http://ashraflaidi.com/t/?h2684
September 7, 2011 08:04 ET : German Constitutional Court rules that Ezone bailout is legal, UK manufacturing and industrial data were mixed. German Industrial production pushed higher. Market turns to BoC rate decision, Canadian Ivey PMI and Fed'ss Beige Book. Also details on Ashraf's appearance in this week's TORONTO MONEY SHOW below.
Euro bounced almost a full cent after German Constitutional Court ruled that German involvement in Eurozone bailouts is legal and rejected all lawsuits that were aimed at blocking country's participation in the financial assistance. However, the court said that the Parliament must have a say in decisions, which burdened Germany's budget. The bounce proved to be short lived as EURUSD retraced all gains and currently trades below the pre-release level.
German Industrial production rose by 4.0% in July after it declined by 1.0% in June which to some extent confirms Angela Merkel's earlier comments that Germany will continue to be Europe's growth locomotive and that so far "there are no signs of a recession in Germany".
In the UK, Halifax House Price Index fell 1.2% in August after a 0.2% rise in July. Manufacturing production rose 0.1% in July after dropping 0.4% in June (+1.9% from 2.1% y/y) and Industrial production declined 0.2% after unchanged print a month earlier (-0.7% from -0.3% y/y). The weak print is blamed on oil and gas rigs maintenance.
Recently, the data from the UK mostly disappointed which reinforces the removal of hawkish votes within the Bank of England's MPC
The New York session will bring Bank of Canada Overnight Rate decision and statement; due at 9:00 am ET. Analysts expect rates to remain unchanged at 1.0%. The accompanying statement is likely to point out concerns about the state of the global economy and declining growth.
At 10:00 am ET Canadian volatile Ivey PMI is due and it is seen slightly higher in August at 46.7 from July's 45.4. Despite the anticipated improvement, this would be a second reading in a row below the 50 level which indicates continued sector contraction.
At 2:00 pm ET the Fed releases its Beige Book that provides insights into the economic condition of each of the 12 Federal Reserve districts.
JOIN ASHRAF AT THIS WEEK's TORONTO MONEY
Join Ashraf in Toronto in Next Week. AshrafLaidi.com will exhibit be at next week's Toronto Money Show on Sep 8-10 - booth # 413. Ashraf will give workshops and on-booth presentations about his latest take on the markets. Click here to register (Admission is free) http://www.moneyshow.com/ tradeshow/ toronto/ world_moneyshow/ Company_Profile.asp?exh=17577
Patrik Urban
Wednesday, September 7, 2011
Tuesday, September 6, 2011
SNB Fixes EURCHF, EURUSD Bounces off DMA, ISM Next
http://www.ashraflaidi.com/forex-news/?a=2680
September 6, 2011 07:56 ET :
SNB rocks markets by fixing EURCHF at 1.20, EURCHF +10% in 80 minutes, RBA drops after rate hold, US services ISM is next. Ashraf's Premium trades will be unveiled later at the opening US bell. EURUSD bounced off its 200 dma.
The Swiss National Bank rocks the markets by setting a minimum exchange rate at 1.20 against the Euro. EURCHF soars more than 10% in 80 minutes. SNB said it will enforce this level with utmost determination and it will buy foreign currency in unlimited quantities in order to achieve a substantial and sustained weakening of the CHF.
EURCHF reached a low today at 1.1019 and jumped almost 10% after the announcement to 1.2160. USDCHF gained from 0.7840 to 0.8572. The resulting rally in euro extended into EURUSD as the pair bounced off its 200 DMA of 1.40.
One factor possibly forcing the SNB decision is today's Swiss August CPI showing -0.3% after -0.8% in July may have contributed to SNB's decision. Italy's budget announcement may also have pushed the SNB into acting ahead of another disappointing program.
The SNB said that strong Franc posed an acute risk to the economy and carries a risk of deflation. Should deflationary pressures continue, the SNB is ready to take other further steps to protect and support the economy.
The ECB said that the SNB had informed it about their intentions and that it made their decision under its own responsibility.
Japanese Yen that is sensitive to any chatter about the possibility of an intervention has weakened as well but only about 100 points.
Gold fell in reaction to SNB announcement to 1861 (silver to 41.70) but it has since recovered about half of its losses.
In other news, Eurozone GDP was not revised and stayed at 0.2% q/q. Yearly figure was revised down to 1.6% from 1.7%. German July manufacturing orders fell by -2.8% after they grew by 1.8% a month earlier. In the US, the US 10 year treasury yield fell below 2% for the first time in 60 years when it reached 1.975%.
