http://ashraflaidi.com/t/?h2929
November 28, 2011 07:38 ET: EUR 600 bln IMF loan rumor denied; Italian business confidence higher; German GfK consumer confidence rose; UK CBI sales decline; OECD calls for action and expects further QE by BOE. Market turns to October new home sales and Dallas FED manufacturing. Added charts & commentary to Intermarket Insights.
Markets saw a complete reversal of sentiment since Friday. The greenback was sold across the board and riskier assets show significant gains. NZD, CHF and GBP are the relative strength winners. Major European equity indices rose 2-2.5%.
Risk rally was sparked by earlier reports that the IMF is preparing a EUR 600 bln loan for Italy. This news was later denied by the IMF spokesperson that confirmed that the IMF is not in discussions with Italian authorities. Despite the denial, EURUSD holds most of the gains and trades near 1.3370 after reaching 1.3398.
On the European data front, Italian business confidence improved slightly in November from 94.2 to 94.4 and German GfK consumer confidence rose to 5.6 from previous 5.3.
We Added 2 charts on EURUSD, identifying the ley level to watch for today & tomorrow in order to preserve the 4-week trendline. Latest Premium Trades for today include on EURUSD (2), EURJPY (2), USDCAD (2) ES (2), US crude (2) and ongoing trades in GBPCAD and silver. Direct Access to today's trades is found here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=557 To get a 1-week trial, click here: http://ashraflaidi.com/ products/ sub01/
Even though the common currency is strengthening, the Italian 2 year yield continues to rise and for the first time crossed above the 8% level. The high so far has been 8.12% but reports of ECB buying have helped to push yield back below 8% towards 7.2%.
The OECD called for an action to boost global economy after it lowered world growth projection for 2012 to 3.4% from 4.6%. The US growth estimate was lowered to 2% from 3.1% and Eurozone GDP is seen to grow only 0.2% in 2012. The OECD has also noted that further QE by the BOE is warranted and estimates that the BOE will buy GBP 400 bln of debt.
CBI reported sales declined to -19 in November from -11 in September which is the weakest result since 3/2009. Reported orders dropped -25% and expected sales for December are seen at -6%. The GBP is holding onto its gains and trades around 1.5575
The economic calendar for the NY session is short today as it includes October new home sales due at 10:00 am ET that are expected to remain at 313K and November Dallas FED manufacturing due at 10:30 am seen higher at 5.0 from previous 2.3.
Patrik Urban
Monday, November 28, 2011
Friday, November 25, 2011
USDX Boosted by Weak EUR, Fading JPY
http://www.ashraflaidi.com/forex-news/?a=2925
November 25, 2011 08:22 ET: French consumer confidence fell and Italian retail sales dropped; Italian short and long term yields rise; Italian Bill auction results in higher yield; USDX at 7 week high, breaking out of the 100 & 200 week moving averages. Poor liquidity and erratic movements likely during the NY session. LATEST PREMIUM TRADES include an important development in the MONTHLY EURUSD chart, with 3 new trades in EURUSD.
USD is soaring today as risk aversion heightens further due to sharp rise in European yields. GBP is also relatively strong while EUR and NZD are the biggest losers. Major European equities are losing about 0.5%.
Long series of disappointing European data continued today as French consumer confidence declined in November to 79 from 82 and September Italian retail sales fell -1.6% from -0.3% on annual basis. Eagerly awaited Italian short term debt auction did not provide a reason for optimism either as Italy sold EUR 8 bln of six months Bills with average yield of 6.5%, significantly higher from previous 3.53% with bid to cover at 1.47, lower from previous 1.57. EURUSD fell to 1.3236, the lowest level since the beginning of October.
LATEST PREMIUM INTERMARKET INSIGHTS include an important development in the MONTHLY EURUSD chart, with 2 new charts on USD INDEX and 3 new trades in EURUSD, 2 in USDCAD & 2 in EURJPY. ========== Click here for direct access todays trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=556 Nonsubscribers can join here: http://ashraflaidi.com/ products/ sub01/
Despite ECB buying, the 10 year Italian yield is firmly above the critical 7% level at 7.27% and another reason for concern is sharp rise in 2 year yield which jumped nearly to 8%. Spanish 10 year yields 6.74% but the German-Spanish remains below 5% as even German yields rise.
USD index reached 7 week high today, eyeing the psychologically important 80 level which roughly coincided with October high at 79.84. Should the resistance be broken, next target is January high at 81.31 followed by 8/2010 high at 83.56. USDX is currently trading around 79.54.
US stock markets close at 1 pm EST, while US bond markets are all closed, liquidity will be poor and erratic movements are likely. There are no fundamental data releases due today.
Patrik Urban
November 25, 2011 08:22 ET: French consumer confidence fell and Italian retail sales dropped; Italian short and long term yields rise; Italian Bill auction results in higher yield; USDX at 7 week high, breaking out of the 100 & 200 week moving averages. Poor liquidity and erratic movements likely during the NY session. LATEST PREMIUM TRADES include an important development in the MONTHLY EURUSD chart, with 3 new trades in EURUSD.
