EUR

Markets Weak As Investors Uncertain If US Can Hold Onto AAA Rating | July 26, 2011

July 26, 2011 By Vantage FX

The USDCHF traded as low at 0.8022 overnight which is now a record as investors demand the safest assets

The Australian equity market is pointed to a higher open today after the US markets recovered from the initial drop pre trade Monday. Overnight the US stocks ended the session down after the deadlock in Washington’s debt negotiations curbed investors’ risk appetite and left them uncertain whether the U.S. can hold on to its triple-A credit rating.

The Dow lost 88.36 points to close at 12592.80, this is its third drop in four sessions. The blue-chip index fell by as much as 145 points early in the session, after the collapse of the debt-ceiling talks triggered a flight to safer assets such as gold, which settled at a record $1,612 an ounce. Stocks recovered some ground as Republicans and Democrats each pledged separate efforts to raise the debt ceiling. The S&P500 index shed 7.59 points to close at 1337.43.

The USDCHF traded as low at 0.8022 overnight which is now a record as investors demand the safest assets while dropping the USD and EUR on the back of lawmakers failing to agree on raising the nations $14.3 trillion debt and Greece’s credit rating cut. At time of writing this report it was sitting at 0.8054.

The NZDUSD dropped to a low of 0.8613 in early Asian trade after a government report showed exports shrank more than economists had estimated.

Gold traded as high as 1624 per ounce as investors demand the metal as a haven investment. Gold is now up 13 percent this year and heading for the 11th straight annual gain.

INDICES
	Last Traded
SPI 200	4535
S&P500 Index	1337.43
Dow Jones Indus. Avg	12592.80
FTSE 100 Index	5925.26

COMMODITIES
	Last Traded
Gold	1613.95
Oil (Nymex)	99.14

CURRENCIES
	Last Traded
AUDUSD	1.0849
EURUSD	1.4372
GBPUSD	1.6280
USDJPY	78.30

Source Bloomberg, Dow Jones News

Filed Under: July Tagged With: AAA, Asian session, AUDUSD, Australian equity market, blue chip, Credit Rating, currency trading, debt ceiling, debt negotiations, democrats, Dow, Dow Jones Indus. Avg, EUR, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, Greece, Greek debt, market wrap, Nymex, NZDUSD, Oil, Republicans, risk appetite, S&P500 Index, SPI 200, US market, US stocks, USD, USDCHF, USDJPY, vantage fx, Washington

US Stocks Surge On The Back Of Strong ISM Data | July 4, 2011

July 4, 2011 By Vantage FX

The EURUSD is currently trading just below key resistance levels of 1.4550 on early Monday morning

The Australian equity market is set for a strong start to the week as U.S. stocks were well up on Friday trade, notching the biggest weekly gain in nearly two years on the back of strong data released by the Institute of Supply Management which showed the U.S. manufacturing sector expanded swiftly in June. The Dow traded up 168 points to close at 12582.75 while the S&P500 rose 19 to 1339.5, these markets will be closed today for the 4 of July holiday.

The EURUSD is currently trading just below key resistance levels of 1.4550 on early Monday morning trade, up from Friday night lows of 1.4437. Surprisingly good manufacturing figures supported the US dollar against most currencies except the AUD and EUR as investors continue to be buoyed by the positive news out of Greece. Over the weekend the Euro-zone governments agreed to pay Greece the next round of last year’s bailout package and set September as the new deadline for completing a second bailout package for Greece.

AUDUSD continued to rally on Friday US session settling at 1.0770, this is the biggest weekly gain for over 13 months, currently the pair is trading at 1.0780.

WTI crude ended Friday lower as investors look at weaker than expected manufacturing data from China and the euro-zone nations.

Gold ended the week in the red settling at 1486 as funds around the world reduce their longs on speculation that slowing global growth will reduce the demand for the metal.

