interest rates

Bullish Markets on Back of Greek Parliament Passing Second Vote | July 1, 2011

July 1, 2011 By Vantage FX

Spot Gold declined overnight to settle at a level of 1,502, sitting just above key support level of 1,500

The Australia equity market is expected to begin the new financial year in positive ground as US stocks rallied for the fourth straight day after the Greek ministers voted to implement the austerity plan which will see the release of 12 billion Euro from the EU and IMF. Finance minister Evangelos Venizelos was quoted “I am very satisfied because now I can go to Euro-group strengthened by a vote of confidence and two approved bills”. The Dow finished up 153 points at 12415 while the S&P500 jumped 13.25 points to 1320.6.

The EURUSD traded as high as 1.4541 overnight which was the highest it has traded on three weeks as the prospects that the Euro-zone raising interest rates next week to curb inflation increased.

The AUDUSD has been relatively quiet in overnight trade falling from a high of 1.0750 to finish the US session at around 1.0715.

The JPY was firm against the USD during the US session trading to a low of 80.27 following strengthening reports on construction. Japanese housing starts increased by 6.4% year-on-year in May from a virtual standstill in April. Currently the USDJPY is trading at 80.73.

Spot Gold (see above chart) declined overnight to settle at a level of 1,502, sitting just above key support level of 1,500 on the back of the Greeks passing the bill which has momentarily curbed demand for the metal.

WTI Crude Oil declined overnight after OPEC increased output and the US prepared to start releasing the emergency stockpile.

INDICES
	Last Traded
SPI 200	4618
S&P500 Index	1315.25
Dow Jones Indus. Avg	12348
FTSE 100 Index	5918

COMMODITIES
	Last Traded
Gold	1502.5
Oil (Nymex)	94.96

CURRENCIES
	Last Traded
AUDUSD	1.0715
EURUSD	1.4496
GBPUSD	1.6045
USDJPY	80.63

Filed Under: July Tagged With: AUDUSD, austerity plan, Australia equity market, construction, crude, crude oil, currency trading, Dow, Dow Jones Indus. Avg, EU, Euro, euro zone, EURUSD, Evangelos Venizelos, Finance Minister, Foreign Exchange, forex, forex market wrap, FTSE 100 Index, GBPUSD, Gold, Greek ministers, IMF, inflation, interest rates, Japanese Housing Starts, JPY, market wrap, metal, Nymex, Oil, OPEC, S&P500 Index, SPI 200, spot gold, US session, US stocks, USDJPY, vantage fx, WTI crude oil

US Relief Rally | June 10, 2011

June 11, 2011 By Vantage FX

EURUSD was under pressure last night as it tumbled over 170 points with a loss of 1.2% approximately

Relief was given overnight to US with SP500 and DOW both finally edged higher at 0.74% and 0.63% respectively. The boost was aided by a combination of surprise deficit contraction data, where trade balance came in at -43.7B which was lower than expected at -48.8B, and continuing claims was 3676K versus the expectation of 3700K.

Furthermore, global markets were all positive as a whole, helped by the announcement regarding new round of austerity measure that will be given to assist debt nations. This move created positive sentiment and led the FTSE and DAX to gain 0.82% and 1.41% respectively. However, EURUSD was under pressure last night as it tumbled over 170 points with a loss of 1.2% approximately, trading back below the low of 1.45 just above the momentarily dip level of 1.4478. Euro currency weakness was further fueled by ECB keeping their interest rates at 1.25% as market was scaling back its position. Moreover, despite the new austerity measure, market participants are still expecting that there is a high chance of default from Greece as debt sharing could only hold off for short term and hence EURUSD will continue to face downward pressure.

AUDUSD advanced back above 1.06 level after an over 80 points loss on the back of weak employment data during Asian session. The strength in AUD was assisted by high risk appetite by global markets as well as strong commodity prices.

Gold gained 0.5% as well as crude made some grounds. The bid market was derived by the ongoing concern of Euro contagion generating some buying interests towards bullion. Moreover, the halted stance by ECB to keep the interest rates at 1.25% forced investor to look for higher return elsewhere such as commodity, and gold being the most defensive and consistent over the last couple of months.

USDJPY made some respectful gain last night as it tried to stay above 80, trading within a weak range of 30 points average. There seems to be lack of momentum on the upside, trading as if it is waiting for some bad sentiment, finding some reasons to break lower. The direction of JPY will soon be cleared for short term when Japan’s domestic CGPI data releases at 9:50amAEST today.

