Global Growth put in to question spurring a flight to safety!
• More risk aversion gripped the markets yesterday and safe haven currencies benefited once again, the CHF and the JPY were the main performers. EURUJPY made a new 8 year low and the EURCHF traded to fresh new lows at 1.3163. US equities closed below 3% and Gold traded back up to $1245 oz. Most of the aversion was sparked by further disappointing data out of the US such as the Consumer confidence index which plunged down to 52.9 for the month of June whilst the Dallas fed manufacturing survey also weakened. With the US showing signs of slowing down again and global sovereign credit concerns adding further stress to the interbank lending markets. USDJPY price action yesterday was between 88.28 - 89.38.
• In Europe the market is bracing its self for a possible forced sell of EUR156 bio worth of Greek bonds as further downgrades hit the nation's securities. We also had the IMF warn on Austrian deficit levels saying they are unsustainable whilst the EU bank stress tests are expected to be discussed in mid-July. On the calendar front we had a better business climate indicator while economic and services confidence beat expectations. EURUSD price action yesterday was between 1.2222 - 1.2150.
Wednesday, June 30, 2010
Tuesday, June 29, 2010
29 Jun 10 : Singapore Market Update
Sembcorp Unit Inks MOU To Build Facility In UAE
Sembcorp Industries’ wholly owned subsidiary, Sembcorp Utilities, has inked a memorandum of understanding (MOU) to develop and build a new seawater reverse osmosis facility in the United Arab Emirates (UAE). Sembcorp expects the facility, which will have a potable water production capacity of around 30 million imperial gallons per day (MIGD), to boost its total seawater desalination capacity in the UAE from 100 MIGD to 130 MIGD. The MOU was inked with the Abu Dhabi Water and Electricity Authority (ADWEA). The facility will be located on the same site as the largest operating hybrid desalination plant in the world, the Fujairah 1 Independent Water and Power Plant (IWPP), which is owned by Emirates Sembcorp Water & Power Company, a joint venture between the subsidiaries of Sembcorp Utilities and ADWEA. Sembcorp said the water output of the new reverse osmosis facility will be sold to the Abu Dhabi Water and Electricity Company (ADWEC), under a 20-year deal. This is in addition to a current 22-year deal for the water and electricity output from the Fujairah 1 IWPP to ADWEC. The new seawater reverse osmosis facility is tipped to cost some US$200m and be operational before the end of 2013.
Significance: Adding to the earlier projects secured in UAE and Oman, this contract further strengthens Sembcorp’s relationship, enhancing its prospects in Middle East.
PST To Buy Two Bulk Carriers For US$123m
Pacific Shipping Trust (PST) said that it will acquire two capesize bulk carriers from Mitsubishi Corporation for a total of US$123.2m. At the same time, it also entered into two agreements for the 10-year time charter of each of the new vessels to China-based steel firm Jiangsu Shagang Group Co at US$27,000 per day for each vessel. The consideration for the two vessels amounts to 75% of PST’s market capitalisation of US$165m as at June 25 when its trustee-manager PST Management (PSTM) signed the contract with Mitsubishi. However, PSTM said that the acquisition is in line with ‘the ordinary course of business of PST’ because the commitment to purchase the vessels was done concurrently with the commitment to charter them out, and would not result in any significant change in its risk profile. Meanwhile, the two vessels are expected to contribute about US$194m in charter revenue over the 10-year time charter period to Jiangsu Shagang.
Significance: The acquisition of the 2 bulk carriers marks PST maiden foray into the non-container vessel segment of the shipping business. Coupled with an acquired price that is substantially lower than the prices contracted in 2007 and 2008 for comparable ships and long-term leases stretching into 2021, PST will enjoy stable income of close to US$500m over the next 10 years.
Depa Makes Cash Offer To Acquire Design Studio
Dubai’s Depa Interiors LLC (Depa) intends to make a voluntary conditional cash offer for Singapore-listed Design Studio Furniture Manufacturer, at 55 cents a share. The offer represents a 15.8% premium to Design Studio’s last traded share price of $0.475 on 25 June. Depa, which currently holds a 24.7% stake in Design Studio, said it intends to make the offer for all the shares it does not already own. The takeover offer is conditional on Depa getting acceptances which will result in it and parties acting in concert holding more than 50% of the voting rights attributable to the issued share capital of the company. Should Depa eventually own more than 90%, Design Studio might be delisted. Depa is a unit of Depa Ltd, a Dubai-based group which provides interior contracting services and is primarily engaged in the hospitality, infrastructure, commercial, retail, yacht, theming and specialist interiors sectors.
Sembcorp Industries’ wholly owned subsidiary, Sembcorp Utilities, has inked a memorandum of understanding (MOU) to develop and build a new seawater reverse osmosis facility in the United Arab Emirates (UAE). Sembcorp expects the facility, which will have a potable water production capacity of around 30 million imperial gallons per day (MIGD), to boost its total seawater desalination capacity in the UAE from 100 MIGD to 130 MIGD. The MOU was inked with the Abu Dhabi Water and Electricity Authority (ADWEA). The facility will be located on the same site as the largest operating hybrid desalination plant in the world, the Fujairah 1 Independent Water and Power Plant (IWPP), which is owned by Emirates Sembcorp Water & Power Company, a joint venture between the subsidiaries of Sembcorp Utilities and ADWEA. Sembcorp said the water output of the new reverse osmosis facility will be sold to the Abu Dhabi Water and Electricity Company (ADWEC), under a 20-year deal. This is in addition to a current 22-year deal for the water and electricity output from the Fujairah 1 IWPP to ADWEC. The new seawater reverse osmosis facility is tipped to cost some US$200m and be operational before the end of 2013.
Significance: Adding to the earlier projects secured in UAE and Oman, this contract further strengthens Sembcorp’s relationship, enhancing its prospects in Middle East.
PST To Buy Two Bulk Carriers For US$123m
Pacific Shipping Trust (PST) said that it will acquire two capesize bulk carriers from Mitsubishi Corporation for a total of US$123.2m. At the same time, it also entered into two agreements for the 10-year time charter of each of the new vessels to China-based steel firm Jiangsu Shagang Group Co at US$27,000 per day for each vessel. The consideration for the two vessels amounts to 75% of PST’s market capitalisation of US$165m as at June 25 when its trustee-manager PST Management (PSTM) signed the contract with Mitsubishi. However, PSTM said that the acquisition is in line with ‘the ordinary course of business of PST’ because the commitment to purchase the vessels was done concurrently with the commitment to charter them out, and would not result in any significant change in its risk profile. Meanwhile, the two vessels are expected to contribute about US$194m in charter revenue over the 10-year time charter period to Jiangsu Shagang.
Significance: The acquisition of the 2 bulk carriers marks PST maiden foray into the non-container vessel segment of the shipping business. Coupled with an acquired price that is substantially lower than the prices contracted in 2007 and 2008 for comparable ships and long-term leases stretching into 2021, PST will enjoy stable income of close to US$500m over the next 10 years.
Depa Makes Cash Offer To Acquire Design Studio
Dubai’s Depa Interiors LLC (Depa) intends to make a voluntary conditional cash offer for Singapore-listed Design Studio Furniture Manufacturer, at 55 cents a share. The offer represents a 15.8% premium to Design Studio’s last traded share price of $0.475 on 25 June. Depa, which currently holds a 24.7% stake in Design Studio, said it intends to make the offer for all the shares it does not already own. The takeover offer is conditional on Depa getting acceptances which will result in it and parties acting in concert holding more than 50% of the voting rights attributable to the issued share capital of the company. Should Depa eventually own more than 90%, Design Studio might be delisted. Depa is a unit of Depa Ltd, a Dubai-based group which provides interior contracting services and is primarily engaged in the hospitality, infrastructure, commercial, retail, yacht, theming and specialist interiors sectors.
Labels:
Market Update
29 Jun 10 : Global Growth
Global Growth put in to question spurring a flight to safety!
* The JPY was the currency of choice yesterday and overnight as global growth concerns were in the limelight ahead of this week's Non Farm Payrolls report which is expecting a decline of -150 in nonfarm payrolls and a gain of 100 in private payrolls. US government bonds at are yearly highs as interest rate hike expectations have moved in to 2011. Income for May gained 0.4% and consumer spending gained by 0.2% for the year. USDJPY price action for the year was between 89.40 - 88.60.
* In the Euro Zone we saw a decline in the supply of money which is not a very positive for the single currency however the increasing fears over the banking sector the decline in lending was expected. The main event risk the markets are bracing themselves for is the upcoming stress tests which will shed some light as to what EU wide banks are actually holding on their balance sheets. Currently we see a lot of fear concerning Spanish banks which are been supported by ECB as private sector lending has almost frozen up. EURUSD price action for the day was between 1.2466 - 1.2207.
* The JPY was the currency of choice yesterday and overnight as global growth concerns were in the limelight ahead of this week's Non Farm Payrolls report which is expecting a decline of -150 in nonfarm payrolls and a gain of 100 in private payrolls. US government bonds at are yearly highs as interest rate hike expectations have moved in to 2011. Income for May gained 0.4% and consumer spending gained by 0.2% for the year. USDJPY price action for the year was between 89.40 - 88.60.
* In the Euro Zone we saw a decline in the supply of money which is not a very positive for the single currency however the increasing fears over the banking sector the decline in lending was expected. The main event risk the markets are bracing themselves for is the upcoming stress tests which will shed some light as to what EU wide banks are actually holding on their balance sheets. Currently we see a lot of fear concerning Spanish banks which are been supported by ECB as private sector lending has almost frozen up. EURUSD price action for the day was between 1.2466 - 1.2207.
Labels:
FX Trading
Monday, June 28, 2010
28 Jun 10 : G20 Meets
G20 Agrees to disagree on fiscal consolidation!
* Markets traded cautiously on Friday and the USD softer on Friday as Q1 GDP was revised to 2.7% from earlier 3.0% estimates. Markets on Friday were sidelined as trader's squared positions ahead of the weekend G20 meeting. The agenda at the G20 was fiscal consolidation however fear arose as countries varied in their opinion on the matter. Countries such as the US for e.g. favored growth policies and want to avoid fiscal cuts as it would put the fragile recovery in to jeopardy. On the other side of the Atlantic however we had countries such as Germany promoting fiscal consolidation saying that it will bring confidence to the markets and restore trust between counter parties. As the G20 came to an end however we had brilliant communiqué from the G20 as all countries agreed to disagree. All members agreed that growth is their main policy however the agreed different countries must consider their individual circumstances and must be flexible in deciding when to cut their deficits. The markets seemed to have taken a liking to the communiqué and risk appetite has picked up since. USDJPY price action was between 89.76 - 89.21.
* In the Europe we had ECB executive board member Tumpel-Gugerell say that Europe's economic recovery is on track and that fiscal consolidation may have positive longer term affects as it will increase confidence in the markets. He also noted that if the EU bank stress tests show that banks require more capital than it can be raised either via private or public sector funds. In Greece we had agreement over a pension reform plan which will be a significant reduction to Greece is deficit reduction plans. EURUSD price action was between 1.2467 - 1.2207.
* Markets traded cautiously on Friday and the USD softer on Friday as Q1 GDP was revised to 2.7% from earlier 3.0% estimates. Markets on Friday were sidelined as trader's squared positions ahead of the weekend G20 meeting. The agenda at the G20 was fiscal consolidation however fear arose as countries varied in their opinion on the matter. Countries such as the US for e.g. favored growth policies and want to avoid fiscal cuts as it would put the fragile recovery in to jeopardy. On the other side of the Atlantic however we had countries such as Germany promoting fiscal consolidation saying that it will bring confidence to the markets and restore trust between counter parties. As the G20 came to an end however we had brilliant communiqué from the G20 as all countries agreed to disagree. All members agreed that growth is their main policy however the agreed different countries must consider their individual circumstances and must be flexible in deciding when to cut their deficits. The markets seemed to have taken a liking to the communiqué and risk appetite has picked up since. USDJPY price action was between 89.76 - 89.21.
* In the Europe we had ECB executive board member Tumpel-Gugerell say that Europe's economic recovery is on track and that fiscal consolidation may have positive longer term affects as it will increase confidence in the markets. He also noted that if the EU bank stress tests show that banks require more capital than it can be raised either via private or public sector funds. In Greece we had agreement over a pension reform plan which will be a significant reduction to Greece is deficit reduction plans. EURUSD price action was between 1.2467 - 1.2207.
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Market Update
Friday, June 25, 2010
25 Jun 10 : Risk Aversion is Back
Range bound trading inhibited the USD from making big moves against most of the majors as uncertainty put the traders on the sidelines awaiting an ice-breaking announcement or rumor. FOMC statement a day before, although unchanged, caused some restlessness in the equity markets and sent them lower.
The EURUSD managed to outline a 120 pips range in yesterday's trading sessions, however failed to show a clear trend or direction. Although EZ Industrial Orders fell short of expectations, yet did not manage to cause a noticeable drop in the EUR against its counterparts. Add to this a no-event Friday for the Euro Zone which may squeeze the pair into an even tighter trading range.
In Japan, things we different where USDJPY fell to just above support of 89.20 putting some heavy pressure on EURJPY and AUDJPY. Risk aversion due to vague and uncertain FED statement caused JPY to strengthen against its counterparts especially the USD. Today's US GDP may fuel a breakout lower or higher than the strong-holding 89.20 support line.
GBPUSD concluded the NY trading sessions in a whiplashing movement after trying testing the 1.5000 psychological handle earlier that day.
Crude was flat yesterday moving in a tight range of 1 to 2 USD a barrel and trading with no direction, while GOLD followed same path but in a larger swinging range. GOLD was trading at 1240.00 in late NY session.
The EURUSD managed to outline a 120 pips range in yesterday's trading sessions, however failed to show a clear trend or direction. Although EZ Industrial Orders fell short of expectations, yet did not manage to cause a noticeable drop in the EUR against its counterparts. Add to this a no-event Friday for the Euro Zone which may squeeze the pair into an even tighter trading range.
In Japan, things we different where USDJPY fell to just above support of 89.20 putting some heavy pressure on EURJPY and AUDJPY. Risk aversion due to vague and uncertain FED statement caused JPY to strengthen against its counterparts especially the USD. Today's US GDP may fuel a breakout lower or higher than the strong-holding 89.20 support line.
GBPUSD concluded the NY trading sessions in a whiplashing movement after trying testing the 1.5000 psychological handle earlier that day.
Crude was flat yesterday moving in a tight range of 1 to 2 USD a barrel and trading with no direction, while GOLD followed same path but in a larger swinging range. GOLD was trading at 1240.00 in late NY session.
Labels:
Market Update
Thursday, June 24, 2010
24 Jun 10 : Asian Markets Round Up
- Asian equity markets are modestly higher, tracking the latter part of the session rebound in the US on dovish Fed rhetoric boosting expectations for lending rates to remain "exceptionally low" for longer than expected. Despite another horrific housing data - this time the more price-flexible new home sales - S&P500 was down just 0.3% and the Dow managed a marginal positive finish. Across Asia, Taiwan, Korea, Japan, Australia, and Shanghai markets are in the positive 0.3-0.5% range entering the final hour of Tokyo trading, while front-month S&Ps also point to modest uptick with a 0.2% gain to 1,090. Sydney markets were relatively stronger early on abrupt resignation of PM Rudd before incoming Labor leader Gillard reaffirmed her intention to pursue a (presumably, watered-down) mining tax.