USD is soaring today as risk aversion heightens further due to sharp rise in European yields. GBP is also relatively strong while EUR and NZD are the biggest losers. Major European equities are losing about 0.5%.
Long series of disappointing European data continued today as French consumer confidence declined in November to 79 from 82 and September Italian retail sales fell -1.6% from -0.3% on annual basis. Eagerly awaited Italian short term debt auction did not provide a reason for optimism either as Italy sold EUR 8 bln of six months Bills with average yield of 6.5%, significantly higher from previous 3.53% with bid to cover at 1.47, lower from previous 1.57. EURUSD fell to 1.3236, the lowest level since the beginning of October.
LATEST PREMIUM INTERMARKET INSIGHTS include an important development in the MONTHLY EURUSD chart, with 2 new charts on USD INDEX and 3 new trades in EURUSD, 2 in USDCAD & 2 in EURJPY. ========== Click here for direct access todays trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=556 Nonsubscribers can join here: http://ashraflaidi.com/ products/ sub01/
Despite ECB buying, the 10 year Italian yield is firmly above the critical 7% level at 7.27% and another reason for concern is sharp rise in 2 year yield which jumped nearly to 8%. Spanish 10 year yields 6.74% but the German-Spanish remains below 5% as even German yields rise.
USD index reached 7 week high today, eyeing the psychologically important 80 level which roughly coincided with October high at 79.84. Should the resistance be broken, next target is January high at 81.31 followed by 8/2010 high at 83.56. USDX is currently trading around 79.54.
US stock markets close at 1 pm EST, while US bond markets are all closed, liquidity will be poor and erratic movements are likely. There are no fundamental data releases due today.
Patrik Urban
Wednesday, November 23, 2011
Poor German Auction & Weak Data Send EUR Below 1.34
http://www.ashraflaidi.com/forex-news/?a=2919
November 23, 2011 07:33 ET : Weak demand resulted in a poor German bond auction; Eurozone industrial new orders plunged; MPM minutes show no votes for more QE. Market turns to durable goods orders, jobless claims, core PCE price index and UoM consumer confidence.
The greenback is the relative strength winner in the ongoing session as risk aversion heightens. EUR and NZD are the biggest losers. Major European equities recovered most of their losses but remain in negative territory.
A combination of disappointing German bond auction with weak data sent Euro lower today. Germany sold only EUR 3.64 bln worth of 10 year bund today while it targeted EUR 6 bln. The Bundesbank retained EUR 2.35 bln that it will attempt to sell over the next few days. The average yield was 1.98% compared to previous 2.09% with weak bid to cover of 1.07.
September Eurozone industrial new orders were significantly below expectations as they plunged -6.4% from previous +1.4% which translates to a mere 1.6% growth y/y (down from Augusts' 5.9%). This is the biggest decline in three years and confirms bleak outlook for Eurozone manufacturing sector. EURUSD fell on the news from 1.3450 to 1.3374.
The Minutes from November MPC meeting showed that all members voted to keep rates steady and there were no votes for more QE. However, some members noted that more bond purchases may be needed in the future. Current QE will continue for additional three months.
Trading during the NY session will be influenced by a large number of data releases. At 8:30 am ET October durable goods orders are due and are seen lower at -1.1% from -0.6% (core orders are expected to grow only 0.1% from previous 1.8%)
Due to tomorrow's Thanksgiving holidays, jobless claims are due today and are seen at 389K from 388K. For the past three weeks, claims have been below the 400k mark.
FED's preferred inflation gauge, the core PCE price index is seen higher in October at 0.1% from previous 0.0%.
Final revision of November UoM consumer confidence is due at 9:55 am and is anticipated to increase to 64.5 from initial estimate of 64.2.
Patrik Urban
November 23, 2011 07:33 ET : Weak demand resulted in a poor German bond auction; Eurozone industrial new orders plunged; MPM minutes show no votes for more QE. Market turns to durable goods orders, jobless claims, core PCE price index and UoM consumer confidence.
The greenback is the relative strength winner in the ongoing session as risk aversion heightens. EUR and NZD are the biggest losers. Major European equities recovered most of their losses but remain in negative territory.
A combination of disappointing German bond auction with weak data sent Euro lower today. Germany sold only EUR 3.64 bln worth of 10 year bund today while it targeted EUR 6 bln. The Bundesbank retained EUR 2.35 bln that it will attempt to sell over the next few days. The average yield was 1.98% compared to previous 2.09% with weak bid to cover of 1.07.
September Eurozone industrial new orders were significantly below expectations as they plunged -6.4% from previous +1.4% which translates to a mere 1.6% growth y/y (down from Augusts' 5.9%). This is the biggest decline in three years and confirms bleak outlook for Eurozone manufacturing sector. EURUSD fell on the news from 1.3450 to 1.3374.