INDICES
	Last Traded
SPI 200	4633
S&P500 Index	1333
Dow Jones Indus. Avg	12515
FTSE 100 Index	5977

COMMODITIES
	Last Traded
Gold	1489
Oil (Nymex)	95.17

CURRENCIES
	Last Traded
AUDUSD	1.0777
EURUSD	1.4568
GBPUSD	1.6071
USDJPY	80.80

Filed Under: July Tagged With: AUD, AUDUSD, Australian equity market, bailout, China manufacturing data, currency trading, Dow, Dow Jones Indus. Avg, EUR, euro zone, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, Greece, Independence Day, ISM Data, manufacturing figures, market wrap, metal, Nymex, Oil, resistance, S&P500, S&P500 Index, SP 200, US Dollar, US Manufacturing sector, US session, US stocks, USD, USDJPY, vantage fx, WTI crude

Greek Parliament Backs Prime Ministers Cabinet | June 22, 2011

June 22, 2011 By Vantage FX

The EURUS traded to a high above the 1.4420 level overnight.

The US equities were strong overnight with the Dow Jones closing up 109 points while the SP500 index rose 17 points. This is now the fourth consecutive day that the US markets have risen and once again is on the back of investors positive thoughts on the survival of Greece.

As expected Greece’s Prime Ministers new cabinet received the vote of confidence from parliament 155-143. This is seen as a crucial hurdle towards approving the country’s austerity package and restarting the flow of bailout funds which is currently been held by the EU and IMF. Ahead of the vote, acting IMF head John Lipsky said that the program outlined for Greece could work and it would prevent a default.

The EURUSD (see above chart) traded to a high above the 1.4420 level overnight. Currently the EUR is not reacting as positively as expected and is trading below the 1.4385 level. Morgan Stanley on Tuesday scaled back its year end EUR forecast to 1.36 due to Greece-related and economic-growth concerns. This is 0.13 lower than their previous projected level of 1.49 at year end.

The AUDUSD rose to a high of 1.0620 in the US trading session overnight from a low of 1.0532 during yesterdays Asian session after the Reserve Bank said that it would maintain the 4.75% benchmark in the face of a potential worsening European debt drama.

Gold futures locked in its sixth positive day as the dollar weakened on the back of the confidence vote.

INDICES
	Last Traded
SPI 200	4540
S&P500 Index	1287.5
Dow Jones Indus. Avg	12092
FTSE 100 Index	5749

COMMODITIES
	Last Traded
Gold	1547
Oil (Nymex)	93.75

CURRENCIES
	Last Traded
AUDUSD	1.0592
EURUSD	1.4375
GBPUSD	1.6225
USDJPY	80.22

Filed Under: June Tagged With: Asian trading session, AUDUSD, austerity package, bailout funds, cabinet, confidence vote, currency trading, dollar, Dow Jones, Dow Jones Indus. Avg, economic growth, EU, EUR, european debt, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, gold futures, Greece, Greek Prime Minister, IMF, John Lipsky, market wrap, Morgan Stanley, Nymex, Oil, parliament, Reserve Bank, S&P500, S&P500 Index, SPI 200, US equities, US markets, US trading session, USDJPY, vantage fx

US Bounced With Cautions | June 17, 2011

June 17, 2011 By Vantage FX

USDJPY Asian strength could not last through the US session as it sold off steadily to lose 40 points approximately.

Markets traded in the mixed last nights as it bounced slightly from yesterday allowing the SP500 and Dow both to have gained 0.54% and 0.18% respectively. The upside moves were supported by very thin volumes, hence lacking the conviction that could proves potential recovery, which it did not. Moreover, the choppy move was actually behind “quadruple witching”, where expiries of multiple contracts are coming up and hence traders are unwind or rolling into new contracts. Given the lack of fundamental for this upside movements, there will still be a downside risk and selling pressure is still very much alive.

EUR’s reaction last night was no surprise, sustaining its declination and had the EURUSD fell as much as 1% in the early part of the session. The pressures saw EURUSD to trade near the 1.047 mark before regaining some of its losses to rally 0.2% on the back of speculation that both EU and IMF may assist Greece and preventing default.

