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.

 

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Thursday, 14 October 2010

October 14, 2010 By

Sydney (14/10/10) – Wall Street was weaker on Thursday after weekly jobless claims figures fell below initial estimates. Market sentiment was buoyant early in the session, before worries over foreclosures and the state of the general economy pushed the indices into the red. PPI figures were also released on Thursday with a 0.1% increase for the period. In line with economists’ forecasts, the result indicated that recent stimulatory measures have led to a cap on wholesale price increases. On the corporate front, Google announced strong earnings for the corresponding quarter with a rise in revenue to $2.1 billion. Highlighting a turn around in advertising revenues, economists were positive on their forecasts. Concerns over the handling of foreclosures savaged the financial sector on Thursday with leading banks Wells Fargo, JP Morgan and Bank of America falling intraday. The so called debate on the management of foreclosures has received negative press and led to a governmental inquiry into the matter. Analysts were cautious on AMD earnings in after hours trade, as the company is forecast to fall below initial estimates. On the commodities front, Gold rose to $1381 off the back of economic jitters and a uncertainty in the US dollar. Light Crude Oil futures tracked the equity market with a 0.37% fall to $82.70. The Volatility Index rose 4.25% to 19.88 with uncertainty compounding price movements.

USDJPY>BOJ comments on Thursday had little impact on the greenback, with the yen trading at 81.15. Announcing further stimulatory measures which included purchasing of government bonds, traders were still negative on the US dollar and looked to Japan for safety. Further easing of the US monetary policy has also concerned economists with predictions of further strength in the pair.

AUDUSD>>The Aussie dollar teased with parity on Thursday after Singapore announced tightening of interest rates. The news helped the buoyant AUD and further put doubt in traders minds over the sustainability of the US economy in the short term. The recent devaluation of the greenback has become cause for concern for export and tourist based economies like Japan and Switzerland. The AUDUSD traded at 0.9964 after lunch.

EURUSD>>News that the Singapore government had tightened monetary policy also spilled over into the European markets, with the EURUSD stabilising at 1.4089. After a strong few sessions, traders took profits during the Thursday session.

USDCHF>>Safe haven buying pushed the swiss franc to a record level on Thursday after comments from the Federal Reserve weakened the greenback. Highlighting the very real possibility of further asset purchases, the Fed also noted the potential for unemployment weakness in the short term. The USDCHF traded at 0.95049.

GBPUSD>>Sterling had a strong rise intraday with the currency pair trading at 1.6024. Limited data and economic uncertainty in the US pushed cable to a new level. Traders are speculating that further easing of monetary policy could spell a jump in price for many of the major currencies like the pound.

USDCAD>> Breaking through parity for the first time, the Canadian dollar continued to rise against the USD. Following its Australian counterpart, the CAD unlike the AUD was able to puncture and hold a key level at 0.9992.

 

 

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Wednesday, 13 October 2010

October 13, 2010 By

Sydney (13/10/10) – Traders were bullish on Wednesday with the Dow Jones rising 75 points and holding the key 11000 level. Mixed economic fundamentals in Europe and Asia did not deter risk appetite during the session with economists confident over quarterly earnings. Early in the day, the Bank of Japan (BOJ) Governor highlighted the importance of an extension of interbank lending, to further stimulate credit markets. This announcement, coupled with a recovery in treasury notes for the session helped the equity markets. On the corporate front, JP Morgan kicked off earnings season with a strong quarterly result for the period. Recording a 23% appreciation in profits with a $4.42 billion result, the company highlighted the reduction in overall outstanding and delinquent loans. Relatively cautious on estimates, stock analysts covering the company were surprised with the buoyancy in revenues and overall recovery in EPS. Technology giant Apple broke through a key milestone with the stock closing above $300 for the session. Recent continued strength in the stock has resulted from iPad and iPhone and iPod releases. In the same sector Yahoo also experienced some sustained buying pressure after the company highlighted a new search tool that was being tested by subsidiary Alibaba. On the commodities front, Gold rose considerably with the precious metal trading at 1373 an ounce. Light Crude Oil futures also experienced substantial buying pressure with renewed market sentiment and buoyant corporate earnings pushing the price to $82.94 (up 1.56%). The VIX was steady intraday with the closing price at 19.07.