The Minutes from November MPC meeting showed that all members voted to keep rates steady and there were no votes for more QE. However, some members noted that more bond purchases may be needed in the future. Current QE will continue for additional three months.
Trading during the NY session will be influenced by a large number of data releases. At 8:30 am ET October durable goods orders are due and are seen lower at -1.1% from -0.6% (core orders are expected to grow only 0.1% from previous 1.8%)
Due to tomorrow's Thanksgiving holidays, jobless claims are due today and are seen at 389K from 388K. For the past three weeks, claims have been below the 400k mark.
FED's preferred inflation gauge, the core PCE price index is seen higher in October at 0.1% from previous 0.0%.
Final revision of November UoM consumer confidence is due at 9:55 am and is anticipated to increase to 64.5 from initial estimate of 64.2.
Patrik Urban
Tuesday, November 22, 2011
Euro Rebounds Despite Soaring Spanish Yields, US GDP Rev Next
http://www.ashraflaidi.com/forex-news/?a=2915
November 22, 2011 08:04 ET: Spanish short term auction sees soaring yields; IMF&EU confirmed Hungarian request for financial assistance; UK public sector borrowing lower. Market turns to Q3 GDP revision, Canadian retail sales and FOMC minutes are due. EURUSD & EURGBP longs hit targets.
USD is slightly weaker in the ongoing session as EURUSD trades above 1.3550. CHF and EUR are the relative strength winners today. Major European equities are higher by about 0.5%.
Despite the new Spanish government that promised to cut deficit and promote growth, Spanish treasury had to pay higher yield today to sell almost EUR 3 bln in short term bills. The average yield on 3 month bill was 5.11% up from previous 2.29% and on 6 month bills the average yield was 5.22% from 3.3% both thus reached the highest points since euro inception. However, 10 year yields (IT, SP, FR) have declined today slightly.
A confirmation that the current crisis is not confined to the Eurozone came as IMF and the European commission confirmed that they had received a request for "precautionary" financial assistance from Hungary which is a member of the European Union. This assistance is meant to secure Hungarian ability to obtain funding in the markets. Hungarian Forint belonged to the worst performing currencies over the past three months but surprisingly, it has been strengthening since Thursday last week.
UK public sector net borrowing was lower than expected when it printed GBP 3.4 bln in October from GBP 10.2 bln in September. Public borrowing continues to be on target for this fiscal year but additional deficit reduction might be more difficult given the weak growth projections. GBPUSD has been on a rollercoaster today as it first dropped from 1.5691 to 1.5622 only to quickly recover back to 1.5680.
The NY session will kick off at 8:30 am with the second estimate for the annualized Q3 GDP that is seen at 2.5%, unchanged from the initial estimate. As this is the second estimate, the impact is likely to be limited.
Canadian September retail sales are also due at 8:30 am and are expected to keep the same pace of growth and print 0.5%. Core retail sales are seen at 0.4%.
Eurozone consumer confidence is due at 10:00 am and should remain unchanged at -20 in November. Readings below 0 continue to express pessimism among consumers.
EURUSD hits our intermediate long target, EURGBP hits all targets, 2 gold trades are triggered, while EURJPY finally gets filled. See the rest of our trades EURUSD. Click here for direct access http://ashraflaidi.com/ products/ sub01/ access/ ?a=554 Click here to subscribe http://ashraflaidi.com/ products/ sub01/
Minutes from November FOMC meeting are due at 2:00 pm but considering the press conference after the actual FOMC decision, the chance of any surprising insights that could notably impact the markets is slim.
Patrik Urban
November 22, 2011 08:04 ET: Spanish short term auction sees soaring yields; IMF&EU confirmed Hungarian request for financial assistance; UK public sector borrowing lower. Market turns to Q3 GDP revision, Canadian retail sales and FOMC minutes are due. EURUSD & EURGBP longs hit targets.
USD is slightly weaker in the ongoing session as EURUSD trades above 1.3550. CHF and EUR are the relative strength winners today. Major European equities are higher by about 0.5%.
Despite the new Spanish government that promised to cut deficit and promote growth, Spanish treasury had to pay higher yield today to sell almost EUR 3 bln in short term bills. The average yield on 3 month bill was 5.11% up from previous 2.29% and on 6 month bills the average yield was 5.22% from 3.3% both thus reached the highest points since euro inception. However, 10 year yields (IT, SP, FR) have declined today slightly.
A confirmation that the current crisis is not confined to the Eurozone came as IMF and the European commission confirmed that they had received a request for "precautionary" financial assistance from Hungary which is a member of the European Union. This assistance is meant to secure Hungarian ability to obtain funding in the markets. Hungarian Forint belonged to the worst performing currencies over the past three months but surprisingly, it has been strengthening since Thursday last week.
UK public sector net borrowing was lower than expected when it printed GBP 3.4 bln in October from GBP 10.2 bln in September. Public borrowing continues to be on target for this fiscal year but additional deficit reduction might be more difficult given the weak growth projections. GBPUSD has been on a rollercoaster today as it first dropped from 1.5691 to 1.5622 only to quickly recover back to 1.5680.