The New York session will bring August ISM Non-Manufacturing composite index that is seen at 51.0, down from 52.7 a month earlier.
This morning's RBA rate decision left interest rates unchanged at 4.75%, and given the uncertain outlook for growth it remains unlikely that the bank will raise rates any time in the near future. While some economists are forecasting a rate cut by the end of the year, it appears that recent weak economic data is more likely to set the tone, and suggests that for now the bank remains fairly relaxed with rates at current levels due to concern about the global growth outlook, and recent turmoil in financial markets due to the debt situation in Europe.
Yesterday's not unexpected drop in services PMI data in the UK has prompted some fears with respect to further QE by the Bank of England this Thursday. This morning's disappointing BRC retail sales numbers won't have done anything to alter that perception, no matter how misguided the perception might be. The services PMI data did drop sharply, however given the events in August and the fall-out from the riots that shouldn't have been a surprise. In the wake of events in Europe and the high levels of inflation it is unlikely that the Bank will move this Thursday, despite some economists suggesting they might
Kyle Morrison & Patrik Urban
September 6, 2011 07:56 ET :
SNB rocks markets by fixing EURCHF at 1.20, EURCHF +10% in 80 minutes, RBA drops after rate hold, US services ISM is next. Ashraf's Premium trades will be unveiled later at the opening US bell. EURUSD bounced off its 200 dma.
The Swiss National Bank rocks the markets by setting a minimum exchange rate at 1.20 against the Euro. EURCHF soars more than 10% in 80 minutes. SNB said it will enforce this level with utmost determination and it will buy foreign currency in unlimited quantities in order to achieve a substantial and sustained weakening of the CHF.
EURCHF reached a low today at 1.1019 and jumped almost 10% after the announcement to 1.2160. USDCHF gained from 0.7840 to 0.8572. The resulting rally in euro extended into EURUSD as the pair bounced off its 200 DMA of 1.40.
One factor possibly forcing the SNB decision is today's Swiss August CPI showing -0.3% after -0.8% in July may have contributed to SNB's decision. Italy's budget announcement may also have pushed the SNB into acting ahead of another disappointing program.
The SNB said that strong Franc posed an acute risk to the economy and carries a risk of deflation. Should deflationary pressures continue, the SNB is ready to take other further steps to protect and support the economy.
The ECB said that the SNB had informed it about their intentions and that it made their decision under its own responsibility.
Japanese Yen that is sensitive to any chatter about the possibility of an intervention has weakened as well but only about 100 points.
Gold fell in reaction to SNB announcement to 1861 (silver to 41.70) but it has since recovered about half of its losses.
In other news, Eurozone GDP was not revised and stayed at 0.2% q/q. Yearly figure was revised down to 1.6% from 1.7%. German July manufacturing orders fell by -2.8% after they grew by 1.8% a month earlier. In the US, the US 10 year treasury yield fell below 2% for the first time in 60 years when it reached 1.975%.
The New York session will bring August ISM Non-Manufacturing composite index that is seen at 51.0, down from 52.7 a month earlier.
This morning's RBA rate decision left interest rates unchanged at 4.75%, and given the uncertain outlook for growth it remains unlikely that the bank will raise rates any time in the near future. While some economists are forecasting a rate cut by the end of the year, it appears that recent weak economic data is more likely to set the tone, and suggests that for now the bank remains fairly relaxed with rates at current levels due to concern about the global growth outlook, and recent turmoil in financial markets due to the debt situation in Europe.
Yesterday's not unexpected drop in services PMI data in the UK has prompted some fears with respect to further QE by the Bank of England this Thursday. This morning's disappointing BRC retail sales numbers won't have done anything to alter that perception, no matter how misguided the perception might be. The services PMI data did drop sharply, however given the events in August and the fall-out from the riots that shouldn't have been a surprise. In the wake of events in Europe and the high levels of inflation it is unlikely that the Bank will move this Thursday, despite some economists suggesting they might
Kyle Morrison & Patrik Urban
Monday, September 5, 2011
Central Banks Rate Announcements Preview
http://www.ashraflaidi.com/forex-news/?a=2677
September 5, 2011 07:31 ET :
USD extends robustness across the board amid heightened risk aversion. Labor Day holidays in the US and in Canada will mean narrow trading ranges and low liquidity with the risk of erratic moves. This week will bring interest rates announcements from several major central banks. Ashraf's Premium Insights return tomorrow. All 4 trades shorting EUR have hit their limits so did the gold longs.
