.9%. Given the ripple effect that a
sale of a home has on the economy, such a large drop would also
indicate weakness in data releases to come.
Over the past few weeks economic data from the US mostly disappointed.
The economy seems to be deteriorating again so in absence of EZ
problems the greenback would depreciate. Should EZ find a real,
credible solution to its issues, markets would calm, risk appetite
would return and USD would drop.
Patrik Urban
greenback was able to recover a portion of its losses. Even though the
USD trades off its lows, it stays under pressure.
GBP was boosted when monthly UK Nationwide house prices increased
significantly from -0.2% to +0.3%. Market is still waiting for
preliminary reading of German monthly CPI figures. Analysts predict a
slight decrease from 0.2% to 0.1%.
Beginning of Friday’s US session will shed light on the health of the
US consumer. Personal Spending is expected to decrease from 0.6% to
0.5% and Personal Income is anticipated to worsen from 0.5% to 0.4%.
Because consumer spending accounts for majority of economic activity
in the US, any deterioration would signify weakness in future data
releases.
Fed’s preferred inflation gauge, the Core PCE Price Index will also be
released at 8:30 am EDT. Market expects an increase from 0.1% to 0.2%.
Today, this release will be even more important than usual as higher
print could reduce the rumors about QE3 that started to circulate
after disappointing GDP figures. So far, the Fed has been clear that
QE3 is not likely to happen. Continued reinvestment of maturing bonds
is, however, one of the options that Fed has.
At 10:00 am EDT the National Association of Realtors will release its
monthly Pending Home Sales figures. Market expects significant
worsening from previous 5.1% to -0.9%. Given the ripple effect that a
sale of a home has on the economy, such a large drop would also
indicate weakness in data releases to come.
Over the past few weeks economic data from the US mostly disappointed.
The economy seems to be deteriorating again so in absence of EZ
problems the greenback would depreciate. Should EZ find a real,
credible solution to its issues, markets would calm, risk appetite
would return and USD would drop.
Patrik Urban
China Saves the Day for ow; US GDP Revision Next
http://www.ashraflaidi.com/forex-news/?a=2409
May 26, 2011 08:05 ET : Risk appetite stabilizes after news that China showed interest in Portuguese and New Zealand investment. Later, the London session showed indecision as price consolidated within unusually narrow range.
J.C. Trichet once again reiterated that ECB is monitoring price level and will do whatever necessary to avoid second round inflation effects. EURUSD did not respond much but the Spanish/German 10 year yield spread narrowed by 13 bps providing support for the euro.
In Switzerland, trade surplus increased from 1B to 1.52B but still came slightly below expected 2.0B and employment level q/q marked another slight improvement to 4.11 from previous 4.09M.
New York session will see eagerly awaited US Preliminary GDP q/q
released at 8:30 am EDT. Markets expect an improvement from last 1.8% to 2.2%. Given the rise in NFP and significant drop in unemployment seen over the past few months, the GDP data should not disappoint despite many, rather poor recent US economic releases.
Estimating whether USD will be able to resume its uptrend should the GDP data come as expected is difficult. Yesterday, the USD was not able to benefit from ongoing EZ problems and doubt inducing comments about Greek exit from EZ. Later, after the Chinese news, the greenback dropped sharply. This could be interpreted as diminishing USD momentum and possible change in bias.
GDP will steal the show but 8:30 am also marks the release of unemployment Claims that are expected to improve from last 409K to 403K.
The 5910 target on FTSE long has been hit (entry at 5840-55). The shorts wouldnt be stopped out until 5920. For more details on our Premium piece, click here http://www.ashraflaidi.com/ products/ sub01/
Patrik Urban
May 26, 2011 08:05 ET : Risk appetite stabilizes after news that China showed interest in Portuguese and New Zealand investment. Later, the London session showed indecision as price consolidated within unusually narrow range.
J.C. Trichet once again reiterated that ECB is monitoring price level and will do whatever necessary to avoid second round inflation effects. EURUSD did not respond much but the Spanish/German 10 year yield spread narrowed by 13 bps providing support for the euro.
In Switzerland, trade surplus increased from 1B to 1.52B but still came slightly below expected 2.0B and employment level q/q marked another slight improvement to 4.11 from previous 4.09M.
New York session will see eagerly awaited US Preliminary GDP q/q
released at 8:30 am EDT. Markets expect an improvement from last 1.8% to 2.2%. Given the rise in NFP and significant drop in unemployment seen over the past few months, the GDP data should not disappoint despite many, rather poor recent US economic releases.
Estimating whether USD will be able to resume its uptrend should the GDP data come as expected is difficult. Yesterday, the USD was not able to benefit from ongoing EZ problems and doubt inducing comments about Greek exit from EZ. Later, after the Chinese news, the greenback dropped sharply. This could be interpreted as diminishing USD momentum and possible change in bias.
