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
Tuesday, December 13, 2011
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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