The NY session will kick off at 8:30 am with the second estimate for the annualized Q3 GDP that is seen at 2.5%, unchanged from the initial estimate. As this is the second estimate, the impact is likely to be limited.
Canadian September retail sales are also due at 8:30 am and are expected to keep the same pace of growth and print 0.5%. Core retail sales are seen at 0.4%.
Eurozone consumer confidence is due at 10:00 am and should remain unchanged at -20 in November. Readings below 0 continue to express pessimism among consumers.
EURUSD hits our intermediate long target, EURGBP hits all targets, 2 gold trades are triggered, while EURJPY finally gets filled. See the rest of our trades EURUSD. Click here for direct access http://ashraflaidi.com/ products/ sub01/ access/ ?a=554 Click here to subscribe http://ashraflaidi.com/ products/ sub01/
Minutes from November FOMC meeting are due at 2:00 pm but considering the press conference after the actual FOMC decision, the chance of any surprising insights that could notably impact the markets is slim.
Patrik Urban
Turning to Existing Home Sales, USDX at 6-Week Highs
November 21, 2011 09:46 ET : Gold fell below 1700, Conservative party in Spain wins election but Spanish yields continue to rise; Eurozone current account shows surplus; BoE calls for more QE; Moody's warns France. Market turns to existing home sales and Canadian wholesale sales.6 trades hit all targets, 6 unfilled, 5 in progress, 2 stopped out.
Euro fell fails to gain traction after Mariano Rajoy's Conservative People's party won in a landslide in Spanish election. The People's party promises to cut the budget deficit while reducing the unemployment and stimulating growth. Despite these pledges, the 10 year yield continues to rise and trades around 6.54%.
USD Index at 6-week highs, nearing both 100 and 200 WEEK moving averages. Gold, touches below both the 55 & 100 DAY MAs
2 of 3 EURUSD Intermarket Indights hit all targets, none of the 2 EURJPY were filled, EURGBP & GBPCAD trades are in progress, 1 USDCAD stopped out, 1 ES stopped out, 1 ES unfilled, 1 Gold short all done, 1 other unfilled, both silver shorts all done, 1 oil short all done, 1 unfilled. See here for more detail: http://ashraflaidi.com/ products/ sub01/ access/ ?a=553, For a 1-week Subscription, click here: http://ashraflaidi.com/ products/ sub01/
Even solid fundamental data was not enough to change the bearish market sentiment as the Eurozone current account balance positively surprised when it showed a EUR 0.5 bln surplus in September after EUR -5.9 bln deficit in August. The market expected a EUR -3.2 bln deficit.
BoE Adam Posen reiterated today his view that the ECB and the FED should engage in "large scale bond purchases" in order to stimulate their economies by lowering interest rates and encouraging investment. Mr. Posen is known for his fear that monetary stimulus would be removed too early before recovery is secured.
French 10 year yield rose today after Moody's warned that French higher yields would cause fiscal challenges and lead to deteriorating growth outlook with negative credit implications. The German-French 10 year spread widened and reached a high of 1.72%.
The US session starts with Canadian wholesale sales at 8:30 am ET that are expected to grow 0.6% in September from 0.2% in August.
Existing home sales are due at 10:00 am and are seen lower at 4.8M in October from previous 4.91M.
Patrik Urban
Euro fell fails to gain traction after Mariano Rajoy's Conservative People's party won in a landslide in Spanish election. The People's party promises to cut the budget deficit while reducing the unemployment and stimulating growth. Despite these pledges, the 10 year yield continues to rise and trades around 6.54%.
USD Index at 6-week highs, nearing both 100 and 200 WEEK moving averages. Gold, touches below both the 55 & 100 DAY MAs
2 of 3 EURUSD Intermarket Indights hit all targets, none of the 2 EURJPY were filled, EURGBP & GBPCAD trades are in progress, 1 USDCAD stopped out, 1 ES stopped out, 1 ES unfilled, 1 Gold short all done, 1 other unfilled, both silver shorts all done, 1 oil short all done, 1 unfilled. See here for more detail: http://ashraflaidi.com/ products/ sub01/ access/ ?a=553, For a 1-week Subscription, click here: http://ashraflaidi.com/ products/ sub01/
Even solid fundamental data was not enough to change the bearish market sentiment as the Eurozone current account balance positively surprised when it showed a EUR 0.5 bln surplus in September after EUR -5.9 bln deficit in August. The market expected a EUR -3.2 bln deficit.
BoE Adam Posen reiterated today his view that the ECB and the FED should engage in "large scale bond purchases" in order to stimulate their economies by lowering interest rates and encouraging investment. Mr. Posen is known for his fear that monetary stimulus would be removed too early before recovery is secured.
French 10 year yield rose today after Moody's warned that French higher yields would cause fiscal challenges and lead to deteriorating growth outlook with negative credit implications. The German-French 10 year spread widened and reached a high of 1.72%.
