2011 May

Holiday Markets | May 31, 2011

May 31, 2011 By Vantage FX

EURUSD was relatively quiet, treading within the averages of 1.4290

Both US and UK markets were closed for Memorial Day overnight. However, the SP500 future was still trading within the range of 5 points, quiet and resilient waiting for the markets to open Tuesday.

European shares finished low for Monday trading session with thin volumes as the both US and UK markets were closed. There was no surprise that this market will continue to struggles amid of euro debt crisis.

All major USD denominated, in particular GBPUSD and EURUSD both were relatively quiet, treading within the averages of 1.6475 and 1.4290 respectively.

Oil came off below 100 early in the afternoon yesterday but tracked back above 100 with very little conviction. A consequential reaction from Euro concerns over region’s debt crisis. However, the late level tracing of 100 shows that Asia may have the momentum in its session today.

INDICES
	Last Traded	Change %
SPI 200 Futures	4676	0.3
S&P500 Index	holiday	0
S&P500 Futures	holiday	0
Dow Jones Indus. Avg	holiday	0
FTSE 100 Index	holiday	0

COMMODITIES
	Last Traded	Change %
Gold	1539.4	-0.03
Oil (Nymex)	100.3	-0.07

CURRENCIES
	Last Traded	Change %
AUDUSD	1.0689	-0.2
EURUSD	1.4293	0.08
GBPUSD	1.6475	0
USDJPY	81.02	-0.09

Filed Under: May Tagged With: Asia, AUDUSD, currency trading, debt crisis, Dow Jones Indus. Avg, Euro, euro debt crisis, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, market wrap, Memorial Day, Oil, oil (nymex), S&P500, S&P500 Future, S&P500 Futures, S&P500 Index, SPI 200 Futures, UK market, US market, USD, USDJPY, vantage fx

A Risk Averse Market | May 30, 2011

May 30, 2011 By Vantage FX

Commodity again is continuing on its bull course with Gold and Copper

US ended modestly higher by the close of Friday but still down fourth week in a row with SP500 traded at 1331.11, a 0.41% up. The US market is pre-emptively trading towards a further Feds interjection. Given the all low than expected data released in the last couple of trading sessions, there is should be a hint that the Feds will continue its zero interest policy to the allow the economy room to breathe, hence weakening the USD even further.

The weakness in US Dollar helped most of USD denominated currencies: AUDUSD, GBPUSD and EURUSD all edged higher by the close of Friday. However, the upside trading looked to have been light with lack of conviction by volumes. AUDUSD was trading well clear above the 1.07 level with the expectation from China to release strong trade balance numbers.

Commodity again is continuing on its bull course with Gold and Copper in particular both looks to surge over the next couple of trading days. This is on the back of China is about to release its trade balance with the expectation that their imports will be much higher than expected, hence may send some good news to their trading partners, especially Australia.

European markets also edged higher between 0.7 to 1% with the help of strong commodity as well as Basel III capital requirements looks to be less stringent. However, the upside volumes looks to be less convicted as euro zone debt crisis remain uncertain. Greece’s debt is now currently standing at approximately 330B euros and a very small chance to pass the fiscal target as its hope for surviving going into default does not look promising. The greys of uncertainties will likely continue for the next week or so until IMF and ECB officials iron the structure of Greek’s debt going forward.

INDICES
	Last Traded	Change %
SPI 200 Futures	4684	0.51
S&P500 Index	1331.10	0.41
S&P500 Futures	1330	0.038
Dow Jones Indus. Avg	12441.58	0.31
FTSE 100 Index	5938.87	0.69

COMMODITIES
	Last Traded	Change %
Gold	1538.3	0.07
Oil (Nymex)	100.58	0.100

CURRENCIES
	Last Traded	Change %
AUDUSD	1.0708	0.103
EURUSD	1.4290	0.042
GBPUSD	1.6490	0.116
USDJPY	80.83	-0.049

Filed Under: May Tagged With: AUDUSD, Australia, Basel III, Bullish, China, commodities, copper, currencies, currency trading, debt crisis, Dow Jones Indus. Avg, ECB, Euro, euro zone, european debt, European market, European session, Euros, EURUSD, Fed, fiscal target, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, Greece, IMF, Imports, indices, interest policy, market wrap, Oil, oil (nymex), S&P500, S&P500 Futures, S&P500 Index, SPI 200 Futures, Trade Balance, US Dollar, US market, US session, USD, USDJPY, vantage fx, volume, zero interest

US In Search For More Easing | May 27, 2011

May 27, 2011 By Vantage FX

Both poor numbers and the ending of QE2 saw USDJPY easing back to 81.20.

