equity market

June 20, 2011 By Vantage FX

The Greek situation remains the talk of the currency markets as Euro-zone finance ministers continue negotiations late into the Sunday evening. Alan Greenspan warned that a default by Greece would more than likely drag the U.S economy into recession, his comments although likely to be correct have not had such an effect as the German Chancellor Merkel said she’s willing to compromise on demands for bondholders to carry the burden and asks instead for purely a voluntary participation by private creditors.

The AUDUSD was one of the biggest beneficiaries of the Merkel confidences and we have seen it turn from a low of below the 1.05 level to finish the Fridays session above the1.0610 level. On the open of the Australia equity market on Monday we are seeing levels of 1.0610.

Gold has held its ground over the last week and ranged traded between levels of 1,528 to 1,554. Silver has been tracking Gold and closed the week down 0.5%. Traders will be concentrating on three major points in the markets this week.

1) The outlook for global growth

2) Chinese range of data out this week

3) The handling of Greece debt

INDICES
	Last Traded	Change %
SPI 200	4482	+0.07
S&P500 Index	1262.5	-0.28
Dow Jones Indus. Avg	11908	-0..25
FTSE 100 Index	5667	+0.04

COMMODITIES
	Last Traded
Gold	1538
Oil (Nymex)	36.06

CURRENCIES
	Last Traded
AUDUSD	1.0604
EURUSD	1.4279
GBPUSD	1.6167
USDJPY	80.09

Filed Under: June Tagged With: Alan Greenspan, AUDUSD, Australia, bondholders, Chinese data, currency markets, currency trading, equity market, euro zone, Finance Ministers, Foreign Exchange, forex, forex market wrap, German Chancellor Merkel, global growth outlook, Gold, Greece, Greek debt, market wrap, Merkel, recession, silver, US Economy, vantage fx

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

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

CPI And Its Effects On Gold | May 16, 2011

May 16, 2011 By Vantage FX

Volatility in Gold with CPI data pushing the commodity into a range

Good morning. Equity and Commodity markets closed the Friday session off on a weaker note with Consumer Price Index data falling in line with initial estimates. Recording 0.4% for the period, the market was disappointed with the result. European debt jitters continued with the possibility of further default by Greece. Germany announced that they would not extend the emergency bailout package, and pushed for stricter austerity measures. Chinese Inflation data continues to pressure the markets, with the large economic power announcing last week a new increase in liquidity requirements for banks. This had the subdued effect on the global economic outlook, as traders eyed the possibility of a slight contraction in the shirt term. Key economic data released in the US this coming week includes Housing Starts (market expects 565,000), Building Permits (market expects 590,000), Industrial Production (market expects 0.5%), on Tuesday, and Initial Claims (market expects 420,000), Continuing Claims (market expects 3.713m), Existing Home Sales (market expects 5.22 million), and Leading Indicators (market expects no change) on Thursday.

On the equity market front, the S&P500 weakened 0.7% or 100 points. The market reacted to corporate news in the tech sector, with Yahoo shares falling considerably, due to the Alibaba news. Key corporate data released on Monday includes earnings from JC Penney, and Urban Outfitters. Both companies are forecast to report solid profits.

On the currency front, the Japanese Yen continued to track yesterday’s movements with the currency consolidating at 80.71. CPI data fell in line with estimates with 0.4% recorded for the period. The market reacted to the economic results with trepidation and caution. Traders continue to be concerned over the economic implications of a stronger yen. Intervention fears have however been eased recently, with the greenback rising against the currency. Weakening to 1.41051, the Euro reacted to US Inflation news and Greek debt concerns. Speculation that refinancing may be required to cope with the ballooning interest costs, the market reacted negatively to the currency. Recent positive comments from ECB Chairman Trichet have had little impact on the region, with economists continuing to see very real risk in the economic system and the debt markets. Key data released next week, will paint a defining picture of the recovery and whether further government stimulation is required. The greenback rose against the Swiss Franc on Friday, with traders moving away from the European based currencies. A sharp rise in the afternoon session was recorded with the market finding Solis in the US dollar. Across the board, traders eyed weakness in the commodity space, coupled with low volatility in inflation. The CPI result was in line with estimates. Private Banking firms in Switzerland highlighted the degree of pressure the strong currency had on investment. A reduction in investment has begun translating into a fall in overall headcount. The USDCHF traded at 0.8926.