USDJPY>>The Yen consolidated on Wednesday with traders continuing to speculate over BOJ intervention measures. Trading at 81.88 at lunch, the BOJ Governor highlighted the potential for further liquidity in the markets, with a possible extension of the current war chest of $61 billion. Economists however noted the rise in Japanese Machine orders, and the impact of rising resource currencies on the Japanese economy.

AUDUSD>>Consumer confidence figures helped buoy the Aussie dollar on Wednesday with the currency pair trading at 0.9890. The 3.3% rise in September indicated an overall strengthening of sentiment. The Aussie dollar however reacted sluggishly to the news, with traders indicating a possible ceiling at 0.9940. The turnaround in the US equity market overnight, highlighted the possibility of stronger corporate earnings which could translate into strength in the greenback.

EURUSD>>Strong industrial output figures pushed the Euro higher on Wednesday. Trading at 1.3972 at lunch, the euro attracted risk traders after the results highlighted a 7.9% from the corresponding period. Economists were surprised by the figure. The ECB’s comments from last week also helped the recovery in the euro, with traders citing a more transparent economic direction in the euro zone.

USDCHF>>Swiss franc continued to rise on Wednesday with the USDCHF trading at 0.9558. Speculation of a possible recover in the euro zone coupled with a strong swiss economy, continued to play havoc on the greenback.

GBPUSD>>Mixed economic reports pushed sterling in and out of positive territory on Wednesday. On a negative note, consumer confidence weakened for the period, whilst the claimant count extended gains. Balancing out this news however was an overall reduction in jobless figures. The GBPUSD traded at 1.5844 at lunch.

USDCAD>> Sharp movement in the USDCAD on Wednesday sparked speculation that the Canadian dollar would head towards parity. Trading slightly above the key level, renewed attraction for commodities and resource based economies were cited as the key reasons for the CAD’s strength.

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Tuesday, 12 October 2010

October 12, 2010 By

Sydney (12/10/10) – The Dow Jones opened the session weaker with traders waiting for a key announcement from the Fed on when QE2 would be implemented. Highlighting a possible start date of the 3rd of Nov, the market warmed to the news with overall sentiment helping push the index back into the black. A leading official at the Federal Reserve commented on the importance of open dialogue over interest rates, as long term low rates could attract adverse corporate risk and lending practices. The meeting notes also concluded that output growth and unemployment could be key issues in the ensuing months, with figures indicating a slight contraction in the economy. Uncertainty over the direction of the economy was also a pressing issue, with the committee members needing further data to make a precise and clear decision. On the corporate front, Intel reporting a strong quarterly result with a $2.96 billion net profit for the period. A rise in revenues and demand for the sector pushed EPS to 52 cents, which was a 2c margin above analysts expectations. Cosmetics company Avon hit the headlines during the Tuesday session with traders speculating over a possible tie up with French company L’Oreal. British paper, the Daily Mail forecast a possible full cash bid for the company within a range of $44 a share. On the commodities front, Gold experienced low volatility and volumes with market uncertainty still playing a key factor. The precious commodity closed at $1351 down 3. Light Crude Oil futures also followed its commodity partners, weakening slightly to a level of $81.69. The Volatility index (VIX) had an uneventful session with a closing price of 18.93.

USDJPY>>Worries over Japanese corporate earnings and QE2 pushed the yen to new heights against the greenback with traders flocking to safety. Trading at 81.97, the Japanese yen impacted the stock market with the Nikkei experiencing a sharp fall intraday. Economists are increasingly becoming concerned over the lack of further stimulatory or forex intervention from the BOJ.

AUDUSD>>The Aussie dollar weakened in trade on Tuesday with the currency pair stabilising at 0.98056. Traders were cautious in taking on risk positions during the session, with important Federal Reserve minutes released later on today. Indications of further stimulatory or monetary measures will be highlighted in the report.