GDP will steal the show but 8:30 am also marks the release of unemployment Claims that are expected to improve from last 409K to 403K.
The 5910 target on FTSE long has been hit (entry at 5840-55). The shorts wouldnt be stopped out until 5920. For more details on our Premium piece, click here http://www.ashraflaidi.com/ products/ sub01/
Patrik Urban
GBP Shrugs off Disappointing data; US Durable Goods Slump
http://www.ashraflaidi.com/forex-news/?a=2405
May 25, 2011 08:34 ET : USD was already coming off its highs before the disappointment in US data, this time from an unexpected 3.6% decline in Apr durable goods, which fell below -2.6% expected). March durable goods orders were revised down to -4.4% from the prev reported -4.1%.
London session saw a slight improvement in sentiment as European equities opened weak but quickly recovered all their losses. USD is lower against most currencies, and even EURUSD could regain towards $1.4120s for now
Finnish parliament approved the participation in bailout of Portugal and Greek PM reiterated that he is determined to stay in EZ and seek political consensus. Despite these developments, the Euro has not been able to stage any kind of meaningful recovery.
The only relevant EZ news today - GfK German Consumer Climate came out at 5.5, slightly worse then previous 5.7. Consumer climate has been
gradually worsening over the past four months.
UK revised Q1 GDP came out at 0.5% as expected (1.8% y/y). Household Spending q/q has worsened to -0.6% which is the largest q/q fall since
Q2 2009. BBA mortgage approvals came out at 29.4K vs 31.2K, down 18% y/y. GBP is not paying attention to these numbers and is the relative strength winner. GBPUSD is currently trading around 1.6230; 100+ points off todays lows.
Commodity & FX traders await Crude oil inventories data that is expected to decrease from previous reading of 0.0M barrels to -1.6M barrels. Since February there have been only two instances of negative results. Negative reading would underpin oil and could give a boost to CAD.
Patrik Urban
May 25, 2011 08:34 ET : USD was already coming off its highs before the disappointment in US data, this time from an unexpected 3.6% decline in Apr durable goods, which fell below -2.6% expected). March durable goods orders were revised down to -4.4% from the prev reported -4.1%.
London session saw a slight improvement in sentiment as European equities opened weak but quickly recovered all their losses. USD is lower against most currencies, and even EURUSD could regain towards $1.4120s for now
Finnish parliament approved the participation in bailout of Portugal and Greek PM reiterated that he is determined to stay in EZ and seek political consensus. Despite these developments, the Euro has not been able to stage any kind of meaningful recovery.
The only relevant EZ news today - GfK German Consumer Climate came out at 5.5, slightly worse then previous 5.7. Consumer climate has been
gradually worsening over the past four months.
UK revised Q1 GDP came out at 0.5% as expected (1.8% y/y). Household Spending q/q has worsened to -0.6% which is the largest q/q fall since
Q2 2009. BBA mortgage approvals came out at 29.4K vs 31.2K, down 18% y/y. GBP is not paying attention to these numbers and is the relative strength winner. GBPUSD is currently trading around 1.6230; 100+ points off todays lows.
Commodity & FX traders await Crude oil inventories data that is expected to decrease from previous reading of 0.0M barrels to -1.6M barrels. Since February there have been only two instances of negative results. Negative reading would underpin oil and could give a boost to CAD.
Patrik Urban
USD Pares Gains as Appetite Returns, Ezone Orders Mixed
http://www.ashraflaidi.com/forex-news/?a=2403
May 24, 2011 09:24 ET : Trading during the London session has been calm with most currencies slightly higher against the USD amid sentiment improvement. Latest data from EZ was mixed, market awaits US housing data.
German final GDP q/q came out as expected at 1.5% and German Ifo Business Climate for May was unchanged at 114.2, slightly higher than
expected 113.9. Klaus Abberger, Ifos economist, was quoted that
recent high euro volatility is a problem for German firms because it
makes it more expensive for companies to hedge their FX exposure.
EZ Industrial New Orders for May declined sharply from previous +0.5
to -1.8%. Data has been progressively worsening over the past quarter
which could be attributed to strong Euro seen from January to end of
April. Lower orders and comments about extra expense German firms have
to make when hedging could predict future weakness.
Euro has ignored these numbers and continued higher. After a brief
consolidation and return below the 1.41 news that the Greek opposition
leader Samaras rejected the austerity plan came out. Even though that
is not a surprising development, it could prevent further euro
appreciation.
In the UK, Public Sector Net Borrowing was lower at 7.7B from previous
15.6B. Analysts however expected borrowing to reach only 5B. Sterling
has not reacted to higher deficit news.