INDICES
	Last Traded	Change %
SPI 200	4549.6	0.28
S&P500 Index	1289.00	0.74
Dow Jones Indus. Avg	12124.36	0.63
FTSE 100 Index	5856.34	0.82

COMMODITIES
	Last Traded	Change %
Gold	1544.5	0.12
Oil (Nymex)	101.76	-0.17

CURRENCIES
	Last Traded	Change %
AUDUSD	1.0629	0.02
EURUSD	1.4524	0.1
GBPUSD	1.6374	0.04
USDJPY	80.36	0.01

Filed Under: June Tagged With: Asian session, AUD, AUDUSD, austerity measure, commodity prices, Continuing Claims, crude oil, currency trading, DAX, debt nations, debt sharing, deficit contraction data, Dow, Dow Jones Indus. Avg, ECB, Employment Data, Euro, european debt contagion, EURUSD, Foreign Exchange, forex, forex market wrap, FTSE, FTSE 100 Index, GBPUSD, global markets, Gold, Greece, interest rates, Japan CGPI, JPY, market wrap, Oil, oil (nymex), S&P500, S&P500 Index, SPI 200, Trade Balance, USDJPY, vantage fx

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

Initial Claims Figures Spark Global Market Selloff | May 6, 2011

May 6, 2011 By Vantage FX

Aussie dollar savaged by global commodity selloff

Good morning. Equity and Commodity markets experienced heightened levels of volatility on Thursday with Initial Claims data disappointing. Reporting a jump for the period, the market had initially priced in 400,000. Other key economic news that was released on Thursday included Productivity and Continuing Claims. Productivity rose to 1.6%, with continuing claims tracking initial claims. Tomorrow will see the release of Non Farm Payrolls, and the Unemployment rate. Across the Atlantic, European Central Bank President Trichet commented on the current economic and debt situation in the Eurozone, citing the potential for sustained debt problems. The Central Banker was cautious in his estimates of economic growth.

On the equity market front, the Dow Jones finished the session 140 points lower. AIG announced that it had posted a $543 million quarterly loss. Food company Kraft released buoyant revenue data, which initially spurred a rise in the stock. The 11% gain in revenue was not able to translate into a higher net profit, with $799 million announced.

On the currency front, the Euro Dollar posted one of the biggest falls during the session, with debt worries and fears of a global economic slowdown, pressuring the currency. Announcing a 78 billion emergency package for Portugal, the EU gave little indication of growth forecasts. This led to speculation that interest rates may be on hold over the coming year. Traders also capitalised on the pullback to crystallise profits and losses. The EURUSD traded at 1.4537. Volatility and Economic fears pushed the Japanese Yen lower on Thursday. Breaking through the psychological level of 80, the Japanese Finance Ministry commented on the moves citing the potential for further action to stabilise the currency. This led to a slight surge late in the day, as the US dollar gained. Economists predict another round of Japanese Intervention, as the currency continues to press on local economic growth. The rising currency however will be subject to yield attractiveness, housing and Manufacturing data. The USDJPY traded at 80.16. The Aussie Dollar experienced a sharp sell off on Thursday with markets reacting to commodity movements. A significant fall in Oil, and Silver translated into a contraction in the demand for the resource based currency pair. Early in the week, the Reserve Bank announced that rates would stay on hold, citing the potential for weakness in the housing and consumer spending sectors. This also contributed to movements during the session. The AUDUSD traded at 1.0576.

Filed Under: May Tagged With: AIG, AUDUSD, Aussie Dollar, commodity market, consumer spending, Continuing Claims, currency market, currency trading, Dow Jones, ECB, equity market, EU, euro dollar, euro zone, european central bank, EURUSD, Foreign Exchange, forex, forex market wrap, housing data, Initial Claims Data, interest rates, Japanese Finance Ministry, Kraft, manufacturing data, market wrap, Non Farm Payroll, Oil, Portugal, Productivity Claims, Reserve Bank, silver, Trichet, unemployment rate, US Dollar, USDJPY, vantage fx, volatility, Yen, yield