SPEAKERS/PRESS
- AUSTRALIA: Outgoing PM Rudd spared himself the inevitable defeat in the Labor cabinet after Julia Gillard finally challenged the increasingly less popular leader, conceding the post through resignation. The first female PM in Australia, Julia Gillard said she intends to allow citizens to choose a PM by calling a vote in months to come. In the mean time, the new PM will "throw the doors open" to the mining industry leaders for further "consultation" but noted she still believes Australia is entitled to a more fair share of mining industry profits. In addition, Gillard said she will renew the push for carbon trading legislation - reform that had to be shelved by PM Rudd because of soft economy and lack of support from the Opposition party. Reacting to the leadership change, Opposition Leader Abbott said the problem is with Labor's policies and not its leader, further calling for mining tax reform to be scrapped.
- NEW ZEALAND: Q1 GDP was in line on both q/q and y/y basis, but components of the data showed a more troubling picture. Most notably, private spending q/q increase was 0.2% - a 1-yr low - while the 1.7% increase in govt spending was a multi-year high. Speaking after the data, Fin Min English said the economy is still faced with significant challenges requiring further steps to make growth sustainable.
- SOUTH KOREA: Finance Ministry raised its 2010 GDP growth forecast to 5.8% from 5.0%, but reiterated recent BOK statements that European debt problems may weigh on recovery. Separately, a Korea Central Bank Official noted policy will not be tight even if interest rates are raised, confirming speculation that the EU fiscal turmoil may be the primary factor in keeping BOK policy on hold.
- CHINA: PBoC daily Yuan policy setting was unchanged around CNY6.81 after "two steps forward, one step back" pattern in the last two days. Going into the G20 summit this weekend, US lawmakers appear to be prepared to keep the pressure on Beijing to appreciate the Yuan. A group of representatives said China's move is 'too little, too late', US Commerce Sec Locke said he's Concerned China's commercial direction is bad for US companies, and US Senator Schumer warned that Congress will move forward on currency legislation shortly.
EQUITIES
- In individual names, the strike at China parts supplier NHK Spring came to an end, as Toyota and Honda plants shut down earlier this week returned to normal operation. Later in the day however, Nissan reported its own labor-related production suspension after a Guangzhou facility went on strike. A Japanese press report suggested that the growing ease of obtaining labor action related information by Chinese workers is in part to blame for the frequency of strikes. Separately in the auto space, local press reported Honda's new hybrid vehicle going on the market in the fall will cost about ¥1.5M, becoming the least expensive hybrid in Japan. Outside Tokyo, Aussie press reported the new CFO of Qantas will focus on cost-cutting, also reducing the number of cheap domestic flights, while Taiwan Semi said it may boost its CAPEX target from prior expected $4.8B.
CURRENCIES/FIXED INCOME/COMMODITIES
- European majors were modestly higher, extending gains against the greenback on dovish FOMC commentary. Most notably, Cable approached 1.50 handle for the first time since mid-May, outperforming relative to EUR following a voice of dissent in the BOE minutes released overnight. EUR/USD rose above 1.2340, while EUR/GBP fell to 0.82 earlier in US hours - lowest level since late 2008. In commodity FX, AUD/USD got up to 0.8770 on confirmation PM Rudd is stepping down before retreat below 0.8740. USD/CAD was unchanged below 1.04, and NZD/USD backed away from a 5-week high of 0.7150. Japanese Yen traded firmer against USD, boosted by dovish Fed and more stalling by the PBoC, as USD/JPY fell below 90.00 for the first time since late May. Spot gold and front month crude were near unchanged on the day, trading around 1,236/oz and $76.40/brl respectively.
SPEAKERS/PRESS
- AUSTRALIA: Outgoing PM Rudd spared himself the inevitable defeat in the Labor cabinet after Julia Gillard finally challenged the increasingly less popular leader, conceding the post through resignation. The first female PM in Australia, Julia Gillard said she intends to allow citizens to choose a PM by calling a vote in months to come. In the mean time, the new PM will "throw the doors open" to the mining industry leaders for further "consultation" but noted she still believes Australia is entitled to a more fair share of mining industry profits. In addition, Gillard said she will renew the push for carbon trading legislation - reform that had to be shelved by PM Rudd because of soft economy and lack of support from the Opposition party. Reacting to the leadership change, Opposition Leader Abbott said the problem is with Labor's policies and not its leader, further calling for mining tax reform to be scrapped.
- NEW ZEALAND: Q1 GDP was in line on both q/q and y/y basis, but components of the data showed a more troubling picture. Most notably, private spending q/q increase was 0.2% - a 1-yr low - while the 1.7% increase in govt spending was a multi-year high. Speaking after the data, Fin Min English said the economy is still faced with significant challenges requiring further steps to make growth sustainable.
- SOUTH KOREA: Finance Ministry raised its 2010 GDP growth forecast to 5.8% from 5.0%, but reiterated recent BOK statements that European debt problems may weigh on recovery. Separately, a Korea Central Bank Official noted policy will not be tight even if interest rates are raised, confirming speculation that the EU fiscal turmoil may be the primary factor in keeping BOK policy on hold.
- CHINA: PBoC daily Yuan policy setting was unchanged around CNY6.81 after "two steps forward, one step back" pattern in the last two days. Going into the G20 summit this weekend, US lawmakers appear to be prepared to keep the pressure on Beijing to appreciate the Yuan. A group of representatives said China's move is 'too little, too late', US Commerce Sec Locke said he's Concerned China's commercial direction is bad for US companies, and US Senator Schumer warned that Congress will move forward on currency legislation shortly.
EQUITIES
- In individual names, the strike at China parts supplier NHK Spring came to an end, as Toyota and Honda plants shut down earlier this week returned to normal operation. Later in the day however, Nissan reported its own labor-related production suspension after a Guangzhou facility went on strike. A Japanese press report suggested that the growing ease of obtaining labor action related information by Chinese workers is in part to blame for the frequency of strikes. Separately in the auto space, local press reported Honda's new hybrid vehicle going on the market in the fall will cost about ¥1.5M, becoming the least expensive hybrid in Japan. Outside Tokyo, Aussie press reported the new CFO of Qantas will focus on cost-cutting, also reducing the number of cheap domestic flights, while Taiwan Semi said it may boost its CAPEX target from prior expected $4.8B.
CURRENCIES/FIXED INCOME/COMMODITIES
- European majors were modestly higher, extending gains against the greenback on dovish FOMC commentary. Most notably, Cable approached 1.50 handle for the first time since mid-May, outperforming relative to EUR following a voice of dissent in the BOE minutes released overnight. EUR/USD rose above 1.2340, while EUR/GBP fell to 0.82 earlier in US hours - lowest level since late 2008. In commodity FX, AUD/USD got up to 0.8770 on confirmation PM Rudd is stepping down before retreat below 0.8740. USD/CAD was unchanged below 1.04, and NZD/USD backed away from a 5-week high of 0.7150. Japanese Yen traded firmer against USD, boosted by dovish Fed and more stalling by the PBoC, as USD/JPY fell below 90.00 for the first time since late May. Spot gold and front month crude were near unchanged on the day, trading around 1,236/oz and $76.40/brl respectively.
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Market Update
24 Jun 10 : US hold interest rates
CURRENCY TRADING SUMMARY - 24th June (00:30 GMT)
U.S. Dollar Trading (USD) in an eventful day of trading the USD finished on a weak footing after finding strength earlier in the day on safe haven demand. May Home Sales surprised to the downside at 300k vs. 410k forecast. The FOMC held rates at 0.25% and slightly downgraded the economic outlook citing the weak housing data and European crisis. In US stocks, DJIA +4 points closing at 10446, S&P -3 points closing at 1092 and NASDAQ -7 points closing at 2254. Looking ahead, Weekly Jobless Claims are forecast at 460k vs. 472k previously.
The Euro (EUR) traded at day lows after the US housing data disappointed and EUR/JPY fell briefly below Y110. June Services PMI fell to 55.4 vs. 56.2 previously whilst Manufacturing PMI fell to 55.6 vs. 55.8 previously. Dollar weakness after the FOMC decision to leave rates low for an extended period of time helped propel the Euro to day highs above 1.2300. EUR/USD traded with a low of 1.2208 and a high of 1.2345 before closing at 1.2320. Looking ahead, April Industrial Orders are forecast at 1.6% vs. 5.2% previously.
The Japanese Yen (JPY) found strength against the major with Y90 broken on the downside but there little follow through as crosses found support and lifted into the US close. Japanese Investor reaction will be key with comments from the new PM and Financial Minister closely scrutinized. Overall the USDJPY traded with a low of 89.71 and a high of 90.59 before closing the day around 89.90 in the New York session.
The Sterling (GBP) pressed higher as the Pound gained favor still glowing in the austerity measures announced in Tuesday's budget. Also helping, the MPC minutes revealing that Junes vote at 7-1 included a member calling for a rate hike. Overall the GBP/USD traded with a low of 1.4802 and a high of 1.4977 before closing the day at 1.4950 in the New York session.
The Australian Dollar (AUD) was very volatile bucking the weakness in other risk currencies as rumors swept the market that the PM Rudd will be replaced in a leadership contest. The market is still unsure as to the mining tax proposed and a new leader may reconsider. Overall the AUD/USD traded with a low of 0.8659 and a high of 0.8784 before closing the US session at 0.8784. Update New Australian PM Glillard after Rudd Quits.
Oil & Gold (XAU) suffered a sharp drop in New York as Oil slumped. Overall trading with a low of USD$1224 and high of USD$1246 before ending the New York session at USD$1236 an ounce. Oil fell near $2 a barrel when weekly inventory numbers came in much higher then expected with a build of 2M barrels. WTI Oil Closed -$1.50 at $76.35 a barrel.
U.S. Dollar Trading (USD) in an eventful day of trading the USD finished on a weak footing after finding strength earlier in the day on safe haven demand. May Home Sales surprised to the downside at 300k vs. 410k forecast. The FOMC held rates at 0.25% and slightly downgraded the economic outlook citing the weak housing data and European crisis. In US stocks, DJIA +4 points closing at 10446, S&P -3 points closing at 1092 and NASDAQ -7 points closing at 2254. Looking ahead, Weekly Jobless Claims are forecast at 460k vs. 472k previously.
The Euro (EUR) traded at day lows after the US housing data disappointed and EUR/JPY fell briefly below Y110. June Services PMI fell to 55.4 vs. 56.2 previously whilst Manufacturing PMI fell to 55.6 vs. 55.8 previously. Dollar weakness after the FOMC decision to leave rates low for an extended period of time helped propel the Euro to day highs above 1.2300. EUR/USD traded with a low of 1.2208 and a high of 1.2345 before closing at 1.2320. Looking ahead, April Industrial Orders are forecast at 1.6% vs. 5.2% previously.
The Japanese Yen (JPY) found strength against the major with Y90 broken on the downside but there little follow through as crosses found support and lifted into the US close. Japanese Investor reaction will be key with comments from the new PM and Financial Minister closely scrutinized. Overall the USDJPY traded with a low of 89.71 and a high of 90.59 before closing the day around 89.90 in the New York session.
The Sterling (GBP) pressed higher as the Pound gained favor still glowing in the austerity measures announced in Tuesday's budget. Also helping, the MPC minutes revealing that Junes vote at 7-1 included a member calling for a rate hike. Overall the GBP/USD traded with a low of 1.4802 and a high of 1.4977 before closing the day at 1.4950 in the New York session.
The Australian Dollar (AUD) was very volatile bucking the weakness in other risk currencies as rumors swept the market that the PM Rudd will be replaced in a leadership contest. The market is still unsure as to the mining tax proposed and a new leader may reconsider. Overall the AUD/USD traded with a low of 0.8659 and a high of 0.8784 before closing the US session at 0.8784. Update New Australian PM Glillard after Rudd Quits.
Oil & Gold (XAU) suffered a sharp drop in New York as Oil slumped. Overall trading with a low of USD$1224 and high of USD$1246 before ending the New York session at USD$1236 an ounce. Oil fell near $2 a barrel when weekly inventory numbers came in much higher then expected with a build of 2M barrels. WTI Oil Closed -$1.50 at $76.35 a barrel.
Labels:
FX Trading,
Market Update
Wednesday, June 23, 2010
23 Jun 10 : Asian Stock Market Update
- Asian equity markets are decidedly bearish, tracking housing weakness-infused late-day US session selloff that sent Wall St indices to one-week lows. Nikkei225 is leading the slide with 1.7% decline, while Shanghai Composite and S&P/ASX are off by about 1%. Korea's Kospi and Taiwan's Taiex are also marginally lower by 0.2% and 0.4%. Ahead of the Fed decision on Wednesday, front-month S&Ps are up about 0.3% on expectations policymakers will reaffirm their commitment to exceptionally low rates for extended period, all despite the chatter that FOMC may also downgrade assessment to the economy, particularly in the wake of soft jobs, housing, and inflation data.
- Economic calendar was limited to an unexpected current account figure from New Zealand - the first surplus since Q2 of 2009. This may bode well for NZ Q1 GDP report on tap for tomorrow, potentially committing RBNZ to further tightening steps in months to come. In Singapore, May CPI also came in above expectations.
SPEAKERS/PRESS
- CHINA: PBoC's widely heralded currency reform announced this weekend saw a step back following overnight buying interest in the greenback. USD/CNY was set around 6.81 after prior session's setting below 6.80. Yuan was set stronger against both the Euro and Sterling at 8.35 and 10.09 respectively. Elsewhere in China, a Securities Regulator said the administration is considering allowing foreign firms to invest in China equities by raising CNY-denominated funds.
- AUSTRALIA: Australian Financial Review renewed speculation the govt is considering raising the threshold for super-profits mining tax from the proposed 6% while also scrapping its exploration penalty provision. A separate press report pointed to rising discontent among PM Rudd's Labor colleagues regarding the unpopular levy, while another feature in the same publication noted PM Rudd may have told party officials that substantial progress has been made in a revised compromise offer to the mining industry. A follow-up to yesterday's quarterly ABARE outlook saw the agency warn that demand from China may weaken in the 2H of the year but rise to higher levels beyond 2010, also expressing concerns about the debt crisis in Europe and subsequent impact on demand for commodity exports.
- JAPAN: Fin Min Noda reflected on greater flexibility for the Yuan as a positive for Japan economy and a necessity to repair of global imbalances. Noda also said the cabinet would like to lower new JGB issuance from FY12 after committing to FY11/12 at/below ¥44T in the prior session's fiscal plan. Separately, Fitch commented on that plan as well, noting it was lacking in detail while acknowledging it was not reasonable to expect concrete steps ahead of next month's Diet elections.
EQUITIES
- In individual names, labor disputes in China continued to hamper Japanese automakers with another action at a Toyota parts plant. Supply disruptions related to strikes have also translated into halted production at a Honda facility. Among other Japan automakers, Nissan CEO said the company has received about 20K orders for Leaf electric vehicle model, up from 6K announced just 2 weeks ago. Company also said it is looking to enter India compact car market in competition with Suzuki. Among other notable share-specific developments in Tokyo, Toshiba traded higher after winning a contract to build motors for Ford electrified cars in the US, and Mizuho shareholder meeting was said to contain talks of a ¥800B common stock offering. Outside Japan, Posco pulled out of its offer to buy Zaporizhstal after its largest shareholder Midland Group sold a 48% stake to a Russian bank. In Australia, Rio Tinto said the market for bauxite is trending higher as China volumes recover to pre-crisis levels in 2010, while that for alumina was seen as "finely balanced". Rio Tinto's estimate for aluminum demand from China was 18-20% - above the 15% overall global demand.