EURUSD>>Trading on thin volume, the EURUSD also fell during the session with traders waiting for key indications of moves from the Fed. Trading at 1.38047, the European markets sustained heavy falls with the dow futures also pointing to a weaker start to the session.

USDCHF>>The greenback strengthened against the swiss franc early in the session before risk aversion and hedging pushed the currency pair lower. Speculation that the US central bank may look at further stimulatory measures including bond purchases was wide spread with traders eyeing possible safety currencies in the event of significant volatility in the majors.

GBPUSD>>Sterling fell sharply against the greenback with the pair trading at 1.5842 just before lunch. Negative housing data released yesterday coupled with the possibility of quantitative easing from the Fed pushed cable lower intraday.

USDCAD>> Canadian dollar bucked the trend on tuesday, with the risky pair stabilising against the greenback. Trading at 1.0158, the pair continued to head towards the key parity level.

 

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Monday, 11 October 2010

October 11, 2010 By

Sydney (11/10/10) – Wall Street seesawed in and out of positive territory on Monday after lacklustre nonfarm payrolls on Friday highlighted further economic weakness. Closing 2 points higher, the Dow Jones experienced uncertain trading conditions, with traders eyeing a the start of earnings season. Renowned currency speculator and hedge fund manager George Soros noted his concerns over the Basel III on Monday with bank risk management cited as a continuing concern. Highlighting the need for reform in the sector, Soros speculated over the impact of the new regulations on financial markets and the need for independent risk assessment. US government officials and policy makers are expected to announce important QE2 measures in the coming months, which would include important regulatory reform. On the corporate front, Gymboree rose 22% intraday after private equity bid for the company. The $1.8 billion proposed price tag from Bain Capital pushed the stock considerably higher. Although this was the highlight of the session, traders eyed important earnings results from JP Morgan and Intel announced later in the week. On the commodities front, Gold continued its strong trend rising 0.7% to 1355. Light Crude Oil futures tracked the general market sentiment with light volume recorded and a slight drop in price to 81.89. The Volatility index (VIX) fell to 18.96, which represented a 8.45% movement.

USDJPY>> The Japanese Yen stabilised on Monday with the currency pair trading at 81.97. Starting the session slightly weaker, traders quickly covered their positions, speculating that the BOJ could intervene in the near future. Non Farm Payroll data on Friday highlighted the continued weakness in US unemployment and the possibility of a double dip recession.

AUDUSD>> Rising to 0.9905 early in the session, the AUDUSD fell back to 0.9842 at lunch. The firmer currency has led to a concerns over demands of Australian exports including tourism, and manufacturing. Commodity pricing has kept in line with the stronger aussie dollar, thus not concerning resources companies. Speculation that the RBA may amend its monetary policy in the coming months has sparked further interest in the yield play.

EURUSD>> Speculation that the ECB may reduce the lending facilities available to European banks had a dramatic impact on debt and currency markets over the weekend. The EURUSD traded at 1.3945 at lunch, the currency pair came off highs off 1.40 early in the session. Unemployment data from Friday also helped boost the riskier euro, with traders seeing a significant risk of deflation and double dip recession in the US.

USDCHF>>Hedging their riskier positions, traders looked to the swiss franc on Monday pushing it to 0.9616. After significantly breaking through parity two weeks ago, the franc has become an increasingly concerning problem for the Central Bank. Highlighting that they would not intervene in the currency markets, the Swiss Reserve has noted the impacts that the pair is having on its export market and the local tourist economy.

GBPUSD>>Sterling trended in a range on Monday with consumer price data and BOE comments worrying traders. Consumer prices for September in the UK rose 3% with the BOE highlighted a very real possibility of further stimulatory moves. The GBPUSD traded at 1.5941 at lunch.

USDCAD>>The greenback stabilised against the Canadian dollar during the Monday session. Trading at 1.011 at lunch, the pair decoupled from the AUDUSD with risk aversion slightly weakening the pair.

