http://www.ashraflaidi.com/forex-news/?a=3014
December 30, 2011 06:52 ET: German finance minister ruled out Eurozone breakup; UK house prices fell; Italian PPI rose m/m but declined y/y, Spanish annual CPI lower; France announced bond auction on January 3rd. EURJPY reached decade's low. Progress on Premium trades is found below.
The greenback is consolidating yesterday's gains and trades little changed. European equities are mixed between -0.2% to +0.4%. Relative strength winners are NZD and JPY.
German finance minister Wolfgang Schaeuble said today that Eurozone has the risk of contagion under control and ruled out Eurozone's breakup. He also reiterated that the ESM rescue mechanism will be implemented in Q1 with ESM active in mid-2012.
In the UK, nationwide house prices fell in December -0.2% from previous 0.4% m/m which translates to 1% from 1.6% y/y. Expectations are for weak activity throughout 2012 with flat or modestly lower prices. GBPUSD trades around 1.5450
On the data front, Italian PPI rose in November in line with expectations 0.2% after -0.2% contraction in October which is 4.5% from 4.7% y/y. Spanish annual CPI declined in December to 2.3% from November's 2.9%. Another sobering news came from Greece as October retail sales dropped nearly -11% y/y after -6.5% in September.
Attention on bond auctions is likely to continue as France announced today that it will attempt to sell EUR 4 4.5 bln in 3 month bills, EUR 1.8 2.2 bln 6 month bills and EUR 1.8 2.2 bln 11 month bills on January 3rd, 2012. According to MNI calculation, the total Eurozone bond issuance was EUR 821 bln in 2011.
EURJPY fell below 100 on EBS today for the first time since June 2001. The follow through has been minimal so far and pair recovered to 100.20 level.
Thursdays Premium Intermarket await the 99.80 target in the EURJPY short as well as both shorts in USDCAD. USDJPY hit all targets, while both gold & silver shorts were stopped out as the Aussie shorts. One EURUSD short is in progress. Direct Access http://ashraflaidi.com/ products/ sub01/ access/?a=576 Nonsubscribers can obtain a free 1-week trial here: http://ashraflaidi.com/ products/
There are no fundamental data releases during the NY session.
Wishing everyone a prosperous & healthy New Year
Patrik Urban
Friday, December 30, 2011
Thursday, December 29, 2011
Euro Underperforms Equities Amid Mixed Italy Auction
http://www.ashraflaidi.com/forex-news/?a=3012
December 29, 2011 08:13 ET: Mixed results from today's Italian bond auction; German CPI expected higher m/m; GBPUSD at fresh 13 week low and EURJPY nears 100 level. Market turns to jobless claims, Chicago PMI and pending home sales. Thursday's Premium trades are up (see link below).
Risk aversion stabilizes while EURUSD struggles to regain $1.29 after dipping to 1.2850s. US equity futures are modestly higher.
German December CPI is still being collected but states that have already published their results saw annual inflation in the 1.7% to 2.4% range. Monthly CPI rose 0.5% to 0.7% which is attributed to holiday season. Results for the whole of Germany will be published later today.
Italy sold EUR 7.02 bln (5 to 8.5 bln target) worth of bonds today. The yield was mixed, bonds maturing in 2014 and 2022 saw lower yield while bonds maturing in 2022 and 2018 saw higher yield. Bid to cover was on the weak side between 1.35 and 1.97. The 10 year Italian-German spread widened 13 bps immediately after the auction and stands at 519 bps. Italian business confidence fell in December to 92.5 from previous 94.0.
Thursdays Premium Intermarket Insights include EURUSD, EURJPY, AUDUSD, USDCAD, gold & silver found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=576 Nonsubscribers can obtain a free 1-week trial here: http://ashraflaidi.com/ products/
GBPUSD fell to a fresh 13 week low and reached 1.5360. During the decline, EURGBP jumped to a 0.8395 high.
EURJPY continues to trade about 40 points above the key 100 mark. Stop loss orders have likely accumulated below and given thin liquidity, the pair could plunge should these orders be tripped.
The US session starts at 8:30 am ET with jobless claims that are expected to rise to 372K from previous 364K. Print that would be in line with expectations or better could boost sentiment as prospects for a solid NFP result on Jan 6 would improve.
At 9:45 am ET Chicago PMI is due and is seen lower at 60.4 in December from November's 62.6. Pending home sales that follow at 10:00 am ET are expected to pull back to 1.5% in November after soaring 10.4% in October.
Patrik Urban
December 29, 2011 08:13 ET: Mixed results from today's Italian bond auction; German CPI expected higher m/m; GBPUSD at fresh 13 week low and EURJPY nears 100 level. Market turns to jobless claims, Chicago PMI and pending home sales. Thursday's Premium trades are up (see link below).
Risk aversion stabilizes while EURUSD struggles to regain $1.29 after dipping to 1.2850s. US equity futures are modestly higher.
German December CPI is still being collected but states that have already published their results saw annual inflation in the 1.7% to 2.4% range. Monthly CPI rose 0.5% to 0.7% which is attributed to holiday season. Results for the whole of Germany will be published later today.
Italy sold EUR 7.02 bln (5 to 8.5 bln target) worth of bonds today. The yield was mixed, bonds maturing in 2014 and 2022 saw lower yield while bonds maturing in 2022 and 2018 saw higher yield. Bid to cover was on the weak side between 1.35 and 1.97. The 10 year Italian-German spread widened 13 bps immediately after the auction and stands at 519 bps. Italian business confidence fell in December to 92.5 from previous 94.0.
Thursdays Premium Intermarket Insights include EURUSD, EURJPY, AUDUSD, USDCAD, gold & silver found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=576 Nonsubscribers can obtain a free 1-week trial here: http://ashraflaidi.com/ products/
GBPUSD fell to a fresh 13 week low and reached 1.5360. During the decline, EURGBP jumped to a 0.8395 high.
EURJPY continues to trade about 40 points above the key 100 mark. Stop loss orders have likely accumulated below and given thin liquidity, the pair could plunge should these orders be tripped.
The US session starts at 8:30 am ET with jobless claims that are expected to rise to 372K from previous 364K. Print that would be in line with expectations or better could boost sentiment as prospects for a solid NFP result on Jan 6 would improve.
At 9:45 am ET Chicago PMI is due and is seen lower at 60.4 in December from November's 62.6. Pending home sales that follow at 10:00 am ET are expected to pull back to 1.5% in November after soaring 10.4% in October.
Patrik Urban
Wednesday, December 28, 2011
EURUSD Little Changed Despite Robust Italian Auction
http://ashraflaidi.com/t/?h3010
December 28, 2011 08:10 ET: Italian bond auctions sees strong demand that results in lower yield; Swiss KOF weakest since mid 2009. Market continues to trade in narrow ranges. No data is due in NY session. US equity futures are up 0.25-0.30%. Our latest Premium trades on EURUSD, AUDUSD, USDCAD, gold & silver are found in the link below.
Despite low volatility and narrow ranges, the greenback is slightly weaker in the ongoing session. European equities are higher between 0.3% to 0.7% and the relative strength winners are NZD followed by CAD.
Results from Italian bond auction helped to improve sentiment as Italy sold EUR 9 bln (9 bln target) worth of 6 month bills with average yield considerably lower at 3.251% from previous 6.504%. Bid to cover also improved to 1.62 from 1.47. The Italian treasury also sold EUR 1.73 bln (1.5 2.5 bln target) of 2013 CTZ bonds with 4.853% yield compared to previous 7.814%. Bid to cover also improved to 2.236 from previous 1.59. Lower yield and good demand could imply that ECB's LTRO is being received well and at least temporarily calmed investors. EURUSD trades little changed around 1.3070.
Latest Premium Intermarket Insights include trades on EURUSD, EURJPY, AUDUSD, USDCAD, gold & silver found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=575 Nonsubscribers can obtain a free 1-week trial here: http://ashraflaidi.com/ products/
Swiss KOF leading indicator fell in December to 0.01 from November's 0.34 which is the weakest print since mid 2009 and marks 8th month of gradual deterioration. CHF ignored the news and trades slightly stronger against the EUR at 1.2198 and also the USD at 0.9330.
WTI pushed nearly to 101.60 earlier during the session which underpinned the CAD. USDCAD fell from 1.02 to 1.0163. Despite higher oil, gold and silver remain under pressure.
Patrik Urban
December 28, 2011 08:10 ET: Italian bond auctions sees strong demand that results in lower yield; Swiss KOF weakest since mid 2009. Market continues to trade in narrow ranges. No data is due in NY session. US equity futures are up 0.25-0.30%. Our latest Premium trades on EURUSD, AUDUSD, USDCAD, gold & silver are found in the link below.
Despite low volatility and narrow ranges, the greenback is slightly weaker in the ongoing session. European equities are higher between 0.3% to 0.7% and the relative strength winners are NZD followed by CAD.
Results from Italian bond auction helped to improve sentiment as Italy sold EUR 9 bln (9 bln target) worth of 6 month bills with average yield considerably lower at 3.251% from previous 6.504%. Bid to cover also improved to 1.62 from 1.47. The Italian treasury also sold EUR 1.73 bln (1.5 2.5 bln target) of 2013 CTZ bonds with 4.853% yield compared to previous 7.814%. Bid to cover also improved to 2.236 from previous 1.59. Lower yield and good demand could imply that ECB's LTRO is being received well and at least temporarily calmed investors. EURUSD trades little changed around 1.3070.
Latest Premium Intermarket Insights include trades on EURUSD, EURJPY, AUDUSD, USDCAD, gold & silver found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=575 Nonsubscribers can obtain a free 1-week trial here: http://ashraflaidi.com/ products/
Swiss KOF leading indicator fell in December to 0.01 from November's 0.34 which is the weakest print since mid 2009 and marks 8th month of gradual deterioration. CHF ignored the news and trades slightly stronger against the EUR at 1.2198 and also the USD at 0.9330.
WTI pushed nearly to 101.60 earlier during the session which underpinned the CAD. USDCAD fell from 1.02 to 1.0163. Despite higher oil, gold and silver remain under pressure.
Patrik Urban
Tuesday, December 27, 2011
Consumer Confidence & Latest Premium Trades
http://ashraflaidi.com/t/?h3008
December 27, 2011 07:12 ET: USD is little changed as markets continue to trade in a narrow range. European equities are higher by about 0.5% and the relative strength winner is CHF. US consumer confidence & housing prices are due. Link to latest Premium trades is found below.
The only fundamental news out of Europe this morning was Swiss UBS consumption indicator that fell in November to 0.81 from previous 0.9. The Franc sold on the news but quickly recovered its losses and is currently trading stronger against the EUR and the USD as well. EURCHF trades right above 1.22 support while USDCHF trades near 0.9330.
An interesting development came yesterday when China and Japan unveiled a currency deal that allows their companies to exchange Chinese currency Yuan directly into Japanese Yen without having to use USD in the process. This step will cut costs between two major Asian economies, boost trade and strengthen Yuan's global role. It will also allow Japanese firms to raise a debt that is denominated in Chinese Yuan (CNY). CNY closed today at 6.3223 against the USD, slightly lower compared to Monday's 6.3198.
Pressure on periphery bonds is reappearing again as Italian 10 year yield moved back above 7% and reached 7.14% high. Italian-German spread reached 5.20% high before pulling back to 5.14%.
Tuesdays Premium Intermarket Insights are found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=575 Nonsubscribers can obtain a free 1-week trial here: http://ashraflaidi.com/ products/
With UK and Canada still on holidays, volatility is likely to remain subdued.