CURRENCIES/FIXED INCOME/COMMODITIES
- USD majors traded in narrow ranges against European and commodity FX ahead of the Fed decision. EUR/USD and AUD/USD consolidated mid-US session losses around 1.2260 and 0.8710 respectively. Cable - an outperformer across the board in the US following the release of the emergency budget - found consistent buying interest just above the 1.48 handle. Japanese Yen was also stronger in late trading as USD/JPY fell below 90.50, supported by risk aversion in equities and uncertainty over China's Yuan policy, where strength is generally expected to translate into weaker Yen. In commodities, spot gold traded narrowly around 1,240 despite a new record high in SPDR Gold Trust ETF holdings at 1,313.0 metric tons. Front-month crude was also weighed down by general investment caution along with a bearish API inventory data where Crude build-up rose +3.68M V -1ME. Also on a related note, FT reported PBR would postpone its $25B share offering until September.
- Economic calendar was limited to an unexpected current account figure from New Zealand - the first surplus since Q2 of 2009. This may bode well for NZ Q1 GDP report on tap for tomorrow, potentially committing RBNZ to further tightening steps in months to come. In Singapore, May CPI also came in above expectations.
SPEAKERS/PRESS
- CHINA: PBoC's widely heralded currency reform announced this weekend saw a step back following overnight buying interest in the greenback. USD/CNY was set around 6.81 after prior session's setting below 6.80. Yuan was set stronger against both the Euro and Sterling at 8.35 and 10.09 respectively. Elsewhere in China, a Securities Regulator said the administration is considering allowing foreign firms to invest in China equities by raising CNY-denominated funds.
- AUSTRALIA: Australian Financial Review renewed speculation the govt is considering raising the threshold for super-profits mining tax from the proposed 6% while also scrapping its exploration penalty provision. A separate press report pointed to rising discontent among PM Rudd's Labor colleagues regarding the unpopular levy, while another feature in the same publication noted PM Rudd may have told party officials that substantial progress has been made in a revised compromise offer to the mining industry. A follow-up to yesterday's quarterly ABARE outlook saw the agency warn that demand from China may weaken in the 2H of the year but rise to higher levels beyond 2010, also expressing concerns about the debt crisis in Europe and subsequent impact on demand for commodity exports.
- JAPAN: Fin Min Noda reflected on greater flexibility for the Yuan as a positive for Japan economy and a necessity to repair of global imbalances. Noda also said the cabinet would like to lower new JGB issuance from FY12 after committing to FY11/12 at/below ¥44T in the prior session's fiscal plan. Separately, Fitch commented on that plan as well, noting it was lacking in detail while acknowledging it was not reasonable to expect concrete steps ahead of next month's Diet elections.
EQUITIES
- In individual names, labor disputes in China continued to hamper Japanese automakers with another action at a Toyota parts plant. Supply disruptions related to strikes have also translated into halted production at a Honda facility. Among other Japan automakers, Nissan CEO said the company has received about 20K orders for Leaf electric vehicle model, up from 6K announced just 2 weeks ago. Company also said it is looking to enter India compact car market in competition with Suzuki. Among other notable share-specific developments in Tokyo, Toshiba traded higher after winning a contract to build motors for Ford electrified cars in the US, and Mizuho shareholder meeting was said to contain talks of a ¥800B common stock offering. Outside Japan, Posco pulled out of its offer to buy Zaporizhstal after its largest shareholder Midland Group sold a 48% stake to a Russian bank. In Australia, Rio Tinto said the market for bauxite is trending higher as China volumes recover to pre-crisis levels in 2010, while that for alumina was seen as "finely balanced". Rio Tinto's estimate for aluminum demand from China was 18-20% - above the 15% overall global demand.
CURRENCIES/FIXED INCOME/COMMODITIES
- USD majors traded in narrow ranges against European and commodity FX ahead of the Fed decision. EUR/USD and AUD/USD consolidated mid-US session losses around 1.2260 and 0.8710 respectively. Cable - an outperformer across the board in the US following the release of the emergency budget - found consistent buying interest just above the 1.48 handle. Japanese Yen was also stronger in late trading as USD/JPY fell below 90.50, supported by risk aversion in equities and uncertainty over China's Yuan policy, where strength is generally expected to translate into weaker Yen. In commodities, spot gold traded narrowly around 1,240 despite a new record high in SPDR Gold Trust ETF holdings at 1,313.0 metric tons. Front-month crude was also weighed down by general investment caution along with a bearish API inventory data where Crude build-up rose +3.68M V -1ME. Also on a related note, FT reported PBR would postpone its $25B share offering until September.
Labels:
Market Update
Monday, June 21, 2010
21 Jun 10 : China Yuen Revalue Might Kick off a Good Week
U.S. Dollar Trading (USD) ended the week little loved with most pairs remaining at week highs against the greenback. With little data out, the markets turned to US Equities which finished at month highs. Risk appetite was further boosted over the weekend with China announcing they would 'enhance renminbi flexibility'. In US stocks, DJIA +16 points closing at 10450, S&P +1 points closing at 1117 and NASDAQ +2 points closing at 2309.
The Euro (EUR) traded in a tight and quiet range close to the 1.2400 level with the market supported on dips. Germany's PPI jumped to 0.9% in May y/y from 0.6% previously. The Single currency gapped higher on Monday morning following China's move and will be looking to test 1.2500 if the positive environment continues. EUR/USD traded with a low of 1.2355 and a high of 1.2417 before closing at 1.2390. Looking ahead, ECB President Trichet speaks.
The Japanese Yen (JPY) was strong against the USD as the USD/JPY remained heavy towards the close struggling to gain traction under Y91. Most Crosses were buoyant however in the 'risk on' environment. GBP/JPY remains near Y135 and AUD/JPY in striking distance of Y80. Overall the USDJPY traded with a low of 90.45 and a high of 90.85 before closing the day around 90.70 in the New York session.
The Sterling (GBP) was not immune to quiet trading into the weekend with a rally in Europe sold back to support under 1.4800. UK Public Debt borrowing was 16bn in May, slightly less then 18.2bn forecast. Preliminary Mortgage Approvals came in near expectations at 51k vs. 48k previously. Overall the GBP/USD traded with a low of 1.4775 and a high of 1.4885 before closing the day at 1.4800 in the New York session.
The Australian Dollar (AUD) was the best performing currency on Friday and surged at the Monday open as the heavily Chinese linked economy was supported from the revaluation talk. The news is positive also in reducing trade tensions with the US. Overall the AUD/USD traded with a low of 0.8652 and a high of 0.8725 before closing the US session at 0.8720.
Oil & Gold (XAU) Fresh year high again on Friday, surging on the break above $1250. Overall trading with a low of USD$1243 and high of USD$1262 before ending the New York session at USD$1257 an ounce. Maintained recent strength extending the rally slightly higher. WTI Oil Closed +$0.39 at $77.18 a barrel.
The Euro (EUR) traded in a tight and quiet range close to the 1.2400 level with the market supported on dips. Germany's PPI jumped to 0.9% in May y/y from 0.6% previously. The Single currency gapped higher on Monday morning following China's move and will be looking to test 1.2500 if the positive environment continues. EUR/USD traded with a low of 1.2355 and a high of 1.2417 before closing at 1.2390. Looking ahead, ECB President Trichet speaks.
The Japanese Yen (JPY) was strong against the USD as the USD/JPY remained heavy towards the close struggling to gain traction under Y91. Most Crosses were buoyant however in the 'risk on' environment. GBP/JPY remains near Y135 and AUD/JPY in striking distance of Y80. Overall the USDJPY traded with a low of 90.45 and a high of 90.85 before closing the day around 90.70 in the New York session.
The Sterling (GBP) was not immune to quiet trading into the weekend with a rally in Europe sold back to support under 1.4800. UK Public Debt borrowing was 16bn in May, slightly less then 18.2bn forecast. Preliminary Mortgage Approvals came in near expectations at 51k vs. 48k previously. Overall the GBP/USD traded with a low of 1.4775 and a high of 1.4885 before closing the day at 1.4800 in the New York session.
The Australian Dollar (AUD) was the best performing currency on Friday and surged at the Monday open as the heavily Chinese linked economy was supported from the revaluation talk. The news is positive also in reducing trade tensions with the US. Overall the AUD/USD traded with a low of 0.8652 and a high of 0.8725 before closing the US session at 0.8720.
Oil & Gold (XAU) Fresh year high again on Friday, surging on the break above $1250. Overall trading with a low of USD$1243 and high of USD$1262 before ending the New York session at USD$1257 an ounce. Maintained recent strength extending the rally slightly higher. WTI Oil Closed +$0.39 at $77.18 a barrel.
Labels:
FX Trading
Sunday, June 20, 2010
Friday, June 18, 2010
18 Jun 10 : Another Week of Up and Down
EU vows to publish bank stress tests!
A weak or two without a crisis or a perceived crisis can go along way for the EURUSD. Yesterday we had a very successful Spanish bond issue which sparked some healthy risk seeking in the FX markets. The Swiss National bank added to this confidence following his hawkish comments on the Swiss economy as well as the news that the EU will back the publishing of ''bank stress tests''. The importance of publishing bank stress tests will help bring confidence back to the markets as the current jitters are caused by lack of knowledge of which bank owns whose debt. Overall price action for the EURUSD was between 1.2239 - 1.2412.
In the US yesterday we had a batch of disappointing economic reports out of the US which seemed to cap the risk appetite caused by the surge in the EUR. Initial jobless claims jumped to 472K for the week indicating that job creation is struggling in the states denting the optimistic recovery in consumer spending. We also had a weak CPI figure yesterday which increased concerns of possible deflation in the US which also caped the risk appetite from the surge in EUR, CPI fell over all by 0.2% and Philly Fed disappointed expectations as the reading was way below consensus. USDJPY price action was between 90.50 - 91.40 as the weak economic data caused a bout of selling in the USDJPY pair.
Currency to watch out for: EURUSD & USDJPY
§ The EURUSD pivot point is at 1.2250 with a preference to enter into Long positions at 1.260
§ The USDJPY pivot point is at 91.10 with a preference to enter Short positions at 91.05
Today's calendar and market movers:
§ UK PSNCR for May expected at 20.25bio
§ Canada Leading Indicators for May expected at 0.7%
Equity Markets:
US equities closed positive yesterday with the S&P500 up by 0.13% and the DJIA up by 0.24%. The European bourses were mixed yesterday with the FTSE up 0.30% the DAX and the CAC closing at 0.53% and 0.19% respectively. The NIKKEI and the HSI at the time of writing is -0.04% and 0.75% respectively.
A weak or two without a crisis or a perceived crisis can go along way for the EURUSD. Yesterday we had a very successful Spanish bond issue which sparked some healthy risk seeking in the FX markets. The Swiss National bank added to this confidence following his hawkish comments on the Swiss economy as well as the news that the EU will back the publishing of ''bank stress tests''. The importance of publishing bank stress tests will help bring confidence back to the markets as the current jitters are caused by lack of knowledge of which bank owns whose debt. Overall price action for the EURUSD was between 1.2239 - 1.2412.
In the US yesterday we had a batch of disappointing economic reports out of the US which seemed to cap the risk appetite caused by the surge in the EUR. Initial jobless claims jumped to 472K for the week indicating that job creation is struggling in the states denting the optimistic recovery in consumer spending. We also had a weak CPI figure yesterday which increased concerns of possible deflation in the US which also caped the risk appetite from the surge in EUR, CPI fell over all by 0.2% and Philly Fed disappointed expectations as the reading was way below consensus. USDJPY price action was between 90.50 - 91.40 as the weak economic data caused a bout of selling in the USDJPY pair.
Currency to watch out for: EURUSD & USDJPY
§ The EURUSD pivot point is at 1.2250 with a preference to enter into Long positions at 1.260
§ The USDJPY pivot point is at 91.10 with a preference to enter Short positions at 91.05
Today's calendar and market movers:
§ UK PSNCR for May expected at 20.25bio
§ Canada Leading Indicators for May expected at 0.7%
Equity Markets:
US equities closed positive yesterday with the S&P500 up by 0.13% and the DJIA up by 0.24%. The European bourses were mixed yesterday with the FTSE up 0.30% the DAX and the CAC closing at 0.53% and 0.19% respectively. The NIKKEI and the HSI at the time of writing is -0.04% and 0.75% respectively.
Labels:
FX Trading
Thursday, June 17, 2010
17 Jun 10 : Asian markets report
- After several days of global risk appetite in the face of fresh turmoil in the EU - namely rumors of Spanish banking system demanding a liquidity oriented €250B credit line - Asian equity markets are finally exhibiting a more cautious tone. Nikkei225 dropped about 0.8% on the other side of midday break despite some M&A activity in the tech space. Sydney's S&P/ASX was off by 0.5%, Korea's Kospi and Shanghai Composite traded flat, and Taiwan's Taiex - returning from holiday - was up 0.9% on catch-up buying. A cautious tone adopted in US markets late in the day is also being felt in S&P futures. With CPI and Philly Fed data on tap for Thursday session, front-month S&Ps are down 0.5% below 1,104.
SPEAKERS/PRESS
- AUSTRALIA: Local press noted the top level talks between miners and Australian govt "failed to make progress" as CEOs of leading companies continue to demand higher concessions from the proposal. A separate early session report suggested the govt is constrained by its promise to bring the budget back into surplus over the next 3 years. Speaking to CNBC later in the day, Resources Minister Ferguson comments indicated the govt has the ""test of will" to persevere with reform to the benefit of the nation, and that the backlash of the resources industry in neither unprecedented nor unexpected. Regarding concerns over the impact of Australia's sovereign standing as a result of the tax, Ferguson said the country will remain attractive to investors despite the proposal.
- CHINA: Despite recent indication that local property market may be cooling as a result of govt measures targeting the sector, China Vanke - nation's biggest property developer - said demand is still strong and no cuts to development plans were expected. Likewise, China's FX regulator SAFE forecasted for capital inflow pressure to be relatively strong this year, driven by yuan rise expectations, interest rate differentials, domestic asset prices, which in turn bears monitoring of hot money inflows. Elsewhere, the Head of China Pension Fund, whose comments supported EUR and weighed on gold, reiterated he expects Euro to stabilize and the dollar to weaken in the long term.
- JAPAN: Japanese press speculated the ruling DPJ party may consider revising the nation's tax code with provisions calling for higher consumption tax. The measure is seen as a potential response to the threat of ¥44.3T JGB issuance cap being insufficient relative to expected tax revenue intake and projected spending. Ahead of tomorrow's monthly cabinet report, a separate note suggested the govt may state the economy has entered a recovery phase.
EQUITIES
- Toyota was hit with a labor dispute in the increasingly discontent workforce in China - just days after a series of strikes suffered in the country by China. According to the report, workers at a parts plant in Tianjin may have been on strike since yesterday. Later today, Toyota said the workers reached an agreement with management to return to work. Elsewhere, Toyota unshelved plans to expand production capacity in Brazil as well as US. In tech sector M&A, Fujitsu and Toshiba confirmed a JV tieup in cell phone operations - the former taking a majority stake in a partnership starting in October. Outside Japan, China's Baosteel has reportedly accepted a 23% increase in iron ore prices from BHP and Rio Tinto for July. Separately, S&P raised its outlook on Rio Tinto to positive from Stable, citing improving credit metrics and plans for debt reduction. Also in China-Australia related developments, Bright Food reiterates it will reach a decision on A$1.75B bid for sugar division of Australia's CSR by the end of June.