Filed Under: May Tagged With: Alibaba, austerity measures, Building Permits, Chinese Inflation Data, commodity market, consolidating, Consumer Price Index, Continuing Claims, contraction, CPI, currency market, currency trading, ECB, ECB Chairman, equity market, Euro, european debt, Existing Home Sales, Foreign Exchange, forex, forex market wrap, Germany, Greece, greenback, Housing Starts, Industrial Production, inflation, Initial Claims, intervention, JC Penny, Leading Indicators, liquidity requirements, market wrap, S&P500, Swiss Franc, Trichet, Urban Outfitters, US Dollar, US inflation, USDCHF, vantage fx, yahoo, Yen

PPI Data Exceed Initial Forecasts | May 13, 2011

May 15, 2011 By Vantage FX

Gold recovered late in the session, with short covering driving the price higher

Good morning. Equity markets finished the Thursday session on a positive note, with Producer Price Index figures supporting gains. Reporting a 0.8% rise in April, the figure beat market expectations of 0.5%. Initial Claims were also announced with a slight increase recorded for the period. This set the level at 434,000. Retail Sales fell to 0.5% from the previous 0.9%. In other news, commodities traded in a consolidated fashion with Gold reporting a slight fall. Light Crude Oil Futures continued to experienced heightened levels of volatility with a slight rise posted. China announced that it would raise bank reserve requirements in an effort to reduce inflation. This is the fifth time that Chinese officials have raised the capital requirements. Traders continue to speculate over the effectiveness of this strategy over tightening of monetary policy.

On the equity market front, the Dow Jones closed 0.5% or 66 points higher. Technology giant Cisco announced solid earnings, however the company reaffirmed their previous comments regarding the challenging market conditions. Analysts were disappointed with the results, translating into a 4.7% fall in the stock.

On the currency front, the Aussie Dollar fell to 1.0665 on Thursday, with jobs data indicating a contraction in the economy. A sharp fall of 22,000 for the period translated into a selloff in the currency. Economists began reassessing their long term interest rate and growth forecasts. Recent speculation that the RBA could lift rates in the coming months, has been laid to rest, with the Governor expected to keep policy at current levels. Relatively lacklustre session for the Japanese Yen on Thursday, with the currency consolidating at 80.91. The market reacted to news that the Japanese Current Account Surplus fell 34% as a result of the Tsunami and Earthquake disasters. Pressure on the economy from the manufacturing sectors has proved a cause for concern for the Bank of Japan. Intervention fears continue to influence the direction of the currency, as traders watch for a potential short term spike in volatility. UK Industrial Production data had limited impact on Pound Sterling with the currency trading at 1.6287. Rising 0.8% in March, the figure contradicted previous estimates. With European debt woes continuing to pressure the region, traders are cautiously watching the role of the Bank of England and whether or not monetary policy will shift in the short term. This could severely impact currency sentiment.

Filed Under: May Tagged With: Aussie Dollar, Bank of England, Bank of Japan, Chinese bank reserve requirements, Cisco, commodities, consolidated, currency market, currency trading, Dow Jones, earthquake, equity market, european debt, Foreign Exchange, forex, forex market wrap, Gold, inflation, Initial Claims, interest rate, intervention measures, Japanese Current Account Surpllus, Jobs Data, Light Crude Oil, manufacturing sectors, market wrap, monetary policy, oil futures, pound, PPI, Producer Price Index, RBA, retail sales, Sterling, tsunami, UK Industrial Production data, vantage fx, volatility, Yen

Weakness in Commodities Pushes Aussie Dollar Lower | May 12, 2011

May 12, 2011 By Vantage FX

The Aussie dollar reacted to an equity and commodity market selloff on Wednesday

Good morning. Weakness in Equity markets recommenced with commodity jitters pushing the major indices lower. Reacting to trade deficit data and the potential for hyper inflation in China, the markets experienced heightened volatility. Light Crude Oil futures posted a 5% fall with traders assuming a slight contraction in the economy, as a result of the China announcement. Economically Treasury Budget data posted a $40.5 billion deficit – slightly better than previously forecast, whilst Trade Balance touched $48.2 billion. Officials in China noted that inflationary pressure continued to stay above the acceptable management level. Economists predict that the Chinese central bank will raise rates in the coming weeks. In other news, European debt worries continued to weigh on the indices with Greek government workers protesting over austerity measures. German Chancellor Merkhel responded negatively to the call for additional funding, with the leader proposing a further tightening of fiscal and government spending in the country.

On the equity market front, the Dow Jones closed 1% lower or 130 points. Oil companies Exxon and Chevron dragged the index lower, with a fall in energy commodities highlighted as a key contributor. Entertainment company Walt Disney disappointed the market, with the company releasing a worse than expected earnings result.