The NY session will bring S&P/CS composite index due at 9:00 am ET which is seen lower at -3.2% in October from -3.59% in September followed by December consumer confidence and Richmond FED manufacturing due at 10:00 am.
US Dec Consumer confidence is expected to rise to 58.5 from 56 while manufacturing sector in Richmond is anticipated higher at 6 from previous 0. This could be the first month with positive growth indicating improving conditions since June.
Patrik Urban
December 27, 2011 07:12 ET: USD is little changed as markets continue to trade in a narrow range. European equities are higher by about 0.5% and the relative strength winner is CHF. US consumer confidence & housing prices are due. Link to latest Premium trades is found below.
The only fundamental news out of Europe this morning was Swiss UBS consumption indicator that fell in November to 0.81 from previous 0.9. The Franc sold on the news but quickly recovered its losses and is currently trading stronger against the EUR and the USD as well. EURCHF trades right above 1.22 support while USDCHF trades near 0.9330.
An interesting development came yesterday when China and Japan unveiled a currency deal that allows their companies to exchange Chinese currency Yuan directly into Japanese Yen without having to use USD in the process. This step will cut costs between two major Asian economies, boost trade and strengthen Yuan's global role. It will also allow Japanese firms to raise a debt that is denominated in Chinese Yuan (CNY). CNY closed today at 6.3223 against the USD, slightly lower compared to Monday's 6.3198.
Pressure on periphery bonds is reappearing again as Italian 10 year yield moved back above 7% and reached 7.14% high. Italian-German spread reached 5.20% high before pulling back to 5.14%.
Tuesdays Premium Intermarket Insights are found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=575 Nonsubscribers can obtain a free 1-week trial here: http://ashraflaidi.com/ products/
With UK and Canada still on holidays, volatility is likely to remain subdued.
The NY session will bring S&P/CS composite index due at 9:00 am ET which is seen lower at -3.2% in October from -3.59% in September followed by December consumer confidence and Richmond FED manufacturing due at 10:00 am.
US Dec Consumer confidence is expected to rise to 58.5 from 56 while manufacturing sector in Richmond is anticipated higher at 6 from previous 0. This could be the first month with positive growth indicating improving conditions since June.
Patrik Urban
Friday, December 23, 2011
10 Year Gilt Yield At Record Lows Below 2%
http://www.ashraflaidi.com/forex-news/?a=3006
December 23, 2011 08:26 ET: UK net mortgage lending at record low, new mortgage approvals decline. Index of services fell, 10 year Gilt yield at lows. SNB reassures 1.20 floor for EURCHF. Durable goods, personal income and spending and Canadian GDP are next.
Currencies are trading in narrow ranges ahead of Christmas break. European equities rose by about 0.6% to 1%. Many European exchanges close early today, bonds and gold trading will end one hour earlier than usual so liquidity is likely to be thin.
UK net mortgage lending reached a record low in November at GBP 0.32 bln from October's GBP 0.825 bln. New mortgage approvals declined slightly to 34.78K from previous 35.2K. The index of services declined to -0.7% in October from a previous unchanged print which pushed the 10 year Gilt yield to record low below 2%.GBPUSD has been stuck within 1.5650 1.5720 range for a few days and it currently trades around 1.5670.
Quarterly SNB bulleting reiterated that the SNB will enforce EURCHF floor at 1.20 and is ready to take further measures if needed. EURCHF is slightly higher trading around 1.2235 after it found support at 1.22.
The NY session will kick off at 8:30 am ET with durable goods orders that are seen higher in November at 2% from previous -0.5%. Personal income is expected steady at 0.4% and personal spending should rise to 0.3% from 0.1%.
Canadian GDP which is due at the same time should rise in November 0.1% from 0.2% m/m and 2.7% from previous 3% y/y. USDCAD has been steadily falling since 12/19 and trades below 1.02.
November new home sales due at 10:00 am is anticipated higher at 315K from previous 307K.
Patrik Urban
December 23, 2011 08:26 ET: UK net mortgage lending at record low, new mortgage approvals decline. Index of services fell, 10 year Gilt yield at lows. SNB reassures 1.20 floor for EURCHF. Durable goods, personal income and spending and Canadian GDP are next.
Currencies are trading in narrow ranges ahead of Christmas break. European equities rose by about 0.6% to 1%. Many European exchanges close early today, bonds and gold trading will end one hour earlier than usual so liquidity is likely to be thin.
UK net mortgage lending reached a record low in November at GBP 0.32 bln from October's GBP 0.825 bln. New mortgage approvals declined slightly to 34.78K from previous 35.2K. The index of services declined to -0.7% in October from a previous unchanged print which pushed the 10 year Gilt yield to record low below 2%.GBPUSD has been stuck within 1.5650 1.5720 range for a few days and it currently trades around 1.5670.
Quarterly SNB bulleting reiterated that the SNB will enforce EURCHF floor at 1.20 and is ready to take further measures if needed. EURCHF is slightly higher trading around 1.2235 after it found support at 1.22.
The NY session will kick off at 8:30 am ET with durable goods orders that are seen higher in November at 2% from previous -0.5%. Personal income is expected steady at 0.4% and personal spending should rise to 0.3% from 0.1%.
Canadian GDP which is due at the same time should rise in November 0.1% from 0.2% m/m and 2.7% from previous 3% y/y. USDCAD has been steadily falling since 12/19 and trades below 1.02.
November new home sales due at 10:00 am is anticipated higher at 315K from previous 307K.
Patrik Urban
Thursday, December 22, 2011
US Consumer Weighs on Growth Revision
http://www.ashraflaidi.com/forex-news/?a=3004
December 22, 2011 08:23 ET: US jobless claims hit fresh 3-year lows at 364K, final US Q3 GDP revised down to 1.8% from 2.0% partly due to personal consumption revision to 7% from 2.3%. UK final GDP revised higher q/q; UK current account deficit at record highs; French downgrade rumor reappears again. Market turns to final Q3 GDP, UOM consumer sentiment, leading indicators and house price index.
USD is mixed in the ongoing session. It is weaker against AUD, NZD and CAD. Relative strength winner is AUD. European equities are higher by 1% to 1.4%.
Riskier assets were higher across the board when the rumor about French downgrade reappeared yet again. Markets quickly sold off but were able to recover.
Italian PM and finance minister Mario Monti called for the senate to approve the budget today. He said that passing of the austerity measures means Italy can face the crisis but warns that the situation is still critical.
UK final Q3 GDP was revised higher to 0.6% from 0.5% q/q and remained unrevised at 0.5% y/y. However, Q2 growth was lowered to 0% from 0.1% q/q. Any improvement in sentiment towards the GBP is likely to be negated by current account deficit that widened considerably in Q3 to the highest level on record to GBP 15.2 bln from GBP 7.4 bln. Current account as a proportion to GDP reached 20+ year high. Considering that most analysts predict zero or close to zero growth in Q4, the Q3 revision higher is likely to be quickly forgotten. GBPUSD trades back below 1.57 nevertheless above 1.5650 support.
CHF continues to fall further, albeit at a slow pace, as Swiss finance minister examines further measures to weaken the Franc. However, Swiss parliament has rejected motions that would allow negative interest rates. EURCHF trades around 1.2230, not far from a session highs.
US final Q3 GDP was revised down to 1.8% from 2.0% partly due to personal consumption revision to 7% from 2.3%. US jobless claims hit fresh 3-year lows at 364K. The news is helping stocks to push up further, alongside a boost to oil prices.
The final December university of Michigan consumer sentiment due at 9:55 am ET should see and increase to 68 from initial 67.7.
November leading indicators are seen lower at 0.3% from previous 0.9% and October house price index is expected to decline to 0.2% from 0.9%. Both indicators are due at 10:00 am.
The latest PREMIUM TRADES show Ashrafs strategy of favouring CAD & oil continues to make up for those unfilled trades. Here are is direct access to those remaining trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=573 Non-members, can get a Free Trial here http://ashraflaidi.com/ products/ sub01/
Patrik Urban
December 22, 2011 08:23 ET: US jobless claims hit fresh 3-year lows at 364K, final US Q3 GDP revised down to 1.8% from 2.0% partly due to personal consumption revision to 7% from 2.3%. UK final GDP revised higher q/q; UK current account deficit at record highs; French downgrade rumor reappears again. Market turns to final Q3 GDP, UOM consumer sentiment, leading indicators and house price index.
USD is mixed in the ongoing session. It is weaker against AUD, NZD and CAD. Relative strength winner is AUD. European equities are higher by 1% to 1.4%.
Riskier assets were higher across the board when the rumor about French downgrade reappeared yet again. Markets quickly sold off but were able to recover.
Italian PM and finance minister Mario Monti called for the senate to approve the budget today. He said that passing of the austerity measures means Italy can face the crisis but warns that the situation is still critical.
UK final Q3 GDP was revised higher to 0.6% from 0.5% q/q and remained unrevised at 0.5% y/y. However, Q2 growth was lowered to 0% from 0.1% q/q. Any improvement in sentiment towards the GBP is likely to be negated by current account deficit that widened considerably in Q3 to the highest level on record to GBP 15.2 bln from GBP 7.4 bln. Current account as a proportion to GDP reached 20+ year high. Considering that most analysts predict zero or close to zero growth in Q4, the Q3 revision higher is likely to be quickly forgotten. GBPUSD trades back below 1.57 nevertheless above 1.5650 support.
CHF continues to fall further, albeit at a slow pace, as Swiss finance minister examines further measures to weaken the Franc. However, Swiss parliament has rejected motions that would allow negative interest rates. EURCHF trades around 1.2230, not far from a session highs.
US final Q3 GDP was revised down to 1.8% from 2.0% partly due to personal consumption revision to 7% from 2.3%. US jobless claims hit fresh 3-year lows at 364K. The news is helping stocks to push up further, alongside a boost to oil prices.
The final December university of Michigan consumer sentiment due at 9:55 am ET should see and increase to 68 from initial 67.7.
November leading indicators are seen lower at 0.3% from previous 0.9% and October house price index is expected to decline to 0.2% from 0.9%. Both indicators are due at 10:00 am.
The latest PREMIUM TRADES show Ashrafs strategy of favouring CAD & oil continues to make up for those unfilled trades. Here are is direct access to those remaining trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=573 Non-members, can get a Free Trial here http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Wednesday, December 21, 2011
Euro Tries to Hold on to Strong LTRO Boost
http://www.ashraflaidi.com/forex-news/?a=3000
December 21, 2011 08:01 ET: Riskier assets soared after the LTRO announcement but declined equally quickly; 3 year LTRO allotted nearly EUR 490 bln; MPC minutes reveal unanimous votes, some members note that more QE may be needed. UK net public borrowing soared. Market turns to Canadian retail sales, US existing home sales, Eurozone confidence and later to NZ GDP. New Wednesday Premium Trades are up focus on US crude & CAD.
USD was initially lower across the board, especially immediately after the ECB LTRO was announced. However, sentiment reversed sharply and the USD was able to recover all losses. Biggest relative strength loser is CHF. Major European equities are higher by 0.5% to 1%.
Euro was inching higher ahead of the ECB LTRO announcement. In its first three year LTRO, the ECB allotted EUR 489.2 bln considerably more than expected EUR 300 bln which caused a spike higher in riskier assets. In its three months LTRO, the ECB allotted almost EUR 30 bln. EURUSD soared nearly to the 1.32 figure immediately after the release but has quickly given up its gains perhaps as the market could become concerned that banks would overexpose themselves to the Eurozone debt.