US overnight followed the bullish lead that was left by the Asian trading session yesterday. It was resilient despite the weaker than expected numbers that were released.

	Survey	Actual	Prior
GDP QoQ (Annualized)	2.20%	1.80%	1.80%
Personal Consumption	2.80%	2.20%	2.70%
GDP Price Index	1.90%	1.90%	1.90%
Core PCE QoQ	1.50%	1.40%	1.50%
Initial Jobless Claims	404K	424K	409K
Continuing Claims	3700K	3690K	3711K

SP500 was boosted by strings of strong corporate earnings, which all topped analyst expectation and erase the two days slide. However, the market quickly reminded itself that quantitative easing (QE2) is about to end but with the economy dragging its feet, there should be no surprises if the Feds decided to interject further. Both poor numbers and the ending of QE2 saw USDJPY easing back to 81.20.

AUDUSD seemed to have been quite muted with US data and continued on its bullish stairs. This was helped by commodity inelastic attitude towards the downside with Copper continue to outperformed as it stays well cleared above 410 level. Moreover, China has been ranked as the key economy among 22 emerging Asian economies that will most likely to sustain strong growth over the next five years. This is sending good news to a much needed dislocated Aussie equity market at present, which explains why AUDUSD is still looking good and can easily see that it will stay above the 1.04 level.

EURUSD lost all of its day trading gain as the woes in Europe continue. The situation in Greece is becoming more pressing as markets are of the view that it will be impossible for Greece to honor its obligation. Even if Greece decided to sell its state assets, which estimated to be worth between 200-300B euros, this somewhat may not provide enough liquidity to its market.

INDICES
	Last Traded	Previous Close	Change %	Net Change
SPI 200 Futures	4674	4669	0.107	5
S&P500 Index	1325.69	1320.47	0.395	5.22
S&P500 Futures	1327	1326.5	0.038	0.5
Dow Jones Indus. Avg	12402.76	12394.66	0.065	8.1
FTSE 100 Index	5880.99	5870.14	0.185	10.85
Volatility Index	16.09	17.07	-5.741	-0.98

COMMODITIES
	Last Traded	Previous Close	Change %	Net Change
Gold	1523.2	1523.7	-0.033	-0.5
Oil (Nymex)	100.13	100.23	-0.100	-0.1

CURRENCIES
	Last Traded	Previous Close	Change %	Net Change
AUDUSD	1.0634	1.0645	-0.103	-0.0011
EURUSD	1.4139	1.4145	-0.042	-0.0006
GBPUSD	1.6386	1.6405	-0.116	-0.0019
USDJPY	81.25	81.29	0.049	-0.04

Filed Under: May Tagged With: Asian session, AUDUSD, Aussie, Bullish, China, commodities, Continuing Claims, copper, Core PCE QoQ, corporate earnings, currency trading, Dow Jones Indus. Avg, equity market, Euros, EURUSD, Feds, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, GDP Price Index, GDP QoQ, Gold, Greece, Initial Jobless Claims, liquidity, market wrap, oil (nymex), Personal Consumption, QE2, Quantitative Easing, S&P 500 Index, S&P500, S&P500 Futures, SPI 200 Futures, US, US overnight session, USDJPY, vantage fx, volatility index

De-Leveraging Time | May 26, 2011

May 26, 2011 By Vantage FX

MT4 Chart for GBPUSD

A mixed bag of numbers were released in UK overnight, which gave the markets a boost with GDP came in as expected at 0.5% and 1.8% for QoQ and YoY respectively. Exports up at 2.3% (higher than analyst expectation) where as imports fell to 2.3%, which was less than expected at -0.7%. Moreover, government spending is high and private consumption was low (there is no surprise there).These numbers somewhat sent good news into the markets and fuelled GBPUSD to rallied over 100 points. Despite the numbers were not that strong, however, it did not surprised the market which is a good thing given all the uncertainties that Europe is currently enduring.