CURRENCIES/FIXED INCOME/COMMODITIES
- In currencies, European and commodity majors are lower and testing US session lows as USD and JPY benefit from the moderate risk aversion. EUR/USD traded down to 1.2260, GBP/USD tested the downside of 1.47, while AUD returned to being the most punished major - AUD/USD fell below 0.86, AUD/JPY lost 70 pips to 78.30, and EUR/AUD was bid up 50 pips to 1.4280. Also in commodity majors, USD/CAD rose to 1.0280 despite reports of appetite for CAD from Russian central bank and NZD/USD fell 30 pips to 0.6950. Japanese Yen, broadly firmer across the board, also gained on USD, as USD/JPY fell to 91.20.
- In commodities, renewed focus on Europe sent safe-haven gold prices up $4 to $1,234/oz. Likewise, front-month crude tracked risk aversion down below $77/brl.
ECONOMIC DATA
- (AU) AUSTRALIA MAY RBA FOREIGN EXCHANGE TRANSACTIONS: A$446M V A$350M PRIOR
- (NZ) NEW ZEALAND JUN ANZ CONSUMER CONFIDENCE INDEX: 122.0 V 126 PRIOR; CONSUMER CONFIDENCE M/M: -3.2% V 3.4% PRIOR
- (JP) JAPAN APR FINAL LEADING INDEX: 101.7 V 101.7 PRIOR; COINCIDENT INDEX: 101.3 V 101.6 PRIOR
- (SI) SINGAPORE MAY ELECTRONIC EXPORTS Y/Y: 38.9% V 25.0%E; NON-OIL DOMESTIC EXPORTS M/M: -0.1% V 1.0%E; Y/Y: 24.4% V 25.7%E
SPEAKERS/PRESS
- AUSTRALIA: Local press noted the top level talks between miners and Australian govt "failed to make progress" as CEOs of leading companies continue to demand higher concessions from the proposal. A separate early session report suggested the govt is constrained by its promise to bring the budget back into surplus over the next 3 years. Speaking to CNBC later in the day, Resources Minister Ferguson comments indicated the govt has the ""test of will" to persevere with reform to the benefit of the nation, and that the backlash of the resources industry in neither unprecedented nor unexpected. Regarding concerns over the impact of Australia's sovereign standing as a result of the tax, Ferguson said the country will remain attractive to investors despite the proposal.
- CHINA: Despite recent indication that local property market may be cooling as a result of govt measures targeting the sector, China Vanke - nation's biggest property developer - said demand is still strong and no cuts to development plans were expected. Likewise, China's FX regulator SAFE forecasted for capital inflow pressure to be relatively strong this year, driven by yuan rise expectations, interest rate differentials, domestic asset prices, which in turn bears monitoring of hot money inflows. Elsewhere, the Head of China Pension Fund, whose comments supported EUR and weighed on gold, reiterated he expects Euro to stabilize and the dollar to weaken in the long term.
- JAPAN: Japanese press speculated the ruling DPJ party may consider revising the nation's tax code with provisions calling for higher consumption tax. The measure is seen as a potential response to the threat of ¥44.3T JGB issuance cap being insufficient relative to expected tax revenue intake and projected spending. Ahead of tomorrow's monthly cabinet report, a separate note suggested the govt may state the economy has entered a recovery phase.
EQUITIES
- Toyota was hit with a labor dispute in the increasingly discontent workforce in China - just days after a series of strikes suffered in the country by China. According to the report, workers at a parts plant in Tianjin may have been on strike since yesterday. Later today, Toyota said the workers reached an agreement with management to return to work. Elsewhere, Toyota unshelved plans to expand production capacity in Brazil as well as US. In tech sector M&A, Fujitsu and Toshiba confirmed a JV tieup in cell phone operations - the former taking a majority stake in a partnership starting in October. Outside Japan, China's Baosteel has reportedly accepted a 23% increase in iron ore prices from BHP and Rio Tinto for July. Separately, S&P raised its outlook on Rio Tinto to positive from Stable, citing improving credit metrics and plans for debt reduction. Also in China-Australia related developments, Bright Food reiterates it will reach a decision on A$1.75B bid for sugar division of Australia's CSR by the end of June.
CURRENCIES/FIXED INCOME/COMMODITIES
- In currencies, European and commodity majors are lower and testing US session lows as USD and JPY benefit from the moderate risk aversion. EUR/USD traded down to 1.2260, GBP/USD tested the downside of 1.47, while AUD returned to being the most punished major - AUD/USD fell below 0.86, AUD/JPY lost 70 pips to 78.30, and EUR/AUD was bid up 50 pips to 1.4280. Also in commodity majors, USD/CAD rose to 1.0280 despite reports of appetite for CAD from Russian central bank and NZD/USD fell 30 pips to 0.6950. Japanese Yen, broadly firmer across the board, also gained on USD, as USD/JPY fell to 91.20.
- In commodities, renewed focus on Europe sent safe-haven gold prices up $4 to $1,234/oz. Likewise, front-month crude tracked risk aversion down below $77/brl.
ECONOMIC DATA
- (AU) AUSTRALIA MAY RBA FOREIGN EXCHANGE TRANSACTIONS: A$446M V A$350M PRIOR
- (NZ) NEW ZEALAND JUN ANZ CONSUMER CONFIDENCE INDEX: 122.0 V 126 PRIOR; CONSUMER CONFIDENCE M/M: -3.2% V 3.4% PRIOR
- (JP) JAPAN APR FINAL LEADING INDEX: 101.7 V 101.7 PRIOR; COINCIDENT INDEX: 101.3 V 101.6 PRIOR
- (SI) SINGAPORE MAY ELECTRONIC EXPORTS Y/Y: 38.9% V 25.0%E; NON-OIL DOMESTIC EXPORTS M/M: -0.1% V 1.0%E; Y/Y: 24.4% V 25.7%E
Labels:
Market Update
Wednesday, June 16, 2010
16 Jun 10 : Singapore Stock Market News
Cosco Wins US$400m Bulk Carrier Orders
Cosco Corporation Singapore (Cosco)’s units, Cosco (Dalian) Shipyard and Cosco (Guangdong) Shipyard have signed 11 contracts and 4 letters of intent with four European shipowners to build 15 bulk carriers, worth more than US$440m in total. Four of these bulk carriers are 82,000 deadweight tonnes (dwt) each, while the other 11 are 57,000 dwt each. The vessels are expected to be delivered between the end of 2011 and the middle of 2013. Going by the normal operational procedures, the shipbuilding contracts will take some time before becoming effective. A separate announcement will be made when the shipbuilding contracts become effective.
Significance: On top of the two new orders secured 2 months back in China, these contracts further boost Cosco confidence in shipbuilding execution and order books.
Lippo To Sell OUE Shares At Lowest Of Price Range
Lippo Group (Lippo) has placed out a far smaller portion of its shares in Overseas Union Enterprise (OUE) than it had earlier flagged, and at the lowest end of its indicated price range. The company will also drop its plan to issue up to $200m in convertible notes due 2015, in the light of current market conditions. Lippo has placed out 18m shares through its investment unit Golden Concord Asia, comparing to 52m shares indicated in an earlier announcement. The $207m worth of shares will be placed out to institutional and sophisticated investors, Lippo said in the regulatory filling yesterday.
Significance: The lowest selling price may make the stock more attractive to institutional investors and thus, create more fund-raising options in the future for Lippo.
Z-Obee Plans To Undertake Taiwan Listing
After its dual listing in Hong Kong in March, Z-Obee Holdings is now planning to undertake another secondary listing in Taiwan. Z-Obee said it has entered into a service agreement with Taiwan-based Polaris Securities Co to engage the latter as a financial adviser to the proposed listing of Taiwan Depository Receipts (TDRs). While Z-Obee has no need for fund-raising at this moment, it has not decided on whether the TDR listing will involve an issue of new shares, placement of existing shares or grant of option to issue new shares. Meanwhile, its financial adviser Polaris has been actively canvassing for TDR issuers from Singapore.
Significance: Z-Obee might benefit from the Taiwan market as investors there are more familiar with tech companies. It also serves as an opportunity for Z-Obee to expand their operation in Taiwan.
Chip Eng Seng And Partner Plans 600 Units EC Project
NTUC Choice Homes and Chip Eng Seng intend to build a executive condominium (EC) on a land parcel in Punggol sold by the state. This is a 60:40 joint venture between NTUC Choice Homes and Chip Eng Seng. The developers’ joint bid of $223.7m, or $308 per square foot per plot ratio (psf ppr), trumped four others at the close of the government tender yesterday. If awarded the 99-year leasehold site, the companies plan to build a 17-storey, 600-unit residential project with full condominium facilities. The break-even price is estimated at around $600 psf and flats will be sold at the ‘prevailing market price’, the companies said.
Significance: The success of this government tender further enhances Chip Eng Seng’s reputation and track record.
Cosco Corporation Singapore (Cosco)’s units, Cosco (Dalian) Shipyard and Cosco (Guangdong) Shipyard have signed 11 contracts and 4 letters of intent with four European shipowners to build 15 bulk carriers, worth more than US$440m in total. Four of these bulk carriers are 82,000 deadweight tonnes (dwt) each, while the other 11 are 57,000 dwt each. The vessels are expected to be delivered between the end of 2011 and the middle of 2013. Going by the normal operational procedures, the shipbuilding contracts will take some time before becoming effective. A separate announcement will be made when the shipbuilding contracts become effective.
Significance: On top of the two new orders secured 2 months back in China, these contracts further boost Cosco confidence in shipbuilding execution and order books.
Lippo To Sell OUE Shares At Lowest Of Price Range
Lippo Group (Lippo) has placed out a far smaller portion of its shares in Overseas Union Enterprise (OUE) than it had earlier flagged, and at the lowest end of its indicated price range. The company will also drop its plan to issue up to $200m in convertible notes due 2015, in the light of current market conditions. Lippo has placed out 18m shares through its investment unit Golden Concord Asia, comparing to 52m shares indicated in an earlier announcement. The $207m worth of shares will be placed out to institutional and sophisticated investors, Lippo said in the regulatory filling yesterday.
Significance: The lowest selling price may make the stock more attractive to institutional investors and thus, create more fund-raising options in the future for Lippo.
Z-Obee Plans To Undertake Taiwan Listing
After its dual listing in Hong Kong in March, Z-Obee Holdings is now planning to undertake another secondary listing in Taiwan. Z-Obee said it has entered into a service agreement with Taiwan-based Polaris Securities Co to engage the latter as a financial adviser to the proposed listing of Taiwan Depository Receipts (TDRs). While Z-Obee has no need for fund-raising at this moment, it has not decided on whether the TDR listing will involve an issue of new shares, placement of existing shares or grant of option to issue new shares. Meanwhile, its financial adviser Polaris has been actively canvassing for TDR issuers from Singapore.
Significance: Z-Obee might benefit from the Taiwan market as investors there are more familiar with tech companies. It also serves as an opportunity for Z-Obee to expand their operation in Taiwan.
Chip Eng Seng And Partner Plans 600 Units EC Project
NTUC Choice Homes and Chip Eng Seng intend to build a executive condominium (EC) on a land parcel in Punggol sold by the state. This is a 60:40 joint venture between NTUC Choice Homes and Chip Eng Seng. The developers’ joint bid of $223.7m, or $308 per square foot per plot ratio (psf ppr), trumped four others at the close of the government tender yesterday. If awarded the 99-year leasehold site, the companies plan to build a 17-storey, 600-unit residential project with full condominium facilities. The break-even price is estimated at around $600 psf and flats will be sold at the ‘prevailing market price’, the companies said.
Significance: The success of this government tender further enhances Chip Eng Seng’s reputation and track record.
Labels:
Market Update
Tuesday, June 15, 2010
15 Jun 10 : Amazing Greek Debt is now JUNK
Moody's downgrades Greek debt to Junk!
* Markets seemed to shun the fear of an EU wide debt crisis yesterday as global risk appetite picked up. It seems that no news is good news especially when the market was heavily pricing in risks of defaults. With a record number of short positions feeling a little anxious on the day and a fantastic Industrial production report coming in higher than expected at 0.8%, markets scrambled to cover their shorts as well as short term spec accounts dipping their toes in some long positions. The report is considered as a forward looking report on the health of an economy as it reacts quickly to changes in the business cycle as well as consumer confidence and employment levels. As the session went on and the EURUSD climbed to 1.2297 Moody's decided to downgrade Greece is debt to junk status giving the much needed excuse to offload those short term speculative long positions just before the London Fix was coming to an end. Overall price action on the day was between 1.2162 - 1.2297.
* In the US yesterday we saw Fed President Bullard reject speculation that the European debt crisis will push back any Fed policy decisions. He says that policy will be dictated by the actual US economic recovery however he says the recovery will have to develop further before any rate hikes are delivered. US stocks traded in line with European wide sentiment with the S&P making highs of just above the 1105 level however as the session went on and the Moody's downgrade was announced traders rushed for the exit once more and the market ended up closing down 0.2% at 1091 points. USDJPY price action yesterday was between 91.39 - 92.11.
* In the UK the focus will be on the latest CPI figures so as to gauge the direction of UK inflation pressures. Last CPI reading stubbornly showed a year on year figure of 3.7% prompting assumptions that the BoE may be forced to enter a preemptive rate hike so as to tame such price pressures. GBPUSD price action was between 1.4501 - 1.4808.
Currency to watch out for: EURUSD & USDJPY
* § The EURUSD pivot point is at 1.2275 with a preference to enter into Short positions at 1.2265
* § The USDJPY pivot point is at 91.75 with a preference to enter Short positions at 91.70
Today's calendar and market movers:
* § UK Consumer Price Index for expected at 3.5% year in year ending May
* § EU Employment for Q1 with last month reading as -0.2%
* § EU Trade for April expected at 3.7 bio
* § US NAHB for June forecasted at 21
Equity Markets:
* US equities closed negative yesterday with the S&P500 down by -0.2% and the DJIA down by -0.18%. The European bourses were positive yesterday with the FTSE up 0.74% the DAX and the CAC closing at 1.28% and 1.98% respectively. The NIKKEI and the HSI at the time of writing is 0.08% and 0.20% respectively.
* Markets seemed to shun the fear of an EU wide debt crisis yesterday as global risk appetite picked up. It seems that no news is good news especially when the market was heavily pricing in risks of defaults. With a record number of short positions feeling a little anxious on the day and a fantastic Industrial production report coming in higher than expected at 0.8%, markets scrambled to cover their shorts as well as short term spec accounts dipping their toes in some long positions. The report is considered as a forward looking report on the health of an economy as it reacts quickly to changes in the business cycle as well as consumer confidence and employment levels. As the session went on and the EURUSD climbed to 1.2297 Moody's decided to downgrade Greece is debt to junk status giving the much needed excuse to offload those short term speculative long positions just before the London Fix was coming to an end. Overall price action on the day was between 1.2162 - 1.2297.
* In the US yesterday we saw Fed President Bullard reject speculation that the European debt crisis will push back any Fed policy decisions. He says that policy will be dictated by the actual US economic recovery however he says the recovery will have to develop further before any rate hikes are delivered. US stocks traded in line with European wide sentiment with the S&P making highs of just above the 1105 level however as the session went on and the Moody's downgrade was announced traders rushed for the exit once more and the market ended up closing down 0.2% at 1091 points. USDJPY price action yesterday was between 91.39 - 92.11.
* In the UK the focus will be on the latest CPI figures so as to gauge the direction of UK inflation pressures. Last CPI reading stubbornly showed a year on year figure of 3.7% prompting assumptions that the BoE may be forced to enter a preemptive rate hike so as to tame such price pressures. GBPUSD price action was between 1.4501 - 1.4808.
