Markets Strong: IBM Strong Earnings and Obama Endorses Deficit Reduction | July 20, 2011

July 20, 2011 By
USDJPY

The USDJPY advanced for the first time in three days trading from lows overnight of 78.82 to as high as 79.28

The Australian equity has opened the day strong after the Dow notched its biggest gain for this year, investors saw optimism on President Barack Obama’s praise for a $3.7 trillion deficit-reduction plan and the strong earnings of International Business Machines.

The Dow traded up 1.63% to finish at 12587 as twenty seven of the 30 components finished higher, led higher by IBM reported quarterly growth in all of its major businesses while the S&P500  index rallied 1.6% to finish 1326.73.

Both markets were significantly higher on the support for a deficit-reduction plan coming out of a bipartisan Senate group. President Barack Obama said overnight that the proposal, which would modify entitlement programs like Social Security and rework the tax code, represents a “very significant step” forward in deficit talks.

The USDJPY advanced for the first time in three days trading from lows overnight of 78.82 to as high as 79.28 as Barack Obama endorsed the deficit cutting proposal by a bipartisan group of senators.

The EURUSD had a choppy overnight session trading from a high of 1.4218 to a low of 1.4109 as the Greek Prime Minister George Papandreou said that Europe’s leader need to show that they can resolve the European Union debt crisis to avoid a contagion enveloping Italy and Spain.

Gold fall from the 31 year high trading from a high of 1610 to a low of 1582.

INDICES
  Last Traded
SPI 200

4488
S&P500 Index

1326
Dow Jones Indus. Avg

12587
FTSE 100 Index

5789
COMMODITIES
  Last Traded
Gold

1589
Oil (Nymex)

98.20
CURRENCIES
 

Last Traded
AUDUSD

1.0742
EURUSD

1.4165
GBPUSD

1.6128
USDJPY

79.15

Source Bloomberg, Dow Jones News

Filed Under: July Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Housing Starts and Building Permits Top Estimates | April 20, 2011

April 20, 2011 By
EURAUD

EURAUD rallied off the back of heightened risk appetite during the tuesday session

Good morning. Equity and Commodity markets rebounded on Tuesday with Housing Starts and Building Permits contributing to gains. Reporting 549,000 new Housing Starts in March, the market had initial forecast 520,000 for the period. Building Permits also outperformed with 594,000 recorded. Economists were happy with the relevant gains in the sector, with the stimulatory measures highlighted as key growth contributors. Important Existing Home Sales and Crude Inventories are released on Wednesday. Across the pond, the European car industry took an unexpected turn, with car registrations falling in Greece, Italy and the UK. The 5% reduction translated into further economic woes in the region. Recent debt refinancing concerns have influenced trading conditions in the local equity and currency markets. In Australia, the Reserve Bank released its headline comments with Officials highlighting that rates should at 4.75%, as this fell in line with the central banks long term monetary and inflationary strategy.

On the equity market front, the Dow Jones closed 65 points higher with technology giant IBM announcing buoyant quarterly earnings. Reporting a 10% rise for the period, the company was confident in its 12 month outlook. Yahoo and Intel also exceeded estimates.

On the currency front, the Aussie dollar rallied against the greenback, with traders eyeing carry trade scenarios. After a disappointing previous session, traders covered short positions and increased their exposure to risk currencies. Rebounding Gold and Oil prices also helped push the Aussie dollar higher, with economists speculating over the impact of a surge in commodity values. The effect of the Chinese government’s announcement to raise bank reserve requirements also helped support the currency during the session. The AUDUSD traded at 1.0523. Risk appetite drove the Euro higher on Tuesday, with the currency touching 1.4343. PMI Data released during the session exceeded initial estimates with 57.8 recorded. Economists had factored in 57.1. Traders warmed to the results driving the price higher. Greek and Irish debt refinancing worries continue to plague the currency, however the markets have cited adequate risk controls that have been implemented by the EU and the ECB. Key US data released later in the day will confirm the trend. The Swiss Franc weakened against the US Dollar, with traders attracted to risk. Supporting the Euro during the day, economists moved away from the safe havens of the Japanese Yen and the Franc. The Switzerland Central Bank have watched recent developments in the currency and have noted the impact of the stronger pair on the economy. European PMI Data helped boost sentiment in the region, with the potential for a mid-term shift in currency demand. The USDCHF traded at 0.8993.