The US session starts with Canadian wholesale sales at 8:30 am ET that are expected to grow 0.6% in September from 0.2% in August.
Existing home sales are due at 10:00 am and are seen lower at 4.8M in October from previous 4.91M.
Patrik Urban
Friday, November 18, 2011
Euro Supported By Lower Yields, Draghi Mum on ECB Purchases
http://www.ashraflaidi.com/forex-news/?a=2908
November 18, 2011 08:45 ET :
German annual PPI lower; Italian industrial orders drop; 10 year periphery bonds yields decline slightly; Canadian annual CPI declines. Market turns to US and Canadian leading indicators. As market retraces & EURUSD rebounds, those who were not filled in yesterdays trades will get a chance to do so now.
The USD is slightly weaker today as market participants take profit and square positions after large moves seen this week. GBP and CHF are the relative strength winners today as they strengthened against most other majors. European equity markets are losing between 0.5% and 1%.
On the European data front, German annual PPI printed 5.3% in October down from previous 5.5% and Italian industrial orders dropped -8.3% in September after growing 4.2% in August which is the largest decline since mid 2009.
ECB president Mario Draghi reiterated during his speech that economic activity is expected to weaken in most advanced economies and noted increased downside risks in the Eurozone. However, he did not provide any insights as to what additional steps can the ECB take in order to cope with the crisis. Not surprisingly, France would like the ECB to implement mechanisms that would prevent additional yield increases while Germany believes that the ECB is not authorized for a more significant market intervention. Draghi did hint the ECB could consider further steps to relieve banks of liquidity strains, saying We are aware of the current difficulties for banks due to the stress on sovereign bonds, the tightness of funding markets and the scarcity of eligible collateral.
As market retraces & EURUSD rebounds, those who were not filled in yesterdays trades will get a chance to do so now. Click here for those trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=552 Click here to get a 1-week trial http://ashraflaidi.com/ products/ sub01/ Premium Subscribers wishing to get SMS alerts of ONLY the Premium Intermarket Insights can send their mobile phone number to Subscription AT Ashraf Laidi Com
The ECB is said to be aggressively buying Italian and Spanish bonds today which helped to push the Italian 10 year yield back below the critical 7% to 6.80%. French 10 year yields 3.60% and Spanish 6.44%. Spanish-German 10 year yield spread narrowed to 4.51% after it exceeded 5% earlier today.
Canadian October CPI printed 2.9% from previous 3.2% on annual basis while the core annual CPI showed 2.1% from 2.2%.
Canadas leading indicators rose 0.2% in October from Septembers rise of 0.1%. Market had expected +0.1%
US leading indicator index is due at 10:00 am ET and is seen higher in October at 0.6% from previous 0.2%.
USD to watch Dallas Fed president Fisher speech at 1:15 pm.
Patrik Urban
November 18, 2011 08:45 ET :
German annual PPI lower; Italian industrial orders drop; 10 year periphery bonds yields decline slightly; Canadian annual CPI declines. Market turns to US and Canadian leading indicators. As market retraces & EURUSD rebounds, those who were not filled in yesterdays trades will get a chance to do so now.
The USD is slightly weaker today as market participants take profit and square positions after large moves seen this week. GBP and CHF are the relative strength winners today as they strengthened against most other majors. European equity markets are losing between 0.5% and 1%.
On the European data front, German annual PPI printed 5.3% in October down from previous 5.5% and Italian industrial orders dropped -8.3% in September after growing 4.2% in August which is the largest decline since mid 2009.
ECB president Mario Draghi reiterated during his speech that economic activity is expected to weaken in most advanced economies and noted increased downside risks in the Eurozone. However, he did not provide any insights as to what additional steps can the ECB take in order to cope with the crisis. Not surprisingly, France would like the ECB to implement mechanisms that would prevent additional yield increases while Germany believes that the ECB is not authorized for a more significant market intervention. Draghi did hint the ECB could consider further steps to relieve banks of liquidity strains, saying We are aware of the current difficulties for banks due to the stress on sovereign bonds, the tightness of funding markets and the scarcity of eligible collateral.
As market retraces & EURUSD rebounds, those who were not filled in yesterdays trades will get a chance to do so now. Click here for those trades http://ashraflaidi.com/ products/ sub01/ access/ ?a=552 Click here to get a 1-week trial http://ashraflaidi.com/ products/ sub01/ Premium Subscribers wishing to get SMS alerts of ONLY the Premium Intermarket Insights can send their mobile phone number to Subscription AT Ashraf Laidi Com
The ECB is said to be aggressively buying Italian and Spanish bonds today which helped to push the Italian 10 year yield back below the critical 7% to 6.80%. French 10 year yields 3.60% and Spanish 6.44%. Spanish-German 10 year yield spread narrowed to 4.51% after it exceeded 5% earlier today.
Canadian October CPI printed 2.9% from previous 3.2% on annual basis while the core annual CPI showed 2.1% from 2.2%.