 

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Thursday, 7 October 2010

October 7, 2010 By

Sydney (07/10/10) – Wall Street closed the session lower on Thursday with trader’s eyeing tomorrow’s important Non Farm Payrolls figures. International Monetary Fund leader Strauss-Kahn highlighted the key economic issues that could impact global economic recovery on thursday, with currency noted as a measure of stability. Speculation from economists of a global currency tug of war between the US and the major pairs, Mr Strauss-Kahn noted the complexity of the new world economy post global financial crisis. Retail sales figures announced in the US beat forecasts with indications of a transformation in sentiment. On the corporate front, Alcoa announced lacklustre earnings with a slight drop in overall 3rd quarter profits to 61 million. Sales however for the period beat analysts forecasts with recent currency fluctuations highlighted as the cause for diminished earnings. Micron Technology announced a strong result for the period, with the company booking a profit of $342 million. The result came off the back of a weaker previous year. The stock was firmer in after hours. Technology company Adobe was reported by the Wall Street Journal on Thursday as having met with Microsoft officials. Traders speculated on what the meeting could translate into, pushing the stock 8% higher in trade. On the commodities front, profit taking pushed Goldslightly lower with the forward month contract trading at $1336 an ounce. Light Crude Oil futures fell 2.1% with economic jitters and speculation over tomorrow’s non farm payrolls, as primary causes. The Volatility index (VIX) rose to 21.56 up 0.3%.

USDJPY>> The Japanese Yen continued to head towards dangerous levels, with the pair trading at 82.41 on Thursday. Hitting a 15 year high against the greenback, Finance Ministry Official Igarashi noted the importance of stabilisation of the yen, with traders speculating that the BOJ may look to asset purchasing measures rather than further currency sales to stem the rise.

AUDUSD>> AUDUSD was considerably stronger during the trade day on Thursday with better than expected jobs data boosting currency sentiment. Trading at a 27 year high against the USD, the pair headed towards parity with an intraday level at 0.9895. Jobs data indicated a rise of 49,500 for the month, with forecasts in the range of 15,000 – 25,000. Buoyant metal prices and positive growth forecasts from China also helped in sending the AUD higher.

EURUSD>> Economists noted on Thursday the growing concern from the ECB over expensive borrowing costs in the credit markets. Traders were initial cautious in early trade with the pair trending before risk appetite pushed the EURUSD to 1.3970. Dragged up by a stronger yen and aussie dollar, most of the major currencies rose against the greenback, with traders citing continual economic concern and possible softening in Non Farm Payrolls tomorrow night.

USDCHF>> Keeping in line with its safe haven counterpart the yen, the swiss franc rose against the US dollar. A market wide sell off in the greenback was spurred by speculation that the Fed and US government would implement further quantitative easing, to accommodate weaker economic conditions. The USDCHF traded at 0.9591 at lunch.

GBPUSD>>Sterling rose during Thursday trade, with the Bank of England announcing that monetary policy would not change. Economists forecast that the BOE would keep rates at 0.5%. Manufacturing data however exceed expectations with an acceleration in growth. The GBPUSD was trading at 1.5992 just before lunch.

USDCAD>>The Canadian dollar strengthened considerably on Thursday with the currency pair continuing to track its resource buddy, the AUD. Falling to 1.0097, the USDCAD followed other major currencies, with the greenback stuttering after Fed Reserve comments.

 