Currency to watch out for: EURUSD & USDJPY
* § The EURUSD pivot point is at 1.2275 with a preference to enter into Short positions at 1.2265
* § The USDJPY pivot point is at 91.75 with a preference to enter Short positions at 91.70
Today's calendar and market movers:
* § UK Consumer Price Index for expected at 3.5% year in year ending May
* § EU Employment for Q1 with last month reading as -0.2%
* § EU Trade for April expected at 3.7 bio
* § US NAHB for June forecasted at 21
Equity Markets:
* US equities closed negative yesterday with the S&P500 down by -0.2% and the DJIA down by -0.18%. The European bourses were positive yesterday with the FTSE up 0.74% the DAX and the CAC closing at 1.28% and 1.98% respectively. The NIKKEI and the HSI at the time of writing is 0.08% and 0.20% respectively.
Labels:
FX Trading
15 Jun 10 : Rally then Cut Short
U.S. Dollar Trading (USD) Global stocks continued to rebound early Monday with positive sentiment sending the Dollar lower across the board. The mood changed however late in the US session after moody cut Greece Credit rating to Junk in a widely expected move. US stocks finished slightly lower after being up for most of the day. In US stocks, DJIA -20 points closing at 10190, S&P -2 points closing at 1089 and NASDAQ +1 points closing at 2243. Looking ahead, TIC Long Term Purchase forecast at 77bn vs. 140bn previously.
The Euro (EUR) took advantage of the positive risk environment to surge above resistance at 1.2215 and push towards 1.2300. The moody's downgrade took the wind out of the rally and the pair finished near support. April's Industrial Production beat expectation at 0.8% vs. 0.5% forecast. EUR/USD traded with a low of 1.2109 and a high of 1.2300 before closing at 1.2220. Looking ahead, June German Zew Survey forecast at 42 vs. 45.8 previously.
The Japanese Yen (JPY) was able to test Y92 on strong cross buying especially in the AUD/JPY and EUR/JPY but the failure to push higher and the reversal in US stocks sent the pair back to more familiar levels near 91.50. Overall the USDJPY traded with a low of 91.40 and a high of 92.14 before closing the day around 91.60 in the New York session. Looking ahead, June BOJ Rate Decision forecast to remain at 0.1%.
The Sterling (GBP) surged after under-performing on Friday as the risk currency played catch up to rally nearly 200 pips on the day. Resistance at 1.4750 was broken in Europe as BoE member Sentence was quoted over the weekend as supporting a rate hike in the second half of 2010. Overall the GBP/USD traded with a low of 1.4545 and a high of 1.4812 before closing the day at 1.4730 in the New York session. Looking ahead, May CPI is forecast at 3.5% vs. 3.7% y/y.
The Australian Dollar (AUD) tracked stocks higher breaking above major resistance at 0.8580 to surged in Europe to fresh month highs. AUD/JPY rallied and fell just short of the key Y80 level as the favorite risk currency enjoyed widespread support. Overall the AUD/USD traded with a low of 0.8501 and a high of 0.8669 before closing the US session at 0.8580. Looking ahead, June RBA Minutes Released.
Oil & Gold (XAU) lost ground as safe haven demand eased and profit takers took control. Overall trading with a low of USD$1215 and high of USD$1234 before ending the New York session at USD$1221 an ounce. Oil Rallied to above resistance at $75 before settling just under the figure late in the US session. WTI Oil Closed +$1.34 at $74.80 a barrel.
The Euro (EUR) took advantage of the positive risk environment to surge above resistance at 1.2215 and push towards 1.2300. The moody's downgrade took the wind out of the rally and the pair finished near support. April's Industrial Production beat expectation at 0.8% vs. 0.5% forecast. EUR/USD traded with a low of 1.2109 and a high of 1.2300 before closing at 1.2220. Looking ahead, June German Zew Survey forecast at 42 vs. 45.8 previously.
The Japanese Yen (JPY) was able to test Y92 on strong cross buying especially in the AUD/JPY and EUR/JPY but the failure to push higher and the reversal in US stocks sent the pair back to more familiar levels near 91.50. Overall the USDJPY traded with a low of 91.40 and a high of 92.14 before closing the day around 91.60 in the New York session. Looking ahead, June BOJ Rate Decision forecast to remain at 0.1%.
The Sterling (GBP) surged after under-performing on Friday as the risk currency played catch up to rally nearly 200 pips on the day. Resistance at 1.4750 was broken in Europe as BoE member Sentence was quoted over the weekend as supporting a rate hike in the second half of 2010. Overall the GBP/USD traded with a low of 1.4545 and a high of 1.4812 before closing the day at 1.4730 in the New York session. Looking ahead, May CPI is forecast at 3.5% vs. 3.7% y/y.
The Australian Dollar (AUD) tracked stocks higher breaking above major resistance at 0.8580 to surged in Europe to fresh month highs. AUD/JPY rallied and fell just short of the key Y80 level as the favorite risk currency enjoyed widespread support. Overall the AUD/USD traded with a low of 0.8501 and a high of 0.8669 before closing the US session at 0.8580. Looking ahead, June RBA Minutes Released.
Oil & Gold (XAU) lost ground as safe haven demand eased and profit takers took control. Overall trading with a low of USD$1215 and high of USD$1234 before ending the New York session at USD$1221 an ounce. Oil Rallied to above resistance at $75 before settling just under the figure late in the US session. WTI Oil Closed +$1.34 at $74.80 a barrel.
Labels:
FX Trading,
Market Update
Monday, June 14, 2010
14 Jun 10 : Retail Sales Disappointing
US Retail Sales disappoint the markets coming in at -1.2%!
* Markets on Friday saw volatility pick up across the board with the EURUSD's trading range over 100 pips. Retail sales on Friday came in weaker than expected for the month at -1.2% however this is not expected to have a great impact on underlying GDP as the report is ex-auto sales. This report spurred a bout of risk aversion and some USD strength pushing the Euro to 1.2045 lows. As the session went on we had the University of Michigan report come out showing a print of 75.5 beating expectations of 74.5. Markets have also shifted their expectations of the next Fed Rate hike to January 2011 from September 2010 given the Euro zone debt crisis. Stocks in the US closed the session in positive territory almost half a percent higher on continued hope that the US will stubbornly continue to grow despite the happenings on the other side of the Atlantic. USDJPY price action was between 91.17 - 91.96.
* In Europe on Friday rumors circulated that Spain was considering tapping part of the EU's stabilization fund which caused part of the initial sell off in the pair. The rumors were discarded as unfounded considering the extreme austerity measures that the country is undertaking. Later in the day we had ECB Member Nowotny say that the Central bank will continue to support the EU debt markets until a certain degree of stabilization is seen. Looking ahead the markets are shifting focus to EU CPI readings as the ECB repeatedly highlights price stability as its main objective. Also focus will be given to Ireland's debt issue tomorrow of 5 year paper for Eur1-1.5 bio. EURUSD price action is between 1.2044 - 1.2208.
* In Japan the 2 day policy meeting begins today were new information should be released regarding the latest BoJ lending scheme which is designed to lend to small business finding it difficult to raise funds. Initial estimates are that the scheme will add as much as 3 trillion Yen to the system. Japans Prime Minister Kan went on later in the day saying that Japan risks defaulting on its debt if Japans fiscal difficulties are not tackled. Kan says that by the end of June hbe will present a medium to long term plan on how to reduce Japans deficit
Currency to watch out for: EURUSD & USDJPY
* § The EURUSD pivot point is at 1.2125 with a preference to enter into Long positions at 1.2135
* § The USDJPY pivot point is at 91.55 with a preference to enter Long positions at 92.10
Equity Markets:
* US equities closed positive yesterday with the S&P500 up by 0.38% and the DJIA up by 0.44%. The European bourses were mixed yesterday with the FTSE up 0.61% the DAX and the CAC closing at -0.14% and 1.11% respectively. The NIKKEI and the HSI at the time of writing is 1.80% and 0.88% respectively.
* Markets on Friday saw volatility pick up across the board with the EURUSD's trading range over 100 pips. Retail sales on Friday came in weaker than expected for the month at -1.2% however this is not expected to have a great impact on underlying GDP as the report is ex-auto sales. This report spurred a bout of risk aversion and some USD strength pushing the Euro to 1.2045 lows. As the session went on we had the University of Michigan report come out showing a print of 75.5 beating expectations of 74.5. Markets have also shifted their expectations of the next Fed Rate hike to January 2011 from September 2010 given the Euro zone debt crisis. Stocks in the US closed the session in positive territory almost half a percent higher on continued hope that the US will stubbornly continue to grow despite the happenings on the other side of the Atlantic. USDJPY price action was between 91.17 - 91.96.
* In Europe on Friday rumors circulated that Spain was considering tapping part of the EU's stabilization fund which caused part of the initial sell off in the pair. The rumors were discarded as unfounded considering the extreme austerity measures that the country is undertaking. Later in the day we had ECB Member Nowotny say that the Central bank will continue to support the EU debt markets until a certain degree of stabilization is seen. Looking ahead the markets are shifting focus to EU CPI readings as the ECB repeatedly highlights price stability as its main objective. Also focus will be given to Ireland's debt issue tomorrow of 5 year paper for Eur1-1.5 bio. EURUSD price action is between 1.2044 - 1.2208.
* In Japan the 2 day policy meeting begins today were new information should be released regarding the latest BoJ lending scheme which is designed to lend to small business finding it difficult to raise funds. Initial estimates are that the scheme will add as much as 3 trillion Yen to the system. Japans Prime Minister Kan went on later in the day saying that Japan risks defaulting on its debt if Japans fiscal difficulties are not tackled. Kan says that by the end of June hbe will present a medium to long term plan on how to reduce Japans deficit
Currency to watch out for: EURUSD & USDJPY
* § The EURUSD pivot point is at 1.2125 with a preference to enter into Long positions at 1.2135
* § The USDJPY pivot point is at 91.55 with a preference to enter Long positions at 92.10
Equity Markets:
* US equities closed positive yesterday with the S&P500 up by 0.38% and the DJIA up by 0.44%. The European bourses were mixed yesterday with the FTSE up 0.61% the DAX and the CAC closing at -0.14% and 1.11% respectively. The NIKKEI and the HSI at the time of writing is 1.80% and 0.88% respectively.
Labels:
FX Trading
14 Jun 10 : Market Coming Back ?
U.S. Dollar Trading (USD) remained on the weak side as stocks and most currencies pushed higher into the weekend overcoming weak US Retail Sales data. May Retail Sales slumped -1.2% vs. +0.2% forecast. The data was countered however by a rise in US Consumer Confidence to a 2 year high at 75.5 vs. 73.6 previously. In US stocks, DJIA +35 points closing at 10211, S&P +4 points closing at 1090 and NASDAQ +24 points closing at 2243. Looking ahead, Fed Member Bullard Speaks.
The Euro (EUR) remained well supported as the market continued to rebound after weeks of heavy selling. Positive risk sentiment and strong cross buying especially on the EUR/GBP underpinned the move higher. May German WPI increased 0.3% as expected. EUR/USD traded with a low of 1.2046 and a high of 1.2152 before closing at 1.2090. Looking ahead, April Industrial Production is forecast at 0.5% vs. 1.3% previously.
The Japanese Yen (JPY) USD/JPY grinded higher for most of the day on solid cross buying. Some volatility after the US retail sales saw day lows but better Consumer Confidence numbers allowed the rally to resume. AUD/JPY continued it recent rally up above. Overall the USDJPY traded with a low of 91.20 and a high of 91.78 before closing the day around 91.71 in the New York session.
The Sterling (GBP) was very volatile hitting 1.4750 going into Europe before reversing hard on EUR/GBP buying and weak economic data. Manufacturing and Industrial Production both posted -0.4%m/m in May vs positive expectations. The pair settled under 1.4600 unable to take advantage of the risk on environment. Overall the GBP/USD traded with a low of 1.4505 and a high of 1.4758 before closing the day at 1.4550 in the New York session.
The Australian Dollar (AUD) broke and closed above 0.8500 in the US session but was range bound in Europe and Asia. AUD/JPY buying on the back of the US Consumer Confidence numbers helped lift the Aussie and sentiment towards the pair has turned quite bullish as the relief rally continues. Overall the AUD/USD traded with a low of 0.8418 and a high of 0.8504 before closing the US session at 0.8503. Looking ahead, Holiday in Australia.
Oil & Gold (XAU) gold continued to trade in range finding support at $1215 but struggled to bounce. Overall trading with a low of USD$1215 and high of USD$1231 before ending the New York session at USD$1226 an ounce. Crude Oil slipped as weak retail sales prompted profit taking on the recent rally. WTI Oil Closed -$1.70 at $73.78 a barrel.
The Euro (EUR) remained well supported as the market continued to rebound after weeks of heavy selling. Positive risk sentiment and strong cross buying especially on the EUR/GBP underpinned the move higher. May German WPI increased 0.3% as expected. EUR/USD traded with a low of 1.2046 and a high of 1.2152 before closing at 1.2090. Looking ahead, April Industrial Production is forecast at 0.5% vs. 1.3% previously.
The Japanese Yen (JPY) USD/JPY grinded higher for most of the day on solid cross buying. Some volatility after the US retail sales saw day lows but better Consumer Confidence numbers allowed the rally to resume. AUD/JPY continued it recent rally up above. Overall the USDJPY traded with a low of 91.20 and a high of 91.78 before closing the day around 91.71 in the New York session.
The Sterling (GBP) was very volatile hitting 1.4750 going into Europe before reversing hard on EUR/GBP buying and weak economic data. Manufacturing and Industrial Production both posted -0.4%m/m in May vs positive expectations. The pair settled under 1.4600 unable to take advantage of the risk on environment. Overall the GBP/USD traded with a low of 1.4505 and a high of 1.4758 before closing the day at 1.4550 in the New York session.
The Australian Dollar (AUD) broke and closed above 0.8500 in the US session but was range bound in Europe and Asia. AUD/JPY buying on the back of the US Consumer Confidence numbers helped lift the Aussie and sentiment towards the pair has turned quite bullish as the relief rally continues. Overall the AUD/USD traded with a low of 0.8418 and a high of 0.8504 before closing the US session at 0.8503. Looking ahead, Holiday in Australia.
Oil & Gold (XAU) gold continued to trade in range finding support at $1215 but struggled to bounce. Overall trading with a low of USD$1215 and high of USD$1231 before ending the New York session at USD$1226 an ounce. Crude Oil slipped as weak retail sales prompted profit taking on the recent rally. WTI Oil Closed -$1.70 at $73.78 a barrel.
Labels:
FX Trading
Saturday, June 12, 2010
The Right Way to Trade Forex
The Right Way to Trade Forex
Discover the Successful and Profitable Trading Strategies
"Failure is a man who has not learnt from his blunders. If you are able to cash in on that experience you are on the path to success" - Jay Lakhani,
It is a sad fact that 90% of traders fail, and many very quickly give up. Why? When I went through a phase of losing trades I treated it as a temporary setback and went back to the drawing board. I analyzed the reasons of my failure and I sought the guidance of Top Traders, Mentors and Coaches to put me back on the path of success and profitability.
In my opinion the high rate of failure for a new trader can be related to the six major obstacles that a trader faces, which are summarized as follows -
Poor Skills
Lack of adequate capital
Setting unrealistic targets and goals
Lack of Patience
Lack of discipline
High risk aversion.
If we look at the list, it becomes apparent that the failure is as a result of trading without having in place a proper Trading System and a Trading Plan- One that includes mind training, quality Forex education and strategies and sound money management rules.
So what is the Characteristics of a Successful Trader? All we have to do is to reframe the liabilities listed above:
Adequate trading knowledge and understanding. You should seek services of good quality mentors and a trading coach.