Silver Continues to React to Economic Speculation | May 4, 2011

May 4, 2011 By Vantage FX

Continued selling pressure pushes Silver lower in trade on Tuesday

Good morning. Equity markets tracked the major commodities on Tuesday, with an early selloff recorded. Reporting a stronger than expected Factory Orders figure for the period, the market had initially eyed a 1.8% rise. The 3.0% result helped the greenback strengthen against the majority of the currencies. ISM Services, Crude Inventories and ADP Employment Change figures are announced on Wednesday. Silver futures posted another significant fall during the session, with exchange margin requirements contributing to movements. Reacting to news that the CME would raise the level of required intraday and overnight margin, traders crystallised profits, and moved into Gold. Silver has seen significant price strength in the last few months. In Asia, India’s central bank raised rates by 0.5%. Citing inflationary pressure, the emerging economy was conscious of private spending and savings levels. China also hit the headlines, with economists speculating over the investment direction the country would take in lieu of the $3 trillion chest available. Recently the government has cited the growing investment potential in the renewable energy and environmental sectors.

On the equity market front, the Dow Jones recovered from early lows to close flat. Entertainment company CBS announced a $3.5 billion revenue for the quarter with $202 net profit. Las Vegas Sands also released earnings in after hours, with the stock savaged 9%.

On the currency front, the EURUSD following other risk currencies during the session, with the pair touching 1.4823. Posting an A Shaped downtrend, the currency reacted to equity market movements. Leading up to the ECB meeting on Thursday, traders will be cautious in their trades. Market analysts continue to speculate over whether or not Trichet will follow last months decision and raise rates at the meeting. Consolidating during the morning session, the Swiss Franc rallied against the greenback late in the day. Market sentiment led to safe haven buying with European interest rates and the potential for a softening in Non Farm Payrolls later in the week. Equity market movements translated into a broad based asset selloff with commodities also experiencing consistent selling pressure. The USDCHF traded at 0.8612. Early weakness in the equity and commodity markets sparked a rise in the Japanese Yen. After a considerable fall in the global markets, traders eyed the potential for further economic discourse. The sentiment that flowed over from the previous session evaporated, with traders moving towards the safe haven pairs. A report released by the Wall Street journal highlighted a shift in hedge fund investment strategy, with money flowing into the emerging markets. This compounded recent volatility in the currency markets. The USDJPY traded at 80.98.

Filed Under: May Tagged With: A Shaped Downtrend, ADP Employment Change, CBS, China, CME, commodities, consolidating, Crude Inventories, currency market, currency trading, Dow Jones, ECB, equity market, EURUSD, Factory Orders, Foreign Exchange, forex, forex market wrap, Gold, greenback, hedge fund investment, India Central Bank, inflationary pressure, interest rates, intraday, ISM Services, Las Vegas Sands, market wrap, Non Farm Payrolls, overnight margin, safe haven buying, selling pressure, selloff, silver, silver futures, strategy, Swiss Franc, USDCHF, USDJPY, vantage fx, volatility, Wall Street Journal, Yen

Markets React to News of Bin Laden’s Death | May 3, 2011

May 3, 2011 By Vantage FX

Silver experienced significant volatility on Monday with the commodity gapping 10%

Good morning. Equity markets finished the session on a weaker note, with mixed corporate, political and economic news. The announced death of Al Qaeda leader Osama Bin Laden, drove the market higher early in the day, with renewed market vigour compounding gains. This was relatively short lived with mixed corporate announcements. Construction Spending data exceeded initial estimates with a 1.4% gain posted in march. Complimenting this economic release was the ISM index, which recorded a rise in the index to 60.4. Quiet session for the European and Asia markets, with debt concerns still driving market volatility. Key economic data released on Tuesday includes Factory Orders, Auto Sales and Truck Sales.

On the equity market front, the Dow Jones posted a slight contraction. Insurance company– Hartford Financial, beat analysts’ forecasts with the company posting a net profit of $588 million. This equated to an EPS of 1.01, which was above the 0.95 first anticipated. In other corporate news Amerisource Bergen posted an 18% rise in 2Q earnings. The company cited a shift in market sentiment and demand.