AUDUSD capitulated through to 1.05 just before the US opens to trade near 1.0475. This weakness was the same as any other currencies, cautioning the potential disaster in Greece. However, AUDUSD made some gains to trade above 1.05 running into some resistances at 1.0555 up until near the final quarter of the session where a 60 points sell offs eventuated before it found some support at 1.05 and rebounded to session highs. The AUDUSD is proving to be resilient and directionless to a certain extent. This motion will continues into the next session and until Monday comes, which would have been after the Greek meeting this Sunday, where the Finance minister will shed some lights on how Greece will finance their debts, some direction will be provided to AUD.

USDJPY Asian strength could not last through the US session as it sold off steadily to lose 40 points approximately. The weakness in this pair has been mentioned in the last couple of reports and we envisage that it will always attempt to run the downside at every chance it gets.

In the next 24 hours, the majority of activities will be based on two things; Greek’s crisis and quadruple witching. No fundamental announcements will be made until Japan releases its trade numbers coming Monday.

INDICES
	Last Traded	Change %
SPI 200	4479.20	-1.92
S&P500 Index	1267.64	0.18
Dow Jones Indus. Avg	11961.52	0.54
FTSE 100 Index	5698.81	-0.76

COMMODITIES
	Last Traded	Change %
Gold	1528.8	-0.07
Oil (Nymex)	95.16	0.22

CURRENCIES
	Last Traded	Change %
AUDUSD	1.0563	0.05
EURUSD	1.4205	0.02
GBPUSD	1.6166	0.05
USDJPY	80.61	0.02

Filed Under: June Tagged With: AUD, AUDUSD, currency trading, default, Dow, Dow Jones Indus. Avg, downside risk, EU, EUR, EURUSD, Finance Minister, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, Greece, IMF, Japan trade figures, market wrap, Nymex, Oil, quadruple witching, S&P500, S&P500 Index, selling pressure, SPI 200, thin volume, US, USDJPY, vantage fx

China Fueled Global Strength | June 15, 2011

June 16, 2011 By Vantage FX

AUDUSD traded back above 1.07 but started to trail back shortly after as it ran into some resistance just above 1.07

Overnight markets rallied as it followed the bullish lead out of China strong industrial output and CPI. SP500 index and Dow both had the biggest gain in over a month of 1.48% and 1.03% respectively, just before a small pulled back but still ended on high note. Strength were also aided by some decent numbers came out of US, in particularly retail sales came in at -0.2% which was higher than expected of -0.5%. The combination of both these results signifies that one, China can switch growth momentum quite rapidly and not only it is a key player for Asia Pacific region but also now more than ever a key player at global level and two, US consumers are now accustomed to high utility costs (for instance, gasoline).

Commodity front was also bullish as both Gold and Oil made some respectful gain of 0.14% and 0.17% respectively. The strength in Gold was fueled by the weakness of USD (does not seem to be stopping anytime soon) and strong commodity switch as inflation fear is coming out of Asia, especially the yesterday’s releases from China.

AUDUSD traded back above 1.07 but started to trail back shortly after as it ran into some resistance just above 1.07, a technical resistance level that has been formed over the last two months, which was also a support in the latter part of April.

Both EUR and GBP had strong gains against the USD in the early part of US session. However, this bullish tone was short lived and superseded by the concern of Greek’s debt as the release package is now on hold. The process is stalling as EU officials could not decide on investors’ role in this second package, especially when default potential is becoming more realistic. The poor sentiment led both EURUSD and GBPUSD to have lost some grounds of 0.3% and 0.4%.

USDJPY attempted to jump on the bull’s wagon gaining a touch under 40 points but came back to stay on yesterday Asian highs. As mentioned in couple of previous report, this pair will continue to face downside pressure and will find it difficult to participate in any upside moves.