AUD has been declining ahead of the upcoming RBA announcement that is due on Tuesday at 12:30 am ET. All 25 economists surveyed by Bloomberg News expect that Australia Cash will stay steady at 4.75%. This notion is supported by RBA governor Stevens who earlier mentioned that while there is some turbulence in the financial markets, monetary policy will not be changed. The implied probability of an interest rate cut surged after disappointing labor market data four weeks ago, but this probability decreased and currently stands at around 18%.
The Bank of Japan will announce rates on Tuesday night as well and their Overnight Call Rate is also seen unchanged at below 0.1%. Market participants have started to price in further easing by the BOJ and many expect that the BOJ will follow the FED in their actions.
Wednesday will bring the Bank of Canada rate statement and the Overnight Rate is also likely to stay unchanged at 1%. While lower rates are not expected, many analysts now predict that next rate hike will come at the end of 2012 or beginning of 2013.
Thursday should prove to be an exciting day for FX traders as both BOE and ECB will announce their rate decisions. The BOE will publish theirs at 7am ET and the rates should stay unchanged. The opposition to further QE seems to be still strong but in light of deteriorating fundamentals, new QE is becoming somewhat more possible. Watch for the Asset Purchase Facility that currently stands at GBP 200 bln. Last week Adam Posen a Monetary Policy Committee member was quoted by Reuters that G7 countries should provide more easing in order to support growth. It will be interesting to see whether he was able to convince other MPC members.
The ECB announces its rate decision at 7:45 am ET and even the European rate is anticipated to stay at 1.5%. However, keep in mind an article published by Bloomberg last week that quoted the CEO of PIMCO Mohamed El-Erian who believes the ECB may be forced to cut rates as the risk of a recession in the Eurozone has increased to 50% in his view. Even if rates are kept steady, watch for ECB press conference at 8:30 am ET for any dovish comments.
DETAILS ON ASHRAF's TORONTO APPEARANCE Sep 8-10
http://ashraflaidi.com/ t/ ?h2676
Patrik Urban
September 5, 2011 07:31 ET :
USD extends robustness across the board amid heightened risk aversion. Labor Day holidays in the US and in Canada will mean narrow trading ranges and low liquidity with the risk of erratic moves. This week will bring interest rates announcements from several major central banks. Ashraf's Premium Insights return tomorrow. All 4 trades shorting EUR have hit their limits so did the gold longs.
AUD has been declining ahead of the upcoming RBA announcement that is due on Tuesday at 12:30 am ET. All 25 economists surveyed by Bloomberg News expect that Australia Cash will stay steady at 4.75%. This notion is supported by RBA governor Stevens who earlier mentioned that while there is some turbulence in the financial markets, monetary policy will not be changed. The implied probability of an interest rate cut surged after disappointing labor market data four weeks ago, but this probability decreased and currently stands at around 18%.
The Bank of Japan will announce rates on Tuesday night as well and their Overnight Call Rate is also seen unchanged at below 0.1%. Market participants have started to price in further easing by the BOJ and many expect that the BOJ will follow the FED in their actions.
Wednesday will bring the Bank of Canada rate statement and the Overnight Rate is also likely to stay unchanged at 1%. While lower rates are not expected, many analysts now predict that next rate hike will come at the end of 2012 or beginning of 2013.
Thursday should prove to be an exciting day for FX traders as both BOE and ECB will announce their rate decisions. The BOE will publish theirs at 7am ET and the rates should stay unchanged. The opposition to further QE seems to be still strong but in light of deteriorating fundamentals, new QE is becoming somewhat more possible. Watch for the Asset Purchase Facility that currently stands at GBP 200 bln. Last week Adam Posen a Monetary Policy Committee member was quoted by Reuters that G7 countries should provide more easing in order to support growth. It will be interesting to see whether he was able to convince other MPC members.
The ECB announces its rate decision at 7:45 am ET and even the European rate is anticipated to stay at 1.5%. However, keep in mind an article published by Bloomberg last week that quoted the CEO of PIMCO Mohamed El-Erian who believes the ECB may be forced to cut rates as the risk of a recession in the Eurozone has increased to 50% in his view. Even if rates are kept steady, watch for ECB press conference at 8:30 am ET for any dovish comments.
DETAILS ON ASHRAF's TORONTO APPEARANCE Sep 8-10
http://ashraflaidi.com/ t/ ?h2676
Patrik Urban
Friday, September 2, 2011
Metals Surge, CHF Firms up Despite Weak Data; NFP is Next
http://www.ashraflaidi.com/forex-news/?a=2673
September 2, 2011 07:57 ET :
Gold hits 1860, silver at 42.60s. Swiss employment drops significantly, UK construction PMI declined and Eurozone PPI increased. PIMCO's El-Erian sees ECB cutting rates. Market turns to US labor market data.