On the currency front, the Aussie dollar rallied during the morning session, before consolidating. News of Bin Laden’s death, helped the greenback, with equity market sentiment shifting away from the major pairs. Thin volumes were recorded with the market cautious leading up to Non Farm Payrolls on Friday. Economists still speculate on the impact the strong currency has had on the property, tourism and export markets. The AUDUSD traded at 1.0958. Trading in a tight range, the Swiss Franc hovered just about 0.86 for much of the day. Traders were comfortable holding the currency, in light of continued debt fears in the euro zone. Traditionally, the CHF is seen as a low risk exposure currency. Retail sales figures released locally also fell shy of initial estimates, further driving speculation. The USDCHF traded at 0.8641. Sterling consolidated for much of the session, with the currency reacting to thin volumes and limited economic leads. Cautiously awaiting for Non Farm Payroll data later in the week, the market was reactive to Bin Laden’s death and the potential for a rise in Interest Rates. Recent awareness of the exposure that British Banks have to Irish sovereign debt could derail a premature tightening in monetary policy. The GBPUSD traded late in the day at 1.6682.

Filed Under: May Tagged With: Al Qaeda, Amerisource Bergen, AUDUSD, Aussie Dollar, Auto Sales, CHF, consolidating, Construction Spending, contraction, currency market, currency trading, debt, Dow Jones, EPS, equity market, euro zone, Factory Orders, forex, forex market wrap, GBPUSD, Hartford Financial, interest rates, Irish sovereign debt, ISM Index, market wrap, monetary policy, Non Farm Payrolls, Osama Bin Laden, Swiss Franc, Truck Sales, USDCHF, vantage fx, volatility

Will Non Farm Payrolls Support Greenback? | May 2, 2011

May 2, 2011 By Vantage FX

Aussie dollar strengthens off the back of risk appetite.

Good morning. Equity and Commodities markets closed the Friday session on a slightly higher note, with the Dow forecasting further market uncertainty. Key economic dataset released during the session included Construction Spending, with the figure below the =des strong note with PMI data in Chicago driving movements. Economic news also extended to Personal Spending and Income. Both figures were above initial estimates, with Personal Income monopolising strong price movements. Economic news released during the day provided key, with traders eyeing the impact of surging commodity and inflation pressures. This has resulted in strong movements and gains in the sector. Key economic news released during the week includes Construction Spending (market expects 0.0%) and ISM (index of 59.7) on Monday, Factory Orders (market expects 1.9%) and Crude Inventories on Tuesday and Wednesday. Unemployment data which included Initial and Continuing Claims also pushed the equity markets into a range early in the week. Economists have forecasted further strength in the employment sector with NFP posting 183,000. This result pushed the unemployment rate to 8.8%

On the equity market front, the S&P500 closed the day at 1364 up 3 points. Car manufacturer Hyundai released a strategy report to the market, with the extension of 2 hybrid vehicles highlighted in the coming years. The introduction of the new product line, will further boost the footprint of the Korean company.

On the currency front, The Japanese Yen strengthened against the greenback on Friday, with economic concerns continuing to drive prices lower. Factoring in the potential for flat interest rates in the short term, the market looked for safety and a security blanket. The Japanese Yen benefited from disappointing Chicago PMI and lacklustre Personal Spending figures. Falling in line with initial expectations, the market highlighted the potential for further contraction in the manufacturing sectors. This would have a sustained positive effect on the Yen. USDJPY traded at 81.11. The Swiss Franc tracked the Euro’s movements with the currency trading at 0.8649. Reacted to EU inflation data and speculation that the Swiss Central Bank may need to raise short term rates led to sustained buying pressure during the after session. The KOF economic indicator was released on Friday with a surprising 2.29 posted in April. Economists had initially expected a much lower result, in light of the recent strength of the local currency. Pound Sterling bucked the trend of the European majors on friday, with the pair trading near 1.67019. The Royal Wedding gave the currency an expected boost, with sentiment rising during the session. Limited economic news was released with volatility driven by US economic data. Lacklustre Personal Spending and Income pushed the pound higher in the late session.

Filed Under: May Tagged With: =des strong, buying pressure, Chicago PMI, commodity market, Construction Spending, contraction, Crude Inventories, currency market, currency trading, Dow Jones, equity market, EU Inflation data, Euro, Factory Orders, Foreign Exchange, forex, forex market wrap, greenback, Hyundai, inflationary pressures, interest rates, ISM, KOF economic indicator, market wrap, NF, NFP, Personal Income, Personal Spending, pound, Royal Wedding, S&P500, Sterling, Swiss Central Bank, Swiss Franc, unemployment rate, USDJPY, vantage fx, volatility, Yen