Canadas leading indicators rose 0.2% in October from Septembers rise of 0.1%. Market had expected +0.1%
US leading indicator index is due at 10:00 am ET and is seen higher in October at 0.6% from previous 0.2%.
USD to watch Dallas Fed president Fisher speech at 1:15 pm.
Patrik Urban
Thursday, November 17, 2011
Spanish, French Yields Rise, Rumours of Margin Hike
http://ashraflaidi.com/t/?h2904
November 17, 2011 08:03 ET :
UK retail sales higher than expected; Swiss ZEW declined; Spain and France auctions pay higher yields; Spain-Germ 10- yr hits 4.99%, Italian 10 year yield firmly above 7%, Chatter of Margin hike in Spanish requirements, Market turns to building permits, housing starts, jobless claims and Philly Fed index. Intermarket Insights due ahead of NY opening bell.
USD stronger against most majors in the ongoing session. Major European stock markets are losing about 1.5%.
UK Retail sales rose 0.6% in October from previous 0.5%, significantly better than expected -0.2%. Annually, retail sales grew 0.9% from 0.3%. This is a second solid print in a row as consumers took advantage of early Christmas discounts. The improvement is not likely to last long though as the unemployment rate remains high and consumer confidence is declining. GBPUSD jumped on the release towards 1.58 but lost most of its gains.
Swiss ZEW economic expectations index fell to -64.3 in November from -54.4 which remains close to two years low seen in September at -75.7.
Spain sold EUR 3.5 bln in 10 year bonds with average yield 6.975%, up from previous 5.43%. Bid to cover was lower at 1.54 compared to previous 1.76. Spain 10-yr yield hit a new high of 6.78%, pushing the spread over Germany to 5%. This is the highest borrowing cost since 1997 and dangerously close to the 7% rate which is by many considered to be unsustainable for longer term funding. A rumor that Clearnet will increase margin requirements for Spanish bonds is pushing yields higher.
France also had to pay higher cost as it sold EUR 6.94 bln in various durations today. The largest auction was for July 2016 BTAN that reached EUR 3.33 bln with average yield 2.82%, higher than previous 2.31%.
Investors have been paying more attention to the fixed income market as 10 year yields have rising not only for the periphery states but also for many Eurozone core countries. Italian 10 year yields around 7.09% and Spanish 6.69% despite ECB buying.
The NY session starts at 8:30 am ET with building permits that are seen higher in October at 0.6M from previous 0.59M and housing starts that are anticipated lower at 0.61M from 0.66M. Jobless claims are seen at 396K from 390K.
Canadian International securities transactions should rise to CAD 9.24 bln in September from CAD 7.92 bln.
Philly Fed index is due at 10:00 am and is anticipated unchanged in November at 8.7.
Patrik Urban
November 17, 2011 08:03 ET :
UK retail sales higher than expected; Swiss ZEW declined; Spain and France auctions pay higher yields; Spain-Germ 10- yr hits 4.99%, Italian 10 year yield firmly above 7%, Chatter of Margin hike in Spanish requirements, Market turns to building permits, housing starts, jobless claims and Philly Fed index. Intermarket Insights due ahead of NY opening bell.
USD stronger against most majors in the ongoing session. Major European stock markets are losing about 1.5%.
UK Retail sales rose 0.6% in October from previous 0.5%, significantly better than expected -0.2%. Annually, retail sales grew 0.9% from 0.3%. This is a second solid print in a row as consumers took advantage of early Christmas discounts. The improvement is not likely to last long though as the unemployment rate remains high and consumer confidence is declining. GBPUSD jumped on the release towards 1.58 but lost most of its gains.
Swiss ZEW economic expectations index fell to -64.3 in November from -54.4 which remains close to two years low seen in September at -75.7.
Spain sold EUR 3.5 bln in 10 year bonds with average yield 6.975%, up from previous 5.43%. Bid to cover was lower at 1.54 compared to previous 1.76. Spain 10-yr yield hit a new high of 6.78%, pushing the spread over Germany to 5%. This is the highest borrowing cost since 1997 and dangerously close to the 7% rate which is by many considered to be unsustainable for longer term funding. A rumor that Clearnet will increase margin requirements for Spanish bonds is pushing yields higher.
France also had to pay higher cost as it sold EUR 6.94 bln in various durations today. The largest auction was for July 2016 BTAN that reached EUR 3.33 bln with average yield 2.82%, higher than previous 2.31%.
Investors have been paying more attention to the fixed income market as 10 year yields have rising not only for the periphery states but also for many Eurozone core countries. Italian 10 year yields around 7.09% and Spanish 6.69% despite ECB buying.
The NY session starts at 8:30 am ET with building permits that are seen higher in October at 0.6M from previous 0.59M and housing starts that are anticipated lower at 0.61M from 0.66M. Jobless claims are seen at 396K from 390K.
Canadian International securities transactions should rise to CAD 9.24 bln in September from CAD 7.92 bln.
Philly Fed index is due at 10:00 am and is anticipated unchanged in November at 8.7.