The employment level in Switzerland dropped significantly in the last quarter to 2.77M from 4.11M previously. Such a drop comes as a surprise especially because analysts expected an unchanged reading of 4.11M. Despite this alarmingly bad result, CHF continues to surge as EURCHF lost another 200+ points and reached as low as 1.1061.
UK construction PMI fell in August to 52.6 from 53.5 in July which is the lowest print since December 2010. Construction PMI has been decreasing steadily over the past five months.
Eurozone monthly PPI came out at 0.5% from a previous unchanged reading and reached 6.1% on annual basis in July. The highest growth came out of the energy component.
A noteworthy article was published by Bloomberg last night in which Mohamed El-Erian, the CEO of PIMCO, said that ECB will probably cut interest rates as the chance of a recession in the Eurozone has risen to 50%.
The New York session will bring the eagerly awaited labor market news. August Non Farm Payrolls are expected to drop to 74K from 117K in July and the unemployment rate is seen unchanged at 9.1%.
Wednesday's ADP report showed a somewhat lower print than anticipated (91K vs. 102K exp.) so the probability of a significant positive surprise is lower to some extent. It is important to keep in mind that the correlation between ADP and NFP is not high (slightly above 0.6) and that ADP report excludes government workers.
Average hourly earnings are seen growing at 2.2% on annual basis in August from 2.3% a month earlier.
Patrik Urban
September 2, 2011 07:57 ET :
Gold hits 1860, silver at 42.60s. Swiss employment drops significantly, UK construction PMI declined and Eurozone PPI increased. PIMCO's El-Erian sees ECB cutting rates. Market turns to US labor market data.
The employment level in Switzerland dropped significantly in the last quarter to 2.77M from 4.11M previously. Such a drop comes as a surprise especially because analysts expected an unchanged reading of 4.11M. Despite this alarmingly bad result, CHF continues to surge as EURCHF lost another 200+ points and reached as low as 1.1061.
UK construction PMI fell in August to 52.6 from 53.5 in July which is the lowest print since December 2010. Construction PMI has been decreasing steadily over the past five months.
Eurozone monthly PPI came out at 0.5% from a previous unchanged reading and reached 6.1% on annual basis in July. The highest growth came out of the energy component.
A noteworthy article was published by Bloomberg last night in which Mohamed El-Erian, the CEO of PIMCO, said that ECB will probably cut interest rates as the chance of a recession in the Eurozone has risen to 50%.
The New York session will bring the eagerly awaited labor market news. August Non Farm Payrolls are expected to drop to 74K from 117K in July and the unemployment rate is seen unchanged at 9.1%.
Wednesday's ADP report showed a somewhat lower print than anticipated (91K vs. 102K exp.) so the probability of a significant positive surprise is lower to some extent. It is important to keep in mind that the correlation between ADP and NFP is not high (slightly above 0.6) and that ADP report excludes government workers.
Average hourly earnings are seen growing at 2.2% on annual basis in August from 2.3% a month earlier.
Patrik Urban
Thursday, September 1, 2011
Will US Manufacturing Also Contract?
http://www.ashraflaidi.com/forex-news/?a=2670
September 1, 2011 07:49 ET :
Both Eurozone Manufacturing PMI and UK Manufacturing PMI contracted, US Manufacturing ISM and Unemployment claims are next. USD is stronger in the ongoing session with the exception of CHF that gained as EURCHF plunged 200+ points. UK Manufacturing PMI showed a similar result as Eurozone manufacturing PMI just 30 minutes earlier. Ashraf's Premium Trades are up
Manufacturing PMI in the UK slowed to 49 in August from 49.4 in July printing the worst result since June 2009. Despite the weak print, the figure was still stronger than the estimate of 48.5. The manufacturing sector in the UK contracted for the second time in a row.
The collateral deal between Finland and Greece showed up on the newswires again today as Irish finance minister said that the deal is definitely off the table and that both parties are seeking other solutions. German government official later said that German, Dutch and Finnish finance ministers will meet on Tuesday in Berlin to discuss this issue.
The New York session starts at 8:30 am ET with Unemployment claims that have been gradually increasing the past three weeks. This week claims are seen at 407K from previous 417K.
August ISM Manufacturing is due at 10:00 am ET and it is expected to fall further to 48.7 from previous 50.9. This is the first month in almost two years when analysts expect a reading below 50 which indicates a manufacturing sector contraction. The decline seen over the past four months (April's reading was 60.4!) confirms the significant deterioration that the economy is experiencing. Should fundamental data releases continue to disappoint, the Fed's projections that the growth will pick up in the second half of the year is likely to be questioned soon.