INDICES
	Last Traded	Change %
SPI 200	4585	0.5
S&P500 Index	1287.87	1.26
Dow Jones Indus. Avg	12076.11	1.03
FTSE 100 Index	5803.13	0.51

COMMODITIES
	Last Traded	Change %
Gold	1527	0.17
Oil (Nymex)	99.44	0.07

CURRENCIES
	Last Traded	Change %
AUDUSD	1.0687	0.01
EURUSD	1.4433	-0.05
GBPUSD	1.6372	0.01
USDJPY	80.62	-0.15

Filed Under: June Tagged With: Asia, AUDUSD, Bullish, China, commodities, CPI, currency trading, Dow, Dow Jones Indus. Avg, EUR, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, gasoline, GBP, GBPUSD, Gold, Greek debt, Industiral Output, inflation, market wrap, oi (nymex), Oil, overnight market, S&P500 Index, SPI 200, technical resistance, US Retail Sales, USD, USDJPY, utility costs, vantage fx

Greece Downgraded To World’s Lowest | June 14, 2011

June 14, 2011 By Vantage FX

USDJPY is struggling to lift itself out of the low 80 as it continues to move around that level and face downward pressure.

Another Greece’s credit downgrade led to a mixed session last night as the market sold off concerning the inability of Greece controlling their debts. The sell offs were short lived as US stock inflexed upwards on the back of strong merger and acquisition activities. This choppy session saw SP500 ended relatively flat on the positive of 0.07%.

EUR attempted to make some respectful gain on the latter part of last night session to stay above 1.44. The selling pressure was initiated by the downgrade of Greece to the lowest level in the world. This downgrade was on the back of the proposed solution, being debt restructuring and extending the maturities of bonds, both of which are not seen as a viable method by market participants as they are just delaying the inevitable default.

AUDUSD currently treading above 1.06 level, gaining back some of its losses on Friday session where the near low 1.05 level was tested. We envisage the AUDUSD as will fluctuates within a 200 points range between 1.05 and 1.07, especially when Gold is creeping towards to the 1500. However, gold can still be seen bullish at least for medium term.

USDJPY is struggling to lift itself out of the low 80 as it continues to move around that level and face downward pressure. Moreover, USDJPY does not look like it will have any upside risks given the ongoing macro issues that are stalling any market upside movements for the next 3-6 months.

In the short term, we envisage the markets will be weak across globally. The Feds does not seem to want to discuss about further QE injection, hence the markets will continue to be soft as they have recognized that US growth is on halt and further injection is required. However, the problem is not supply but rather demand constraint as mentioned in the report previously, the market is still rich with cash but reluctantly dispatch it. It would seem that the Feds has recognized this and trying to give the markets a chance to circulate their own money, allowing the markets to operate freely and move away from nationalization, however, since the inception of GFC back in 2008 market fundamentals had somewhat been replaced by sentiment driven, forcing participants to put everything on reserve as they are afraid of liquidity issue.

INDICES
	Last Traded	Change %
S&P500 Index	1271.83	0.07
Dow Jones Indus. Avg	11952.97	0.01
FTSE 100 Index	5773.46	0.13

COMMODITIES
	Last Traded	Change %
Gold	1516.5	0.06
Oil (Nymex)	96.95	-0.36

CURRENCIES
	Last Traded
AUDUSD	1.0595
EURUSD	1.4398
GBPUSD	1.6364
USDJPY	80.165

Filed Under: June Tagged With: AUDUSD, bonds, Bullish, Credit Rating, currency trading, debt, Dow Jones Indus. Avg, downgrade, EUR, EURUSD, Feds, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, GFC, Gold, Greece, market wrap, maturities, merger and acquisitions, Oil, oil (nymex), QE injection, Quantitative Easing, S&P500, S&P500 Index, selling pressure, selloff, US Stock, USDJPY, vantage fx

No Sign Of Stimulus From Bernanke | June 8, 2011

June 9, 2011 By Vantage FX

Swiss Fran was the most underperformed currency as it fell across the board on the back of flat CPI

Previous day weakness was followed through to overnight after Ben Bernanke moronic speech of stating nothing but the obvious facts. Bernanke admitted that US is slowing down but was muted on the topic of further stimulus, sending the market to have a sell off. US fell moderately across the board with SP500 index down 0.1% and Dow traded relatively flat by session end at -0.04%. The weak sentiment will continue until some structural changes are made or at least provide some intention of the government policy going forward. The feds will need to be cleared of whether there will be a QE3 or some sort of stimulus plan to provide some lights to the market. Lack of communication will see the market start to unwind, especially of all the QE trades.