Commodities rallied again for a second day, Nymex breached the 101 level where as Gold continued to steady itself back to 1550 level (which could easily be the next stop). The movements are becoming clearer by the day, sending a signal into the markets that these two are on a one way street. Oil is becoming a scarce commodity as mentioned in the last two reports that OPEC is running out of its reserves trying to fill the gap that Libya caused. Gold is now back to “defensive” category as Europe trying to outline its austerity measure for Greece.

Strong commodities allowed AUDUSD and AUDJPY to regained all of its losses incurred during its trading hour due to the stream of bad news. Trading back at 1.0550 and 86.50 levels respectively.

Australia downgraded its banks, media sector and especially its market targets by 8%, this was followed by China had some downgrades on its own, in particular growth. These downgrades are forcing the markets to put back the bear hat. However, let’s not forget that this is not all entirely bad news as the markets looks to tighten both fiscal and monetary policies (across Asia and Europe) because there is capacity.

INDICES
	Last Traded	Previous Close	Change %	Net Change
SPI 200 Futures	4629	4589	0.872	40
S&P500 Index	1320.47	1316.28	0.318	4.19
S&P500 Futures	1317.25	1316.5	0.057	0.75
Dow Jones Indus. Avg	12394.66	12356.21	0.311	38.45
FTSE 100 Index	5870.14	5858.41	0.200	11.73
Volatility Index	17.07	17.82	-4.209	-0.75

COMMODITIES
	Last Traded	Previous Close	Change %	Net Change
Gold	1527.5	1527.8	-0.020	-0.3
Oil (Nymex)	101.47	101.32	0.148	0.15

CURRENCIES
	Last Traded	Previous Close	Change %	Net Change
AUDUSD	1.053	1.0532	-0.019	-0.0002
EURUSD	1.4086	1.4088	-0.014	-0.0002
GBPUSD	1.6289	1.6274	0.092	0.0015
USDJPY	82.01	81.97	-0.049	0.04

Filed Under: May Tagged With: Asia, AUDJPY, AUDUSD, austerity measures, Australia, bank downgrades, bearish, China, commodities, currency trading, Dow Jones Indus. Avg, downgrades, Europe, EURUSD, Exports, fiscal policy, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, GDP, Gold, government spending, Greece, Imports, Libya, market wrap, media sector, monetary policy, Nymex, Oil, oil (nymex), OPEC, private consumption, QoQ, S&P500 Futures, S&P500 Index, SPI 200 Futures, UK, USDJPY, vantage fx, volatility index, YoY

A Tenuous Market… | May 25, 2011

May 25, 2011 By Vantage FX

Chart for Gold (XAUUSD)

US market overnight tracked sideways as they tentatively waited for some sort of resolution in the European region. SP500 attempted to rally after the open within the interval of 40 minutes. However, it was not long until it slowly headed south and traded within a 6 points range for the remaining of the session.

The “fear” sentiment largely driven by the downgrade of Greek’s debt as well as S&P also set the Italian credit rating from stable to negative. Markets in the last 48 hours looked at Treasuries, USD and commodities for some salvations. This explains why gold and oil (back up above the 100 level) slowly creeping north, coupled with the fact that Goldman upgraded from bearish to bullish view (as the market is embracing the loss in Libyan’s oil production and OPEC lack of interjection). Hence, allowing AUDUSD to hold its 1c gain after the dip to 1.0480.

FTSE and DAX continued to displayed weakness and this is no surprise. Both tried to convert themselves to a “bid” market, however, ended at previous day lows of 5850 and 7150 respectively. Apart from Greece is now looking to default just around the corner (as its current supply can only last to July 2011), sentiment was not helped when PMI in Eurozone pulled back to the mid 50s level, slender the market conditions even further.

