Mixed GDP and Initial Claims Figures Spur Volatility | April 29, 2011

April 29, 2011 By
XAUAUD

Gold rallied, with traders eyeing safe haven assets

Good morning. Equity markets finished the Thursday session on a positive note with mixed economic drivers. GDP Data released during the day highlighted inconsistency in forecasting with 1.8% recorded for Q1. The market had factored in 1.7%. Initial Claims figures however rose for the period, with 429,000 recorded. This was well above initial estimates of 390,000. A surprising economic announcement was that of Pending Home Sales, with 5.1% posted in March. Economists highlighted that the result was a key driver in trader and market sentiment. Tomorrow’s economic data includes Personal Income, Personal Spending, and Chicago PMI. In other news, Japanese Central Bank Governor commented on the proposed increase in stimulatory measures. Rejecting the possibility of further measures to combat slow economic growth, the Bank of Japan cited the potential for a slingshot recovery scenario. Industrial Output posted its worst over fall, during the session.

On the equity market front, the Dow Jones rose 72 points to close at 12763. Software / Technology giant Microsoft reported a strong rise in earnings for the quarter with net income rising about $5.1 billion. Buoyant demand in the xbox business unit, was cited as a key contributing factor. In other corporate news, Motorola closed 2% higher, with the market reacting to encouraging earnings news.

On the currency front, the Aussie Dollar continued on its strong trend, with the currency breaking through 1.09. Trading at 1.0894, late in the session the currency took a breather ahead of GDP data. Commodity movements were contained early in the day, before a late rally in base metals and Gold. Oil contracted, pushing the greenback higher. Reacting to yesterday’s inflation forecast in Australia, economists began factoring in an early rise in rates. Volatile session for the Japanese Yen on Thursday, with economic uncertainty pushing the greenback in and out of positive territory. Key GDP data released during the day also painted a mixed picture with 1.8% recorded. This was slightly above initial forecasts, however the GDP deflator fell shy of the 2.4% expected. Markets also reacted to a rise in Initial Claims with 429,000 posted for the period. The Japanese Yen firmed on safe haven buying later in the session. The USDJPY traded at 81.55.  EURUSD weakened considerably against the greenback on Thursday, with the currency touching 1.4793. Market fears that Spain could be the next country to receive an emergency bailout, plagued the currency late in the day. Portugal originally noted during the debt crisis, that they would not require the EU’s helping hand. The adjustment in sentiment and a rise in debt borrowing costs pressured the Portuguese economy, forcing the country to receive an EU package. Jitters over the crisis continued to force the Euro into a downward trend.

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Fed’s Comments Push Equity Markets Higher | April 28, 2011

April 29, 2011 By
AUDUSD

Risk appetite pushes the Aussie Dollar to record levels.

Good morning. Equity markets closed Wednesday on a positive note, with comments from the Federal Reserve driving sentiment. Highlighting the importance of further economic stimulation, Bernanke was confident that the recent Bond Purchasing program had begun to pay dividends. The Fed kept the headline interest rate at 0.25%. Durable Orders data released during the session also supported renewed market vigour with 2.5% recorded in March. This was above market expectations of 1.8%. Thursday will see a slew of economic reports with GDP, Initial Claims and Pending Home Sales released. Across the atlantic, markets were relatively subdued, ahead of the royal wedding on Friday. Traders are keenly watching the ECB and Bank of England for an indication of economic direction, in light of recent debt developments.

On the equity market front, the S&P 500 closed 0.6% higher with online retailer EBay posting a better than expected quarter. Reporting a 20% boost in earnings, the company was comfortable with current economic environment. Berkshire Hathaway former boss Sokol could be landed with civil action from the company, after the board found that the executive had breached trading guidelines. The move had little impact on the price.

On the currency front, The Japanese Yen weakened against the greenback on Wednesday with the market eyeing a sovereign downgrade from ratings agency Standard and Poor. Highlighting the recent impact of the Japanese earthquake and tsunami on the economy, the ratings company was also cautious on the long term outlook of the currency. Recent market volatility has led to a strong local currency, in turn influencing corporate earnings. Nintendo and Canon cited the impact of the buoyant yen on their long term earnings. The USDJPY traded at 82.03.   Continuing to outperform the US dollar, the Aussie reacted to news that the RBA could increase rates early in May. Inflation data released during the session, highlighted a 1.6% quarterly gain. This translated into an annual 3.3%, which is above the Reserve Bank’s level of comfort. The Aussie dollar opened slightly lower, before recovering to push past 1.085. Comments from exporters continued to worry economists with agricultural producers feeling the effects of a strong currency. The AUDUSD traded at 1.0869. The Swiss Franc rallied against the US dollar with Durable Orders figures initially supporting the greenback. Trading at 0.8738, the market watched for comments from the Fed over the currenct monetary policy stance. Bernanke is forecast to leave rates at record lows. Key economic data released later in the week in the US includes Q1 GDP, and Personal Income. The market expects a 1.7% rise for the corresponding period. Safe haven buying ahead of the announcements have contributed to further gains in the CHF.