Filed Under: April Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Retail Sales Data Falls In Line With Initial Estimates | April 14, 2011

April 14, 2011 By
USDCAD

Canadian Dollar weakened against the greenback, with commodity strength having little effect on the movements

Good morning. Equity markets were modestly higher on Wednesday with low volumes and volatility recorded. The Federal Reserve released the Beige Book during the session with indications that the Japanese and Libyan events have had significant impact on growth and economic efficiency. Retail Sales data recorded a 0.4% gain, which was in line with initial estimates. Crude Inventory levels also contracted slightly from the previous period. US President Obama announced that health care was an important issue that required significant reform. The proposed medicare changes would have dramatic impact on the biotech and pharmaceutical sectors. Across the Atlantic, European Central Bank officials continued to watch movements in the currency, as speculation of a rate rise had little impact on price movements. The market have cautiously watched the recent debt crisis in Portugal and the ensuing borrowing costs associated with sovereign downgrades in Greece and Ireland. Economic news set to be released on Thursday includes PPI and Initial Claims.

On the equity market front, the S&P500 closed the session flat with mixed corporate leads from the tech and financial sectors contributing to movements. Riverbed Technology finished the day on a strong note with an upgrade in broker 12 month estimates driving gains. IBM and Microsoft also rose in trade with the sector receiving a boost in market sentiment. Biotechnology company Biosante Pharmaceuticals was a stand out performer, with the company reacting to Obama’s medicare reform comments.

On the currency front, the Euro weakened against the US dollar on Wednesday, with debt concerns playing on the minds of traders. Portuguese woes and the potential for further bailout measures led to a discourse in the Euro currency.  Economists have also factored in the potential for a tightening in monetary policy. This has recently been supported by gains in GDP growth and employment.  Risks that have been highlighted in the region include sovereign debt and borrowing costs. Greece, Ireland and Portugal have felt the effects of a surge in costs. The EURUSD traded at 1.4446.  Swiss Producer Price Index data supported gains in the currency. Trading at 0.8961, the Statistics office announced that PPI fell in line with initial estimates of 0.4%. Market Analysts were comfortable with the figure, indicating the potential for further GDP growth in the short term. The recent appreciation in the currency has been watched with anticipation, as traders factor in the potential for a tightening in global interest rates.  Yield attraction and aversion to the carry trade pushed the greenback higher against the Japanese Yen. Trading at 83.84, the market initially factored in the nuclear disaster into the equation, with the currency falling against most of the majors. Recovering late in the session, the Japanese Yen received support from covering trades. The market continues to be cautious in its estimation of economic growth and interest rates in light of the recent disasters.

Filed Under: April Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

GDP Drives Market Gains on Friday | March 28, 2011

March 28, 2011 By
EURUSD

Euro Aussie dollar weakens as risk appetite supports the AUD.

Good morning. Equity markets finished the Friday session on a positive note, with GDP figures boosting sentiment. Reporting a 3.1% rise for the February period, the market initially expected 2.9%. The Deflator fell in line with estimates. Japanese officials cited radiation problems in waters around the Fukushima nuclear plant, leading to a temporary spike in the US dollar. Allied forces continued to attack Libyan forces, with President Obama citing the need for a unified force against Colonel Gaddafi. This week will see a slew of economic data. Personal Spending figures (market expects 0.5%), Personal Income (market expects 0.3%), and Pending Home Sales (market expects 0.3%) on Monday, Consumer Confidence (market expects 65) on Tuesday, ADP Employment (market expects 210,000) and Crude Inventories on Wednesday, Initial Claims (market expects 383,000), Continuing Claims (market expects 3,700,000), Chicago PMI (market expects 69.5), and Factory Orders (market expects 0.4%) on Thursday, Non Farm Payrolls (market expects 185,000), Unemployment Rate (market expects 8.9%), Construction Spending (market expects -0.7%), and Hourly Earnings (market expects 0.2%) on Friday.