Adequate capitalization - Don't be fooled that you can earn thousands every week from a starting capital of $500
Realistic Goals - don't expect 100% profit each month, it simply is not possible.
Have patience - don't trade if you don't have to. You should wait for a set-up according to your trading plan and system.
Have Discipline to follow your rules
Understanding and Managing Risk
And lastly the most important is having a Trading System and a Trading Plan. Virtually 90% of Traders that have never had one!
If you look at the advice from the world's most successful people or traders today, you will notice that they follow the guidelines as identified above.
"Define first the level of risk you dare assume. Start with a small position, and then build it up if it works" - George Soros
"Give me a stock clerk with a goal and I'll give you a man who will make history. Give me a man with no goals and I'll give you a stock clerk" - J.C. Penny
“If you go to work on your goals, your goals will go to work on you. If you go to work on your plan, your plan will go to work on you. Whatever good things we build end up building us." - Jim Rohn
YOU who is responsible for your success or failure.” I can show you the path to successful trading - but YOU have to make a choice to follow it or not."
- Jay Lakhani.
Discover the Successful and Profitable Trading Strategies
"Failure is a man who has not learnt from his blunders. If you are able to cash in on that experience you are on the path to success" - Jay Lakhani,
It is a sad fact that 90% of traders fail, and many very quickly give up. Why? When I went through a phase of losing trades I treated it as a temporary setback and went back to the drawing board. I analyzed the reasons of my failure and I sought the guidance of Top Traders, Mentors and Coaches to put me back on the path of success and profitability.
In my opinion the high rate of failure for a new trader can be related to the six major obstacles that a trader faces, which are summarized as follows -
Poor Skills
Lack of adequate capital
Setting unrealistic targets and goals
Lack of Patience
Lack of discipline
High risk aversion.
If we look at the list, it becomes apparent that the failure is as a result of trading without having in place a proper Trading System and a Trading Plan- One that includes mind training, quality Forex education and strategies and sound money management rules.
So what is the Characteristics of a Successful Trader? All we have to do is to reframe the liabilities listed above:
Adequate trading knowledge and understanding. You should seek services of good quality mentors and a trading coach.
Adequate capitalization - Don't be fooled that you can earn thousands every week from a starting capital of $500
Realistic Goals - don't expect 100% profit each month, it simply is not possible.
Have patience - don't trade if you don't have to. You should wait for a set-up according to your trading plan and system.
Have Discipline to follow your rules
Understanding and Managing Risk
And lastly the most important is having a Trading System and a Trading Plan. Virtually 90% of Traders that have never had one!
If you look at the advice from the world's most successful people or traders today, you will notice that they follow the guidelines as identified above.
"Define first the level of risk you dare assume. Start with a small position, and then build it up if it works" - George Soros
"Give me a stock clerk with a goal and I'll give you a man who will make history. Give me a man with no goals and I'll give you a stock clerk" - J.C. Penny
“If you go to work on your goals, your goals will go to work on you. If you go to work on your plan, your plan will go to work on you. Whatever good things we build end up building us." - Jim Rohn
YOU who is responsible for your success or failure.” I can show you the path to successful trading - but YOU have to make a choice to follow it or not."
- Jay Lakhani.
Labels:
FX Trading
Friday, June 11, 2010
11 Jun 10 : Some Singapore Market Updates
UOB To Launch $5b Debt Programme
United Overseas Bank (UOB) has set up a euro medium-term note programme, a debt-issuing facility that allows it to borrow up to $5b in various currencies and at different maturities. Under the programme, UOB may issue senior or subordinated debt securities in Singapore dollars or other currencies in various amounts, when needed. The proceeds raised will be used for general corporate purposes, UOB said. ‘There is no time line on the first and subsequent issuances under the programme, and the issue size will depend on market conditions, as well as UOB’s needs,’ the spokesman said.
Significance: The programme will allow UOB to tap debt markets outside the US. Meanwhile, it allows the issuance of longer-term debt to diversify UOB’s funding across different tenures.
Yanlord Land In US$300m JV With GIC Unit
China-based Yanlord Land has teamed up with the real estate unit of Government of Singapore Investment Corp (GIC) to set up a US$300m company to develop a residential project in Chengdu. The project is strategically situated along the second ring road of Chengdu city. Yanlord Land said the new project is expected to build on the group’s earlier successes in Chengdu – the Hengye International Plaza commercial development and the high-end residential project Hengye Star Garden, and will complement the group’s latest integrated commercial development, Yanlord Landmark.
Significance: Joint venture contracts secured of late serve to enhance Yanlord Land’s property development portfolio in China.
PLife REIT To Expand In Japan
Parkway Life REIT (PLife REIT) has strengthened its foothold in Japan. The healthcare trust, whose $1.15b portfolio includes private hospitals in Singapore, announced yesterday the acquisition of six new nursing home and care facility properties in Japan for 3.9b yen ($60.5m). The six new properties are valued at 4.04b yen, using the discounted cashflow method. The purchase price is 2.8% below the valuation. Meanwhile, the acquisition is expected to be fully funded via a five-year unsecured term loan facility of 4.2b yen from CIMB Bank Berhad, one of the REIT’s key partner banks.
Significance: Acquisition is yield accretive and the long lease term expects to improve the total portfolio weighted average lease term to expiry (by gross revenue), which stands at 13.2 years as at March 31, thus boosting the resilience of its portfolio.
Samudera To Add A Vessel To Kolkata
Samudera Shipping (Samudera) Line has added a vessel to its Kolkata-Haldia Express service to meet growing demand for cargo to and from Kolkata. The new gearless vessel, which has a capacity of 629 twenty-foot equivalent units (TEU), allows the container shipping line to improve its service frequency to one sailing a week between Singapore and Kolkata. ‘Samudera used to sail through Kolkata every 16 days,’ the company said. As a result of improving global trade activity, overall container volume handled by Samudera grew to 334,000 TEU in the first quarter of this year, 20.4% up from 278,000 TEU a year ago.
Significance: Addition of vessel allows Samudera to enhance the service quality by offering better sailing frequency and added flexibility. This also boosts its presence beyond the shores of South East Asia.
United Overseas Bank (UOB) has set up a euro medium-term note programme, a debt-issuing facility that allows it to borrow up to $5b in various currencies and at different maturities. Under the programme, UOB may issue senior or subordinated debt securities in Singapore dollars or other currencies in various amounts, when needed. The proceeds raised will be used for general corporate purposes, UOB said. ‘There is no time line on the first and subsequent issuances under the programme, and the issue size will depend on market conditions, as well as UOB’s needs,’ the spokesman said.
Significance: The programme will allow UOB to tap debt markets outside the US. Meanwhile, it allows the issuance of longer-term debt to diversify UOB’s funding across different tenures.
Yanlord Land In US$300m JV With GIC Unit
China-based Yanlord Land has teamed up with the real estate unit of Government of Singapore Investment Corp (GIC) to set up a US$300m company to develop a residential project in Chengdu. The project is strategically situated along the second ring road of Chengdu city. Yanlord Land said the new project is expected to build on the group’s earlier successes in Chengdu – the Hengye International Plaza commercial development and the high-end residential project Hengye Star Garden, and will complement the group’s latest integrated commercial development, Yanlord Landmark.
Significance: Joint venture contracts secured of late serve to enhance Yanlord Land’s property development portfolio in China.
PLife REIT To Expand In Japan
Parkway Life REIT (PLife REIT) has strengthened its foothold in Japan. The healthcare trust, whose $1.15b portfolio includes private hospitals in Singapore, announced yesterday the acquisition of six new nursing home and care facility properties in Japan for 3.9b yen ($60.5m). The six new properties are valued at 4.04b yen, using the discounted cashflow method. The purchase price is 2.8% below the valuation. Meanwhile, the acquisition is expected to be fully funded via a five-year unsecured term loan facility of 4.2b yen from CIMB Bank Berhad, one of the REIT’s key partner banks.
Significance: Acquisition is yield accretive and the long lease term expects to improve the total portfolio weighted average lease term to expiry (by gross revenue), which stands at 13.2 years as at March 31, thus boosting the resilience of its portfolio.
Samudera To Add A Vessel To Kolkata
Samudera Shipping (Samudera) Line has added a vessel to its Kolkata-Haldia Express service to meet growing demand for cargo to and from Kolkata. The new gearless vessel, which has a capacity of 629 twenty-foot equivalent units (TEU), allows the container shipping line to improve its service frequency to one sailing a week between Singapore and Kolkata. ‘Samudera used to sail through Kolkata every 16 days,’ the company said. As a result of improving global trade activity, overall container volume handled by Samudera grew to 334,000 TEU in the first quarter of this year, 20.4% up from 278,000 TEU a year ago.
Significance: Addition of vessel allows Samudera to enhance the service quality by offering better sailing frequency and added flexibility. This also boosts its presence beyond the shores of South East Asia.
Labels:
Market Update
11 Jun 10 : Stock Market Soar but for how long
U.S. Dollar Trading (USD) gave up recent gains in a risk on environment as global stocks rallied and risk aversion eased. Weekly Jobless Claims were steady at 456k vs. 453k previously and April's Trade Balance was close to expectations at -40.3bn previously. In US stocks, DJIA +277 points closing at 10172, S&P +31 points closing at 1086 and NASDAQ +59 points closing at 2218. Looking ahead, May Retail Sales are forecast at 0.2% vs. 0.4% previously.
The Euro (EUR) broke above 1.2000 in Asia as the head of the Chinese Pension Fund stated that the Euro will whether the Crisis and that he was more concerned with US debt holdings. This positive news combined with comments from ECB's Trichet (ECB held at 1.0%) concerning upgraded GDP growth forecasts. EUR/USD traded with a low of 1.1956 and a high of 1.2144 before closing at 1.2130. Looking ahead, May German WPI previously at 1.7%.
The Japanese Yen (JPY) weakened as the crosses rallied especially on the AUD/JPY and NZD/JPY. USD/JPY was hardly changed as the USD remained under pressure and speculation of a Chinese Yuan revaluation kept the outlook mixed. Q1 GDP was finalized at 1.2% Q/Q. Overall the USDJPY traded with a low of 90.84 and a high of 91.57 before closing the day around 91.30 in the New York session.
The Sterling (GBP) did well in the risk on environment with cable breaking above 1.4700 and GBP/JPY heading for a test of Y135. The BOE held at 0.5% and did little to surprise the market holding the Asset Purchase program at 200bn. Overall the GBP/USD traded with a low of 1.4507 and a high of 1.4733 before closing the day at 1.4705 in the New York session. Looking ahead, May Core PPI is forecast at 0.5% vs. 1.1% previously.
The Australian Dollar (AUD) staged a second day of major gains with the May Unemployment coming in super strong at +27k vs. +17k forecast and the Unemployment Rate dropped the 5.2% vs. 5.4% previously. Combined with the stock market rally the Aussie broke above 0.8300 and then 0.8400 to test 0.8500 late in the US session. Overall the AUD/USD traded with a low of 0.8273 and a high of 0.8512 before closing the US session at 0.8490.
Oil & Gold (XAU) ended the day unchanged as reduced safe haven demand was countered by the weak USD. Overall trading with a low of USD$1215 and high of USD$1234 before ending the New York session at USD$1220 an ounce. Crude Oil surged for the 3rd Day. WTI Oil Closed +$1.10 at $75.48 a barrel.
The Euro (EUR) broke above 1.2000 in Asia as the head of the Chinese Pension Fund stated that the Euro will whether the Crisis and that he was more concerned with US debt holdings. This positive news combined with comments from ECB's Trichet (ECB held at 1.0%) concerning upgraded GDP growth forecasts. EUR/USD traded with a low of 1.1956 and a high of 1.2144 before closing at 1.2130. Looking ahead, May German WPI previously at 1.7%.
The Japanese Yen (JPY) weakened as the crosses rallied especially on the AUD/JPY and NZD/JPY. USD/JPY was hardly changed as the USD remained under pressure and speculation of a Chinese Yuan revaluation kept the outlook mixed. Q1 GDP was finalized at 1.2% Q/Q. Overall the USDJPY traded with a low of 90.84 and a high of 91.57 before closing the day around 91.30 in the New York session.
The Sterling (GBP) did well in the risk on environment with cable breaking above 1.4700 and GBP/JPY heading for a test of Y135. The BOE held at 0.5% and did little to surprise the market holding the Asset Purchase program at 200bn. Overall the GBP/USD traded with a low of 1.4507 and a high of 1.4733 before closing the day at 1.4705 in the New York session. Looking ahead, May Core PPI is forecast at 0.5% vs. 1.1% previously.
The Australian Dollar (AUD) staged a second day of major gains with the May Unemployment coming in super strong at +27k vs. +17k forecast and the Unemployment Rate dropped the 5.2% vs. 5.4% previously. Combined with the stock market rally the Aussie broke above 0.8300 and then 0.8400 to test 0.8500 late in the US session. Overall the AUD/USD traded with a low of 0.8273 and a high of 0.8512 before closing the US session at 0.8490.
Oil & Gold (XAU) ended the day unchanged as reduced safe haven demand was countered by the weak USD. Overall trading with a low of USD$1215 and high of USD$1234 before ending the New York session at USD$1220 an ounce. Crude Oil surged for the 3rd Day. WTI Oil Closed +$1.10 at $75.48 a barrel.
Labels:
FX Trading,
Market Update
Thursday, June 10, 2010
10 Jun 10 : China Help a bit but...
CURRENCY TRADING SUMMARY - 10th June (00:30 GMT)
U.S. Dollar Trading (USD) was on the back foot as risk appetite picked up in Asia on leaked China Trade Data showing a jump in Exports of 50% vs. 32%. The data is to be officially released later today and could help support the market searching for good news. Crude Oil Inventories showed another draw-down of -1.8mln and help oil and commodities rally. Stocks gave up gain late in the US session as jitters remain and this helped the USD pare loses. In US stocks, DJIA -40 points closing at 9899, S&P -6 points closing at 1055 and NASDAQ -11 points closing at 2158. Looking ahead, Weekly Jobless Claims are forecast at 338k vs. 453k previously and April Trade Balance is forecast at -41bn vs. -40.4bn previously.
The Euro (EUR) broke above 1.2000 as traders went after weak stops above the figure but failed to close above the key level as US stocks slumped into the close. EUR/JPY likewise was able to break above Y110 before the market eased back to close under the key resistance. EUR/USD traded with a low of 1.1923 and a high of 1.2075 before closing at 1.1980. Looking ahead, ECB rate announcement forecast to remain at 1.0% and President Trichet's Press Conference.
The Japanese Yen (JPY) stayed in a tight range pivoting the Y91.50 level as risk appetite comes and goes. The medium term outlook is being clouded by the weaker then expected US jobs Growth and uncertainty as to the new PM's fiscal plan. April Machine Orders showed a +4% jump vs. +1.2% previously. Overall the USDJPY traded with a low of 91.04 and a high of 91.69 before closing the day around 91.30 in the New York session. UPDATE Q1 Final GDP confirmed at 1.2%.
The Sterling (GBP) shrugged off Tuesday's Fitch comments with the market pushing above 1.4600 as sentiment improved before profit taking helped easing into the US close. April's Trade Balance was slightly worse than expected at -7.3bn vs. -7bn previously. Overall the GBP/USD traded with a low of 1.4394 and a high of 1.4611 before closing the day at 1.4540 in the New York session. Looking ahead, BOE Rate Announcement forecast to remain at 0.5%.