US data will be limited to New Home Sales and Richmond Manufacturing
Index both released at 10:00 am EDT. Over the past year, New Homes
Sales have stabilized but they still hover near decade lows. New Home
Sales is expected to increase slightly from 300K to 305K. Analysts see
Richmond Manufacturing Index that has been declining the past three
months unchanged at 10. Unless this reading surprises significantly,
the impact on the FX market should be limited.
Despite the stabilization that the housing market experienced over the
past year, situation continues to be dire. Given the importance of the
housing market on consumers confidence, there cannot be any serious
discussion about an improvement of the economy as a whole unless we
see significant multi-month improvement in the housing market.
Patrik Urban
May 24, 2011 09:24 ET : Trading during the London session has been calm with most currencies slightly higher against the USD amid sentiment improvement. Latest data from EZ was mixed, market awaits US housing data.
German final GDP q/q came out as expected at 1.5% and German Ifo Business Climate for May was unchanged at 114.2, slightly higher than
expected 113.9. Klaus Abberger, Ifos economist, was quoted that
recent high euro volatility is a problem for German firms because it
makes it more expensive for companies to hedge their FX exposure.
EZ Industrial New Orders for May declined sharply from previous +0.5
to -1.8%. Data has been progressively worsening over the past quarter
which could be attributed to strong Euro seen from January to end of
April. Lower orders and comments about extra expense German firms have
to make when hedging could predict future weakness.
Euro has ignored these numbers and continued higher. After a brief
consolidation and return below the 1.41 news that the Greek opposition
leader Samaras rejected the austerity plan came out. Even though that
is not a surprising development, it could prevent further euro
appreciation.
In the UK, Public Sector Net Borrowing was lower at 7.7B from previous
15.6B. Analysts however expected borrowing to reach only 5B. Sterling
has not reacted to higher deficit news.
US data will be limited to New Home Sales and Richmond Manufacturing
Index both released at 10:00 am EDT. Over the past year, New Homes
Sales have stabilized but they still hover near decade lows. New Home
Sales is expected to increase slightly from 300K to 305K. Analysts see
Richmond Manufacturing Index that has been declining the past three
months unchanged at 10. Unless this reading surprises significantly,
the impact on the FX market should be limited.
Despite the stabilization that the housing market experienced over the
past year, situation continues to be dire. Given the importance of the
housing market on consumers confidence, there cannot be any serious
discussion about an improvement of the economy as a whole unless we
see significant multi-month improvement in the housing market.
Patrik Urban
Ezone PMI Disappoints, EURUSD Breaks 1.40
http://www.ashraflaidi.com/forex-news/?a=2399
May 23, 2011 08:01 ET : Negative Eurozone sentiment pushes the single currency down across the board. Earlier during the session market broke below the psychologically important 1.40 handle but has since recovered a portion of recent losses. PMI data came worse than expected.
EZ manufacturing PMI deteriorated to 7 months low after it fell sharply to 54.8 from the last reading of 58 and PMI services came out at 55.4 from previous 56.7. Market expected 57.6 and 56.6 respectively. French and German PMI numbers also disappointed and marked multi months worst readings. The exception was French services PMI that decreased only slightly to 62.8 from previous 62.9 which is still near recent highs.
Little dose of confidence was injected to the markets when analysts from Moodys and Fitch rating agencies reaffirmed a stable outlook for Italy. Italian government is preparing a deficit cutting measures in response to last week cut in outlook to negative by S&P.
Since Friday EURUSD is down almost four cents. Euro represents 58.6% of the value of USD index so the recent fall in EURUSD helped USD index to break above the technically important area around 76.00. This resistance given by November 2010 low that coincides with 38.2% fib.ret. of the fall from 81.30 to 72.69 should now act as support. USD index is currently trading around 76.25.
Current USD strength is reflected in pricing of commodities that are trading near sessions lows, spot gold is holding slightly above 1500 USD/oz and spot silver trades at 34.75 USD/oz.
There are no data releases during the upcoming US session. Trading will be mainly determined by risk on/off sentiment and by technical indicators. CAD traders should keep in mind that Canada has a bank holiday today in observance of Victoria Day. The liquidity is likely to be poor so trading within narrow range with occasional erratic movement is probable.
The daily "Intermarket Insight" will be published shortly, unveiling key distinct dynamics in Spanish bond spreads, which stand out from the other eripheral spread. for access to our premium section, click here: http://www.ashraflaidi.com/ products/ sub01/
Patrick Urban
May 23, 2011 08:01 ET : Negative Eurozone sentiment pushes the single currency down across the board. Earlier during the session market broke below the psychologically important 1.40 handle but has since recovered a portion of recent losses. PMI data came worse than expected.