Patrik Urban
Wednesday, November 16, 2011
BoE Projects 1.3% CPI In 2 Years; US CPI, IndusProd Is Next
http://ashraflaidi.com/t/?h2901
November 16, 2011 08:00 ET : Periphery yields continue to rise; UK labor market data mixed; BOE projects inflation to drop to 1.3% in 2 years; Eurozone CPI remains elevated. Market turns to CPI, TIC flows, capacity utilization and industrial production. Both EURUSD Premium trades hit all targets, pattern seen repeating as range remains intact.
EURUSD was declining throughout the Asian session and reached a 1.3430 low right before London traders got to their desks. Profit taking sent EURUSD 130+ points higher but the common currency was not able to hold onto the gains and quickly gave them up. EURUSD is trading around 1.3470. Major European equity indices are losing between 0.5% and 1%.
The closely watched Italian 10 year yield reached 7.13% today but has since declined to current 6.85 with German-Italian 10 year spread around 5%. A reason for concern comes from soaring Spanish 10 year yield that reached 6.34% today which is above the high seen in August. At the beginning of October, Spanish 10 year yielded only 4.98%.
In the UK, the labor market data was mixed. The unemployment rate ticked up in September to 8.3% from 8.1% but the claimant count decreased in October to 5.3K from previous 13.4K. The claimant rate held steady at 5%.
The long awaited quarterly inflation report predicts CPI to fall to 1.3% in two years and GDP growth to reach 3.1% in the same timeframe. However, the BOE notes unusually uncertain outlook and high sensitivity to developments in the Eurozone.
BOE governor King in his speech reiterated that the forecasts are based on the assumption that there is no change in QE which could imply further QE is possible as the projection is below BOE's 2% inflation target.
Eurozone annual consumer inflation remained elevated at 3% in October mainly due to persistently high energy costs. Core CPI was unchanged at 1.6%.
Both EURUSD trades hit all targets. One of our AMENDED GBPUSD TRADES hit all targets. following the markets rapid decline in Asia (as we were not filled in Tuesdays trades) More on GBPCAD, EURJPY, US crude and gold as well as FOUR CHARTS on GBP, CAD & EURUSD, click here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=550 Non-subscribers click here: http://ashraflaidi.com/ products/ sub01/
The NY session will start at 8:30 am with October CPI that is seen lower at 3.7% from 3.9% on annual basis while core CPI should increase to 2.1% from 2.0%.
Long term TIC flows due at 9:00 am should show an increase to USD 63.4 bln in September from USD 57.9 bln in August and Capacity utilization and industrial production both due at 9:15 am are seen slightly higher at 77.6% and 0.4% respectively.
Patrik Urban
November 16, 2011 08:00 ET : Periphery yields continue to rise; UK labor market data mixed; BOE projects inflation to drop to 1.3% in 2 years; Eurozone CPI remains elevated. Market turns to CPI, TIC flows, capacity utilization and industrial production. Both EURUSD Premium trades hit all targets, pattern seen repeating as range remains intact.
EURUSD was declining throughout the Asian session and reached a 1.3430 low right before London traders got to their desks. Profit taking sent EURUSD 130+ points higher but the common currency was not able to hold onto the gains and quickly gave them up. EURUSD is trading around 1.3470. Major European equity indices are losing between 0.5% and 1%.
The closely watched Italian 10 year yield reached 7.13% today but has since declined to current 6.85 with German-Italian 10 year spread around 5%. A reason for concern comes from soaring Spanish 10 year yield that reached 6.34% today which is above the high seen in August. At the beginning of October, Spanish 10 year yielded only 4.98%.
In the UK, the labor market data was mixed. The unemployment rate ticked up in September to 8.3% from 8.1% but the claimant count decreased in October to 5.3K from previous 13.4K. The claimant rate held steady at 5%.
The long awaited quarterly inflation report predicts CPI to fall to 1.3% in two years and GDP growth to reach 3.1% in the same timeframe. However, the BOE notes unusually uncertain outlook and high sensitivity to developments in the Eurozone.
BOE governor King in his speech reiterated that the forecasts are based on the assumption that there is no change in QE which could imply further QE is possible as the projection is below BOE's 2% inflation target.
Eurozone annual consumer inflation remained elevated at 3% in October mainly due to persistently high energy costs. Core CPI was unchanged at 1.6%.
Both EURUSD trades hit all targets. One of our AMENDED GBPUSD TRADES hit all targets. following the markets rapid decline in Asia (as we were not filled in Tuesdays trades) More on GBPCAD, EURJPY, US crude and gold as well as FOUR CHARTS on GBP, CAD & EURUSD, click here: http://ashraflaidi.com/ products/ sub01/ access/ ?a=550 Non-subscribers click here: http://ashraflaidi.com/ products/ sub01/
The NY session will start at 8:30 am with October CPI that is seen lower at 3.7% from 3.9% on annual basis while core CPI should increase to 2.1% from 2.0%.