Periphery-German 10 year yield spreads widened again after they narrowed following the ECB announcement. Bunds traders note that low liquidity is causing choppy price action.
BoEs MPC minutes revealed that all members voted to hold rates steady during the 12/8 MPC meeting and that they agreed there was a little merit in changing asset buying. However, some noted that the outlook has deteriorated and that more QE may well be needed. In other news, public sector net borrowing has jumped in November to GBP 15.2 bln from previous GBP 3 bln. However, this increase was expected. GBPUSD trades below 1.57 after reaching a high at 1.5770.
Most of Tuesdays premium longs in Aussie, ES and CAD were unfilled due to rapid market moves, while both of the gold shorts were stopped out. Here are Wednesdays premium trades contain with a focus on oil, Aussie and CAD CAD http://ashraflaidi.com/ products/ sub01/ access/ ?a=573 Nonsubscribers can click here: http://ashraflaidi.com/ products/ sub01/
The NY session starts at 8:30 am ET with Canadian retail sales that are seen lower at 0.5% in October from 1% in September. Core sales are also seen lower at 0.3% from 0.5%.
US existing home sales are due at 10:00 am and are anticipated to rise in November to 5.09M from 4.97M. December Eurozone consumer confidence which is due at the same time is expected to decline to -21 from -20.4
Later in the session at 4:45 pm New Zealand will announce Q3 GDP growth that should reach 0.6% from 0.1% q/q and 2.2% from 1.5% y/y.
Patrik Urban
December 21, 2011 08:01 ET: Riskier assets soared after the LTRO announcement but declined equally quickly; 3 year LTRO allotted nearly EUR 490 bln; MPC minutes reveal unanimous votes, some members note that more QE may be needed. UK net public borrowing soared. Market turns to Canadian retail sales, US existing home sales, Eurozone confidence and later to NZ GDP. New Wednesday Premium Trades are up focus on US crude & CAD.
USD was initially lower across the board, especially immediately after the ECB LTRO was announced. However, sentiment reversed sharply and the USD was able to recover all losses. Biggest relative strength loser is CHF. Major European equities are higher by 0.5% to 1%.
Euro was inching higher ahead of the ECB LTRO announcement. In its first three year LTRO, the ECB allotted EUR 489.2 bln considerably more than expected EUR 300 bln which caused a spike higher in riskier assets. In its three months LTRO, the ECB allotted almost EUR 30 bln. EURUSD soared nearly to the 1.32 figure immediately after the release but has quickly given up its gains perhaps as the market could become concerned that banks would overexpose themselves to the Eurozone debt.
Periphery-German 10 year yield spreads widened again after they narrowed following the ECB announcement. Bunds traders note that low liquidity is causing choppy price action.
BoEs MPC minutes revealed that all members voted to hold rates steady during the 12/8 MPC meeting and that they agreed there was a little merit in changing asset buying. However, some noted that the outlook has deteriorated and that more QE may well be needed. In other news, public sector net borrowing has jumped in November to GBP 15.2 bln from previous GBP 3 bln. However, this increase was expected. GBPUSD trades below 1.57 after reaching a high at 1.5770.
Most of Tuesdays premium longs in Aussie, ES and CAD were unfilled due to rapid market moves, while both of the gold shorts were stopped out. Here are Wednesdays premium trades contain with a focus on oil, Aussie and CAD CAD http://ashraflaidi.com/ products/ sub01/ access/ ?a=573 Nonsubscribers can click here: http://ashraflaidi.com/ products/ sub01/
The NY session starts at 8:30 am ET with Canadian retail sales that are seen lower at 0.5% in October from 1% in September. Core sales are also seen lower at 0.3% from 0.5%.
US existing home sales are due at 10:00 am and are anticipated to rise in November to 5.09M from 4.97M. December Eurozone consumer confidence which is due at the same time is expected to decline to -21 from -20.4
Later in the session at 4:45 pm New Zealand will announce Q3 GDP growth that should reach 0.6% from 0.1% q/q and 2.2% from 1.5% y/y.
Patrik Urban
Tuesday, December 20, 2011
Sentiment Improves On Positive Data And Solid Spanish Auction
German IFO improves, GfK confidence remains steady and PPI slows. Spanish bill auction results in significantly lower yield, UK CBI retail sales improve, Canadian CPI lower. Market turns to housing market data.
The greenback is lower across the board in the ongoing session as positive data improved sentiment. The relative strength winners are NZD, AUD and CHF. Major European equities are higher by about 1%.
The common currency is bid and trades nearly 100 points above today's lows boosted by German IFO business climate that improved in December to 107.2 from previous 106.6. Other components also helped to underpin riskier assets as expectations improved to 98.4 from 97.3 and current assessment remained steady at 116.7 better than expected 116. German PPI rose 5.2% in November, slightly lower compared to previous 5.3% and finally GfK consumer confidence survey remained steady at 5.6.
Another reason for the improved risk appetite came from Spain as it exceeded its target EUR 3.5-4.5 bln and sold EUR 5.64 bln worth of bills today with significantly lower yields compared to the previous auction. 6 month bill sold at 2.43% from previous 5.23% and 3 month bill sold at 1.73% compared to 5.11%. Bid to cover was solid 4.06 and 2.86 respectively. 10 year periphery-German spreads started to narrow immediately after the auction.
In other news, Swedish Riksbank cut its repo rate 25 bps to 1.75% as expected citing slowing economy and deteriorating outlook.
In the UK, December CBI retail sales bested expectations and reached the highest point since May as data improved to +9 in December from previous -19. and Canadian CPI slowed in November to 0.1% from previous 0.2% (core CPI 0.1% from 0.3%) m/m but remained steady at 2.9% (core steady at 2.1%) y/y.
The US session will bring building permits that are seen slightly lower in November at 635K from previous 644K and housing starts that are expected higher at 635K from 628K in October. Both are due at 8:30 am ET.
By the end of the trading session at 4:45 pm ET New Zealand will release current account deficit that should widen in Q3 considerably to NZD -3.77 bln from NZD -0.92 bln.
Patrik Urban
The greenback is lower across the board in the ongoing session as positive data improved sentiment. The relative strength winners are NZD, AUD and CHF. Major European equities are higher by about 1%.
The common currency is bid and trades nearly 100 points above today's lows boosted by German IFO business climate that improved in December to 107.2 from previous 106.6. Other components also helped to underpin riskier assets as expectations improved to 98.4 from 97.3 and current assessment remained steady at 116.7 better than expected 116. German PPI rose 5.2% in November, slightly lower compared to previous 5.3% and finally GfK consumer confidence survey remained steady at 5.6.
Another reason for the improved risk appetite came from Spain as it exceeded its target EUR 3.5-4.5 bln and sold EUR 5.64 bln worth of bills today with significantly lower yields compared to the previous auction. 6 month bill sold at 2.43% from previous 5.23% and 3 month bill sold at 1.73% compared to 5.11%. Bid to cover was solid 4.06 and 2.86 respectively. 10 year periphery-German spreads started to narrow immediately after the auction.
In other news, Swedish Riksbank cut its repo rate 25 bps to 1.75% as expected citing slowing economy and deteriorating outlook.
In the UK, December CBI retail sales bested expectations and reached the highest point since May as data improved to +9 in December from previous -19. and Canadian CPI slowed in November to 0.1% from previous 0.2% (core CPI 0.1% from 0.3%) m/m but remained steady at 2.9% (core steady at 2.1%) y/y.
The US session will bring building permits that are seen slightly lower in November at 635K from previous 644K and housing starts that are expected higher at 635K from 628K in October. Both are due at 8:30 am ET.
By the end of the trading session at 4:45 pm ET New Zealand will release current account deficit that should widen in Q3 considerably to NZD -3.77 bln from NZD -0.92 bln.
Patrik Urban
Monday, December 19, 2011
Awaiting Draghi's Testimony
http://www.ashraflaidi.com/forex-news/?a=2993
December 19, 2011 08:54 ET: European finance ministers hold a conference call; Eurozone current account deficit widened and construction output fell; BoEs Paul Fisher comments weigh in on the GBP. Canadian wholesale sales edge up, NAHB housing market awaited as well as ECB president Mario Draghi's testimony.
USD is mixed in the ongoing US session; weaker against NZD, CAD and CHF and stronger against GBP. The relative strength winner is CAD followed by CHF. Major European equities are higher by about 0.5% to 0.7%.
European finance ministers will hold a conference call today scheduled to begin at 9:30 am ET in which they will discuss EUR 200 bln in bilateral IMF loans and details of the fiscal union, such as stricter budget rules, negotiated at the EU summit on 12/9. Considering that market sentiment deteriorated rapidly after the EU summit, it would be surprising to see any lasting optimism based on the result of today's conference call.
On the data front, Eurozone seasonally adjusted current account deficit widened to EUR -7.5 bln in October from EUR +2.2 bln in September while the non seasonally adjusted deficit widened to EUR -1.7 bln from previous EUR -0.7 bln. Eurozone construction output fell in October -1.4% from previous -1.5% m/m and -2.8% after +0.1% y/y . September was revised lower to -1.5% from -1.3%.
GBP weakened slightly after BOE's policy maker Paul Fisher said that present situation is potentially more dangerous than 2008 and that downside risks from Eurozone are bigger than inflation. He further said that UK banks are not as robust as the BOE would like. GBPUSD oscillates around the 1.55 figure.
Canadian wholesale sales rose 0.9% in October from previous +0.5%. US NAHB housing market index due at 10:00 am ET is seen at 21 in December from 20.
Market volatility could increase at 10:30 am ET when ECB president Mario Draghi testifies before the EU economic and monetary committee. This comes one day after Draghis interview to the FT warning about the consequences of nations leaving the Eurozone as well as the breakup of the single currency area.
7 of Fridays Premium trades are in progress. 1 EURUSD long & 1 AUDNZD short hit all targets. The latter trade has stood for 2 weeks. Direct access to these trades is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=571 Non Subscribers can click on here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
December 19, 2011 08:54 ET: European finance ministers hold a conference call; Eurozone current account deficit widened and construction output fell; BoEs Paul Fisher comments weigh in on the GBP. Canadian wholesale sales edge up, NAHB housing market awaited as well as ECB president Mario Draghi's testimony.
USD is mixed in the ongoing US session; weaker against NZD, CAD and CHF and stronger against GBP. The relative strength winner is CAD followed by CHF. Major European equities are higher by about 0.5% to 0.7%.
European finance ministers will hold a conference call today scheduled to begin at 9:30 am ET in which they will discuss EUR 200 bln in bilateral IMF loans and details of the fiscal union, such as stricter budget rules, negotiated at the EU summit on 12/9. Considering that market sentiment deteriorated rapidly after the EU summit, it would be surprising to see any lasting optimism based on the result of today's conference call.
On the data front, Eurozone seasonally adjusted current account deficit widened to EUR -7.5 bln in October from EUR +2.2 bln in September while the non seasonally adjusted deficit widened to EUR -1.7 bln from previous EUR -0.7 bln. Eurozone construction output fell in October -1.4% from previous -1.5% m/m and -2.8% after +0.1% y/y . September was revised lower to -1.5% from -1.3%.
GBP weakened slightly after BOE's policy maker Paul Fisher said that present situation is potentially more dangerous than 2008 and that downside risks from Eurozone are bigger than inflation. He further said that UK banks are not as robust as the BOE would like. GBPUSD oscillates around the 1.55 figure.