EZ manufacturing PMI deteriorated to 7 months low after it fell sharply to 54.8 from the last reading of 58 and PMI services came out at 55.4 from previous 56.7. Market expected 57.6 and 56.6 respectively. French and German PMI numbers also disappointed and marked multi months worst readings. The exception was French services PMI that decreased only slightly to 62.8 from previous 62.9 which is still near recent highs.
Little dose of confidence was injected to the markets when analysts from Moodys and Fitch rating agencies reaffirmed a stable outlook for Italy. Italian government is preparing a deficit cutting measures in response to last week cut in outlook to negative by S&P.
Since Friday EURUSD is down almost four cents. Euro represents 58.6% of the value of USD index so the recent fall in EURUSD helped USD index to break above the technically important area around 76.00. This resistance given by November 2010 low that coincides with 38.2% fib.ret. of the fall from 81.30 to 72.69 should now act as support. USD index is currently trading around 76.25.
Current USD strength is reflected in pricing of commodities that are trading near sessions lows, spot gold is holding slightly above 1500 USD/oz and spot silver trades at 34.75 USD/oz.
There are no data releases during the upcoming US session. Trading will be mainly determined by risk on/off sentiment and by technical indicators. CAD traders should keep in mind that Canada has a bank holiday today in observance of Victoria Day. The liquidity is likely to be poor so trading within narrow range with occasional erratic movement is probable.
The daily "Intermarket Insight" will be published shortly, unveiling key distinct dynamics in Spanish bond spreads, which stand out from the other eripheral spread. for access to our premium section, click here: http://www.ashraflaidi.com/ products/ sub01/
Patrick Urban
Euro Drops, CAD Inflation Slips, Onto Retail Sales
http://www.ashraflaidi.com/forex-news/?a=2394
May 20, 2011 08:06 ET : Euro is weak across the board on lingering Greece & Spain concerns as well as a negative Bundesbank report. CAD Dragged by weak CPI, now awaiting retail sales.
Euro fell on a combination of prolonged concerns with Greece and Spain as well as a report from the Bundesbank indicating German weakness in the foreseeable future. Also weighing on EUR were remarks by Bank of Slovakia Jozef Makuch who is also on ECBs governing council , indicating
that inflation spike is temporary and inflation is well anchored in mid to longer term in EZ. EUR currently weak across the board and even higher German April PPI rose to 1.0% from last 0.4% and on annualized basis firmed up to 6.4% from previous 6.2% did not provide support.
In Canada, May CPI decreased significantly to 0.3% (0.5% exp.) from
last reading of 1.1%. Core CPI was also on the weak side at 0.2% (0.1%
exp.) from previous 0.7% slightly undermining the need to increase
interest rates before Q4. BoC meets 5 more times this year in May,
July, September, October and December.
Markets awaits Canadian Retail Sales at 8:30 am EDT, expecting an improvement to 0.9% from Aprils 0.4%. Positive reading would mark a back to back improvement after two negative readings in February and March. Core retail sales are expected to improve slightly from 0.7% to 0.8%.
Today there are no economic releases from the US.
In absence of news releases, trading is likely to be determined by
risk on/risk off sentiment and technical indicators will become more
important.
After a strong USD close last week, USD bulls were ready to keep
pushing higher. Most US economic releases this
week disappointed (with the exception of slightly better than expected
unemployment claims yesterday) so the sentiment started to shift. Over
the past three days USD closed at lower levels each day and unless
there is a large, USD positive move during today's trading, USD will
have lost most of its gains from last week. USD bulls are unlikely to
give up just yet. Also watch out from options expiry in the US today, which could add extra volatility to indices later in the session.
By PU -AshrafLaidi.com Staff
May 20, 2011 08:06 ET : Euro is weak across the board on lingering Greece & Spain concerns as well as a negative Bundesbank report. CAD Dragged by weak CPI, now awaiting retail sales.
Euro fell on a combination of prolonged concerns with Greece and Spain as well as a report from the Bundesbank indicating German weakness in the foreseeable future. Also weighing on EUR were remarks by Bank of Slovakia Jozef Makuch who is also on ECBs governing council , indicating
that inflation spike is temporary and inflation is well anchored in mid to longer term in EZ. EUR currently weak across the board and even higher German April PPI rose to 1.0% from last 0.4% and on annualized basis firmed up to 6.4% from previous 6.2% did not provide support.
In Canada, May CPI decreased significantly to 0.3% (0.5% exp.) from
last reading of 1.1%. Core CPI was also on the weak side at 0.2% (0.1%
exp.) from previous 0.7% slightly undermining the need to increase
interest rates before Q4. BoC meets 5 more times this year in May,
July, September, October and December.