Traders should also note that FOMC member and Federal Reserve Governor Elizabeth Duke will speak at 12:00 pm about the housing market. Q&A session after the speech is expected so any remarks regarding monetary policy could cause high volatility.
Ashraf's Premium piece that seeks to exploit, among others, further weakness in the euro can be found here: http://ashraflaidi.com/ products/ sub01/access/?a=486 Nonsubscribers can become members here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
September 1, 2011 07:49 ET :
Both Eurozone Manufacturing PMI and UK Manufacturing PMI contracted, US Manufacturing ISM and Unemployment claims are next. USD is stronger in the ongoing session with the exception of CHF that gained as EURCHF plunged 200+ points. UK Manufacturing PMI showed a similar result as Eurozone manufacturing PMI just 30 minutes earlier. Ashraf's Premium Trades are up
Manufacturing PMI in the UK slowed to 49 in August from 49.4 in July printing the worst result since June 2009. Despite the weak print, the figure was still stronger than the estimate of 48.5. The manufacturing sector in the UK contracted for the second time in a row.
The collateral deal between Finland and Greece showed up on the newswires again today as Irish finance minister said that the deal is definitely off the table and that both parties are seeking other solutions. German government official later said that German, Dutch and Finnish finance ministers will meet on Tuesday in Berlin to discuss this issue.
The New York session starts at 8:30 am ET with Unemployment claims that have been gradually increasing the past three weeks. This week claims are seen at 407K from previous 417K.
August ISM Manufacturing is due at 10:00 am ET and it is expected to fall further to 48.7 from previous 50.9. This is the first month in almost two years when analysts expect a reading below 50 which indicates a manufacturing sector contraction. The decline seen over the past four months (April's reading was 60.4!) confirms the significant deterioration that the economy is experiencing. Should fundamental data releases continue to disappoint, the Fed's projections that the growth will pick up in the second half of the year is likely to be questioned soon.
Traders should also note that FOMC member and Federal Reserve Governor Elizabeth Duke will speak at 12:00 pm about the housing market. Q&A session after the speech is expected so any remarks regarding monetary policy could cause high volatility.
Ashraf's Premium piece that seeks to exploit, among others, further weakness in the euro can be found here: http://ashraflaidi.com/ products/ sub01/access/?a=486 Nonsubscribers can become members here: http://ashraflaidi.com/ products/ sub01/
Patrik Urban
Tuesday, August 30, 2011
Eurozone Confidence Disappoints, Latest Premium Trades
http://www.ashraflaidi.com/forex-news/?a=2662
August 30, 2011 08:25 ET :
USD is stronger across the board in the ongoing session. Eurozone data disappointed again, UK mortgage approvals rose. Market turns to Consumer confidence and FOMC minutes. Ashraf's latest Premium trades are up; 2 on EURUSD, EURGBP, EURJPY, GBPJPY gold, silver and more.
The Eurozone Business climate indicator dropped in August to 0.07 from 0.44 and the Eurozone Economic confidence fell to 98.3 from previous 103. Both indicators showed the weakest print since March 2010. This drop is blamed on continued anticipation of a slower growth and debt worries that plague Eurozone.
In the UK, Mortgage Approvals increased to 49.2K in July from 48.5 in June reaching the highest level since May 2010. Building Societies Association noted “an encouraging trend”.
Ashraf's latest trades on EURUSD using the latest volatility chart are up. Direct access here: http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=485 Non-members can click here: http://www.ashraflaidi.com/ products/ sub01/
S&P Case-Shiller composite index is due at 9:00 am ET and seen coming at -4.6% after dropping by 4.5% previously. The selling price of a single family home has been declining each month since July 2010.
Consumer Confidence in August is seen lower at 52.1 after 59.5 in July.
At 2:00 pm ET the Fed releases Minutes from its August meeting that could provide insights as to how strongly FOMC members view the opposition to announcing additional easing measures and what tools would the Fed implement should the economy deteriorate to a point when the use of such tools would be warranted.
Patrik Urban
August 30, 2011 08:25 ET :
USD is stronger across the board in the ongoing session. Eurozone data disappointed again, UK mortgage approvals rose. Market turns to Consumer confidence and FOMC minutes. Ashraf's latest Premium trades are up; 2 on EURUSD, EURGBP, EURJPY, GBPJPY gold, silver and more.
The Eurozone Business climate indicator dropped in August to 0.07 from 0.44 and the Eurozone Economic confidence fell to 98.3 from previous 103. Both indicators showed the weakest print since March 2010. This drop is blamed on continued anticipation of a slower growth and debt worries that plague Eurozone.