Swiss Franc was the most underperformed currency as it fell across the board on the back of flat CPI came in unchanged at 0%, which is higher than expected at -0.1%. CHF depreciated over 1.1% to 1.1918 against the dollar. The weakness was further amplified as it is not in favour of the debt rollover out of Greece.

EURUSD initially fell during the Bernanke’s speech, however, found its inflexion point short after as it marched north and trading just short of 1.47. Also, GBPUSD tracked sideway and was muted throughout the session after an over 1% gain made of the open.

AUDUSD back above 1.07 as it followed the bullish EUR overnight. Moreover, there seems to be an obvious consolidation within a 50 points range around this level. NZDUSD looks to be weak on Asian open as it faces some selling pressure, a switch of risk appetite from the Kiwi holders.

INDICES
	Last Traded	Change %
SPI 200	4566.3	-0.0.6
S&P500 Index	1284.94	-0.1
Dow Jones Indus. Avg	12070.81	-0.16
FTSE 100 Index	5864.65	0.0.3

COMMODITIES
	Last Traded	Change %
Gold	1543.3	unch
Oil (Nymex)	99.69	0.61

CURRENCIES
	Last Traded	Change %
AUDUSD	1.0711	-0.01
EURUSD	1.4683	-0.0.6
GBPUSD	1.6441	-0.04
USDJPY	80.25	-0.09

Filed Under: June Tagged With: AUDUSD, Ben Bernanke, Bernanke, Bullish, CHF, CPI, currency trading, debt rollover, dollar, Dow, Dow Jones, Dow Jones Indus. Avg, EUR, EURUSD, Fed, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, government policy, Greece, inflexion, Kiwi, market sell off, market wrap, NZDUSD, Oil, oil (nymex), QE3, Quantitative Easing, risk appetite, S&P500 Index, sell off, SPI 200, stimulus, stimulus plan, Swiss Franc, US, USDJPY, vantage fx

Moody To Downgrade US Debt | June 3, 2011

June 6, 2011 By Vantage FX

NZDUSD seemed to have ready put back the bull hat and marches on

US was relatively quiet last night with some preliminary numbers that were released to set up for the nervous non-farm payrolls tonight at 10:30 AEST. SP500 futures traded within 11 points range with an average mean of 6 points range. US gained approximately 3.5 points on the back of mediocre results with nonfarm productivity higher than expected at 1.8% and initial jobless claims were 5K more than expected, indicating high participation rate with limited capacity from the economy to take on more jobs. More importantly, this signifies that US is still struggling with its economic growth and non-farm tonight will certainly confirm if the number is weak (which is expected to come in much lower than last month).

Moody promulgated last night that they look to downgrade US government’s Aaa credit rating unless debt limit is increase by July. This was further escalated when Tim Geithner warned that congress will need to raise debt ceiling to prevent catastrophic affects and stall US growth.

Event	Survey	Actual	Prior	Revised
Nonfarm Productivity	1.70%	1.80%	1.60%	- -
Unit Labor Costs	0.80%	0.70%	1.00%	- -
Initial Jobless Claims	417K	422K	424K	428K
Continuing Claims	3675K	3711K	3690K	3712K

Greece’s debt finally found some ground last night as Eurozone officials confirmed that new program involves external aid with a 3 year adjustment. This has provided some relief for the markets and saw the EUR soared across the board with EURUSD breached the 1.45 level, and holding its highs throughout the session.

Gold and Oil fell dramatically in the early part of US session losing 0.85% and 2% respectively, with Oil broken below 99 level. The commodity bear did not last long as it rallied back the majority of its losses when Eurozone announced a 3 year adjustment program for Greece. Commodity currencies AUDUSD and USDCAD also reversed their losses against USD, with AUDUSD treading just below 1.07 and USDCAD just above 97.40. Moreover, AUD sympathetic partner NZDUSD seemed to have ready put back the bull hat and marches on the already impressive move on the upside of 16% just under 3 months.