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Wednesday, 6 October 2010

October 6, 2010 By

Sydney (06/10/10) – The Dow Jones was firmer on Wednesday with the index rising 22 points, offsetting the weaker tech based NASDAQ. Economically, traders were still cautious during the session with weaker than expected private sector jobs figures indicating the possibility of a double dip recession. Recording a 39,000 drop in employment for the period, the US government indicated the possibility of further stimulatory measures. Key Non Farm Payroll figures on Friday are expected to drive the trend for much of the week with mixed forecasts . On the corporate front, Apple announced the introduction of a Verizon designed wireless application for the iPhone. This news however was dampened by litigation reports, with Motorola highlighting an infringement lawsuit over the iPad. The news had little impact on Apple with the stock flat for the session. Cloud computing companies felt the brunt of profit downgrades and revenue revisions on wednesday, with leading data center supplier Equinix falling substantially. Analysts and traders reassessed their weightings in the sector, with institutional volume pushing it lower. On the commodities front, Gold rose to $1350 an ounce with economic fears and dollar worries compounding gains. Light Crude Oil futures were buoyed by a stronger Dow with the contract hitting $83.25 (up 0.5%). The Volatility index (VIX) closed the session at 21.49, down 1.2%.

USDJPY>> The US Dollar weakened against the yen on Wednesday with the currency pair trading at 83.07. Declining export growth had been highlighted as a cause for concern with the BOJ looking to further implement stimulatory measures. The reduction in the benchmark interest rate on Tuesday had recourse on a strong yen. Traders noted the economic uncertainty in the US and lack of yield in the greenback has led to its recent slide.

AUDUSD>> Speculation of further US monetary policy changes pushed the greenback lower in trade against the Aussie dollar on wednesday. Trading at 0.9753, the AUDUSD rose in early morning trade substantially with traders and analysts eyeing the important yield differential. Yesterday’s decision by the RBA to hold rates at current levels temporarily impacted the currency before a spike in the price.

EURUSD>> Economic figures pushed the euro lower on Wednesday with the pair trading at 1.3815. Announcing an increase in euro zone growth, economists noted the lacklustre private demand figures, and the possibility of a double dip scenario. Traders looked to risk aversion and the greenback. Due to deflationary possibilities, gold intraday has also experienced some heightened buying pressure.

USDCHF>> The USDCHF traded in a tight range during much of the session with low volume recorded. Risk aversion temporarily pushed the swiss franc higher with mixed euro zones figures and expectations of possible shifts in US monetary policy. The USDCHF traded at 0.9657.

GBPUSD>>Sterling continued to feel the after effects of positive private sector data announced yesterday. Trading at 1.5873 at lunch, economists were mixed in their growth forecasts with many looking to US Nonfarm payrolls for a lead.

USDCAD>> The USDCAD opened weaker on Wednesday before risk aversion pushed the greenback higher. Decoupling from its Australia counterpart, the Canadian dollar felt the effects of  speculation over interest rate policy and economic uncertainty.  The Dollar Canadian traded at 1.0142 at lunch London time.

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Tuesday, 5 October 2010

October 5, 2010 By

Sydney (05/10/10) – Wall Street recorded a strong move on Tuesday with the Dow Jones rising 190 points intraday due to a strong service sector results. Announcing a rise to 53.2 for the month of September, economists had a conservative estimate for the period due to economic pressures. In other surprising news, the Bank of Japan (BOJ) announced that the benchmark interest rate would be cut to further assist in stimulating the economy. With a 0-0.25% range, the Japanese government also announced the resumption of asset purchasing with a 2 trillion yen amount allocated. British economic figures boosted confidence in the European markets with the services sector recording a strong result. Economists had expected a weaker forecast. On the corporate front, machinery company Caterpillar was 3% stronger intraday after the renewed economic vigour pushed the sector higher. American Express continued to fall during the session, with traders eyeing its credit card decision from the previous day. Energy stocks Chevron and Exxon Mobil were helped by solid rises in light crude futures and natural gas. Trading at $63.17, traders and analysts found solstice in the Exxon with yield and commodity strength helping buoy the price. On the commodities front, Gold rose 1.89% late in the session to $1342 an ounce. Indian wedding season and weakness in the greenback pushed the precious commodity to new levels. Light Crude Oil futures were substantially stronger with the economic barometer rising 1.6% to $82.82 a barrel. The VIX felt the full effects of renewed market sentiment with a 7% fall to 21.87.

USDJPY>>The BOJ took steps to control the yen’s appreciation on Tuesday with a lowering of the benchmark rate level to 0-0.25%.  In an attempt to stimulate the overall economy, the central bank also highlighted asset purchases with a 5 trillion yen war chest. Economists and traders found the news to be favourable initially with a rise in the greenback against the currency before settling at 83.33.