PBOC has explicitly made it clear that they will tighten their monetary policy in the short term. This has created a very “restrictive nature” in the market and had the Shanghai composite down 0.28%, which is holding a 3% down from Monday. Goldman downgraded their 2011 GDP to 9.4% from 10%. Furthermore, across the emerging markets realm, the respective regulator bodies are now on the “rate hike” band wagon, fighting inflationary pressure (so too is RBA).

AUDUSD currently range trading at present and the last 3 sessions has proven that. Partly because of China tightening policy view as Australia has great leverage in that nation, as well as RBA consistently promulgates that it must raise the rate soon to curb inflation.

INDICES
	Last Traded	Previous Close	Change %	Net Change
SPI 200 Futures	4633	4630	0.065	3
S&P500 Index	1316.28	1317.37	-0.083	-1.09
S&P500 Futures	1313	1313.5	-0.038	-0.5
Dow Jones Indus. Avg	12356.21	12381.26	-0.202	-25.05
FTSE 100 Index	5858.41	5835.89	0.386	22.52
Volatility Index	17.82	18.27	-2.463	-0.45

COMMODITIES
	Last Traded	Previous Close	Change %	Net Change
Gold	1525.4	1523.3	0.138	2.1
Oil (Nymex)	99.19	99.59	-0.402	-0.40001

CURRENCIES
	Last Traded	Previous Close	Change %	Net Change
AUDUSD	1.0555	1.0559	-0.038	-0.0004
EURUSD	1.4096	1.41	-0.028	-0.0004
GBPUSD	1.6178	1.6181	-0.019	-0.0003
USDJPY	82.04	81.95	-0.110	0.09

Filed Under: May Tagged With: AUDUSD, Australia, bearish, Bullish, China, commodities, Credit Rating, currency trading, DAX, Dow Jones Indus. Avg, Europe, Eurozone, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE, FTSE100 Index, GBPUSD, GDP, Gold, Goldman, Greece, Greek debt, inflation, inflationary pressure, Libya, market wrap, monetary policy, Nymex, Oil, OPEC, PBOC, PMI, rate hike, RBA, S&P500, S&P500 Futures, S&P500 Index, Shanghai composite, sovereign downgrade, SPI 200 Futures, tightening policy, treasuries, US Dollar, US market, USD, USDJPY, vantage fx, volatility index, XAUUSD

European Woes Continue | May 24, 2011

May 24, 2011 By Vantage FX

Overnight Summary:

SPI ↓ 0.62%
Dow Jones ↓ 1.1%
S&P500 ↓ 1.2%
FTSE100 ↓ 1.9%
Gold ↑ 0.4%
Oil ↓ 2.4%
Vix ↑ 4.8%

EURUSD broke two months low of 1.40 on the back of ongoing concerns for the European debt crisis.

Markets across the globe were gloomy overnight with the key theme being “European Debt Crisis”. The situation has gone from bad to worse.

EURUSD broke two months low of 1.40 on the back of ongoing concerns for the European debt crisis. The weak sentiment was caused by the protagonist GREECE as Europe struggles with restructuring Greek’s debt, and possibly its peripheral nations (Spain, Ireland and Portugal). This debt issue has placed tremendous amount of pressures on Banks in Europe.

ECB is also struggling to accept the extension of Greek debt maturities as they have recently learnt that there may be “hidden debt”. Greek’s credit rating has been downgraded to junk bond status as Greek officials met and discussed new austerity program. This may include spending cuts and government selling their state assets at discounted value.

Dow Jones had the highest one day fall in almost two months with Volatility Index traded above the 20 level. This weakness also sent the yield on 10 year bonds as low as 3.11%

Asia was also weak with China’s manufacturing index fell to a ten month low and the their market closed down 3%. Aussie Market also wore the bear hat with heavy selling lead by the Financial sector.

Risk was taken off and diversed at the same time on the commodity front as Oil capitulated and gold marched north. This sent the AUDUSD lower breaching the 1.05 level. This long view on gold is reflecting the markets taking gold as defensive as more woes on USD weakness. This looks to continue at least in the short term as Feds continues to face funding pressure.