INDICES
	Last Traded	Previous Close	Change %	Net Change
SPI 200 Futures	4615	4606	0.195	9
S&P500 Index	1312.94	1314.55	-0.122	-1.61
S&P500 Futures	1311.75	1312.5	-0.057	-0.75
Dow Jones Indus. Avg	12248.55	12290.14	-0.338	-41.59
FTSE 100 Index	5847.92	5928.61	-1.361	-80.69
Volatility Index	18.09	18.3	-1.148	-0.21

COMMODITIES
	Last Traded	Previous Close	Change %	Net Change
Gold	1535.5	1532.7	0.183	2.8
Oil (Nymex)	100.75	100.4	0.349	0.35

CURRENCIES
	Last Traded	Previous Close	Change %	Net Change
AUDUSD	1.0686	1.067	0.150	0.0016
EURUSD	1.4491	1.4491	0.000	0
GBPUSD	1.6367	1.6371	-0.024	-0.0004
USDJPY	80.82	80.9	0.099	-0.08

Filed Under: June Tagged With: AUD, AUDUSD, Bullish, commodity, commodity bear, Continuing Claims, Credit Rating, currency trading, debt limit, Dow Jones Indus. Avg, downgrade US, EUR, euro zone, Eurozone, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, Greece, Greek debt, Initial Jobless Claims, market wrap, Moody, Non Farm Payroll Data, Non Farm Productivity, NZDUSD, Oil, oil (nymex), S&P500, S&P500 Futures, S&P500 Index, SPI 200 Futures, Tim Geithner, Unit Labour Costs, US, US session, USD, USDCAD, USDJPY, vantage fx, volatility index

Weak US Payrolls Spur June Sell Off | June 2, 2011

June 2, 2011 By Vantage FX

All 24 major commodities such as Silver, coffee and wheat all lost a touch under 3%.

US weak numbers ended the US equities longest streak of gains sending the SP500 index to plunged 2.3%. The noticeable figure payrolls in May came in at 38000 jobs added, which was one fifth of analyst’s expectation. The dismal move worsen as ISM manufacturing expanded at the slowest rate since mid 2009, a sign of US economy is dragging its feet on the path of recovery.

USD strengthened sent it peers EUR and GBP to an offer’s market as both tread back to the highs of May. Moreover, the dollar index jumped over 2.3% with the help of its most weighted currency being EUR to have fallen just over 0.8%.

Event	Survey	Actual	Prior	Revised
ADP Employment Change	175K	38K	179K	177K
Construction Spending MoM	0.30%	0.40%	1.40%	0.10%
ISM Manufacturing	57.1	53.5	60.4	- -
ISM Prices Paid	81.5	76.5	85.5	- -
Total Vehicle Sales	12.44M	11.76M	13.14M	- -
Domestic Vehicle Sales	9.70M	9.22M	10.20M	- -

Greece’s debt was downgraded more than expected as Moody raised their chance of default to 50%. European official wasted no time following the poor sentiment and came together to plan the second bailout package, aiming to flick off the renewed concern that looms the markets. EURUSD stumbled to the near 1.43 level, reflecting the believable views that traders has on the chance of Greece’s recovery path.

Gold traded through 1550, a month high. Playing a role of a defensive class and outperformed all other asset classes. Oil fell aggressively 2.4% to 100.29 a barrel, the most in almost a month. Moreover, all 24 major commodities such as Silver, coffee and wheat all lost a touch under 3%. The retreat across the commodity realm (except for Gold) sent AUDUSD back to 1.06 and CAD to trade back near 1.02.