Canadian wholesale sales rose 0.9% in October from previous +0.5%. US NAHB housing market index due at 10:00 am ET is seen at 21 in December from 20.
Market volatility could increase at 10:30 am ET when ECB president Mario Draghi testifies before the EU economic and monetary committee. This comes one day after Draghis interview to the FT warning about the consequences of nations leaving the Eurozone as well as the breakup of the single currency area.
7 of Fridays Premium trades are in progress. 1 EURUSD long & 1 AUDNZD short hit all targets. The latter trade has stood for 2 weeks. Direct access to these trades is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=571 Non Subscribers can click on here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Friday, December 16, 2011
Appetite Rebounds, Italy Passes Austerity, CPI Next
http://www.ashraflaidi.com/forex-news/?a=2989
December 16, 2011 07:52 ET: Italian Lower House approves austerity, German FDP support leaders backing ESM; Eurozone trade surplus decline; Euro stabilizes on improved appetite, AUDUSD above parity, gold above 1600, CHF consolidates yesterday's gains. Focus turns to consumer inflation, two FOMC members' speeches and Canadian international securities transactions.
Improved sentiment combined with position squaring helped to push riskier assets slightly higher throughout the London session. Relative strength winners are NZD and AUD. European indices are mixed between -0.4% to +0.5%.
Event though a referendum among chancellor Merkel's coalition failed to reach the necessary quorum, nearly 55% of those who voted supported party's leaders who back the ESM. German economics minister Roesler said that the FDP remains pro-European and that today's result is a victory for Angela Merkel.
On the data front, Eurozone trade surplus shrank in October to EUR 1.1 bln from previous EUR 2.7 bln. On seasonally adjusted basis it shrank to EUR 0.3 bln from EUR 2.2 bln as imports (+7%) rose faster than exports (+6%). Pro-export Germany saw a 1.7% decline in exports. EURUSD trades firmly above 1.30 but has not been able to break above 1.3045 resistance.
Euro is underpinned by narrowing 10 year spreads. Italy-Germany narrowed to 441 bps while Spain-Germany spread narrowed to 326 bps. However, German 2 year yields only 0.22% while its US counterpart yields 0.23% which may limit EURUSD recovery.
CHF has been consolidating yesterday's gains and continues to trade near its highs despite rumors of SNB selling after EURCHF peg was confirmed at 1.20. EURCHF trades around 1.2230 with reported large stop loss orders sitting below the figure.
The New York session will bring CPI due at 8:30 am ET that is expected to remain steady at 3.5% y/y (+0.1% from -0.1% m/m). Core CPI is also seen steady at 2.1% y/y and 0.1% from 0.1% m/m.
Canadian international securities transactions also due at 8:30 am ET are expected to rise to CAD 8.23 bln from previous CAD 7.35 bln
The market volatility could also increase at 11:15 am and at 12:00 pm when Chicago Fed president and FOMC member Charles Evans and Dallas Fed president and FOMC member Richard Fisher deliver their speeches.
Patrik Urban
December 16, 2011 07:52 ET: Italian Lower House approves austerity, German FDP support leaders backing ESM; Eurozone trade surplus decline; Euro stabilizes on improved appetite, AUDUSD above parity, gold above 1600, CHF consolidates yesterday's gains. Focus turns to consumer inflation, two FOMC members' speeches and Canadian international securities transactions.
Improved sentiment combined with position squaring helped to push riskier assets slightly higher throughout the London session. Relative strength winners are NZD and AUD. European indices are mixed between -0.4% to +0.5%.
Event though a referendum among chancellor Merkel's coalition failed to reach the necessary quorum, nearly 55% of those who voted supported party's leaders who back the ESM. German economics minister Roesler said that the FDP remains pro-European and that today's result is a victory for Angela Merkel.
On the data front, Eurozone trade surplus shrank in October to EUR 1.1 bln from previous EUR 2.7 bln. On seasonally adjusted basis it shrank to EUR 0.3 bln from EUR 2.2 bln as imports (+7%) rose faster than exports (+6%). Pro-export Germany saw a 1.7% decline in exports. EURUSD trades firmly above 1.30 but has not been able to break above 1.3045 resistance.
Euro is underpinned by narrowing 10 year spreads. Italy-Germany narrowed to 441 bps while Spain-Germany spread narrowed to 326 bps. However, German 2 year yields only 0.22% while its US counterpart yields 0.23% which may limit EURUSD recovery.
CHF has been consolidating yesterday's gains and continues to trade near its highs despite rumors of SNB selling after EURCHF peg was confirmed at 1.20. EURCHF trades around 1.2230 with reported large stop loss orders sitting below the figure.
The New York session will bring CPI due at 8:30 am ET that is expected to remain steady at 3.5% y/y (+0.1% from -0.1% m/m). Core CPI is also seen steady at 2.1% y/y and 0.1% from 0.1% m/m.
Canadian international securities transactions also due at 8:30 am ET are expected to rise to CAD 8.23 bln from previous CAD 7.35 bln
The market volatility could also increase at 11:15 am and at 12:00 pm when Chicago Fed president and FOMC member Charles Evans and Dallas Fed president and FOMC member Richard Fisher deliver their speeches.
Patrik Urban
Thursday, December 15, 2011
FX Stabilizes Ahead of Busy US Session
http://www.ashraflaidi.com/forex-news/?a=2986
December 15, 2011 07:57 ET: Eurozone CPI remains at 3% and core at 1.6%, quarterly employment declined; GBPUSD slightly stronger despite falling CBI industrial orders; CHF rose after SNB kept floor at 1.20. NY session will bring PPI, empire state manufacturing, TIC data, industrial orders and Philly fed manufacturing. Link to latest Premium Trades & Cyclical Charts is below.
USD consolidates recent gains and it is only little changed against most majors. The one exception is CHF against which the USD is noticeably weaker. The relative strength winners are NZD and CHF. Major European equity indices are higher by about 0.5% to 1%.
Spain sold over EUR 6 bln worth of debt today, considerably above its EUR 3.5 bln target. In its largest auction today, it sold EUR 2.45 bln January 2016 bonds with significantly lower yield 4.02% from previous 5.27%. However, bid to cover fell to 1.99 from previous 2.83. Relatively decent auction helped the Euro to recover a part of its losses as it trades around 1.30, about 50 points above today's low.
In his speech in Berlin, the ECB president Mario Draghi said that the deposit facility is at the same levels as after Lehman Brothers collapsed and that funding pressure will continue to exist not only for banks but also corporates. The ECB president expects that reserve ratio cut freed up to EUR 100 bln in liquidity.
On the data front, Eurozone headline consumer inflation remained at 3% and core CPI stayed at 1.6% in November. Eurozone quarterly employment contracted by -0.1% from 0.2%.
GBPUSD has rallied back above 1.55 despite UK CBI industrial order expectations falling further in December to -23 from November's -19. Total orders fell to the lowest point since 10/2010 and export orders dropped to lowest point in nearly two years.
EURCHF dropped sharply from nearly 1.24 to 1.2250 after SNB kept its floor at 1.20 and reiterated that it will defend the cap with utmost determination. The SNB still sees the Franc as overvalued but SNB Chairman Hildebrand noted that the cap has corrected massive Franc overvaluation. The SNB has kept its libor rate below 0.25%.
The NY session has a busy calendar today. 8:30 am ET will bring PPI which is expected to rise 0.2% in November from -0.3% m/m (2.9% from 2.8% y/y); jobless claims are seen slightly higher at 389K from 381K; Empire state manufacturing index should rise in December to 3 from 0.6.
Net TIC flows due at 9:00 am are expected decline to USD 53.4 bln in October from USD 68.6 bln in September and industrial production due at 9:15 am ET is anticipated to rise mere 0.1% in November from previous 0.7% rise.
The last data release for today is Philly Fed manufacturing due at 10:00 am which is seen higher in December at 5 from November's 3.6.
There are 12 new Premium trades from Thursday night, which can be accessed directly at http://ashraflaidi.com/ products/ sub01/ access/ ?a=570 Non-Subscribers can click here to join: http://ashraflaidi.com/ products/
Patrik Urban
December 15, 2011 07:57 ET: Eurozone CPI remains at 3% and core at 1.6%, quarterly employment declined; GBPUSD slightly stronger despite falling CBI industrial orders; CHF rose after SNB kept floor at 1.20. NY session will bring PPI, empire state manufacturing, TIC data, industrial orders and Philly fed manufacturing. Link to latest Premium Trades & Cyclical Charts is below.
USD consolidates recent gains and it is only little changed against most majors. The one exception is CHF against which the USD is noticeably weaker. The relative strength winners are NZD and CHF. Major European equity indices are higher by about 0.5% to 1%.
Spain sold over EUR 6 bln worth of debt today, considerably above its EUR 3.5 bln target. In its largest auction today, it sold EUR 2.45 bln January 2016 bonds with significantly lower yield 4.02% from previous 5.27%. However, bid to cover fell to 1.99 from previous 2.83. Relatively decent auction helped the Euro to recover a part of its losses as it trades around 1.30, about 50 points above today's low.
In his speech in Berlin, the ECB president Mario Draghi said that the deposit facility is at the same levels as after Lehman Brothers collapsed and that funding pressure will continue to exist not only for banks but also corporates. The ECB president expects that reserve ratio cut freed up to EUR 100 bln in liquidity.
On the data front, Eurozone headline consumer inflation remained at 3% and core CPI stayed at 1.6% in November. Eurozone quarterly employment contracted by -0.1% from 0.2%.
GBPUSD has rallied back above 1.55 despite UK CBI industrial order expectations falling further in December to -23 from November's -19. Total orders fell to the lowest point since 10/2010 and export orders dropped to lowest point in nearly two years.
EURCHF dropped sharply from nearly 1.24 to 1.2250 after SNB kept its floor at 1.20 and reiterated that it will defend the cap with utmost determination. The SNB still sees the Franc as overvalued but SNB Chairman Hildebrand noted that the cap has corrected massive Franc overvaluation. The SNB has kept its libor rate below 0.25%.
The NY session has a busy calendar today. 8:30 am ET will bring PPI which is expected to rise 0.2% in November from -0.3% m/m (2.9% from 2.8% y/y); jobless claims are seen slightly higher at 389K from 381K; Empire state manufacturing index should rise in December to 3 from 0.6.
Net TIC flows due at 9:00 am are expected decline to USD 53.4 bln in October from USD 68.6 bln in September and industrial production due at 9:15 am ET is anticipated to rise mere 0.1% in November from previous 0.7% rise.
The last data release for today is Philly Fed manufacturing due at 10:00 am which is seen higher in December at 5 from November's 3.6.
There are 12 new Premium trades from Thursday night, which can be accessed directly at http://ashraflaidi.com/ products/ sub01/ access/ ?a=570 Non-Subscribers can click here to join: http://ashraflaidi.com/ products/
Patrik Urban
Wednesday, December 14, 2011
EURUSD at 1.2960, Rumours of French Downgrade
http://www.ashraflaidi.com/forex-news/?a=2982
December 14, 2011 07:39 ET: EURUSD hit $1.2970s, UK labor market data mixed; Swiss ZEW declined; Eurozone industrial production lower. Italian auction results in higher yield and lower cover but reaches intended target. NY session will bring import prices, Canadian leading indicators and manufacturing sales. Here is Ashraf's interview in later September making the case for $1.29 by year-end http://youtu.be/ wSodzBHN7Y4
USD is higher across the board as the attack on the Euro continues. EURUSD breaks below 1.30 at lowest since January 2011. European equities are losing -0.8 to -1.5%.