Markets awaits Canadian Retail Sales at 8:30 am EDT, expecting an improvement to 0.9% from Aprils 0.4%. Positive reading would mark a back to back improvement after two negative readings in February and March. Core retail sales are expected to improve slightly from 0.7% to 0.8%.
Today there are no economic releases from the US.
In absence of news releases, trading is likely to be determined by
risk on/risk off sentiment and technical indicators will become more
important.
After a strong USD close last week, USD bulls were ready to keep
pushing higher. Most US economic releases this
week disappointed (with the exception of slightly better than expected
unemployment claims yesterday) so the sentiment started to shift. Over
the past three days USD closed at lower levels each day and unless
there is a large, USD positive move during today's trading, USD will
have lost most of its gains from last week. USD bulls are unlikely to
give up just yet. Also watch out from options expiry in the US today, which could add extra volatility to indices later in the session.
By PU -AshrafLaidi.com Staff
GBP sees a lift after much improved Retail Sales, CHF slides as Zew index disappoints
http://www.ashraflaidi.com/forex-news/?a=2390
May 19, 2011 08:17 ET : Risk appetite is improving and higher yielding currencies are trading near their highs of the session. GBP is retracing a portion of yesterdays losses after May retail sales showed a solid reading of 1.1%, much improved from Aprils 0.3%. Retail sales often show volatile results and at least a portion of todays reading can be attributed to sales related to the Royal Wedding.
Relative strength loser is CHF after May Zew Economic Expectations index came out significantly weaker at -11.5 from last 8.8. CHF is weaker across the board. Last months print of 8.8 was the only positive reading since September 2010.
Upcoming US session will bring unemployment claims at 8:30 am EDT, expected to improve slightly to 421K from last weeks 434K. For the past five weeks market saw readings over 400K which shows labor market deterioration after 7 weeks of sub 400K readings seen during late February to early April.
At 10:00 am May Existing Home Sales will be released expected to improve to 5.21M from last 5.10M. Housing market is critically important for US consumers and while there are some encouraging signs, weakness persists. Existing home sales have been improving since August 2010 but are still far below pre-crisis levels. New home sales are still at decades lows.
Philly Fed manufacturing index will also be released at 10:00 am EDT. After a significant improvement seen at the end of 2010 and early 2011 Philly Fed index dropped in April from 43.4 to 18.5. May reading is expected to show slight improvement to 20.2.
Recent trend towards USD strength seems to be getting tired and the greenback has closed at weak levels over the past two days. From this point of view, the close of todays NY session is extremely important. Additional USD weakness and a close below yesterdays low would point to change in bias and USD could become a sell on rallies.
For the latest trading ideas on OIL, EURUSD, GOLD, SILVER & CADJPY, see our Premium Intermarket Insights here: http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=429
by P.U, AshrafLaidi.com Staff
May 19, 2011 08:17 ET : Risk appetite is improving and higher yielding currencies are trading near their highs of the session. GBP is retracing a portion of yesterdays losses after May retail sales showed a solid reading of 1.1%, much improved from Aprils 0.3%. Retail sales often show volatile results and at least a portion of todays reading can be attributed to sales related to the Royal Wedding.
Relative strength loser is CHF after May Zew Economic Expectations index came out significantly weaker at -11.5 from last 8.8. CHF is weaker across the board. Last months print of 8.8 was the only positive reading since September 2010.
Upcoming US session will bring unemployment claims at 8:30 am EDT, expected to improve slightly to 421K from last weeks 434K. For the past five weeks market saw readings over 400K which shows labor market deterioration after 7 weeks of sub 400K readings seen during late February to early April.
At 10:00 am May Existing Home Sales will be released expected to improve to 5.21M from last 5.10M. Housing market is critically important for US consumers and while there are some encouraging signs, weakness persists. Existing home sales have been improving since August 2010 but are still far below pre-crisis levels. New home sales are still at decades lows.
Philly Fed manufacturing index will also be released at 10:00 am EDT. After a significant improvement seen at the end of 2010 and early 2011 Philly Fed index dropped in April from 43.4 to 18.5. May reading is expected to show slight improvement to 20.2.
Recent trend towards USD strength seems to be getting tired and the greenback has closed at weak levels over the past two days. From this point of view, the close of todays NY session is extremely important. Additional USD weakness and a close below yesterdays low would point to change in bias and USD could become a sell on rallies.
For the latest trading ideas on OIL, EURUSD, GOLD, SILVER & CADJPY, see our Premium Intermarket Insights here: http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=429
by P.U, AshrafLaidi.com Staff
GBP Deepens Losses After UK Jobs, BoE
http://www.ashraflaidi.com/forex-news/?a=2386
May 18, 2011 08:43 ET : GBP loses its luster after UK jobless claims come out much worse at 12.4K vs 0.700K expected. This is the worst reading since February 2010. To make things worse, March reading was revised up from 0.7K to 6.4K, which points to a significant weakening in the labor market. Nevertheless, unemployment rate has improved from 7.8% to 7.7% while the market expected worsening to 7.9%.