INDICES
	Last Traded	Previous Close	Change %	Net Change
SPI 200 Futures	4637	4709	-1.529	-72
S&P500 Index	1314.55	1345.2	-2.278	-30.65
S&P500 Futures	1313	1312	0.076	1
Dow Jones Indus. Avg	12290.14	12569.79	-2.225	-279.65
FTSE 100 Index	5928.61	5989.99	-1.025	-61.38
Volatility Index	18.3	15.45	18.447	2.85

COMMODITIES
	Last Traded	Previous Close	Change %	Net Change
Gold	1542.8	1543.2	-0.026	-0.4
Oil (Nymex)	99.82	100.29	-0.469	-0.47

CURRENCIES
	Last Traded	Previous Close	Change %	Net Change
AUDUSD	1.0626	1.0614	0.113	0.0012
EURUSD	1.4339	1.4328	0.077	0.0011
GBPUSD	1.6337	1.6334	0.018	0.0003
USDJPY	80.99	80.95	-0.049	0.04

Filed Under: June Tagged With: ADP Employment Change, AUDUSD, bailout, CAD, coffee, commodities, COnstruction Spending MoM, currency trading, dollar, dollar index, Domestic Vehicle Sales, Dow Jones Indus. Avg, downgrade, EUR, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBP, GBPUSD, Gold, Greek debt, ISM Manufacturing, ISM Prices Paid, market wrap, Moody, Oil, oil (nymex), Payrolls, S&P500 Futures, S&P500 Index, silver, SPI 200 Futures, Total Vehicle Sales, US equities, USD, USDJPY, vantage fx, volatility index, wheat

Jobless Claims Shake Economic Recovery | April 15 2011

April 15, 2011 By Vantage FX

Pound Sterling received an unexpected boost as consumer confidence levels recovered.

Good morning. Equity markets opened the Thursday session on a weaker note with European debt woes, and Jobless Claims influencing movements. Reporting a rise in Initial Claims to 412,000, the market had originally factored in 385,000. The Producer Price Index also painted a softening in the economy with 0.7% recorded for the March period. Economists had forecast 1.1% for the period. Across the Atlantic, European debt worries flagged the markets. Speculation that European leaders were discussing the potential for further restructuring in Greece, led to a sell off in the major currencies. French Economic Minister La Garde was adamant that the role the EU had taken on the issue of debt default was adequate. Economic news set to be released on Friday includes CPI, Core CPI, Industrial Production and Capacity Utilisation. The market has factored in a CPI level of 0.5% for March.

On the equity market front, the Dow Jones was slightly weaker in early trade as markets reacted to economic concerns. Technology companies weighed on the indices, with private computer sales data released, indicating a softening in the market. Google is expected to release strong results after today’s market close.

On the currency front, Pound Sterling bucked the risk trend, with the currency rising against the greenback. Trading at 1.6338, the pair reacted to a weaker Euro, with traders switching out of the currency into the GBP. British consumer confidence data also contributed to gains, with the market comfortable with the current levels recorded. Key economic figures in the US are expected to refine the trend and confirm the direction of many of the commodity based risk pairs. The Swiss Franc experienced consistent buying pressure on Thursday with the currency pair trading at 0.8931. Opening weaker, the USDCHF consolidated at lunch time before recovering late in the day. Swiss company Roche announced a disappointing fall in 1^st quarter sales, with the company highlighting the growing problem of a stronger currency. Exporters and the tourism sector have been significantly impacted by the appreciation. Japanese Yen rallied against the greenback on Thursday with the currency reacting to news in Europe. Fears of another debt contagion resulted in safe haven buying and strength in the Swiss Franc and the Yen. Traders also looked towards changes in the bond markets, with Japanese investors purchasing an extensive amount of overseas debt. Recent appreciation in the greenback has been attributed to the G7 Intervention after the devastating earthquake and tsunami. The USDJPY traded at 83.27.

Filed Under: April Tagged With: Bond Markets, British Consumer Confidence, buying pressure, Capacity Utilisation, consolidated, Core CPI, CPI, currency market, currency trading, debt contagion, Dow Jones, equity market, EUR, Euro, european debt, Foreign Exchange, forex, forex market wrap, French Economic Minister, G7 intervention, GBP, Google, Greece, greenback, Industrial Production, Initial Claims, jobless claims, La Garde, market wrap, pound, Producer Price Index, Roche, Sterling, Swiss Franc, USDCHF, USDJPY, vantage fx, Yen