Rumours of a France downgrade are swirling again as markets await the reaction by S&P to the EU Summit. But French 10-yr yields are actually down at 3.19%, while the spread w/ German 10 yr yields is 1.23% from the 1.90% high reached in Nov.
In the UK, claimant count rate remained at 5% in November while jobless claims reached 3K from previous 2.5K. Even though the claims were significantly below expectations of 14K, the total number of claimants reached the highest level in nearly two years. The ILO unemployment rate kept steady at 8.3%. According to the Office for Budget Responsibility, the unemployment would reach 8.7% in 2012. GBPUSD moved higher on the release but has since lost its gains and trades below 1.55
Swiss ZEW economic expectations index dropped in December to -72 from previous -64.3 supporting the expectations of a sharp slowdown. Somewhat surprisingly, 70% of surveyed experts are expecting the price level to remain steady. The eagerly awaited SNB meeting which could possibly result in an increase of the EURCHF peg is due tomorrow at 3:30 am ET. EURCHF trades firmly above 1.23
Eurozone industrial production declined in October -0.1% after it declined -2.0% in September which translates to 1.3% from 2.2% annual growth.
Italy was able to sell EUR 3 bln 2016 BTP reaching its intended target amount. However, the average yield increased to 6.47% from previous 6.29% while bid to cover declined to 1.42 from 1.47. After the auction, 10 year Italian-German spread increased to over 500bp. Meanwhile, Germany completed 2011 funding with today's auction and sold its 2 year with the lowest yield since Euro introduction.
The New York session kicks off at 8:30 am ET with November import price index that is expected to rise to 1% m/m from previous -0.6% but decline y/y to 10.1% from 11%.
Canadian leading indicators are seen higher in November at 0.4% from 0.2% while manufacturing sales are anticipated lower in October at -0.6% from 2.6%. Both are due also at 8:30 am ET.
Crude oil inventories due at 10:30 am ET are expected to drop -2.2M barrels after growing 1.3M barrels last week.
Patrik Urban
December 14, 2011 07:39 ET: EURUSD hit $1.2970s, UK labor market data mixed; Swiss ZEW declined; Eurozone industrial production lower. Italian auction results in higher yield and lower cover but reaches intended target. NY session will bring import prices, Canadian leading indicators and manufacturing sales. Here is Ashraf's interview in later September making the case for $1.29 by year-end http://youtu.be/ wSodzBHN7Y4
USD is higher across the board as the attack on the Euro continues. EURUSD breaks below 1.30 at lowest since January 2011. European equities are losing -0.8 to -1.5%.
Rumours of a France downgrade are swirling again as markets await the reaction by S&P to the EU Summit. But French 10-yr yields are actually down at 3.19%, while the spread w/ German 10 yr yields is 1.23% from the 1.90% high reached in Nov.
In the UK, claimant count rate remained at 5% in November while jobless claims reached 3K from previous 2.5K. Even though the claims were significantly below expectations of 14K, the total number of claimants reached the highest level in nearly two years. The ILO unemployment rate kept steady at 8.3%. According to the Office for Budget Responsibility, the unemployment would reach 8.7% in 2012. GBPUSD moved higher on the release but has since lost its gains and trades below 1.55
Swiss ZEW economic expectations index dropped in December to -72 from previous -64.3 supporting the expectations of a sharp slowdown. Somewhat surprisingly, 70% of surveyed experts are expecting the price level to remain steady. The eagerly awaited SNB meeting which could possibly result in an increase of the EURCHF peg is due tomorrow at 3:30 am ET. EURCHF trades firmly above 1.23
Eurozone industrial production declined in October -0.1% after it declined -2.0% in September which translates to 1.3% from 2.2% annual growth.
Italy was able to sell EUR 3 bln 2016 BTP reaching its intended target amount. However, the average yield increased to 6.47% from previous 6.29% while bid to cover declined to 1.42 from 1.47. After the auction, 10 year Italian-German spread increased to over 500bp. Meanwhile, Germany completed 2011 funding with today's auction and sold its 2 year with the lowest yield since Euro introduction.
The New York session kicks off at 8:30 am ET with November import price index that is expected to rise to 1% m/m from previous -0.6% but decline y/y to 10.1% from 11%.
Canadian leading indicators are seen higher in November at 0.4% from 0.2% while manufacturing sales are anticipated lower in October at -0.6% from 2.6%. Both are due also at 8:30 am ET.
Crude oil inventories due at 10:30 am ET are expected to drop -2.2M barrels after growing 1.3M barrels last week.
Patrik Urban
Tuesday, December 13, 2011
Will FOMC Inaction Hurt Metals Some More?
December 13, 2011 08:08 ET : UK inflation eases; German and Eurozone ZEW improves; Spanish auction well received; Swiss government lowers GDP and inflation forecast. Market turns to US retail sales, which IBD/TIPP economic optimism and later to FOMC rate announcement. See Ashrafs latest analysis on Gold, Silver & the technical of Gold/Silver Ratio below.
USD drops across board as risk appetite improves, courtesy of better than expected Spanish auctions. Relative strength winners are AUD, NZD and CHF. European equities show nearly 1% gains.
UK inflation pressure continues to ease as anticipated. The CPI declined to 4.8% in November from 5.0% in October while the core CPI declined to 3.2% from 3.4%. The decline is attributed to lower price of food, petrol and clothing. The reaction on GBPUSD was minimal as the result was in line with expectations.
The pressure on the euro may ease in the short term as positive surprises regarding sentiment were released. German ZEW economic sentiment printed -53.8 in December, slightly better than November's -55.2 while its Eurozone's counterpart showed -54.1 from previous -59.1. EURUSD currently trades firmly above 1.32.
Spanish bond auction was well received, further underpinning the Euro. Spain sold EUR 3.44 bln in 12 months bills at 4.05% with bid to cover at 3.1 and additional EUR 1.5 bln of 18 months bills at 4.226% with bid to cover at 5.0. As a consequence, Spanish-German 10 year spread paired back widening seen earlier during the session and it currently stands around 409 bps.
The Swiss government lowered its forecast for 2012 GDP growth to 0.5% from 0.9% and sees deflation reaching -0.3% from previous projection of an inflation of +0.3%. Growth should reach 1.9% in 2013. On a positive note, if the Eurozone crisis does not worsen, it is projected that the downturn is expected to be relatively short. Considering the projected deflation and recent SNB comments that the Franc is still overvalued, the rumors that the SNB will increase the EURCHF peg on Thursday gained credibility.
The US session starts at 8:30 am ET with November retail sales that are seen higher at 0.6% from previous 0.5%. However, core sales are expected to decline to 0.5% from previous 0.6%.
IBD/TIPP economic optimism index due at 10:00 am is anticipated to rise to 42.6 in December from previous 40.6.
The key event will come at 2:15 pm ET when the FOMC delivers its statement. The fed funds rate will remain below 0.25%. Given the recent improvements in US data, mainly lower unemployment rate, the FED is unlikely to hint new easing measures and will instead adopt the wait and see approach.
See Ashrafs latest analysis on GOLD, SILVER & GOLD/SILVER Ratio Technicals here: http://ashraflaidi.com/ hot-chart/ ?a=2977
Patrik Urban
USD drops across board as risk appetite improves, courtesy of better than expected Spanish auctions. Relative strength winners are AUD, NZD and CHF. European equities show nearly 1% gains.
UK inflation pressure continues to ease as anticipated. The CPI declined to 4.8% in November from 5.0% in October while the core CPI declined to 3.2% from 3.4%. The decline is attributed to lower price of food, petrol and clothing. The reaction on GBPUSD was minimal as the result was in line with expectations.
The pressure on the euro may ease in the short term as positive surprises regarding sentiment were released. German ZEW economic sentiment printed -53.8 in December, slightly better than November's -55.2 while its Eurozone's counterpart showed -54.1 from previous -59.1. EURUSD currently trades firmly above 1.32.
Spanish bond auction was well received, further underpinning the Euro. Spain sold EUR 3.44 bln in 12 months bills at 4.05% with bid to cover at 3.1 and additional EUR 1.5 bln of 18 months bills at 4.226% with bid to cover at 5.0. As a consequence, Spanish-German 10 year spread paired back widening seen earlier during the session and it currently stands around 409 bps.
The Swiss government lowered its forecast for 2012 GDP growth to 0.5% from 0.9% and sees deflation reaching -0.3% from previous projection of an inflation of +0.3%. Growth should reach 1.9% in 2013. On a positive note, if the Eurozone crisis does not worsen, it is projected that the downturn is expected to be relatively short. Considering the projected deflation and recent SNB comments that the Franc is still overvalued, the rumors that the SNB will increase the EURCHF peg on Thursday gained credibility.
The US session starts at 8:30 am ET with November retail sales that are seen higher at 0.6% from previous 0.5%. However, core sales are expected to decline to 0.5% from previous 0.6%.
IBD/TIPP economic optimism index due at 10:00 am is anticipated to rise to 42.6 in December from previous 40.6.
The key event will come at 2:15 pm ET when the FOMC delivers its statement. The fed funds rate will remain below 0.25%. Given the recent improvements in US data, mainly lower unemployment rate, the FED is unlikely to hint new easing measures and will instead adopt the wait and see approach.
See Ashrafs latest analysis on GOLD, SILVER & GOLD/SILVER Ratio Technicals here: http://ashraflaidi.com/ hot-chart/ ?a=2977
Patrik Urban
Monday, December 12, 2011
Euro Adds to Losses, Swiss Premium Piece
http://www.ashraflaidi.com/forex-news/?a=2972
December 12, 2011 08:15 ET: Euro Deepens Sell-off S&P to decide on Ezone downgrades in coming days; German WPI lower; Swiss employment higher; Italy sells 1 year bill with lower yield; French auction later today. The US session brings federal budget deficit data. See out extensive Premium piece on the CHF & one way to exploit franc weakness ahead of Thursdays quarterly SNB meeting.
Relatively tight ranges seen during the Asian session were broken when London traders got to their desks and started to buy the greenback. The USD is higher across the board and European equities are losing slightly less than 1%.
It seems that Friday's EU summit with its new treaty was quickly forgotten as traders continue to sell the common currency. EURGBP trades just a few points above the critical support given by November 10th low at 0.8485 and should this level be broken, the market would target the support zone around 0.8350 and in extension even 0.8150. On the back of the EURGBP selloff, GBPUSD jumped from 1.5540 to above 1.56.
S&P head in France Carol Sirou said that the S&P will decide whether to downgrade Eurozone countries in coming days so it is reasonable to assume that as long as the rating downgrade looms the willingness to open long Euro positions will be slim.
Latest Premium piece on trading CHF Fundamentals & Technicals ahead of Thursdays SNB meeting is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=56
The European economic calendar was light today. German November WPI printed 4.9% y/y, marginally lower from previous 5% and Swiss employment level rose to 4.05M in Q3 up from previous 4.02M.
Italian treasury was able to sell EUR 7 bln in 1 year bills with 5.952% yield, slightly lower compared to previous 6.087% with bid to cover at 1.925. Despite the lower yield, EURUSD continues to trade heavy bellow 1.33. French bond auction is scheduled for later today and given the downgrade threat, the risks of higher yields and/or low demand are high.
The US data is limited to the federal budget deficit due at 2:00 pm which is expected to widen in November rather substantially to USD -138.5 bln from previous USD -98.5 bln.