On the equity market front, the Dow Jones was 50 points higher on Friday with technology stocks driving gains. Oracle released buoyant corporate results in after hours trade during the previous session. General Market sentiment also supported the IBM share price during the session.

On the currency front, comments from the IMF over the recent G7 intervention, helped support the greenback against the Japanese Yen on Friday. Trading at 82.17, the currency reacted to speculation that the BOJ could be looking to further support the greenback and weaken the yen. Japanese government officials noted on Friday that the radiation levels at Fukushima plant in the north east of the country were a result of a leakage in core number 3. Officials were concerned that the level of contamination could be dire to the surrounding areas. This news had little negative impact on the currency, with traders continuing to focus on the potential growth from the rebuilding phase. The Australian Dollar continued to test resistance on Friday with the currency pair rallying to 1.0271. Offshore investment in the AUD contributed to the gains, as traders eyed a possible rebound in commodity prices. Markets continued to factor in a buyback from BHP and a boost in mineral demand from Japan and China. The recent crisis in Japan has led traders to reassess the demand for resources from the region and the impact this would have on commodity prices.

Filed Under: March Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Tuesday, 19 October 2010

October 19, 2010 By

Sydney (19/10/10) – Wall Street was bolstered by strong corporate earnings on Monday with the Dow Jones index rising 80 points. Opening relatively weaker, the market rose off the back of renewed economic sentiment and stronger than expected home building confidence figures. Breaking a five month losing streak, traders were optimistic on the economic outlook. On the corporate front, Citigroup announced a $2.1 billion revenue for the period with the company highlighting a decrease in credit write downs and provisions. The revenue figure was slightly below forecasts, however analyst noted the difficult trading conditions during the period. IBM also released earnings during the session, with a rise in operating profit’s and hardware sales. Although the result was solid, the market factored in administrative costs and noted the increasingly difficult conditions in the sector. IBM in after hours trading was 3% lower at $138.50. Technology company Apple announced better than expected earnings, with iPad and iPhone sales helping the company. Recording a 27% jump in revenues, Apple noted the strong demand for Mac Computers with 3.8 million sold. On the commodities front, Gold was slightly weaker with the precious commodity hitting resistance at $1370. Light Crude Oil futures tracked the general market sentiment with a 2.25% upside move to $83.01 a barrel. The Volatility Index was relatively unchanged at 19.09.

USDJPY>> Monday saw the yen fall into a relatively tight range with the pair trading at 81.20 at lunch. Testing support at 80.8 on Friday, leading Japanese analysts have highlighted the potential impact of a sustained weaker US dollar and the current situation in the services sectors. Consumer sales and demand for key services fell for the previous period. Economists predict that the BOJ will step into the currency markets fairly shortly to stabilise the yen.

AUDUSD>> Traders are awaiting important RBA minutes that will highlight the direction of interest rates and the general economy. Released on Tuesday this week, the AUDUSD traded at 0.9865 during the lunch session. Touching parity on Friday, the volatility in the currency pair has steadily grown over the last few weeks, with economic uncertainty in the US, and high yield differential cited as contributing factors.

EURUSD>> The Euro weakened against the dollar on Monday with the currency pair trading at 1.38937. Following the broad based market sentiment, traders moved away from risk appetite and waited for US equity market leads. Euro zone powerhouse, Germany is expected to release sentiment figures tomorrow, with speculation that the figure could fall below economists expectations.