Filed Under: May Tagged With: Asia, austerity measures, Australia, bear, bearish, bonds, China Manufacturing Index, currency trading, Dow Jones, ECB, Europe, European Banks, european debt crisis, EURUSD, Financial Sector, Foreign Exchange, forex, forex market wrap, FTSE100, Gold, Greece, Greek credit rating, Ireland, junk bond status, market wrap, Oil, Portugal, S&P500, Spain, SPI, vantage fx, volatility index, yield

Greek Debt Restructuring Concerns Savage The Euro | May 23, 2011

May 23, 2011 By Vantage FX

The Euro experienced heavy selling on Friday after the ECB rejected proposed restructuring

Good morning. Equity and Commodity markets finished on Friday in the red, with traders moving away from risk assets. Disappointing Existing Home Sales data on Thursday coupled with debt restructuring concerns in Europe, led to a equity wide selloff. Middle East tensions also plagued the headlines, with Syrian officials receiving little support from the West. The US government announced that assets held by the ruling party in the US would be frozen. This comes after reports of heavy civilian causalities. Key economic data released this week includes New Home Sales (market expects 300,000) on Tuesday, Durable Orders (market expects -2%) and Crude Inventories on Wednesday, GDP (market expects 2.0%), Initial Claims (market expects 400,000) and Continuing Claims (3.7m) on Thursday and Personal Income (market expects 0.4%), Personal Spending (market expects 0.5%), and Pending Home Sales (market expects -1.8%) on Friday.

On the equity market front, the S&P500 closed Friday’s session 0.77% lower. Safe haven buying pushed consumer staples and discretionary companies Kraft and Disney higher on Friday. Both companies bucked the overall negative trend for the day. Key corporate earnings released this week includes Campbell Soup and Krispy Kreme, with both companies expected to fall in line with estimates.

On the currency front, the Japanese Yen continued to trade in a range on Friday, with the currency touching 81.67. With no major economic data released during the session, traders moved away from the yen and traded the higher risk currencies of the Euro and Pound. According to reuters reports, the Japanese budget contraction is expects to hit almost 10 trillion yen leading up to the years 2010-2015. Traders also eyed the potential for intervention from the BOJ in light of recent movements in the pair. Aussie dollar followed the yen during the session, with little or no movement recorded. Trading in a band, the currency pair touched 1.0671, before weakening. Awaiting next weeks’ key policy announcement, the market is factoring in the potential for further support in the resources sector. Recent weakness has spurred a sudden and knee jerk attention to buying. The AUDUSD traded at 1.0671, with a sharp rebound in afternoon trade recorded. Euro weakened considerably against the greenback with news that Greek would be downgraded by fitch. Announcing a B+ rating, the agency cited continued pressure from borrowing costs and economic instability. With both Greece and Portugal experiencing significant monetary loss, the market cautiously watched for further debt contagion commentary. The disappointing announcement from Fitch during the session spurred on a rise in demand for the safe haven currencies, like the Swiss Franc and Japanese Yen.

Filed Under: May Tagged With: AUDUSD, Aussie Dollar, BOJ, budget contraction, campbell soup, commodity market, Continuing Claims, Crude Inventories, currency market, currency trading, debt contagion, debt restructuring, Disney, downgrade, Durable Orders, equity market, Euro, Europe, Existing Home Sales, fitch, Foreign Exchange, forex, forex market wrap, Greece, greenback, Initial Claims, Kraft, krispy kreme, market wrap, Middle East tensions, New Home Sales, Pending Home Sales, Personal Income, Personal Spending, Portugal, pound, S&P500, Swiss Franc, Syria, US Government, vantage fx, Yen

Canadian Dollar Reacts To Renewed Strength In Commodities | May 19, 2011

May 19, 2011 By Vantage FX

Canadian dollar rallied against the greenback with oil futures boosting the price

Good morning. Equity markets finished in the black on Wednesday with traders reacting to news that the Federal Reserve would assess a stimulus exit strategy. The meeting minutes also painted a positive picture, with the board undecided over monetary policy and inflation. Economic news released during the session included Crude Inventories and the Mortgage Index. Both fell in line with initial estimates. Thursday will see the release of Initial Claims (market expects 423,000), Existing Home Sales (market expects 5.23 million) and Leading Indicators. US regulators announced that they would look into ratings agency reform, with the government highlighting the inflation of corporate debt valuations. The move would ensure that ratings companies who receive payments would be required to provide an unbiased valuation metric. The market saw this move as key un the reformation process. Across the Atlantic, Greek debt woes dissipated with the equity markets following the Dow Jones to close higher.