Long term TIC flows due at 9:00 am should show an increase to USD 63.4 bln in September from USD 57.9 bln in August and Capacity utilization and industrial production both due at 9:15 am are seen slightly higher at 77.6% and 0.4% respectively.
Patrik Urban
Tuesday, November 15, 2011
Italian 10 Yr Yield Above 7%; US Retail Sales Next
http://ashraflaidi.com/t/?h2897
November 15, 2011 07:30 ET: Eurozone Q3 GDP growth same as Q2 while German and French GDP grew faster; ZEW economic sentiment fell further in Eurozone as well as in Germany; UK inflation slips. Italian 10 year yield rose back above 7%. Market turns to US PPI, retail sales and Empire state manufacturing. Today's Premium Intermarket Insights due at the US open.
The greenback is the relative strength winner again as it rises across the board with the exception of JPY. Major European equity indices are losing about 1%.
Eurozone's GDP grew 0.2% in Q3 the same pace as in Q2. However, the annual print declined from 1.6% to 1.4%. Two largest Eurozone's economies, Germany and France, maintained GDP growth, albeit a slow one. German Q3 GDP rose 0.5% up from 0.3% while French Q3 GDP grew 0.4% up from previous -0.1%. However, German economy minister Philipp Roesler warned today that economic growth will slow down in coming months which corresponds to ZEW's projection that Germany will contract in Q1 2012.
German ZEW economic sentiment index fell for the 10th time in a row in November to -55.2 from -48.3 and its Eurozone's counterpart declined further to -59.1 from -51.2. Greek and Italian government crises contributed to the worsening the Center for European Economic Research noted.
EUR is being pressured again as Italian 10 year yield moved back above the critical 7% mark and the German-Italian 10 year spread widened to 5.24% (last week's Eurozone-era high was 5.54%)
EURUSD trades have near session lows slightly above 1.35.
It seems that the long standing BOE projection about peaking inflation is finally becoming a reality. UK consumer inflation declined to 5% y/y from previous 5.2% which is below market expectations of 5.1%. BOE governor Mervyn King reiterated today that MPC sees CPI falling sharply in the next six months and should reach 2% target by the end of 2012. GBPUSD fell after the release to 1.5828 and currently trades around 1.5860.
The New York session will start at 8:30 am with October PPI that is seen lower at 6.3% from 6.9% on annual basis (core PPI is expected higher at 2.9% from 2.5%). Advance October retail sales are seen lower at 0.3% from previous 1.1% (core sales are expected lower at 0.2% from 0.5%).
November Empire state manufacturing is seen at -2.0 from previous -8.5 and Canadian manufacturing sales are anticipated lower at 1.3% in September from 1.4% in August.
Patrik Urban
November 15, 2011 07:30 ET: Eurozone Q3 GDP growth same as Q2 while German and French GDP grew faster; ZEW economic sentiment fell further in Eurozone as well as in Germany; UK inflation slips. Italian 10 year yield rose back above 7%. Market turns to US PPI, retail sales and Empire state manufacturing. Today's Premium Intermarket Insights due at the US open.
The greenback is the relative strength winner again as it rises across the board with the exception of JPY. Major European equity indices are losing about 1%.
Eurozone's GDP grew 0.2% in Q3 the same pace as in Q2. However, the annual print declined from 1.6% to 1.4%. Two largest Eurozone's economies, Germany and France, maintained GDP growth, albeit a slow one. German Q3 GDP rose 0.5% up from 0.3% while French Q3 GDP grew 0.4% up from previous -0.1%. However, German economy minister Philipp Roesler warned today that economic growth will slow down in coming months which corresponds to ZEW's projection that Germany will contract in Q1 2012.
German ZEW economic sentiment index fell for the 10th time in a row in November to -55.2 from -48.3 and its Eurozone's counterpart declined further to -59.1 from -51.2. Greek and Italian government crises contributed to the worsening the Center for European Economic Research noted.
EUR is being pressured again as Italian 10 year yield moved back above the critical 7% mark and the German-Italian 10 year spread widened to 5.24% (last week's Eurozone-era high was 5.54%)
EURUSD trades have near session lows slightly above 1.35.
It seems that the long standing BOE projection about peaking inflation is finally becoming a reality. UK consumer inflation declined to 5% y/y from previous 5.2% which is below market expectations of 5.1%. BOE governor Mervyn King reiterated today that MPC sees CPI falling sharply in the next six months and should reach 2% target by the end of 2012. GBPUSD fell after the release to 1.5828 and currently trades around 1.5860.
The New York session will start at 8:30 am with October PPI that is seen lower at 6.3% from 6.9% on annual basis (core PPI is expected higher at 2.9% from 2.5%). Advance October retail sales are seen lower at 0.3% from previous 1.1% (core sales are expected lower at 0.2% from 0.5%).
November Empire state manufacturing is seen at -2.0 from previous -8.5 and Canadian manufacturing sales are anticipated lower at 1.3% in September from 1.4% in August.
Patrik Urban
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