The Australian Dollar (AUD) took full advantage of the improvement in risk to rally up to 0.8350 on strong commodities and good Chinese data. June Consumer Sentiment dropped -5.7% as the European Financial debt crisis and stock market fall took it's toll. The RBNZ hiked rate 0.25% as expected to 2.75%. Overall the AUD/USD traded with a low of 0.8193 and a high of 0.8361 before closing the US session at 0.8280. Looking ahead, May Employment +17.5k vs. 33.7k previously. May Unemployment Rate forecast at 5.4% vs. 5.4% previously. UPDATE ACTUAL EMPLOYMENT +36K UNEMPLOYMENT RATE 5.2%
Oil & Gold (XAU) Gold was hit hard by profit taking as improving sentiment reduced safe haven demand. The market then took profit induced by the US stock bounce. Overall trading with a low of USD$1221 and high of USD$1241 before ending the New York session at USD$1230 an ounce. Oil rallied on the bullish US weekly Inventory numbers. WTI Oil Closed +$2.39 at $74.38 a barrel.
U.S. Dollar Trading (USD) was on the back foot as risk appetite picked up in Asia on leaked China Trade Data showing a jump in Exports of 50% vs. 32%. The data is to be officially released later today and could help support the market searching for good news. Crude Oil Inventories showed another draw-down of -1.8mln and help oil and commodities rally. Stocks gave up gain late in the US session as jitters remain and this helped the USD pare loses. In US stocks, DJIA -40 points closing at 9899, S&P -6 points closing at 1055 and NASDAQ -11 points closing at 2158. Looking ahead, Weekly Jobless Claims are forecast at 338k vs. 453k previously and April Trade Balance is forecast at -41bn vs. -40.4bn previously.
The Euro (EUR) broke above 1.2000 as traders went after weak stops above the figure but failed to close above the key level as US stocks slumped into the close. EUR/JPY likewise was able to break above Y110 before the market eased back to close under the key resistance. EUR/USD traded with a low of 1.1923 and a high of 1.2075 before closing at 1.1980. Looking ahead, ECB rate announcement forecast to remain at 1.0% and President Trichet's Press Conference.
The Japanese Yen (JPY) stayed in a tight range pivoting the Y91.50 level as risk appetite comes and goes. The medium term outlook is being clouded by the weaker then expected US jobs Growth and uncertainty as to the new PM's fiscal plan. April Machine Orders showed a +4% jump vs. +1.2% previously. Overall the USDJPY traded with a low of 91.04 and a high of 91.69 before closing the day around 91.30 in the New York session. UPDATE Q1 Final GDP confirmed at 1.2%.
The Sterling (GBP) shrugged off Tuesday's Fitch comments with the market pushing above 1.4600 as sentiment improved before profit taking helped easing into the US close. April's Trade Balance was slightly worse than expected at -7.3bn vs. -7bn previously. Overall the GBP/USD traded with a low of 1.4394 and a high of 1.4611 before closing the day at 1.4540 in the New York session. Looking ahead, BOE Rate Announcement forecast to remain at 0.5%.
The Australian Dollar (AUD) took full advantage of the improvement in risk to rally up to 0.8350 on strong commodities and good Chinese data. June Consumer Sentiment dropped -5.7% as the European Financial debt crisis and stock market fall took it's toll. The RBNZ hiked rate 0.25% as expected to 2.75%. Overall the AUD/USD traded with a low of 0.8193 and a high of 0.8361 before closing the US session at 0.8280. Looking ahead, May Employment +17.5k vs. 33.7k previously. May Unemployment Rate forecast at 5.4% vs. 5.4% previously. UPDATE ACTUAL EMPLOYMENT +36K UNEMPLOYMENT RATE 5.2%
Oil & Gold (XAU) Gold was hit hard by profit taking as improving sentiment reduced safe haven demand. The market then took profit induced by the US stock bounce. Overall trading with a low of USD$1221 and high of USD$1241 before ending the New York session at USD$1230 an ounce. Oil rallied on the bullish US weekly Inventory numbers. WTI Oil Closed +$2.39 at $74.38 a barrel.
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FX Trading
Wednesday, June 9, 2010
09 Jun 10 : Dollar Continues to Gain
The USD gains further against the Euro and the Sterling on U.S. economy recovery outpacing that of Europe.
* The U.S. economy's recovery could outpace that of Europe's; as sovereign debt concerns continue in the EU to weigh on growth. The euro weakened to as low at 1.1900 yesterday and is trading around that level today ahead of tomorrow's ECB interest rate decision. The European Central Bank is forecasted to leave its key interest rate at a record low until the second quarter of 2011.
* Federal Reserve Chairman Ben S. Bernanke is due to testify today following his comments on the 7th of June where he said he'll raise interest rates before the economy returns to full employment. Investors across the world have little confidence in Europe's efforts to contain its crisis or in Jean-Claude Trichet, ECB President, with a strong majority calling for a default by Greece likely. Only 23% of investors expect the $1 trillion rescue package to both keep the European monetary union together and prevent a debt default by a government, according to a Bloomberg poll of investors and analysts.
* In Asia stocks fell and investors flocked to the safety of the Japanese Yen as the currency rose across the board, increasing demand for safer assets. The yen rose to 109.17 per euro from 109.50 yesterday. Two days ago, the yen traded at 108.08, the strongest level since November 2001.
* Fitch Ratings comments on the U.K.'s fiscal challenge send the sterling lower against most of its major peers. "The scale of the United Kingdom's fiscal challenge is formidable," Fitch said in the first statement by a credit-rating firm on the U.K. since Cameron took office May 11. Sterling declined to 1.4345 against the U.S. dollar and 130.40 against the yen.
Currency to watch out for: EURUSD & USDJPY
* The EURUSD pivot point is at 1.2010 with a preference to enter into short positions at 1.2000
* The GBPUSD pivot point is at 1.4480 with a preference to enter into short positions at 1.4470
Today's calendar and market movers:
* UK Trade Balance expected to post slightly higher to -7.00bln sterling
* US Crude Oil Inventories expected to increase to -1.1 million from -1.9 million
* Federal Reserve Chairman Ben Bernanke is due to testify about economic and financial conditions and the federal budget before the House Budget Committee.
Equity Markets:
* US equities finished mostly higher on Tuesday, led by material and financial shares. At the closing bell the Dow Jones was up 1.26%, the S&P up 1.10% and the NASDAQ ended the day down 0.15%. Stocks in Europe ended lower as well with the FTSE -0.81%, CAC -0.98% and the DAX -0.62%. At the time of writing the Nikkei down 1.04% and the Hang Seng down -0.37%.
* The U.S. economy's recovery could outpace that of Europe's; as sovereign debt concerns continue in the EU to weigh on growth. The euro weakened to as low at 1.1900 yesterday and is trading around that level today ahead of tomorrow's ECB interest rate decision. The European Central Bank is forecasted to leave its key interest rate at a record low until the second quarter of 2011.
* Federal Reserve Chairman Ben S. Bernanke is due to testify today following his comments on the 7th of June where he said he'll raise interest rates before the economy returns to full employment. Investors across the world have little confidence in Europe's efforts to contain its crisis or in Jean-Claude Trichet, ECB President, with a strong majority calling for a default by Greece likely. Only 23% of investors expect the $1 trillion rescue package to both keep the European monetary union together and prevent a debt default by a government, according to a Bloomberg poll of investors and analysts.
* In Asia stocks fell and investors flocked to the safety of the Japanese Yen as the currency rose across the board, increasing demand for safer assets. The yen rose to 109.17 per euro from 109.50 yesterday. Two days ago, the yen traded at 108.08, the strongest level since November 2001.
* Fitch Ratings comments on the U.K.'s fiscal challenge send the sterling lower against most of its major peers. "The scale of the United Kingdom's fiscal challenge is formidable," Fitch said in the first statement by a credit-rating firm on the U.K. since Cameron took office May 11. Sterling declined to 1.4345 against the U.S. dollar and 130.40 against the yen.
Currency to watch out for: EURUSD & USDJPY
* The EURUSD pivot point is at 1.2010 with a preference to enter into short positions at 1.2000
* The GBPUSD pivot point is at 1.4480 with a preference to enter into short positions at 1.4470
Today's calendar and market movers:
* UK Trade Balance expected to post slightly higher to -7.00bln sterling
* US Crude Oil Inventories expected to increase to -1.1 million from -1.9 million
* Federal Reserve Chairman Ben Bernanke is due to testify about economic and financial conditions and the federal budget before the House Budget Committee.
Equity Markets:
* US equities finished mostly higher on Tuesday, led by material and financial shares. At the closing bell the Dow Jones was up 1.26%, the S&P up 1.10% and the NASDAQ ended the day down 0.15%. Stocks in Europe ended lower as well with the FTSE -0.81%, CAC -0.98% and the DAX -0.62%. At the time of writing the Nikkei down 1.04% and the Hang Seng down -0.37%.
Labels:
FX Trading
09 Jun 10 : Gold Sets New High
U.S. Dollar Trading (USD) in another volatile day of trading the market roller coaster continued with a rally in Asia sold off in Europe but finished back at day highs in the US. Bernanke helped markets in Asia with positive comments the the US recovery was continuing. In US stocks, DJIA +123 points closing at 9939, S&P +11 points closing at 1062 and NASDAQ -3 points closing at 2170. Looking ahead, Bernanke Speaks and Crude Oil inventories released forecast at -1.1% vs. -1.9% previously
The Euro (EUR) tested 1.19 as sentiment soured in Europe but when this held the pair rallied sharply to test the now key 1.2000 level. Resistance held true and the pair slipped back into a tight range. EUR/GBP lifted off previous lows on Pound weakness. German Trade Balance missed forecast at 13.1bn vs. 14bn expected. EUR/USD traded with a low of 1.1901 and a high of 1.2010 before closing at 1.1950.
The Japanese Yen (JPY) fell below Y91 at the height of the market weakness in Europe on heavy GBP/JPY and EUR/JPY selling but was able to recover and remain in more familiar ranges in the mid Y91.50 zone. April Leading Indicators dropped -0.2% vs. 4.4% previously. Overall the USDJPY traded with a low of 90.80 and a high of 91.95 before closing the day around 91.40 in the New York session. UPDATE April Machine Orders at 4% vs. 1.2% previously.
The Sterling (GBP) was the worst performing currency as Fitch warned the markets that the UK fiscal position was challenging and required aggressive austerity measures. Cable broke below 1.4400 and was only saved by the late Dow Rally which prompted a return above the figure. Overall the GBP/USD traded with a low of 1.4344 and a high of 1.4532 before closing the day at 1.4440 in the New York session. Looking ahead, April Trade Balance forecast at -7bn vs. 7.52bn previously.
The Australian Dollar (AUD) staged a solid recovery as the risk currency took advantage of stronger stocks to outperform the rest of the market and end close to 0.8300 resistance. 0.8000 continues to be a key target for the bears but the day to day movement of the stock markets are trumping attempts to test the key psychological level. Overall the AUD/USD traded with a low of 0.8121 and a high of 0.8289 before closing the US session at 0.8240. Update June Consumer Sentiment -5.7%.
Oil & Gold (XAU) Gold caught the markets focus with a break higher to fresh record highs above $1250. The market then took profit induced by the US stock bounce. Overall trading with a low of USD$1232 and high of USD$1252 before ending the New York session at USD$1238 an ounce. Oil continued to rally up $0.55 as the gulf spill prompted supply concerns. WTI Oil Closed +$0.55 at $71.99 a barrel.
The Euro (EUR) tested 1.19 as sentiment soured in Europe but when this held the pair rallied sharply to test the now key 1.2000 level. Resistance held true and the pair slipped back into a tight range. EUR/GBP lifted off previous lows on Pound weakness. German Trade Balance missed forecast at 13.1bn vs. 14bn expected. EUR/USD traded with a low of 1.1901 and a high of 1.2010 before closing at 1.1950.
The Japanese Yen (JPY) fell below Y91 at the height of the market weakness in Europe on heavy GBP/JPY and EUR/JPY selling but was able to recover and remain in more familiar ranges in the mid Y91.50 zone. April Leading Indicators dropped -0.2% vs. 4.4% previously. Overall the USDJPY traded with a low of 90.80 and a high of 91.95 before closing the day around 91.40 in the New York session. UPDATE April Machine Orders at 4% vs. 1.2% previously.
The Sterling (GBP) was the worst performing currency as Fitch warned the markets that the UK fiscal position was challenging and required aggressive austerity measures. Cable broke below 1.4400 and was only saved by the late Dow Rally which prompted a return above the figure. Overall the GBP/USD traded with a low of 1.4344 and a high of 1.4532 before closing the day at 1.4440 in the New York session. Looking ahead, April Trade Balance forecast at -7bn vs. 7.52bn previously.
The Australian Dollar (AUD) staged a solid recovery as the risk currency took advantage of stronger stocks to outperform the rest of the market and end close to 0.8300 resistance. 0.8000 continues to be a key target for the bears but the day to day movement of the stock markets are trumping attempts to test the key psychological level. Overall the AUD/USD traded with a low of 0.8121 and a high of 0.8289 before closing the US session at 0.8240. Update June Consumer Sentiment -5.7%.
Oil & Gold (XAU) Gold caught the markets focus with a break higher to fresh record highs above $1250. The market then took profit induced by the US stock bounce. Overall trading with a low of USD$1232 and high of USD$1252 before ending the New York session at USD$1238 an ounce. Oil continued to rally up $0.55 as the gulf spill prompted supply concerns. WTI Oil Closed +$0.55 at $71.99 a barrel.
Labels:
FX Trading,
Market Update
Tuesday, June 8, 2010
08 Jun 10 : Risk Aversion Up
Gold surges, equities fall as risk aversion picks up!
• Markets yesterday traded with caution once again with the US equity markets finishing the session below -1.15% and gold approached last month's record highs to $1245. The VIX, a gauge of fear, traded above 3% to 36.6 as the overall market uncertainty as to developments in Europe and US economic recovery are causing many market participants to purchase insurance in the form of options against future adverse movements in most assets. The only economic data released out of the US on the day was the consumer credit report which showed an increase of $1 bio. We also heard some comments from soon to be Federal Reserve Vice Chairman Janet Yellen saying that ''significant; headwinds to stability remain''. USDJPY price action yesterday was between 91.00 - 92.07.
• In Europe we saw continuous declines in equity and currency markets following the previous days shocking comments from Hungarian officials about the possibility of default. From the financial calendar we had a much stronger than expected factory orders report jumping 2.8% for the month as well as a successful bond auction by the Dutch and Belgian treasury. This shows that the market still segregates between Northern and Southern countries and that Northern EU members have not experienced any significant rise in the cost of financing their debt. EURUSD price action yesterday was between 1.1991 - 1.1875.
Currency to watch out for: EURUSD & USDJPY
•§ The EURUSD pivot point is at 1.1990 with a preference to enter into Short positions at 1.1980
•§ The USDJPY pivot point is at 91.85 with a preference to enter Short positions at 91.80
Today's calendar and market movers:
•§ Germany Industrial Output for the month of April expected at 0.8%
•§ Canada Housing Starts for May expected at 200K
•§ US Redbook for the week, previous months reading was 0.3%
Equity Markets:
• US equities closed negative yesterday with the S&P500 down by -1.35% and the DJIA down by -1.16%. The European bourses were negative yesterday with the FTSE down -1.11% the DAX and the CAC closing at -0.57% and -1.21%. The NIKKEI and the HSI at the time of writing is 0.18% and 0.35% respectively.
• Markets yesterday traded with caution once again with the US equity markets finishing the session below -1.15% and gold approached last month's record highs to $1245. The VIX, a gauge of fear, traded above 3% to 36.6 as the overall market uncertainty as to developments in Europe and US economic recovery are causing many market participants to purchase insurance in the form of options against future adverse movements in most assets. The only economic data released out of the US on the day was the consumer credit report which showed an increase of $1 bio. We also heard some comments from soon to be Federal Reserve Vice Chairman Janet Yellen saying that ''significant; headwinds to stability remain''. USDJPY price action yesterday was between 91.00 - 92.07.