AUDUSD>> The Australia dollar fell sharply against the US dollar during the session with the RBA announcing that rates would stay on hold. Citing uncertainty in the global economy and slight consumer demand weakness for the move, traders exited positions. Analysts noted that the currency was an attractive yield option, with many investors expecting a rate rise today. The AUDUSD traded at 0.9595 at lunch.

EURUSD>> Strong buying from Asia pushed the euro higher against the dollar with decisive interest rate announcements in Australia and Japan highlighted as contributing factors. Traders assessed their risk appetite and looked back at the traditional major currencies, with the euro benefiting greatly. Trading at 1.3776 at lunch, the lustre of possible economic stability in the euro zone emerged with substantial volume reweighting.

USDCHF>> Strength of the euro spilled over into the swiss franc during the day with the USDCHF trading at 0.96825. Deemed as a safe haven currency, traders were attracted to the currency as a hedge against adverse possible economic announcements in the US. Traders are eyeing important nonfarm payrolls on Friday for further direction.

GBPUSD>> Private Sector growth figures beat economists’ expectations on Tuesday, pushing sterling to 1.58806 against the greenback.  A positive result for the economy, traders still emphasised the caution surrounding the global recovery and the relative uncertainty of consumer sentiment, employment and housing.

USDCAD>> The Canadian dollar continued to strengthen against the greenback on Tuesday with interest rate announcements in Asia having little impact. Trading within a relatively  tight range for much of the session, the CAD recorded low volumes. The USDCAD traded at 1.02072 during lunch London time.

 

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Monday, 4 October 2010

October 4, 2010 By

Sydney (04/10/10) – The Dow Jones fell sharply on Monday with European austerity concerns dampening trader sentiment. Weakening 78 points late in the session, a softening in corporate earnings forecasts and speculation of a double dip scenario were highlighted as primary causes. Analysts from several large investment banks however cited the possible decoupling of the US economy from Europe and Asia. Recent growth estimates in China and Asia Pacific have painted a positive growth picture with unemployment and housing data still cause for concern in Europe and the US. The White House also felt the full pressure on monday, with President Obama quizzed by a leading Harvard economist over tax cuts and key economic forecasts. On the corporate front, energy company Chevron announced a $1 billion buyback which initially pushed the stock higher before closing slightly weaker. Traders and Analysts forecast an earnings downgrade for Alcoa on Thursday with the stock feeling the full brunt of softer expectations. Goldman Sachs revised their revenue estimates for Microsoft during the session, with the mobile technology cited as an area of cost pressure and earnings weakness. The stock fell 1.93% on the news. On the commodities front, Gold weakened slightly during the lacklustre session with the futures contract closing at $1316 an ounce. Light Crude Oil futures rose slightly intraday holding $81.66 a barrel. The Volatility Index experienced heightened volatility on Monday with a 4.9% upside move due to global economic and corporate concerns.

USDJPY>>The strong end to the week on the US equity markets had little impact on the greenback on Monday with the Yen strengthening. Heading towards a key 83 level, economists are uncertain as to the stimulatory tactics that the BOJ and Japanese government will take. Recent currency intervention has had limited impact on the yen and the ensuing drain that the currency rise is having on the export sector is becoming increasingly a concern. The USDJPY traded at  83.31 at lunch.

AUDUSD>> Monday’s trade session was slightly subdued for the Aussie dollar with the currency pair trading at 0.9672. A public holiday in all states, traders took the opportunity to lock in gains and assess the impact of continuing European economic austerity concerns and the Monetary Policy changes on the local and global markets.

EURUSD>> Continued debate over the austerity measures plagued the EURUSD on Monday with the pair falling to 1.3683. Renowned economist Joseph Stiglitz highlighted to the market that lack of infrastructure and government spending in the euro zone could lead to a new economic crisis or period of recession. Traders limited their risk weighting, pushing the greenback higher.