CAD traders should pay attention at 1:10 pm when BOC governor Mark Carney delivers a speech on Canadian economic developments in Toronto and also at 2:10 pm when he holds a press conference.
Patrik Urban
December 12, 2011 08:15 ET: Euro Deepens Sell-off S&P to decide on Ezone downgrades in coming days; German WPI lower; Swiss employment higher; Italy sells 1 year bill with lower yield; French auction later today. The US session brings federal budget deficit data. See out extensive Premium piece on the CHF & one way to exploit franc weakness ahead of Thursdays quarterly SNB meeting.
Relatively tight ranges seen during the Asian session were broken when London traders got to their desks and started to buy the greenback. The USD is higher across the board and European equities are losing slightly less than 1%.
It seems that Friday's EU summit with its new treaty was quickly forgotten as traders continue to sell the common currency. EURGBP trades just a few points above the critical support given by November 10th low at 0.8485 and should this level be broken, the market would target the support zone around 0.8350 and in extension even 0.8150. On the back of the EURGBP selloff, GBPUSD jumped from 1.5540 to above 1.56.
S&P head in France Carol Sirou said that the S&P will decide whether to downgrade Eurozone countries in coming days so it is reasonable to assume that as long as the rating downgrade looms the willingness to open long Euro positions will be slim.
Latest Premium piece on trading CHF Fundamentals & Technicals ahead of Thursdays SNB meeting is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=56
The European economic calendar was light today. German November WPI printed 4.9% y/y, marginally lower from previous 5% and Swiss employment level rose to 4.05M in Q3 up from previous 4.02M.
Italian treasury was able to sell EUR 7 bln in 1 year bills with 5.952% yield, slightly lower compared to previous 6.087% with bid to cover at 1.925. Despite the lower yield, EURUSD continues to trade heavy bellow 1.33. French bond auction is scheduled for later today and given the downgrade threat, the risks of higher yields and/or low demand are high.
The US data is limited to the federal budget deficit due at 2:00 pm which is expected to widen in November rather substantially to USD -138.5 bln from previous USD -98.5 bln.
CAD traders should pay attention at 1:10 pm when BOC governor Mark Carney delivers a speech on Canadian economic developments in Toronto and also at 2:10 pm when he holds a press conference.
Patrik Urban
Friday, December 9, 2011
EUR Rebounds on Looming Treaty Deal
http://www.ashraflaidi.com/forex-news/?a=2966
December 9, 2011 08:06 ET: Eurozone members to sign a new treaty; ECB weekly bond purchases capped at EUR 20 bln; Bundesbank open to IMF loans; UK producer inflation slowing; UK trade deficit narrows at the fastest pace. Market turns to US and Canadian trade deficit and UoM consumer confidence.
USD weakens across the board as EU summit progresses and risk appetite returns to the market. The relative strength winners are GBP, EUR and NZD. Major European equity indices show about 0.5% to 1% gains.
All 17 members of the Eurozone and 23 out of 27 members of the European Union agreed to a new treaty that assures deeper integration and stricter fiscal rules. The UK did not sign the proposed amendments to the EU treaty while three other EU members are still considering participation. Chancellor Merkel said that this new treaty would become the foundation of a fiscal and stability union. EURUSD reached 1.3430 after it fell to 1.3282 earlier during the session.
One factor that significantly contributed to the improving sentiment was a report published by Dow Jones that said that the BundesBank was "fundamentally open" to bilateral loans to the IMF. The loans could not be marked for the Eurozone but as crisis loans.
Also noteworthy was a report that the ECB purchases of sovereign bonds would be capped at EUR 20 bln per week. Italian 10 year yield jumped back above 7% and the German-Italian spread widened to over 5%.
In the UK, PPI input prices rose 13.4% in November y/y which is lower from previous 14.3% while output prices rose 5.4% y/y down from October's 5.7% confirming that inflation pressure is easing. UK trade deficit narrowed at the fastest pace on record in October to GBP -7.6 bln from previous GBP -10.2 bln as exports soared which could help to at least partially offset declines in manufacturing, industrial and construction output in Q4 GDP calculation. October construction output declined sharply -2.5% m/m and +2.7 y/y. GBPUSD trades firmly above 1.57.
The NY session starts at 8:30 am ET with a trade deficit that is expected to widen slightly to USD -44 bln in October from previous USD -43.1 bln. Preliminary December UOM consumer confidence due at 9:55 am ET is seen higher at 65.8 from previous 64.1.
Canadian data will include trade balance due at 8:30 am that is anticipated to show a surplus of CAD 0.7 bln in October, somewhat lower compared to September's CAD 1.2 bln. Labor productivity which is due at the same time should grow 0.4% in Q3 after -0.9% contraction in Q2.
ES, Gold, US crude, USDCAD and silver shorts remain in progress. Oil shorts missed target by 5 cents, while all EURUSD shorts are done. Direct access here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=567 Non Subscribers can click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
December 9, 2011 08:06 ET: Eurozone members to sign a new treaty; ECB weekly bond purchases capped at EUR 20 bln; Bundesbank open to IMF loans; UK producer inflation slowing; UK trade deficit narrows at the fastest pace. Market turns to US and Canadian trade deficit and UoM consumer confidence.
USD weakens across the board as EU summit progresses and risk appetite returns to the market. The relative strength winners are GBP, EUR and NZD. Major European equity indices show about 0.5% to 1% gains.
All 17 members of the Eurozone and 23 out of 27 members of the European Union agreed to a new treaty that assures deeper integration and stricter fiscal rules. The UK did not sign the proposed amendments to the EU treaty while three other EU members are still considering participation. Chancellor Merkel said that this new treaty would become the foundation of a fiscal and stability union. EURUSD reached 1.3430 after it fell to 1.3282 earlier during the session.
One factor that significantly contributed to the improving sentiment was a report published by Dow Jones that said that the BundesBank was "fundamentally open" to bilateral loans to the IMF. The loans could not be marked for the Eurozone but as crisis loans.
Also noteworthy was a report that the ECB purchases of sovereign bonds would be capped at EUR 20 bln per week. Italian 10 year yield jumped back above 7% and the German-Italian spread widened to over 5%.
In the UK, PPI input prices rose 13.4% in November y/y which is lower from previous 14.3% while output prices rose 5.4% y/y down from October's 5.7% confirming that inflation pressure is easing. UK trade deficit narrowed at the fastest pace on record in October to GBP -7.6 bln from previous GBP -10.2 bln as exports soared which could help to at least partially offset declines in manufacturing, industrial and construction output in Q4 GDP calculation. October construction output declined sharply -2.5% m/m and +2.7 y/y. GBPUSD trades firmly above 1.57.
The NY session starts at 8:30 am ET with a trade deficit that is expected to widen slightly to USD -44 bln in October from previous USD -43.1 bln. Preliminary December UOM consumer confidence due at 9:55 am ET is seen higher at 65.8 from previous 64.1.
Canadian data will include trade balance due at 8:30 am that is anticipated to show a surplus of CAD 0.7 bln in October, somewhat lower compared to September's CAD 1.2 bln. Labor productivity which is due at the same time should grow 0.4% in Q3 after -0.9% contraction in Q2.
ES, Gold, US crude, USDCAD and silver shorts remain in progress. Oil shorts missed target by 5 cents, while all EURUSD shorts are done. Direct access here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=567 Non Subscribers can click here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Thursday, December 8, 2011
BOE Keeps Rates Steady; ECB Is Next
The BOE kept rates unchanged and did not increase QE; The ECB rate announcement is next followed by a press conference at 8:30 am. NY session will bring jobless claims, wholesale inventories and Canadian housing starts.
Markets have been trading within relatively tight ranges throughout the Asian and London sessions as traders positioned themselves for the BOE and especially the ECB rate announcements. Main European equities are in red but only marginally.
Despite worsening fundamentals, the BOE chose the wait and see approach and kept rates steady at 0.5% as expected and did not increase the Asset Purchase Facility that stands at GBP 275 bln. Two weeks ago, the OECD noted that further QE by the BOE is warranted and projects that the APF will be increased to GBP 400 bln. The next MPC meeting is on January 12th.
At 7:45 am ET the ECB will announce their rate decision. In a Bloomberg poll, 54 out of 58 economists expect the benchmark rate to be lowered by 25 bp to 1%. Other measures to stimulate bank lending and to cope with the ongoing crisis are also expected to be announced. On 11/30 MNI reported that sources within the ECB had claimed that the central bank is ready to be more flexible with respect to possible rate cuts, collateral framework and bond purchases. Reports also suggest that the ECB could offer 2 or even 3 year loans.
As usual, the ECB press conference which causes a significant volatility is scheduled to start 45 minutes after the announcement at 8:30 am ET. Keep in mind that the EU summit starts today and any remarks about the likelihood of an approval of reforms leading to a fiscal union might underpin the common currency.
The NY session data will include Canadian housing starts due at 8:15 am that are anticipated lower in November at 200K from 208K, US jobless claims are due at 8:30 am and are seen lower at 397K from previous 402K and wholesales inventories that are expected to rise 0.4% in October from previous -0.1%.
CAD traders should also note that the BOC will release its Financial System Review at 10:30 am so the volatility is likely to increase.
Patrik Urban
Markets have been trading within relatively tight ranges throughout the Asian and London sessions as traders positioned themselves for the BOE and especially the ECB rate announcements. Main European equities are in red but only marginally.
Despite worsening fundamentals, the BOE chose the wait and see approach and kept rates steady at 0.5% as expected and did not increase the Asset Purchase Facility that stands at GBP 275 bln. Two weeks ago, the OECD noted that further QE by the BOE is warranted and projects that the APF will be increased to GBP 400 bln. The next MPC meeting is on January 12th.
At 7:45 am ET the ECB will announce their rate decision. In a Bloomberg poll, 54 out of 58 economists expect the benchmark rate to be lowered by 25 bp to 1%. Other measures to stimulate bank lending and to cope with the ongoing crisis are also expected to be announced. On 11/30 MNI reported that sources within the ECB had claimed that the central bank is ready to be more flexible with respect to possible rate cuts, collateral framework and bond purchases. Reports also suggest that the ECB could offer 2 or even 3 year loans.
As usual, the ECB press conference which causes a significant volatility is scheduled to start 45 minutes after the announcement at 8:30 am ET. Keep in mind that the EU summit starts today and any remarks about the likelihood of an approval of reforms leading to a fiscal union might underpin the common currency.
The NY session data will include Canadian housing starts due at 8:15 am that are anticipated lower in November at 200K from 208K, US jobless claims are due at 8:30 am and are seen lower at 397K from previous 402K and wholesales inventories that are expected to rise 0.4% in October from previous -0.1%.
CAD traders should also note that the BOC will release its Financial System Review at 10:30 am so the volatility is likely to increase.
Patrik Urban
Wednesday, December 7, 2011
Euro Slips on German Comments; GBP Strong Despite Weak Data
http://ashraflaidi.com/t/?h2958
December 7, 2011 07:28 ET: German official pessimistic about EU summit; UK manufacturing and industrial production decline; German industrial production increased. Market turns to UK NIESR GDP estimate, crude oil inventories and later to RBNZ rate announcement. See status on last night's Premium trades below.
USD edges high as risk appetite wanes, with the biggest losers being EUR, NZD and CHF. CAD & AUD are holding steady. European equities are higher by 0.1% to 0.5%.
Market sentiment reversed and risk aversion increased after MNI reported that senior German official expressed more pessimism on a chance of a EU summit deal. EURUSD sold off from around 1.3440 to 1.3369.