On the equity market front, the S&P500 finished the session 0.8% higher. Energy and Oil companies received a significant boost, with the futures touching $100 a barrel. News that the senate rejected a proposed subsidy reduction helped boost the sector. Machinery company Deere and Co. released positive results for the period, with a 65% rise in earnings. This announcement was unable to support the stock late in the session.

On the currency front, the Swiss Franc rallied considerably against the greenback on Wednesday, with traders covering their risk positions leading up to key data released on Thursday. Initial Claims and Housing data will be announced, with the market factoring in fairly lacklustre results. Trading at 0.8809, the Swiss Franc has experienced heightened degrees of volatility, with the currency trading in a 5 cent range over the last month. UK Inflation data continued to overshadow the markets sentiment towards the Pound Sterling, with the currency trading at 1.6166. Initially factoring in a rate rise, the market was subdued by the announcement that the Bank of England had voted in favour for a neutral policy for the period. Leaving rates at current levels led to a selloff in the currency, as traders looked towards higher yielding risk pairs. Uneventful session for the Euro on Wednesday with the currency opening slightly lower before finding support at 1.4245. Greek debt concerns continue to cause uneasiness in the region, with the markets concerned that Portugal could also have similar problems. With the ECB meeting coming up relatively soon, economists will look for direction and further action to stem the debt problems in the region

Filed Under: May Tagged With: Bank of England, Crude Inventories, currency market, currency trading, Deere & Co., Dow Jones, ECB, energy, equity market, Euro, Existing Home Sales, Federal Reserve, Foreign Exchange, forex, forex market wrap, Greek debt, housing data, inflation, Initial Claims, Leading Indicators, market wrap, monetary policy, Mortgage Index, Oil, Portugal, pound, S&P500, Sterling, Swiss Franc, UK Inflation data, vantage fx, volatility

Housing Jitters Extend The Dow’s Losing Streak | May 18, 2011

May 18, 2011 By Vantage FX

Swiss Franc recommenced its long term trend, with the greenback weakening against the safe haven currency

Good morning. Equity markets were mixed on Tuesday, with the major indices experiencing heightened volatility. Opening weaker, traders shifted from currencies and treasuries to equities late in the session. On the economic front, Housing Starts and Building Permits fell short of initial estimates with 523,000 for HS recorded. Building Permits were forecast to reach 590,000 for the April period. The figure was however significantly lower with 551,000 recorded. Across the atlantic, EU officials commented on the Greek debt situation, with Jean Claude Juncker noting the importance of economic stabilisation in the region. He did not rule out the potential for debt refinancing as Greece continues to struggle with the current austerity package. The market is eagerly watching the situation in Portugal and speculating over the economic impact the crisis is having on the small country.

On the equity market front, the S&P500 finished the session flat at 1329. Computer and Technology manufacturer Dell posted a significant rise in profits for the period, with the company recorded a net income of $945 million. This translated into a 134% rise in income. In other corporate news, HP posted a slight increase in profits for the period. The report however fell short of initial forecasts, pushing the stock 7% lower.

On the currency front, the Japanese Yen weakened against the greenback with markets factoring in a possible easing of monetary policy. Citing extended economic pressure from natural disasters and sluggish growth, the Bank of Japan was confident that long term deflation could be alleviated. This had the reverse effect on the pair, with traders moving out of the low yield currency and shifting into the riskier assets. Markets also eyed the potential for further debt worries in Europe and the impact this would have on the yen. The USDJPY traded at 81.36. Aussie dollar consolidated on Tuesday, with the currency reacting to further speculation over interest rates in Australia. The RBA have recently been analysing the housing and retail sales data, with the market cautious over the short term impact of a drop in property prices. Noosa, the Sunshine and Gold Coasts in Queensland have begun to show signs of weakness in the sector, with a significant contraction in housing prices. This could translate into a fall in the currency. The AUDUSD traded at 1.06225. Strong surge in the Euro on Tuesday, with interest rate speculation driving gains. The announcement that British inflation rose during the period, translated into a cross regional currency push. Economists expect a similar scenario in the Euro zone. Debt concerns were eased during the session, as Greece reaffirmed that they would be able to cover their short term debt obligations. Traders continue to be sceptical. The EURUSD traded late in the day at 1.4234.