In the UK, Mortgage Approvals increased to 49.2K in July from 48.5 in June reaching the highest level since May 2010. Building Societies Association noted “an encouraging trend”.
Ashraf's latest trades on EURUSD using the latest volatility chart are up. Direct access here: http://www.ashraflaidi.com/ products/ sub01/ access/ ?a=485 Non-members can click here: http://www.ashraflaidi.com/ products/ sub01/
S&P Case-Shiller composite index is due at 9:00 am ET and seen coming at -4.6% after dropping by 4.5% previously. The selling price of a single family home has been declining each month since July 2010.
Consumer Confidence in August is seen lower at 52.1 after 59.5 in July.
At 2:00 pm ET the Fed releases Minutes from its August meeting that could provide insights as to how strongly FOMC members view the opposition to announcing additional easing measures and what tools would the Fed implement should the economy deteriorate to a point when the use of such tools would be warranted.
Patrik Urban
Monday, August 29, 2011
Market Turns to FEDs Preferred Inflation Gauge
http://www.ashraflaidi.com/forex-news/?a=2659
August 29, 2011 07:28 ET :
German CPI is still being collected but indications are that it will be as expected. Fundamental releases in NY session include Core PCE price index, personal spending and income and housing data.
USD trading lower against all majors with the exception of CHF. One of the largest moves is seen in USDCAD that has been steadily declining since Asian open. USDCAD currently trades around 9760 which is a few points below the previous range.
German CPI is expected to reach 2.3% on annual basis, slightly lower from previous 2.4%. Month over month CPI is projected to show a decline by -0.1% from previous increase of 0.4%. CPI data is still being collected in several states but the already published results suggest that there will not be any significant surprise. So far, most states have showed annual prints 1.9%-2.4% while monthly numbers show a decline between -0.1% and -0.2%.
Euro is supported by European Commissions comments that there is no need to recapitalize European banks. These remarks come in response to Christine Lagardes speech in which she called for urgent recapitalization of Europes weakest lenders. Lagarde is the managing director of the IMF.
The New York session will bring various data from July. At 8:30 am ET Core PCE price index is due and is expected to increase to 0.2% from previous 0.1%. The annual figure is seen at 1.4% from 1.3%. Given the latest increase in producer and consumer inflation the possibility for a higher print certainly exists. This indicator is Feds preferred measure of the overall price level. A figure on the upside will further add resistance to any QE3, thus maylead to renewed downside in equities.
Personal Spending is expected to rise to 0.5% after dropping to -0.2% in June and Personal Income is projected to increase to 0.3% from 0.1%. Both indicators measure the financial health of American consumers. Given how important consumers are to the US economy, disappointing figures would imply continued deterioration.
At 9:00 am ET J. C. Trichet is scheduled to testify on Eurozones debt crisis before the Economic committee of the European parliament so high volatility is likely.
At 10:00 am ET the National Association of Realtors will release its latest Pending Home sales figures. Sales are expected to decrease by -0.8% from a 2.4% jump in June.
Patrik Urban
August 29, 2011 07:28 ET :
German CPI is still being collected but indications are that it will be as expected. Fundamental releases in NY session include Core PCE price index, personal spending and income and housing data.
USD trading lower against all majors with the exception of CHF. One of the largest moves is seen in USDCAD that has been steadily declining since Asian open. USDCAD currently trades around 9760 which is a few points below the previous range.
German CPI is expected to reach 2.3% on annual basis, slightly lower from previous 2.4%. Month over month CPI is projected to show a decline by -0.1% from previous increase of 0.4%. CPI data is still being collected in several states but the already published results suggest that there will not be any significant surprise. So far, most states have showed annual prints 1.9%-2.4% while monthly numbers show a decline between -0.1% and -0.2%.
Euro is supported by European Commissions comments that there is no need to recapitalize European banks. These remarks come in response to Christine Lagardes speech in which she called for urgent recapitalization of Europes weakest lenders. Lagarde is the managing director of the IMF.
The New York session will bring various data from July. At 8:30 am ET Core PCE price index is due and is expected to increase to 0.2% from previous 0.1%. The annual figure is seen at 1.4% from 1.3%. Given the latest increase in producer and consumer inflation the possibility for a higher print certainly exists. This indicator is Feds preferred measure of the overall price level. A figure on the upside will further add resistance to any QE3, thus maylead to renewed downside in equities.
Personal Spending is expected to rise to 0.5% after dropping to -0.2% in June and Personal Income is projected to increase to 0.3% from 0.1%. Both indicators measure the financial health of American consumers. Given how important consumers are to the US economy, disappointing figures would imply continued deterioration.