Another important UK news came in form of BoE MPC minutes. As
expected, voting pattern remained unchanged 6-3 in favor of keeping
rates steady. Rumors that Martin Weale had changed his vote proved
false as he did vote for a rate hike again. QE will continue to stay
at GBP 200B.
On the back of labor market disappointment GBPUSD loses all of its
yesterdays gains as it trades full cent off yesterday's highs and is
currently trading near session lows at 1.6170.
See Ashraf's GBPUSD chart in Monday's Premium piece, warning of 1.6120 being the confluence support of May Trendline & 100 dma here: http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=425
Minutes from April FOMC meeting due at 2:00 pm EST could shed some light onto QE2 exit strategy. Considering the news conference that Ben Bernanke had right after the April FOMC meeting it is not very likely that todays minutes could shock the market with a big surprise.
USD is consolidating yesterdays losses and most currencies are trading near their yesterdays highs. It would be necessary to see another down day and another weak closing to turn the recent trend toward USD strength around and shift bias down.
See Ashraf's TECHNICAL INTERMARKET PARAMETERS on this piece ($SPX, DOW-30, FTSE-100, RUSSELL 2000, GOLD, OIL, EURUSD)
http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=428
By PU - AshrafLaidi.com Staff
May 18, 2011 08:43 ET : GBP loses its luster after UK jobless claims come out much worse at 12.4K vs 0.700K expected. This is the worst reading since February 2010. To make things worse, March reading was revised up from 0.7K to 6.4K, which points to a significant weakening in the labor market. Nevertheless, unemployment rate has improved from 7.8% to 7.7% while the market expected worsening to 7.9%.
Another important UK news came in form of BoE MPC minutes. As
expected, voting pattern remained unchanged 6-3 in favor of keeping
rates steady. Rumors that Martin Weale had changed his vote proved
false as he did vote for a rate hike again. QE will continue to stay
at GBP 200B.
On the back of labor market disappointment GBPUSD loses all of its
yesterdays gains as it trades full cent off yesterday's highs and is
currently trading near session lows at 1.6170.
See Ashraf's GBPUSD chart in Monday's Premium piece, warning of 1.6120 being the confluence support of May Trendline & 100 dma here: http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=425
Minutes from April FOMC meeting due at 2:00 pm EST could shed some light onto QE2 exit strategy. Considering the news conference that Ben Bernanke had right after the April FOMC meeting it is not very likely that todays minutes could shock the market with a big surprise.
USD is consolidating yesterdays losses and most currencies are trading near their yesterdays highs. It would be necessary to see another down day and another weak closing to turn the recent trend toward USD strength around and shift bias down.
See Ashraf's TECHNICAL INTERMARKET PARAMETERS on this piece ($SPX, DOW-30, FTSE-100, RUSSELL 2000, GOLD, OIL, EURUSD)
http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=428
By PU - AshrafLaidi.com Staff
UK CPI highest since '08; Onto US Housing & IP
http://www.ashraflaidi.com/forex-news/?a=2382
May 17, 2011 08:14 ET : GBP bounces off the lows after highest inflation reading since 2008, EUR supported by agreement to provide aid to Portugal. EURUSD still in a downtrend and far from turning bullish.
USD is little changed against most other currencies with the exception of GBP and JPY. GBP is once again supported by higher then expected inflation figures. UK CPI year over year came out at 4.5%, higher then expected 4.2% and up from the latest 4.0% (core 3.7% vs. 3.4%). Month over month CPI saw a print of 1%. As a result, GBPUSD jumped to 1.6307 but has met selling pressure and has retreated back pre-announcement levels at 1.6260. This reading is the highest since October 2008.
See Ashraf's long & short strategies for GBPUSD in yesterday's Premium insights http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=425
Bank of Englads governor Mervyn King in his Inflation Letter blames higher readings on VAT increase, high energy and import prices and sees further rise in CPI in coming months.
Euro has gained slightly against the greenback after European finance ministers agreed to provide 78B Euro aid package to Portugal. This aid has to be approved by all EZ countries. Euro is holding at session highs, currently at 1.4210 and that is despite the disappointing German ZEW economic sentiment index that came out at 3.1 much worse than previous 7.6. Market expected 4.8. This result is the worst since February and marks four months of gradual worsening in sentiment.
News releases published during the upcoming US session will include building permits that are expected unchanged at 0.59M and housing starts that are expected to improve slightly from 0.55M to 0.58M. These releases are published at 8:30 am EDT.