USDCHF>>The swiss franc was weaker against the greenback, with comments from the OECD pushing the USD higher intraday. Highlighting that the swiss franc was one of the most overvalued major currencies based on PPP, the OECD was cautious on its long term estimates. Traders crystallised positions, sending the greenback higher. The USDCHF traded at 0.9585.

GBPUSD>>Cable started the week on a negative note with the currency pair trading at 1.58890. Recent weakness in the greenback and heightened concern over the European and British economies helped the USD rise.

USDCAD>>Traders moved away from the Canadian dollar on Monday with risk aversion and global economic uncertainty cited. The recent rise of the CAD has been broadly based on commodity movements and Canadian GDP growth. The USDCAD traded at 1.02041.

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Friday, 15 October 2010

October 15, 2010 By

Sydney (15/10/10) – The Dow Jones closed 30 points weaker on Friday with the tech heavy NASDAQ rising after buoyant corporate earnings. Fed Chief Bernanke did not surprise the market with the Central Banker highlighting the need for stimulus measures to combat slowing growth, credit liquidity and unemployment. CPI figures indicated a slight rise of 0.1% for the previous period. Economists were confused and uncertain as to the direction of the market, with buoyant manufacturing and retail sales data overshadowed by a drop in overall consumer sentiment. On the corporate front, Google’s strong earnings from the previous session helped support the nasdaq with the company reporting a 32% increase for the corresponding quarter. General Electric, however disappointed analysts with earnings lower than initial expectations. The stock fell early of the back the news before recovering towards the end of the session. Next Monday will see earnings season kick into full gear with Apple, IBM and Citigroupannouncing earnings. On the commodities front, Gold fell 0.5% to 1370. Traders have highlighted a possible ceiling at 1400 with a possible short term oversupply in the precious metal. Profit takers pushed Light Crude Oil futures 1.4% lower to $81.48. The Volatility Index also tracked oil with the risk measure weakening 4.2% to 19.03.

USDJPY>> The Yen continued to worry BOJ officials on Friday with the currency pair trading at 81.13. With the currency war between the greenback heating up, Japanese analysts are increasing becoming more bearish on corporate earnings and forecasts. The Nikkei was lower in trade in the afternoon with falls in leading export based electronics providers Canon and Panasonic.

AUDUSD>> Sitting just below parity, the Aussie dollar traded at 0.9948 towards lunch London time. Forecasting continued strength in the AUD due to high interest rates and GDP strength, economists were unable to give a time frame on when the pair would reach parity. Fed Chief Bernanke will comment on the economic news tonight with CPI and Retail sales data released.

EURUSD>> The Euro was stronger against the greenback leading up to important US Manufacturing, CPI and Retail sales data. Rising to 1.4096, traders were bullish on the pair, highlighting the possibility that the Fed may begin monetary easing and further asset purchases. The move would spur continued buying in the higher yielding currencies like the Euro, AUD and CAD.

USDCHF>>Opening the session slightly firmer, greenback sentiment started to waiver with the pair trading at 0.9518 at lunch. Looking to safety, in the form of the swiss franc, traders also took solstice in the perceived strength of the Euro zone and Switzerland. The yield differential is helping a number of the major currencies at the moment, with economists speculating that US interest rates could fall to 0%.

GBPUSD>>Cable followed the other major pairs on Friday with the currency hitting 1.6054. Lack of UK economic data had little impact on the rising GBP with the market awaiting important comments from Fed Chief Bernanke. Economists are painting a disappointing picture economically and will be interesting to see how the market reacts in the event of surprise data.

USDCAD>>After breaking through parity yesterday the Canadian dollar weakened on Friday with risk aversion supporting the greenback. Trading at 1.0060, economists also looked to important economic data from Canada, which would also provide an insight into the resource space.

 

Filed Under: October Tagged With: , , , , , , , , , , , , ,