Consumer Confidence Boosts US Equity Markets | April 27, 2011

April 27, 2011 By Vantage FX

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

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

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

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

Filed Under: April Tagged With: Amazon, Aussie Dollar, canon, Case Shiller Index, consolidating, consumer confidence data, contraction, Crude Inventories, currency market, currency trading, debt refinancing, deficit, Dow Jones, Durable Orders, equity market, Euro, EURUSD, Foreign Exchange, forex, forex market wrap, GDP, global financial crisis, Housing Market, ICB, index, inflation, inflationary pressure, interest rates, Ireland, market wrap, marubeni, monetary policy, Reserve Bank, risk appetite, tourism, US Dollar, USDJPY, vantage fx, volatility, Washington DC, Yen

US Sovereign Outlook Rattles Markets | April 19, 2011

April 19, 2011 By Vantage FX

Pound Sterling reacted to US and European sovereign debt worries

Good morning. Equity markets reacted to debt worries on Monday, with the major indices experiencing heavy selling pressure. Ratings Agency Standard and Poor announced that they had placed the US on a negative watch in light of recent economic developments and a growing budget deficit. The US still holds a AAA sovereign rating. Energy commodities tracked the equity markets, with Oil futures contracting 2% to close at $107.43. Safe haven Gold bucked the trend and supported precious metal prices. In Europe, economists speculated over the impending emergency bailout extension, which would assist in lowering debt refinancing costs in Greece and Ireland. Critics to the fund, have highlighted the possibility for a significant increase in fiscal costs and a lack of qualified austerity measures. Finland has been a vocal critic to the measures. In Asia, Chinese officials announced the tightening of bank reserve requirements. This had a positive effect on the local markets, with traders previously factoring in the possibility of a raising of interest rates. The measure is expected to slow growth and force inflation lower.

On the equity market front, the S&P500 closed the session 1.1% lower. Technology company Texas Instruments reported a solid profit for the quarter, with the company forecasting stronger growth patterns over the next 12 months. Google announced that it had invested in an alternative project based in Oregon. The $100 million purchase, adds to the current portfolio of green energy assets.

On the currency front, The Euro reacted to debt concerns, with the currency falling to 1.4223. With ratings agency S&P reducing the long term outlook for the US, the market was uncertain over the potential debt refinancing in Greece, Portugal and Ireland. Economists were also uncomfortable with the potential for a contagion effect. Speculation that the ECB could raise rates in the coming months had little supportive effect during the day session. Tracking other risk and European based currencies, Pound Sterling contracted during the session. Falling against the US dollar, the market was cautious on the high yield, high risk currencies. Continued debt concerns and the potential for refinancing in the region led to spike in volatility and volume during the lunchtime session. Key housing data released in the US this week, will also impact the movements in the base currency. The Japanese Yen strengthened against the greenback on Monday with traders flooding towards safe haven currencies – the yen and franc. Trading at 82.37, the USDJPY was driven lower by repatriation of yen in light of recent disasters. Insurers continue to reinvest in the local currency to cover their financial obligations. The debt downgrade in the US also compounded movements during the session, with fears that the European debt crisis could be spreading to the rest of the World.

Filed Under: April Tagged With: AAA, Asia, austerity measures, bank reserve, budget deficit, China, contagion effect, currency market, currency trading, debt refinancing, ECB, energy commodities, equity market, Euro, Finland, Foreign Exchange, forex, forex market wrap, franc, Gold, Google, Greece, greenback, high yield, inflation, interest rates, Ireland, market wrap, oil futures, Oregon, Portugal, pound, precious metal, repatriation yen, S&P, S&P500, selling pressure, sovereign rating, Standard and Poor, Sterling, Texas Instruments, US, US Dollar, vantage fx, Yen

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

April 14, 2011 By Vantage FX

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: aversion, Barak Obama, Biosante Pharamaceuticals, biotech sector, carry trade, Crude Inventory, currency market, currency trading, debt crisis, equity market, Euro, european central bank, EURUSD, Federal Reserve, Foreign Exchange, forex, forex market wrap, GDP, Greece, greenback, health care, IBM, Initial Claims, interest rates, Ireland, Japan, Libya, market wrap, medicare, microsoft, monetary policy, nuclear disaster, pharamaceutical sector, Portugal, PPI, retail sales, Riverbed Technology, S&P500, Sovereign Debt, sovereign downgrade, Swiss PPI, The Beige Book, US Dollar, US President, vantage fx, volatility, Yen, yield attraction