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Consumer Confidence Boosts US Equity Markets | April 27, 2011

April 27, 2011 By
XAGUSD

Silver tracked other base metal commodities and weakened against the greenback on Tuesday

Good morning. Equity markets finished the Tuesday session on a positive note with Consumer Confidence data driving gains. Reporting a better than expected 65.4 on the index, the market had initially factored in 64.4.  On the housing front however, the Case Shiller index posted a contraction of 3.33%. The report covers 20 cities within the US and focuses on adjusting the overall mean housing price for the period. Washington DC posted a slight increase, with mid west America experiencing larger falls in February. Wednesday will see Durable Orders and Crude Inventories released to the market. Across the Atlantic, debt refinancing worries were contained, with economists highlighting the potential for an adjustment in short inflation. Chinese officials also spoke of inflationary pressure with the country forecasting a rise for the second quarter. Markets have been cautious in analysing and forecasting potential tightening in monetary policy in the global giant.

On the equity market front, the Dow Jones closed 115 points higher. The Tech sector experienced heightened levels of volatility with Amazon falling 3%. The company reported a 38% rise in revenues, however logistics and fulfilment cost pressure led to a decline in overall profitability.

On the currency front, the Aussie Dollar rallied against the greenback with the currency pair touching 1.0791 late in the day. Initial commodity strength supported gains, with traders also speculating on future inflationary levels. Recent hints from the Reserve Bank that interest rates would go higher, have led to a steady rise in the pairing. Economists continue to speculate over the impact of a stronger currency on the local tourism industry.  Risk appetite pushed the Euro higher against the US dollar on Tuesday. Debt figures released during the day had a subdued effect on the currency. Recording a 142% debt level, in relation to GDP, the market noted the significant impact of the Global Financial Crisis on Ireland’s growing deficit. Worries over the cost of refinancing the debt has led to significant volatility in the currency. Traders await key comments from the ECB later in the week. The EURUSD traded at 1.4637. Consolidating on Tuesday, the Japanese Yen traded on thin volumes. Corporate news from Canon and Marubeni pushed the Yen higher early in the session, before recovering late in the day. Highlighting a fall in earnings for the period, Canon was cautious on their quarterly outlook, as earthquake and currency fears erode sentiment. Marubeni noted the importance of re centralisation of production to reduce the impact of a stronger yen. The USDJPY traded at 81.67.

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Will New Home Sales Data Support Growth ? | April 26, 2011

April 26, 2011 By

The Japanese Yen reacted to New Home Sales Data late in the session.

Good Morning. Equity markets finished the session on a slightly weaker note on Monday. Coming off an Easter Break the major indices experienced light volumes and volatility. New Home Sales data was released in the US with 300,000 reported for the period. The market had factored in 280,000. Consumer Confidence, GDP, and Personal Income figures are released later in the week. Commodities experienced a mixed session, with Light Crude Oil falling to 112.20 a barrel. Gold however bucked the trend and stabilised at 1508 an ounce. The International Monetary Fund surprised the market, with the agency reporting on the strength of the Chinese economy and its dominance from a real GDP point of view. Proposing that the US economy would fall behind the Chinese market in 5 years time, the report cited pressure from the manufacturing and financial services sectors. Across the atlantic, European leaders were cautious on the short term outlook , with Greek and Spanish debt refinancing costs highlighted as key contributors for market direction. A significant jump could see further weakness in the region.

On the equities front, the Dow Jones closed 26 points lower. Mixed sector earnings reported during the session, with positive movements from Ameriprise. The financial services provider posted a 13% gain in earnings. Netflix announced a strong gain in profit for the period, however the EPS fell well shy of the $1.02 expected. The market savaged the stock, pushing the company 4.9% lower.

On the currency front, the Swiss Franc continued its strong march against the greenback, with the currency trading at 0.8808. Recovering before the Easter break, the USDCHF fell away, even after New Home Sales were released. The market continues to eye the potential for higher yield and safety in the Swiss Franc. Traders have watched with anticipation over the recent developments in the EU. Debt refinancing costs in Greece, Ireland and Spain and the concern over a potential default has played into the arms of the Swiss Franc. Trading lower, the Japanese Yen reacted to news that the Bank of Japan would keep rates at current levels. The market was also apprehensive in light of disappointing corporate data from Nintendo. The computer games and console manufacturer posted a 50% fall in earnings from the previous period. Economists however continue to factor in the possibility of heightened investment from the economic power houses of China and the US. The recent disasters have led to a closer ties with both countries. The USDJPY traded at 81.92.

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Good Friday Holiday | April 23rd 2011

April 23, 2011 By

Good friday Holiday

Filed Under: April
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