In the UK, manufacturing production declined -0.7% in October from previous +0.1% (0.3% from previous 1.3% y/y). Industrial production fell -0.7% from unchanged print in September (-1.7% from -1.5% y/y). Manufacturing sector provides more than 10% of UK GDP (industrial production over 15%) so the probability that Q4 GDP will contract is high. GBPUSD trades slightly weaker around 1.56.
German data surprised to the upside second day in a row as industrial production rose in October 0.8%, significantly higher from previous -2.7%.
The NY session starts at 8:30 am ET when FED governor and FOMC member Sarah Bloom Raskin gives a speech in Baltimore.
GBP volatility could increase at 10:00 am EST when the NIESR GDP estimate is due and is expected at 0.5%, unchanged from a previous reading. Given the weak manufacturing result from earlier today, GBP will be more sensitive to a disappointment.
Crude oil inventories due at 10:30 am are expected to decline to -0.8M barrels from previous +3.9M which could underpin oil and consequently the CAD.
At 3:00 pm, the RBNZ announces its rate decision. In a Bloomberg survey, all 15 economists expect the official cash rate to remain at 2.5%. Nevertheless, the NZD could weaken as the policy statement is likely to express that rates are likely to stay at record low due to continued market distress and the ongoing crisis. The fundamentals also point to a slowdown which further suggesting no rate increases in the near future. The unemployment rate ticked up to 6.6% in Q3 from 6.5% seen in Q1 and Q2, the annual CPI declined to 4.6% from previous 5.3% and Q2 GDP fell to 0.1% from 0.9% in Q1.
Those holding our PREMIUM SHORTS in AUDNZD, bear in the RBA has cut rates yesterday. Both of last nights premium trades in EURUSD were done. USDCAD shorts are nearing their target, while our US crude longs were filled. EURJPY, EURGBP and GBPCAD remain in progress. And do not forget gold, which is charted on Daily & weekly charts in last nights Premium piece. For direct access to the latest Premium Intermarket Insights, click here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=565 Non-members can get a free 1-week trial here: http://ashraflaidi.com/ products/ sub01/ access
Patrik Urban
December 7, 2011 07:28 ET: German official pessimistic about EU summit; UK manufacturing and industrial production decline; German industrial production increased. Market turns to UK NIESR GDP estimate, crude oil inventories and later to RBNZ rate announcement. See status on last night's Premium trades below.
USD edges high as risk appetite wanes, with the biggest losers being EUR, NZD and CHF. CAD & AUD are holding steady. European equities are higher by 0.1% to 0.5%.
Market sentiment reversed and risk aversion increased after MNI reported that senior German official expressed more pessimism on a chance of a EU summit deal. EURUSD sold off from around 1.3440 to 1.3369.
In the UK, manufacturing production declined -0.7% in October from previous +0.1% (0.3% from previous 1.3% y/y). Industrial production fell -0.7% from unchanged print in September (-1.7% from -1.5% y/y). Manufacturing sector provides more than 10% of UK GDP (industrial production over 15%) so the probability that Q4 GDP will contract is high. GBPUSD trades slightly weaker around 1.56.
German data surprised to the upside second day in a row as industrial production rose in October 0.8%, significantly higher from previous -2.7%.
The NY session starts at 8:30 am ET when FED governor and FOMC member Sarah Bloom Raskin gives a speech in Baltimore.
GBP volatility could increase at 10:00 am EST when the NIESR GDP estimate is due and is expected at 0.5%, unchanged from a previous reading. Given the weak manufacturing result from earlier today, GBP will be more sensitive to a disappointment.
Crude oil inventories due at 10:30 am are expected to decline to -0.8M barrels from previous +3.9M which could underpin oil and consequently the CAD.
At 3:00 pm, the RBNZ announces its rate decision. In a Bloomberg survey, all 15 economists expect the official cash rate to remain at 2.5%. Nevertheless, the NZD could weaken as the policy statement is likely to express that rates are likely to stay at record low due to continued market distress and the ongoing crisis. The fundamentals also point to a slowdown which further suggesting no rate increases in the near future. The unemployment rate ticked up to 6.6% in Q3 from 6.5% seen in Q1 and Q2, the annual CPI declined to 4.6% from previous 5.3% and Q2 GDP fell to 0.1% from 0.9% in Q1.
Those holding our PREMIUM SHORTS in AUDNZD, bear in the RBA has cut rates yesterday. Both of last nights premium trades in EURUSD were done. USDCAD shorts are nearing their target, while our US crude longs were filled. EURJPY, EURGBP and GBPCAD remain in progress. And do not forget gold, which is charted on Daily & weekly charts in last nights Premium piece. For direct access to the latest Premium Intermarket Insights, click here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=565 Non-members can get a free 1-week trial here: http://ashraflaidi.com/ products/ sub01/ access
Patrik Urban
Tuesday, December 6, 2011
EURCHF Bounces on Swiss CPI, BoC Statement, Ivey Awaited
http://ashraflaidi.com/t/?h2954
December 6, 2011 08:08 ET : Expectations of EURCHF floor lifting likely to reemerge after Swiss CPI declined again; German factory orders surprise to the upside; Eurozone Q3 GDP confirmed at 0.2% q/q. Market turns to Canadian rate decision, building permits, Canadas Ivey PMI and US IBD TIPP economic optimism index.
Financial markets are recovering losses incurred after yesterday's surprising S&P mass downgrade warning. Riskier assets were first bought when London session started but started to give up their gains. Relative strength winners are EUR, NZD and AUD. Major European equities are higher by 0.3% to 1%.
Deflationary pressures in Switzerland are increasing as CPI declined -0.2% m/m in November and 0.5% y/y from previous -0.1%. The Franc weakened sharply to 1.2416 against the Euro but has since gained some losses back. Stronger deflation is likely to bring back calls from labor unions and other parties for a higher EURCHF floor. However, considering the ongoing Eurozone crisis, previous calls for EURCHF floor at 1.40 seem exaggerated as it would become expensive to defend. Next SNB meeting is on 15th of December.
German factory orders grew solid 5.2% in October, significantly above expectations of +0.9%. September orders were revised lower from -4.3% to -4.6%. Export oriented German economy could benefit in the months ahead from 8.9% growth in foreign orders within the Eurozone and 7.9% rise in orders from the rest of the world. Eurozone Q3 GDP was unrevised at +0.2% q/q and +1.4% y/y.
The NY session starts at 8:30 am ET with Canadian building permits that are seen higher at 2.3% in October from previous -4.9%. The reaction is likely to be muted as traders will wait for BoC rate announcement at 9:00 am ET. The overnight rate is likely to remain at 1%. A forecast compiled by Bloomberg shows that BOC is the only G10 central bank that is expected to raise rates during 2012. Nonetheless, traders will await the statement of the BoC and whether it revises down its economic forecast.
Also from Canada, is the 10:00 am release of the November PMI anticipated to rise to 55.2 in from previous 54.4.
December IBD TIPP economic optimism index is due also at 10:00 am and should improve to 42.5 from 40.6.
Patrik Urban
December 6, 2011 08:08 ET : Expectations of EURCHF floor lifting likely to reemerge after Swiss CPI declined again; German factory orders surprise to the upside; Eurozone Q3 GDP confirmed at 0.2% q/q. Market turns to Canadian rate decision, building permits, Canadas Ivey PMI and US IBD TIPP economic optimism index.
Financial markets are recovering losses incurred after yesterday's surprising S&P mass downgrade warning. Riskier assets were first bought when London session started but started to give up their gains. Relative strength winners are EUR, NZD and AUD. Major European equities are higher by 0.3% to 1%.
Deflationary pressures in Switzerland are increasing as CPI declined -0.2% m/m in November and 0.5% y/y from previous -0.1%. The Franc weakened sharply to 1.2416 against the Euro but has since gained some losses back. Stronger deflation is likely to bring back calls from labor unions and other parties for a higher EURCHF floor. However, considering the ongoing Eurozone crisis, previous calls for EURCHF floor at 1.40 seem exaggerated as it would become expensive to defend. Next SNB meeting is on 15th of December.
German factory orders grew solid 5.2% in October, significantly above expectations of +0.9%. September orders were revised lower from -4.3% to -4.6%. Export oriented German economy could benefit in the months ahead from 8.9% growth in foreign orders within the Eurozone and 7.9% rise in orders from the rest of the world. Eurozone Q3 GDP was unrevised at +0.2% q/q and +1.4% y/y.
The NY session starts at 8:30 am ET with Canadian building permits that are seen higher at 2.3% in October from previous -4.9%. The reaction is likely to be muted as traders will wait for BoC rate announcement at 9:00 am ET. The overnight rate is likely to remain at 1%. A forecast compiled by Bloomberg shows that BOC is the only G10 central bank that is expected to raise rates during 2012. Nonetheless, traders will await the statement of the BoC and whether it revises down its economic forecast.
Also from Canada, is the 10:00 am release of the November PMI anticipated to rise to 55.2 in from previous 54.4.
December IBD TIPP economic optimism index is due also at 10:00 am and should improve to 42.5 from 40.6.
Patrik Urban
Monday, December 5, 2011
US Services ISM Looking to Defy Eurozone After UK Bounce
http://ashraflaidi.com/t/?h2950
December 5, 2011 08:56 ET : UK PMI services rose but employment dropped; Eurozone retail sales rose m/m but fell y/y; Italy approved austerity and its 10 year yield declined.
Market turns to ISM non manufacturing and factory orders. Risk appetite back on the rise at the expense of broad weakness in USD and JPY. Dow futures +151 pts, ES + 18 at 1261. Premium Intermarket Insights due ahead of the US session.
Traders await Merkel-Sarkozy meeting in Paris where, among other topics, the possibility of a fiscal union will be discussed. A press conference is scheduled for later today but all details will likely be released only on Friday during the EU economic summit. There will likely be several bouts of rumour-driven market moves and retracements.
10 year Italian bond trades comfortably below the critical 7% around 6.43% after the Italian government approved austerity measures worth of EUR 30 bln. 10 year German-Italian spread is tighter at around 4.43%.
UK services PMI rose in November to 52.1 from previous 51.3. Analysts expected worsening towards 50.6 so GBPUSD jumped higher on the release. However, it quickly lost its gains and within minutes fell to pre-release levels as November saw the fastest pace of job losses in 15 months. A contraction in employment was recorded four times out of the last five months. Nevertheless, resilient service sector could imply that the MPC will not increase the Asset Purchase Facility after its Thursday meeting and will wait instead for additional data.
Eurozone data was mixed today. October retail sales increased +0.4% m/m after dropping -0.6% a month earlier but the annual result recorded a -0.4% decline after September's -1.4%. Eurozone Sentix investor confidence fell further in December to -24 from November's -21.2 which is a sixth back to back decline.
The New York session will bring ISM non-manufacturing that is expected to rise to 53.8 in November from 52.9 in October and October factory orders that are seen lower at -0.3% from previous +0.3%. Both releases are due at 10:00 am ET.
Market volatility could also increase at 12:10 pm when FED Chicago president and FOMC member Charles Evans delivers a speech in Indiana on the US economic outlook.
Patrik Urban
December 5, 2011 08:56 ET : UK PMI services rose but employment dropped; Eurozone retail sales rose m/m but fell y/y; Italy approved austerity and its 10 year yield declined.
Market turns to ISM non manufacturing and factory orders. Risk appetite back on the rise at the expense of broad weakness in USD and JPY. Dow futures +151 pts, ES + 18 at 1261. Premium Intermarket Insights due ahead of the US session.