• In Europe we saw continuous declines in equity and currency markets following the previous days shocking comments from Hungarian officials about the possibility of default. From the financial calendar we had a much stronger than expected factory orders report jumping 2.8% for the month as well as a successful bond auction by the Dutch and Belgian treasury. This shows that the market still segregates between Northern and Southern countries and that Northern EU members have not experienced any significant rise in the cost of financing their debt. EURUSD price action yesterday was between 1.1991 - 1.1875.
Currency to watch out for: EURUSD & USDJPY
•§ The EURUSD pivot point is at 1.1990 with a preference to enter into Short positions at 1.1980
•§ The USDJPY pivot point is at 91.85 with a preference to enter Short positions at 91.80
Today's calendar and market movers:
•§ Germany Industrial Output for the month of April expected at 0.8%
•§ Canada Housing Starts for May expected at 200K
•§ US Redbook for the week, previous months reading was 0.3%
Equity Markets:
• US equities closed negative yesterday with the S&P500 down by -1.35% and the DJIA down by -1.16%. The European bourses were negative yesterday with the FTSE down -1.11% the DAX and the CAC closing at -0.57% and -1.21%. The NIKKEI and the HSI at the time of writing is 0.18% and 0.35% respectively.
Labels:
FX Trading
08 Jun 10 : Market Looking for Directions
U.S. Dollar Trading (USD) weak Asian stocks (Nikkei -4% at one point) kept risk off for most of the day with a mild recovery being sold into and the equity markets closing near day lows. April Consumer Credit was solid at +1bn vs. 0.5bn previously. Keeping sentiment low was news the US Financial Crisis Commission had issued subpoenas for Goldman Sachs. In US stocks, DJIA -115 points closing at 9816, S&P -14 points closing at 1050 and NASDAQ -45 points closing at 2173. Looking ahead, Fed Chairman Bernanke Speaks.
The Euro (EUR) the pressure continued on Monday with the EUR/USD breaking below 1.19 in Asia before staging a relief rally. The Market stalled just below the now key 1.2000 level and fell back once more with US stocks ending weaker. German Factory Orders surprised at 2.8% vs. -0.1% forecast. EUR/USD traded with a low of 1.1876 and a high of 1.1993 before closing at 1.1920. Looking ahead, April German Trade Balance forecast at 14bn vs. 13.3bn previously.
The Japanese Yen (JPY) was stronger is the risk averse environment falling back to Y91 on the major and fresh year lows on the EUR/JPY near Y108. In Europe the markets staged a relief rally and this helped USD/JPY back to Y92 and EUR/JPY tested briefly above Y110. Focus on PM Kan's Cabinet and policy direction will affect the Yen today in Asia. Overall the USDJPY traded with a low of 90.96 and a high of 92.10 before closing the day around 91.59 in the New York session. Looking ahead, April Leading Indicators previously at 4.4%.
The Sterling (GBP) was beholden to market sentiment off in Asia before rebounding in the Europe above 1.4500. The market then eased back for the rest of the day as US stocks turned negative. EUR/GBP pushed up towards 0.8300 before resuming its downtrend and hitting fresh year lows just above 0.8200. Overall the GBP/USD traded with a low of 1.4387 and a high of 1.4566 before closing the day at 1.4480 in the New York session.
The Australian Dollar (AUD) tested 0.8100 after falling heavily at the start of the week on AUD/JPY selling but was able to bounce back above the 0.8200 as the Euro recovered in Europe. The weakness in US stocks towards the close pushed the Aussie back down to day lows under 0.8100 and weakness in commodities excluding gold is keeping the key 0.8000 level in focus. Overall the AUD/USD traded with a low of 0.8081 and a high of 0.8217 before closing the US session at 0.8110. Looking ahead, May Business Confidence previously at 13.
Oil & Gold (XAU) pushed towards record highs as the European turmoil added demand for the safe haven asset. Overall trading with a low of USD$1210 and high of USD$1245 before ending the New York session at USD$1240 an ounce. Oil was mixed finishing flat after testing $70 a barrel. WTI Oil Closed -$0.07 at $71.44 a barrel.
The Euro (EUR) the pressure continued on Monday with the EUR/USD breaking below 1.19 in Asia before staging a relief rally. The Market stalled just below the now key 1.2000 level and fell back once more with US stocks ending weaker. German Factory Orders surprised at 2.8% vs. -0.1% forecast. EUR/USD traded with a low of 1.1876 and a high of 1.1993 before closing at 1.1920. Looking ahead, April German Trade Balance forecast at 14bn vs. 13.3bn previously.
The Japanese Yen (JPY) was stronger is the risk averse environment falling back to Y91 on the major and fresh year lows on the EUR/JPY near Y108. In Europe the markets staged a relief rally and this helped USD/JPY back to Y92 and EUR/JPY tested briefly above Y110. Focus on PM Kan's Cabinet and policy direction will affect the Yen today in Asia. Overall the USDJPY traded with a low of 90.96 and a high of 92.10 before closing the day around 91.59 in the New York session. Looking ahead, April Leading Indicators previously at 4.4%.
The Sterling (GBP) was beholden to market sentiment off in Asia before rebounding in the Europe above 1.4500. The market then eased back for the rest of the day as US stocks turned negative. EUR/GBP pushed up towards 0.8300 before resuming its downtrend and hitting fresh year lows just above 0.8200. Overall the GBP/USD traded with a low of 1.4387 and a high of 1.4566 before closing the day at 1.4480 in the New York session.
The Australian Dollar (AUD) tested 0.8100 after falling heavily at the start of the week on AUD/JPY selling but was able to bounce back above the 0.8200 as the Euro recovered in Europe. The weakness in US stocks towards the close pushed the Aussie back down to day lows under 0.8100 and weakness in commodities excluding gold is keeping the key 0.8000 level in focus. Overall the AUD/USD traded with a low of 0.8081 and a high of 0.8217 before closing the US session at 0.8110. Looking ahead, May Business Confidence previously at 13.
Oil & Gold (XAU) pushed towards record highs as the European turmoil added demand for the safe haven asset. Overall trading with a low of USD$1210 and high of USD$1245 before ending the New York session at USD$1240 an ounce. Oil was mixed finishing flat after testing $70 a barrel. WTI Oil Closed -$0.07 at $71.44 a barrel.
Labels:
FX Trading
Monday, June 7, 2010
07 Jun 10 : Non Farm Payroll Disappointed our Markets
Non Farm payrolls disappoint the markets!
* Markets on Friday had another down day due to the very disappointing Non Farm Payrolls report. The number was expected to show that the US created 523K jobs for the month of may, however the report only indicated that the US created just over 400K jobs and most of these jobs were public sector jobs as opposed to the private sector. The whole world is expecting the US to be one of the main drivers of global growth this year and such disappointing job reports can only add to the global pessimism prevailing these days. USDJPY collapsed from 92.87 - 90.97 following the report. Equity markets fell over 3% and Gold rallied to $1220oz.
* In Europe on Friday we had further sovereign default risks appear via Hungary as officials said that the previous government has been tampering with budget figures and that the possibility of a Hungarian default cannot be excluded. Clearly Hungarian officials either do not recognize the dangers in using such rhetoric or are planning for a debt restructuring of their own. The Hungarian story coupled with the bad NFP report caused the Euro to trade below 1.2000 to a low of 1.1878 opening the way to 1.1000 targets set by a number of global tier one investment banks.
* Looking ahead the market has shifted its focus to the ECB bank stress tests results so as to cast some light on the actual situation faced by EU banks. The ECB policy decision will also be in focus this Thursday where Trichet's communiqué will be widely watched. It is worth noting that the ECB has lost some credibility lately following its announcement of the bond purchasing program a day after it categorically denied such a move.
Currency to watch out for: EURUSD & USDJPY
* § The EURUSD pivot point is at 1.2020 with a preference to enter into Short positions at 1.2010
* § The USDJPY pivot point is at 91.65 with a preference to enter Short positions at 91.60
Today's calendar and market movers:
* § EZ Sentix Index for June is forecasted at -7
* § Germany Industrial Orders for April expected at 0.2%
* § US Consumer Credit for April expected at 0.5 bio
Equity Markets:
US equities closed negative yesterday with the S&P500 down by -3.51% and the DJIA down by -3.44%. The European bourses were negative yesterday with the FTSE down -1.63% the DAX and the CAC closing at -1.91% and -2.86%. The NIKKEI and the HSI at the time of writing is -3.84% and -2.36% respectively.
* Markets on Friday had another down day due to the very disappointing Non Farm Payrolls report. The number was expected to show that the US created 523K jobs for the month of may, however the report only indicated that the US created just over 400K jobs and most of these jobs were public sector jobs as opposed to the private sector. The whole world is expecting the US to be one of the main drivers of global growth this year and such disappointing job reports can only add to the global pessimism prevailing these days. USDJPY collapsed from 92.87 - 90.97 following the report. Equity markets fell over 3% and Gold rallied to $1220oz.
* In Europe on Friday we had further sovereign default risks appear via Hungary as officials said that the previous government has been tampering with budget figures and that the possibility of a Hungarian default cannot be excluded. Clearly Hungarian officials either do not recognize the dangers in using such rhetoric or are planning for a debt restructuring of their own. The Hungarian story coupled with the bad NFP report caused the Euro to trade below 1.2000 to a low of 1.1878 opening the way to 1.1000 targets set by a number of global tier one investment banks.
* Looking ahead the market has shifted its focus to the ECB bank stress tests results so as to cast some light on the actual situation faced by EU banks. The ECB policy decision will also be in focus this Thursday where Trichet's communiqué will be widely watched. It is worth noting that the ECB has lost some credibility lately following its announcement of the bond purchasing program a day after it categorically denied such a move.
Currency to watch out for: EURUSD & USDJPY
* § The EURUSD pivot point is at 1.2020 with a preference to enter into Short positions at 1.2010
* § The USDJPY pivot point is at 91.65 with a preference to enter Short positions at 91.60
Today's calendar and market movers:
* § EZ Sentix Index for June is forecasted at -7
* § Germany Industrial Orders for April expected at 0.2%
* § US Consumer Credit for April expected at 0.5 bio
Equity Markets:
US equities closed negative yesterday with the S&P500 down by -3.51% and the DJIA down by -3.44%. The European bourses were negative yesterday with the FTSE down -1.63% the DAX and the CAC closing at -1.91% and -2.86%. The NIKKEI and the HSI at the time of writing is -3.84% and -2.36% respectively.
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FX Trading
07 Jun 2010 : Another Week Opens... With a Whimper..
CURRENCY TRADING SUMMARY - 7th June (00:30 GMT)
U.S. Dollar Trading (USD) risk aversion spiked again on Friday with weaker than expected Jobs data compounded by renewed European Concerns. May Non Farms increased by 431k vs. 513k forecast and included 411k census jobs. May's Unemployment Rate dropped to 9.7% vs. 9.9% previously. In US stocks, DJIA +323 points closing at 9931, S&P -37 points closing at 1064 and NASDAQ -83 points closing at 2219. Looking ahead, April Consumer Credit is forecast at 0.5bn vs. 2bn previously.
The Euro (EUR) aggressive selling resumed after the French PM stated the fall in the Euro was good for France and Hungary let the market know the previous government falsified data. Adding to this weak US stocks and the market pushed through 1.20 on the major and Y110 on the EUR/JPY. EUR/USD traded with a low of 1.1958 and a high of 1.2215 before closing at 1.1963. Looking ahead, June Eurozone Sentix forecast at -7bn vs. -6.4bn. Also Released, April German Industrial Orders forecast at 0.2% vs. 5% previously.
The Japanese Yen (JPY) safe haven flows and weak US data reversed the USD/JPY direction which had being enjoying solid gains of the back PM Kan's appointment. EUR/JPY and AUD/JPY were very heavy in the US and could extend losses if stock markets continue to fall. Overall the USDJPY traded with a low of 91.43 and a high of 92.89 before closing the day around 91.59 in the New York session.
The Sterling (GBP) tracked the Euro lower falling below 1.4500 support on heavy GBP/JPY selling. UK House Prices dropped -0.4% in May according to Halifax. EUR/GBP continued to slump below 0.8300 to test 0.8250. Overall the GBP/USD traded with a low of 1.4456 and a high of 1.4681 before closing the day at 1.4466 in the New York session.
The Australian Dollar (AUD) with risk off the currency crashed nearly 3% falling below 0.8400 and then 0.8300. AUD/JPY slipped back to Y75 support but with Dow losses over 300 points the market is cautious of further selling Monday from Japanese investors. Overall the AUD/USD traded with a low of 0.8214 and a high of 0.8477 before closing the US session at 0.8230.
Oil & Gold (XAU) rallied off $1000 as the demand for alternative investments pushed the precious metal back to $1220. Overall trading with a low of USD$1197 and high of USD$1221 before ending the New York session at USD$1219 an ounce. Oil Slumped on investor concerns about global growth. WTI Oil Closed -$3.10 at $71.51 a barrel.
U.S. Dollar Trading (USD) risk aversion spiked again on Friday with weaker than expected Jobs data compounded by renewed European Concerns. May Non Farms increased by 431k vs. 513k forecast and included 411k census jobs. May's Unemployment Rate dropped to 9.7% vs. 9.9% previously. In US stocks, DJIA +323 points closing at 9931, S&P -37 points closing at 1064 and NASDAQ -83 points closing at 2219. Looking ahead, April Consumer Credit is forecast at 0.5bn vs. 2bn previously.
The Euro (EUR) aggressive selling resumed after the French PM stated the fall in the Euro was good for France and Hungary let the market know the previous government falsified data. Adding to this weak US stocks and the market pushed through 1.20 on the major and Y110 on the EUR/JPY. EUR/USD traded with a low of 1.1958 and a high of 1.2215 before closing at 1.1963. Looking ahead, June Eurozone Sentix forecast at -7bn vs. -6.4bn. Also Released, April German Industrial Orders forecast at 0.2% vs. 5% previously.
The Japanese Yen (JPY) safe haven flows and weak US data reversed the USD/JPY direction which had being enjoying solid gains of the back PM Kan's appointment. EUR/JPY and AUD/JPY were very heavy in the US and could extend losses if stock markets continue to fall. Overall the USDJPY traded with a low of 91.43 and a high of 92.89 before closing the day around 91.59 in the New York session.
The Sterling (GBP) tracked the Euro lower falling below 1.4500 support on heavy GBP/JPY selling. UK House Prices dropped -0.4% in May according to Halifax. EUR/GBP continued to slump below 0.8300 to test 0.8250. Overall the GBP/USD traded with a low of 1.4456 and a high of 1.4681 before closing the day at 1.4466 in the New York session.
The Australian Dollar (AUD) with risk off the currency crashed nearly 3% falling below 0.8400 and then 0.8300. AUD/JPY slipped back to Y75 support but with Dow losses over 300 points the market is cautious of further selling Monday from Japanese investors. Overall the AUD/USD traded with a low of 0.8214 and a high of 0.8477 before closing the US session at 0.8230.
Oil & Gold (XAU) rallied off $1000 as the demand for alternative investments pushed the precious metal back to $1220. Overall trading with a low of USD$1197 and high of USD$1221 before ending the New York session at USD$1219 an ounce. Oil Slumped on investor concerns about global growth. WTI Oil Closed -$3.10 at $71.51 a barrel.
Labels:
FX Trading
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