On the currency front, the Aussie Dollar weakened considerably against the greenback on Wednesday with the market reacting to chinese inflation figures. With the local budget released during the previous session, the market was apprehensive about the long term outlook, in light of property data. Reacting to a better than expected treasury balance figures, economists cited the possibility of a slight contraction in demand for resources, if Chinese interest rates are raised. The AUDUSD traded at 1.0698. Reporting a significant drop in earnings, car manufacturer Toyota drove equity and currency market volatility higher. The USDJPY traded at 80.96 late in the session. The announcement however did not surprise analysts with many forecasting a weakening in earnings. The recent earthquake, tsunami disasters coupled with the stronger yen, have had a dramatic effect on the demand for the local currency. Important economic data released during the session included Trade and Treasury Balance data. The reports supplied mixed figures. Consolidating late in the day, the Euro opened lower against the US dollar on Wednesday. The market reacted to news that Greece may require additional funding to cover obligations. Germany reacted to the news, citing the importance of further austerity measures. Riots in Greece over budget cuts and government restructuring also pressured the local government, the EU and the Euro during the day. The Euro zone continued to shy away from further monetary grants. The EURSUD traded at 1.42017.

Filed Under: May Tagged With: Angela Merkhel, AUDUSD, Aussie Dollar, austerity measures, budget cuts, chevron, China, Chinese Central Bank, commodities, contraction, currency market, currency trading, Dow Jones, equity market, Euro, euro zone, EURUSD, Exxon, Foreign Exchange, forex, forex market wrap, German Chancellor, Germany, government restructuring, Greece, Greece riots, greenback, hyper inflation, inflationary pressure, Light Crude Oil, market wrap, Merkhel, Oil, Toyota, Trade Balance, trade deficit data, Treasury Budget data, US Dollar, USDJPY, vantage fx, volatility, Walt Disney, Yen

Intervention Concerns Squashed By Falling Japanese Yen | May 11, 2011

May 11, 2011 By Vantage FX

Japanese Yen weakened considerably against the greenback, as currency sentiment shifts.

Good morning. Equity markets were buoyant in trade on Tuesday, with investors eyeing positive corporate announcements. Commodities were mixed during the session, with Oil closing slightly lower, and gold consolidating. Reacting to Export, Import Prices and Wholesale Inventories data, traders are still awaiting key CPI and PPI data later in the week. In Canada, key Analysts cited that the new government would enhance the already strong economy and boost resource output. The comments came off the back of news released last week when the elections were finalised. Chinese officials announced during the session that the country had posted a significant surplus in trade, with a 29.9% increase in exports for the period. This came, after Treasury Secretary Timothy Geitner, met with the Chinese Central Bank and Government.

On the equity market front, the S&P500 rose 0.8% to close at 1357. News that Microsoft would purchase internet telecommunications company Skype for $8 billion, sent a clear message that big M&A was still viable, in spite of the previous debt crisis. Entertainment company Disney, announced that earnings slightly contracted for the period, with $942 million posted. Interest Rate risk, coupled with a slowdown in advertising revenues has impacted margins considerably.

On the currency front, The Swiss Franc took a breather on Tuesday, with the greenback rising on Export, Import Price and Wholesale Inventory data. A strong reaction by base metal commodities coupled with several corporate announcements on the equity markets contributed to volatility. Falling during the morning session, the USDCHF traded off relatively light volumes. The evening session price for the currency pair was 0.8807. Pound Sterling fell against the US dollar, with speculation that the Bank of England Chairman would reduce his long term economic forecasts for the country. Awaiting the key BOE meeting, traders prompted the move, with a switch into the Euro. Mixed economic data including manufacturing figures coupled with recovering property prices, has pressured the pair and sentiment towards the currency. The GBPUSD traded at 1.6357. A shift in trader sentiment supported the greenback on Tuesday with the currency rising against the Japanese Yen. Markets reacted to positive data from the previous couple of sessions, with Export and Import Sales figures also rising for the period. Wholesale Inventories touched 1.1% in March, which was above initial estimates. The Japanese Yen opened firmer before consolidating at lunch and selling off in the evening. The USDJPY traded at 80.74.

Filed Under: May Tagged With: Bank of England, base metal commodities, BOE, BOE Chairman, Canada, Chinese Central Bank, Chinese Government, commodities, CPI, currency market, currency trading, Disney, elections, equity market, Euro, Export Prices, Foreign Exchange, forex, forex market wrap, GBPUSD, Gold, greenback, Import Prices, interest rate, manufacturing data, market wrap, microsoft, Oil, pound, PPI, S&P500, Skype, Sterling, Swiss Franc, Timothy Geitner, trade surplus, Treasury Secretary, US Dollar, USDCHF, USDJPY, vantage fx, volatility, Wholesale Inventories, Yen