As QE2 is coming closer to its end, any indicators that can be used to gauge future inflation will become more closely watched. At 9:15 am EDT capacity utilization and US INDUSTRIAL PRODUCTION will be released. Capacity utilization has been slowly but steadily increasing since July 2009 and market expects another improvement from 77.4% to 77.7%. Generally, it is assumed that only move over 80% would start to create inflationary pressures. Industrial production is expected to worsen from 0.8% to 0.5%. It is however important to keep in mind that this indicator is very volatile.
Kiwi traders will be waiting for PPI q/q numbers coming out at 6:45 pm EDT. Market expects a decrease from 0.9% to 0.6%. Price action has been decidedly negative so any downside surprise is likely to punish NZD strongly.
by PU - AshrafLaidi.com staff
May 17, 2011 08:14 ET : GBP bounces off the lows after highest inflation reading since 2008, EUR supported by agreement to provide aid to Portugal. EURUSD still in a downtrend and far from turning bullish.
USD is little changed against most other currencies with the exception of GBP and JPY. GBP is once again supported by higher then expected inflation figures. UK CPI year over year came out at 4.5%, higher then expected 4.2% and up from the latest 4.0% (core 3.7% vs. 3.4%). Month over month CPI saw a print of 1%. As a result, GBPUSD jumped to 1.6307 but has met selling pressure and has retreated back pre-announcement levels at 1.6260. This reading is the highest since October 2008.
See Ashraf's long & short strategies for GBPUSD in yesterday's Premium insights http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=425
Bank of Englads governor Mervyn King in his Inflation Letter blames higher readings on VAT increase, high energy and import prices and sees further rise in CPI in coming months.
Euro has gained slightly against the greenback after European finance ministers agreed to provide 78B Euro aid package to Portugal. This aid has to be approved by all EZ countries. Euro is holding at session highs, currently at 1.4210 and that is despite the disappointing German ZEW economic sentiment index that came out at 3.1 much worse than previous 7.6. Market expected 4.8. This result is the worst since February and marks four months of gradual worsening in sentiment.
News releases published during the upcoming US session will include building permits that are expected unchanged at 0.59M and housing starts that are expected to improve slightly from 0.55M to 0.58M. These releases are published at 8:30 am EDT.
As QE2 is coming closer to its end, any indicators that can be used to gauge future inflation will become more closely watched. At 9:15 am EDT capacity utilization and US INDUSTRIAL PRODUCTION will be released. Capacity utilization has been slowly but steadily increasing since July 2009 and market expects another improvement from 77.4% to 77.7%. Generally, it is assumed that only move over 80% would start to create inflationary pressures. Industrial production is expected to worsen from 0.8% to 0.5%. It is however important to keep in mind that this indicator is very volatile.
Kiwi traders will be waiting for PPI q/q numbers coming out at 6:45 pm EDT. Market expects a decrease from 0.9% to 0.6%. Price action has been decidedly negative so any downside surprise is likely to punish NZD strongly.
by PU - AshrafLaidi.com staff
Disappointing US data sends USD lower; USD buying likely to resume later
http://www.ashraflaidi.com/forex-news/?a=2378
May 16, 2011 13:49 ET : USD is giving up earlier gains after a number of US data releases disappointed this morning. Empire State Manufacturing Index disappointed when it came out at 11.9 from previous 21.7. Market expected 20.7.
TIC data describing net foreign purchases of long-term securities came out worse than expected at 24B. This reading marks deterioration as even the previous reading of 27.2B was regarded as highly disappointing. Market expected 57.7B.
Even NAHB Housing Market Index fell short of expectations when results came out at 16 compared to 17 expected.
As a result USD is giving up earlier gains across the board. EURUSD is currently 130+ points up from todays lows. Strong downtrend is however likely to attract selling. Only a close above last Fridays highs could be interpreted as a sign of diminishing bearish sentiment.
Aussie traders will want to pay attention to the minutes from the latest Monetary PolicyMeeting that will be released at 9:30 pm EDT. Over the past two weeks AUDUSD lost 500 points and according to COT report futures holdings were trimmed only a bit.AUDUSD can easily become sell on rallies and unwinding of accumulated longs could send AUD much lower. The market implied chances of a June hike fell from over 50% toabout 30% so even from a macro perspective holding AUD became less interesting then only a short time ago.
by P.U. - AshrafLaidi.com staff
May 16, 2011 13:49 ET : USD is giving up earlier gains after a number of US data releases disappointed this morning. Empire State Manufacturing Index disappointed when it came out at 11.9 from previous 21.7. Market expected 20.7.
TIC data describing net foreign purchases of long-term securities came out worse than expected at 24B. This reading marks deterioration as even the previous reading of 27.2B was regarded as highly disappointing. Market expected 57.7B.