At 9:00 am ET J. C. Trichet is scheduled to testify on Eurozones debt crisis before the Economic committee of the European parliament so high volatility is likely.
At 10:00 am ET the National Association of Realtors will release its latest Pending Home sales figures. Sales are expected to decrease by -0.8% from a 2.4% jump in June.
Patrik Urban
All Eyes on GDP Revision and Bernanke
http://www.ashraflaidi.com/forex-news/?a=2656
August 26, 2011 08:07 ET :
UK GDP confirmed at 0.2%. Finnish-Greek collateral issue continues to be unclear. Market turns to US Q2 GDP revision and Ben Bernanke's speech at Jackson Hole symposium. Ashraf's Premium trades are in progress.
UK Q2 GDP remained unrevised on quarterly and annual basis at 0.2% q/q and 0.7% y/y respectively. Despite the data & market fixation on Bernanke, GBPUSD broke below 1.63, extending losses towards 1.6260s.
The Finnish collateral issue is likely to continue to weigh in on markets as the situation is unclear. The Finance minister Urpilainens office has informed that the collateral deal with Greece is no longer valid, most likely due to political pressure from Germany, while a senior Finnish government source said that collateral continues to be an absolute precondition for a participation in the second Greek bailout. Negotiations are therefore likely to continue in search of another solution.
Other news include information that France, Spain, Italy and Belgium extended their bans on short selling financial stocks until the end of September and that rating agency S&P sees downside risks in some Asian countries. S&P however notes that debt wise, Asia continues to be more stable than Europe or USA.
The US session kicks off at 8:30 am ET with preliminary Q2 GDP expected slightly lower at 1.1% from previous 1.3% which would be a third consecutive quarterly slowdown. Over the past year analyst continued to lower their growth projections as it is becoming clear that V shaped recovery was only a wishful thinking. A significant problem with lower long term growth is that measures such as GDP to debt ratio were projected with higher growth in mind so each tick lower have a considerable negative impact.
Revised University of Michigan Consumer Sentiment index due at 9:55 am is expected at 56.2 but it is unlikely to cause volatility as traders will eagerly wait for Ben Bernankes speech at Jackson Hole symposium that should start only five minutes later at 10:00 am. New round of QE is not likely but Ben Bernanke will attempt to convince markets that the Fed has additional tools that could be used should deteriorating economic conditions warrant it.
Subscribers can see Pre-Bernanke Trading Strategies here http://ashraflaidi.com/ products/ sub01/ access/ ?a=483 Non-members can subscribe here http://ashraflaidi.com/ products/ sub01
Patrik Urban
August 26, 2011 08:07 ET :
UK GDP confirmed at 0.2%. Finnish-Greek collateral issue continues to be unclear. Market turns to US Q2 GDP revision and Ben Bernanke's speech at Jackson Hole symposium. Ashraf's Premium trades are in progress.
UK Q2 GDP remained unrevised on quarterly and annual basis at 0.2% q/q and 0.7% y/y respectively. Despite the data & market fixation on Bernanke, GBPUSD broke below 1.63, extending losses towards 1.6260s.
The Finnish collateral issue is likely to continue to weigh in on markets as the situation is unclear. The Finance minister Urpilainens office has informed that the collateral deal with Greece is no longer valid, most likely due to political pressure from Germany, while a senior Finnish government source said that collateral continues to be an absolute precondition for a participation in the second Greek bailout. Negotiations are therefore likely to continue in search of another solution.
Other news include information that France, Spain, Italy and Belgium extended their bans on short selling financial stocks until the end of September and that rating agency S&P sees downside risks in some Asian countries. S&P however notes that debt wise, Asia continues to be more stable than Europe or USA.
The US session kicks off at 8:30 am ET with preliminary Q2 GDP expected slightly lower at 1.1% from previous 1.3% which would be a third consecutive quarterly slowdown. Over the past year analyst continued to lower their growth projections as it is becoming clear that V shaped recovery was only a wishful thinking. A significant problem with lower long term growth is that measures such as GDP to debt ratio were projected with higher growth in mind so each tick lower have a considerable negative impact.
Revised University of Michigan Consumer Sentiment index due at 9:55 am is expected at 56.2 but it is unlikely to cause volatility as traders will eagerly wait for Ben Bernankes speech at Jackson Hole symposium that should start only five minutes later at 10:00 am. New round of QE is not likely but Ben Bernanke will attempt to convince markets that the Fed has additional tools that could be used should deteriorating economic conditions warrant it.