USDCHF>> Flight to safety on Monday pushed the Swiss Franc higher against the US dollar. Trading at 0.9724 during lunch, economists were concerned with comments from leading nobel prize winner Stiglitz. The trigger in downward pressure against the greenback was closely watched by the Swiss Central Bank as the appreciation in the currency could have further damaging effects on various sectors in the economy including tourism.

GBPUSD>> Better than expected construction PMI data helped the pound during the trade day on Monday. Opening lower in the morning session, the currency headed towards 1.5826 after renewed local economic sentiment.

USDCAD>> The Canadian dollar lost ground against the greenback with the pair trading at 1.0217. Risk aversion and safety helped support the US dollar. Following its Australian counterpart, economists highlighted renewed economic uncertainty as a contributing factor.

 

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Friday, 1 October 2010

October 1, 2010 By

Sydney (01/10/10) – The Dow Jones rose 42 points in late trade on Friday with local and global economic data boosting risk appetite and investor sentiment. Announcing an increase in overall manufacturing for the period, the result was slightly below expectations with a 54.4 level recorded. The month of September however indicated renewed market sentiment with the Dow rising 7.7%. Highlighting general positive global economic drivers, traders also saw potential upside in the commodity space with gold and oil helped by the renewed market sentiment. NY Central Bank official announced on Friday the possibility of further stimulation measures if the state’s economy did not stabilise. The comments come as the Commerce Dept released consumer spending data which highlighted a stronger August with a 0.4% rise. Earlier in the day, China announced Manufacturing figures which noted better than forecast demand for Chinese products. On the corporate front, HP introduced their new CEO to the market, with the stock reacting negatively falling 4% intraday. Key financial stocks, Citigroup and Lisley Corp, firmed during the trade day after analysts from Macquarie Bank reaffirmed their positive ratings for both companies. Technology giant Microsoft announced its intention to pursue legal proceedings against Motorola for infringement on the Android technology. Microsoft shareholders did not warm to the news, with the stock slightly lower. On the commodities front, Gold recommenced its trend, with the precious commodity rising to $1320 an ounce. Analysts highlight Indian wedding season and greenback uncertainty as the prime reasons for the recent appreciation. Light Crude Oil futures also strengthened considerably, breaking the key $80 level and closing at $81.62. The VIX index fell 5% to 22.53.

USDJPY>>The Japanese Yen continued to strengthen on Friday with strong Chicago PMI Data having little impact on the greenback. Traders watched the currency pair closely, in anticipation of further currency divestment. September saw the offload of 2.1 trillion yen by the central bank. In spite of this stabilisation strategy, the USDJPY has risen further. The USDJPY traded at 83.16 during the morning session.

AUDUSD>> Chinese Manufacturing data pushed the Australian dollar higher during the trade day. Reporting a 53.8 index level, economists were surprised with the figure, highlighting the potential for further monetary policy changes. Traders were attracted to the yield potential of the AUDUSD with the currency rising to 0.9723.

EURUSD>> Renewed global economic sentiment and demand for risk appetite helped the euro on Friday with the currency trading at 1.3734. Indications that the US and Chinese economies could be responding well to stimulatory measures were highlighted in overnight PMI data and a Chinese purchasing managers report.

USDCHF>> Concerning economic data in Switzerland pushed the major pairs higher against the franc in early trade, before profit taking came into the market. Announcing a substantial drop in manufacturing and retail sales, the government highlighted the recent currency appreciation as a contributing factor. The USDCHF was trading at 0.9781.

GBPUSD>> Sterling was buoyed by renewed economic vigour during the trade session. Trading at 1.5826, the pair experienced heightened volatility with the EU rebate temporarily pushing the pound lower before recovering.  Bank of England official Posen continued to command the headlines with comments highlighting a need for further economic stimulation.

USDCAD>> The Canadian dollar continued to trend higher against the greenback, with the USDCAD trading at 1.0275. Traders eyed the Aussie dollar for a lead, with Chinese manufacturing data helping the resource based currency pair.

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