Traders await Merkel-Sarkozy meeting in Paris where, among other topics, the possibility of a fiscal union will be discussed. A press conference is scheduled for later today but all details will likely be released only on Friday during the EU economic summit. There will likely be several bouts of rumour-driven market moves and retracements.
10 year Italian bond trades comfortably below the critical 7% around 6.43% after the Italian government approved austerity measures worth of EUR 30 bln. 10 year German-Italian spread is tighter at around 4.43%.
UK services PMI rose in November to 52.1 from previous 51.3. Analysts expected worsening towards 50.6 so GBPUSD jumped higher on the release. However, it quickly lost its gains and within minutes fell to pre-release levels as November saw the fastest pace of job losses in 15 months. A contraction in employment was recorded four times out of the last five months. Nevertheless, resilient service sector could imply that the MPC will not increase the Asset Purchase Facility after its Thursday meeting and will wait instead for additional data.
Eurozone data was mixed today. October retail sales increased +0.4% m/m after dropping -0.6% a month earlier but the annual result recorded a -0.4% decline after September's -1.4%. Eurozone Sentix investor confidence fell further in December to -24 from November's -21.2 which is a sixth back to back decline.
The New York session will bring ISM non-manufacturing that is expected to rise to 53.8 in November from 52.9 in October and October factory orders that are seen lower at -0.3% from previous +0.3%. Both releases are due at 10:00 am ET.
Market volatility could also increase at 12:10 pm when FED Chicago president and FOMC member Charles Evans delivers a speech in Indiana on the US economic outlook.
Patrik Urban
Friday, December 2, 2011
CAD Jobs Disappoint, Onto US, New Premium Trades
http://www.ashraflaidi.com/forex-news/?a=2946
December 2, 2011 07:46 ET: Merkel calls for a fiscal union; Swiss retail sales declined; UK construction PMI lower but still expanding; Eurozone PPI lower; Canadian labor market data disappointed. Focus turns to NFP and the unemployment rate. Pre-US Jobs Premium Trades are below.
The USD is mixed today but trades within narrow ranges. The relative strength winners are NZD and AUD while JPY is the biggest loser. European equity indices trade higher by about 1.5%.
German chancellor Angela Merkel who spoke to the German parliament today called for an enforceable fiscal union and again reiterated her dissenting stance towards the introduction of Euro bonds. She maintained her attitude that only budget discipline and lower government borrowing could solve the root of the crisis. France and Germany will propose changes for the EU on Monday.
Swiss fundamentals are firmly on the deterioration path as retail sales declined in October -0.2% y/y after dropping -1.4% in September. CHF is weaker against the Euro trading around 1.2350.
UK construction PMI declined in November to 52.3 from 53.9. Despite the slowdown it remained in the expansionary territory.
Eurozone PPI rose 0.1% in October, less than 0.3% seen a month earlier. On annual basis PPI rose 5.5% which is considerably lower compared to previous 5.8%. The ECB meets next Thursday and the probability that rates will be lowered is high.
FRIDAY PREMIUM TRADES ARE HERE: http://ashraflaidi.com/ products/ sub01/ access/ ?a=562 Nonmembers click here to join http://ashraflaidi.com/ products/
The loonie declined sharply after Canada lost 18.6K jobs in November after -54K in October. Market expected employers to add 18K jobs. The unemployment rate ticked up to 7.4% from previous 7.3%. USDCAD rose from 1.0096 to 1.0140 immediately after the release.
The NY session will bring the eagerly awaited labor market data at 8:30 am ET. November NFP is expected to rise to 126K from previous 80K and the unemployment rate is seen steady at 9.0%.
Wednesday's ADP figure exceeded expectations as it printed a solid 206K growth in private jobs which was the best result since 3/2011 and nearly double of the gain seen in the previous month. Positive surprise that would fuel risk appetite is therefore likely to a degree. However, keep in mind that jobless claims rose back above 400K and that the employment component of ISM manufacturing decreased to 51.8 from previous 53.5.
Patrik Urban
December 2, 2011 07:46 ET: Merkel calls for a fiscal union; Swiss retail sales declined; UK construction PMI lower but still expanding; Eurozone PPI lower; Canadian labor market data disappointed. Focus turns to NFP and the unemployment rate. Pre-US Jobs Premium Trades are below.
The USD is mixed today but trades within narrow ranges. The relative strength winners are NZD and AUD while JPY is the biggest loser. European equity indices trade higher by about 1.5%.
German chancellor Angela Merkel who spoke to the German parliament today called for an enforceable fiscal union and again reiterated her dissenting stance towards the introduction of Euro bonds. She maintained her attitude that only budget discipline and lower government borrowing could solve the root of the crisis. France and Germany will propose changes for the EU on Monday.
Swiss fundamentals are firmly on the deterioration path as retail sales declined in October -0.2% y/y after dropping -1.4% in September. CHF is weaker against the Euro trading around 1.2350.
UK construction PMI declined in November to 52.3 from 53.9. Despite the slowdown it remained in the expansionary territory.
Eurozone PPI rose 0.1% in October, less than 0.3% seen a month earlier. On annual basis PPI rose 5.5% which is considerably lower compared to previous 5.8%. The ECB meets next Thursday and the probability that rates will be lowered is high.
FRIDAY PREMIUM TRADES ARE HERE: http://ashraflaidi.com/ products/ sub01/ access/ ?a=562 Nonmembers click here to join http://ashraflaidi.com/ products/
The loonie declined sharply after Canada lost 18.6K jobs in November after -54K in October. Market expected employers to add 18K jobs. The unemployment rate ticked up to 7.4% from previous 7.3%. USDCAD rose from 1.0096 to 1.0140 immediately after the release.
The NY session will bring the eagerly awaited labor market data at 8:30 am ET. November NFP is expected to rise to 126K from previous 80K and the unemployment rate is seen steady at 9.0%.
Wednesday's ADP figure exceeded expectations as it printed a solid 206K growth in private jobs which was the best result since 3/2011 and nearly double of the gain seen in the previous month. Positive surprise that would fuel risk appetite is therefore likely to a degree. However, keep in mind that jobless claims rose back above 400K and that the employment component of ISM manufacturing decreased to 51.8 from previous 53.5.
Patrik Urban
Thursday, December 1, 2011
Euro Set for Another 1.35 Break
http://www.ashraflaidi.com/forex-news/?a=2942
December 1, 2011 07:37 ET: French and Spanish auctions well received; Swiss Q3 GDP disappointed; Swiss PMI declined; German and Eurozone PMIs as initially estimated; UK PMI declined. Focus turns to jobless claims, November ISM manufacturing and construction spending. 4of the 17 Premium Trades hit all targets. See details below.
Risk assets are consolidating after yesterday's "central banks coordinated liquidity injection" rally. USD has a negative bias but is losing only slightly against other majors. Relative strength winners are CHF, EUR and NZD but not by a significant amount. Major European equities are mixed between -0.7% to and 0.4%.
Euro is underpinned by well received French and Spanish debt auctions of various maturities. Spain reached its full target of EUR 3.75 bln with yields only slightly higher and improved cover ratios. France sold EUR 4.35 bln out of EUR 4.5 bln target and saw some yields actually lower compared to the previous auction. Bid to cover for all French bonds that were offered today improved rather significantly. EURUSD continues to trade just under the 1.35 mark.
Final November manufacturing PMI's from Germany and the Eurozone were unchanged compared to their initial estimates at 47.9 and 46.4 respectively.
Swiss Q3 GDP disappointed when it printed 0.2% q/q from previous 0.5% which translates to a mere 1.3% growth y/y from 2.2%. This is the weakest quarterly print since Q2 2009 and reinforces fears of a Q4 recession. A significant decline in exports is blamed for the slowdown which could pressure the SNB to increase the EURCHF floor, perhaps on SNBs meeting on December 15th. Swiss SVME PMI declined in November to 44.8 from 46.9. CHF has ignored this news and trades at 1.2275 against the EUR.
In the UK, November PMI printed 47.6 which is the weakest result since June 2009 and slightly lower than October's 47.8. Outlook is bleak as export orders fell after the crisis curtailed demand which subsequently prompted additional job cuts. Continued contraction is likely to increase pressure on the BOE to enlarge the Asset Purchase Facility further.
BoE released its Financial Stability Report that stated that the current environment is exceptionally threatening for UK banks and Eurozone sovereign and banking risks pose the biggest threat to UK financial stability.
4 of our 17 Wednesday Premium Trades hit all targets, 1 remain unfilled, the rest are in progress. For Direct Access to these trades is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=560 NonSubscribers can join here: http://ashraflaidi.com/ products/ sub01/
The New York session starts with jobless claims at 8:30 am that are expected to remain for the fourth week below the 400K mark and print 390K from previous 393K.
November ISM manufacturing is due at 10:00 am and is anticipated to rise to 51.5 from 50.8. Construction spending in October is seen higher at 0.4% from previous 0.2%.
Patrik Urban
December 1, 2011 07:37 ET: French and Spanish auctions well received; Swiss Q3 GDP disappointed; Swiss PMI declined; German and Eurozone PMIs as initially estimated; UK PMI declined. Focus turns to jobless claims, November ISM manufacturing and construction spending. 4of the 17 Premium Trades hit all targets. See details below.
Risk assets are consolidating after yesterday's "central banks coordinated liquidity injection" rally. USD has a negative bias but is losing only slightly against other majors. Relative strength winners are CHF, EUR and NZD but not by a significant amount. Major European equities are mixed between -0.7% to and 0.4%.
Euro is underpinned by well received French and Spanish debt auctions of various maturities. Spain reached its full target of EUR 3.75 bln with yields only slightly higher and improved cover ratios. France sold EUR 4.35 bln out of EUR 4.5 bln target and saw some yields actually lower compared to the previous auction. Bid to cover for all French bonds that were offered today improved rather significantly. EURUSD continues to trade just under the 1.35 mark.
Final November manufacturing PMI's from Germany and the Eurozone were unchanged compared to their initial estimates at 47.9 and 46.4 respectively.
Swiss Q3 GDP disappointed when it printed 0.2% q/q from previous 0.5% which translates to a mere 1.3% growth y/y from 2.2%. This is the weakest quarterly print since Q2 2009 and reinforces fears of a Q4 recession. A significant decline in exports is blamed for the slowdown which could pressure the SNB to increase the EURCHF floor, perhaps on SNBs meeting on December 15th. Swiss SVME PMI declined in November to 44.8 from 46.9. CHF has ignored this news and trades at 1.2275 against the EUR.
In the UK, November PMI printed 47.6 which is the weakest result since June 2009 and slightly lower than October's 47.8. Outlook is bleak as export orders fell after the crisis curtailed demand which subsequently prompted additional job cuts. Continued contraction is likely to increase pressure on the BOE to enlarge the Asset Purchase Facility further.
BoE released its Financial Stability Report that stated that the current environment is exceptionally threatening for UK banks and Eurozone sovereign and banking risks pose the biggest threat to UK financial stability.
4 of our 17 Wednesday Premium Trades hit all targets, 1 remain unfilled, the rest are in progress. For Direct Access to these trades is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=560 NonSubscribers can join here: http://ashraflaidi.com/ products/ sub01/
The New York session starts with jobless claims at 8:30 am that are expected to remain for the fourth week below the 400K mark and print 390K from previous 393K.
November ISM manufacturing is due at 10:00 am and is anticipated to rise to 51.5 from 50.8. Construction spending in October is seen higher at 0.4% from previous 0.2%.
Patrik Urban
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