Filed Under: May Tagged With: AUDUSD, Aussie Dollar, austerity measures, Australia, Bank of Japan, british inflation, Building Permits, currencies, currency market, currency trading, deflation, Dell, equities, equity market, EU, Euro, euro zone, EURUSD, Foreign Exchange, forex, forex market wrap, Gold Coast, Greece, Greek debt, greenback, housing data, Housing Starts, HP, interest rates, Jean Claude Juncker, market wrap, monetary policy, Noosa, Portugal, Queensland, RBA, Retail Sales Data, S&P500, Sunshine Coast, treasuries, USDJPY, vantage fx, volatility, Yen, yield

Traders Watch The Events Play Out In Greece | May 17, 2011

May 17, 2011 By Vantage FX

Significant range for the Euro dollar, with traders assessing the Greek debt situation

Good morning. Equity markets remained weak on Monday with the major indices reacting to economic uncertainty. Oil and Gold futures opened the session on a positive note before contracting late in the session. This had a significant effect on the resource based currencies of the AUD and CAD. News stories that commanded the headlines included the arrest of IMF chief for sexual assault. Economists reassessed the outcome for the debt talks in light of this breaking story. Economically the Housing index and Empire Manufacturing were released during the session. According to the report, the housing market stayed in line with initial forecasts. Manufacturing however contracted significantly, with 11.9 recorded for the 1^st week of May. Tomorrow will see the important release of Housing Starts, Building Permits and Industrial Production.

On the equity market front, the Dow Jones closed 47 points lower with the index reacting to mixed corporate earnings and merger and acquisition speculation. NY Stock Exchange shares weakened considerably, as news broke that the bid from the Nasdaq and ICE would be blocked. Cash rich Google announced that it would use its large balance sheet for debt issuance opportunities. This could result in a significant upside adjustment in earnings.

On the currency front, the Aussie dollar weakened against the greenback on Monday with the currency reacting to speculation over RBA minutes. Leading up to the key meeting, traders were cautious and apprehensive in light of recent developments. Risk aversion also played an important role during the session, with an equity and commodity market selloff pushing all of the major risk pairs lower. After a big week of economic news last week, traders have little leads or direction. The AUDUSD traded at 1.0564. Consolidating late in the session, the Japanese Yen rallied against the greenback early in the day. A dismissive and sentiment focused market, the currency pair initially reacted to volatility before strengthening after Mitsubishi’s earnings news. Announcing a significant uplift in profits for the period, the car manufacturer highlighted that a stronger yen had a slight impact on the result. The company cited that a reduction in overall borrowing costs had contributed to the result. The USDJPY traded at 80.76. Sterling followed other risk currencies during the session with the currency falling to 1.6197. The market continued to focus on the debt concerns in Greece and the possibility of default. Limited economic leads this week will also spur thin trading and heightened degrees of volatility. The Bank of England is forecast to release its minutes very soon, with traders speculating that rates will continue to stay on hold.

Filed Under: May Tagged With: AUD, AUDUSD, Aussie Dollar, Bank of England, borrowing costs, Building Permits, CAD, commodity market, consolidating, corporate earnings, currency market, currency trading, Dow Jones, Empire Manufacturing, equity market, european debt, Foreign Exchange, forex, forex market wrap, Gold, Google, Greece, greenback, Housing Index, Housing Starts, ICE, IMF Chief, Industrial Production, M&A speculation, market wrap, Nasdaq, New York Stock Exchange, NYSE, Oil, RBA, risk aversion, USDJPY, vantage fx, volatility, Yen