Even NAHB Housing Market Index fell short of expectations when results came out at 16 compared to 17 expected.
As a result USD is giving up earlier gains across the board. EURUSD is currently 130+ points up from todays lows. Strong downtrend is however likely to attract selling. Only a close above last Fridays highs could be interpreted as a sign of diminishing bearish sentiment.
Aussie traders will want to pay attention to the minutes from the latest Monetary PolicyMeeting that will be released at 9:30 pm EDT. Over the past two weeks AUDUSD lost 500 points and according to COT report futures holdings were trimmed only a bit.AUDUSD can easily become sell on rallies and unwinding of accumulated longs could send AUD much lower. The market implied chances of a June hike fell from over 50% toabout 30% so even from a macro perspective holding AUD became less interesting then only a short time ago.
by P.U. - AshrafLaidi.com staff
Market awaits US CPI figures; EUR weekly close critical
http://www.ashraflaidi.com/forex-news/?a=2374
May 13, 2011 07:47 ET : EURUSD gained a full cent on the back of good GDP numbers but has since slipped back slightly. GBPUSD continues to trade heavy near the lows of the day.
Euro was supported during the London session after both French and German Q1 GDP numbers came out much better than expected at 1.5% and 1.0% respectively. Market expected only a modest growth at 0.9% and 0.6%. Whole Eurozone preliminary GDP q/q also came out better than expected at 0.8% vs. 0.6% expected.
EURUSD gained a full cent and reached a high of 1.4340 but has slipped back slightly. Cable continues to be the relative strength loser and trades near the lows of the day. Risk on atmosphere underpinned silver (up 2 USD/oz on the day) and gold (up nearly 15 USD/oz).
Trading during the US session is likely to be determined by core CPI released at 8:30 EDT. Market expects an increase to 0.2% m/m from last 0.1%. Higher then expected reading could send the greenback sharply higher as this would support hawkish voices inside of the FED. A sustained rise in the year on year consumer inflation level would make a future increase in Fed Funds Rate or a decision to start shrinking FEDs balance sheet more likely and it would virtually eliminate the possibility of QE3. Obviously, lower then expected core CPI reading will have the opposite effect. Headline CPI reading is expected at 0.4% m/m after last months 0.5%.
More details on QE2 exit strategy can be found in yesterdays IMT.
Second and last data release of the day is University of Michigan Consumer Sentiment Index released at 9:55 EDT. Traders expect an improvement from last reading of 69.8 to 70.0. Unless we see a significant improvement/disappointment, this release is not likely to change a direction that markets will take after the more important core CPI number.
Should EURUSD close above 1.4250s, then we could see a range bound market for the next few trading sessions. If the US inflation data comes higher and EURUSD closes daily as well as weekly candle near the lows, path to 1.40 continues to be open.
PU - AshrafLaidi.com Staff
May 13, 2011 07:47 ET : EURUSD gained a full cent on the back of good GDP numbers but has since slipped back slightly. GBPUSD continues to trade heavy near the lows of the day.
Euro was supported during the London session after both French and German Q1 GDP numbers came out much better than expected at 1.5% and 1.0% respectively. Market expected only a modest growth at 0.9% and 0.6%. Whole Eurozone preliminary GDP q/q also came out better than expected at 0.8% vs. 0.6% expected.
EURUSD gained a full cent and reached a high of 1.4340 but has slipped back slightly. Cable continues to be the relative strength loser and trades near the lows of the day. Risk on atmosphere underpinned silver (up 2 USD/oz on the day) and gold (up nearly 15 USD/oz).
Trading during the US session is likely to be determined by core CPI released at 8:30 EDT. Market expects an increase to 0.2% m/m from last 0.1%. Higher then expected reading could send the greenback sharply higher as this would support hawkish voices inside of the FED. A sustained rise in the year on year consumer inflation level would make a future increase in Fed Funds Rate or a decision to start shrinking FEDs balance sheet more likely and it would virtually eliminate the possibility of QE3. Obviously, lower then expected core CPI reading will have the opposite effect. Headline CPI reading is expected at 0.4% m/m after last months 0.5%.
More details on QE2 exit strategy can be found in yesterdays IMT.
Second and last data release of the day is University of Michigan Consumer Sentiment Index released at 9:55 EDT. Traders expect an improvement from last reading of 69.8 to 70.0. Unless we see a significant improvement/disappointment, this release is not likely to change a direction that markets will take after the more important core CPI number.
Should EURUSD close above 1.4250s, then we could see a range bound market for the next few trading sessions. If the US inflation data comes higher and EURUSD closes daily as well as weekly candle near the lows, path to 1.40 continues to be open.
PU - AshrafLaidi.com Staff
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