Subscribers can see Pre-Bernanke Trading Strategies here http://ashraflaidi.com/ products/ sub01/ access/ ?a=483 Non-members can subscribe here http://ashraflaidi.com/ products/ sub01
Patrik Urban
Thursday, August 25, 2011
Euro Ignores Another Set of Poor Data
http://ashraflaidi.com/t/?h2652
August 25, 2011 08:07 ET :
Euro continues to shrug off weak data and remains strong. GBP is the relative strength loser. Market is likely to calm ahead of Jackson Hole Symposium.
Euro continues to be strong despite yet another disappointment from Germany. GfK Consumer Confidence Survey for September came fell from 5.3 to 5.2 showing the worst print since October 2010.
Todays data from Switzerland is not any better. ZEW Economic Expectations survey saw 5th straight monthly decline in August when it dropped to -71.4 from previous -58.9. Last time the sentiment was this poor was at the end of 2008. CHF weakened about 30 pips after the announcement but it is likely that the overall sentiment will be more important for the future direction of the CHF.
4 NEW PREMIUM TRADES were issued on Wednesday night, (2 on EURUSD, 1 on USDJPY, 1 on EURGBP and one on SILVER) DIRECT ACCESS HERE: http://ashraflaidi.com/ products/ sub01/ access/ ?a=481 NON-Subscribers click here: http://ashraflaidi.com/ products/ sub01/
UK CBI Realized Sales suffered the biggest fall in a year when they dropped from -5 to -14. GBP is the relative strength loser as it could not rally even when Euro was rallying nearly 100 pips. GBP continues to trade in a narrow range and consolidates yesterdays losses. A break below yesterdays low would open a way for a test of a support at 1.62 which coincides with 50% fib. retracement of a rally from 1.5779 to 1.6443.
New York session will bring weekly unemployment claims due at 8:30 am that are expected at 403K from previous 408K.
The FX market is likely to calm down a bit as traders are unlikely to want to open new positions ahead of Ben Bernankes 10:00 am ET Fridays speech at Jackson Hole Symposium. Rising consumer and producer inflation decreases chances of an announcement of QE3 so his speech is likely to only reaffirm pledges that rates will stay at current levels with the possibility of capping yields should it be warranted. Equity markets have been anticipating additional stimulus so the lack of an announcement could see a market selling off.
Gold and silver continue to drop after a margin hike announcement. Gold lost almost 200 USD since peaking at 1912 just three days ago. The situation in silver is similar as both metals trade below yesterdays lows. Silver trades right above the 39 mark.
Patrik Urban
August 25, 2011 08:07 ET :
Euro continues to shrug off weak data and remains strong. GBP is the relative strength loser. Market is likely to calm ahead of Jackson Hole Symposium.
Euro continues to be strong despite yet another disappointment from Germany. GfK Consumer Confidence Survey for September came fell from 5.3 to 5.2 showing the worst print since October 2010.
Todays data from Switzerland is not any better. ZEW Economic Expectations survey saw 5th straight monthly decline in August when it dropped to -71.4 from previous -58.9. Last time the sentiment was this poor was at the end of 2008. CHF weakened about 30 pips after the announcement but it is likely that the overall sentiment will be more important for the future direction of the CHF.
4 NEW PREMIUM TRADES were issued on Wednesday night, (2 on EURUSD, 1 on USDJPY, 1 on EURGBP and one on SILVER) DIRECT ACCESS HERE: http://ashraflaidi.com/ products/ sub01/ access/ ?a=481 NON-Subscribers click here: http://ashraflaidi.com/ products/ sub01/
UK CBI Realized Sales suffered the biggest fall in a year when they dropped from -5 to -14. GBP is the relative strength loser as it could not rally even when Euro was rallying nearly 100 pips. GBP continues to trade in a narrow range and consolidates yesterdays losses. A break below yesterdays low would open a way for a test of a support at 1.62 which coincides with 50% fib. retracement of a rally from 1.5779 to 1.6443.
New York session will bring weekly unemployment claims due at 8:30 am that are expected at 403K from previous 408K.
The FX market is likely to calm down a bit as traders are unlikely to want to open new positions ahead of Ben Bernankes 10:00 am ET Fridays speech at Jackson Hole Symposium. Rising consumer and producer inflation decreases chances of an announcement of QE3 so his speech is likely to only reaffirm pledges that rates will stay at current levels with the possibility of capping yields should it be warranted. Equity markets have been anticipating additional stimulus so the lack of an announcement could see a market selling off.
Gold and silver continue to drop after a margin hike announcement. Gold lost almost 200 USD since peaking at 1912 just three days ago. The situation in silver is similar as both metals trade below yesterdays lows. Silver trades right above the 39 mark.
Patrik Urban
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