04.08.08
Posted in Currency, Forex, Forex Calendar, Forex Income, Forex Indicator, Forex Info, Forex News, Forex Signal at 3:04 am by yeop
European releases overnight:
February Forecast Actual
German Industrial Production (MoM) - 0.4% +0.4%
German Industrial Production (YoY) +5.3% +6.1%
April
Euro-zone Sentix Investor Confidence +0.2 +4.1
While some figures out of Germany are tending to warn against over-optimism (as opposed to pessimism) the industrial production numbers were pretty damn solid. This was largely down to the construction sector so may be a one-off. However, the fact that Euro-zone investors have recovered some of their nerves as shown in the Sentix confidence numbers does help.
ECB officials have retained a very focused and persistent line of confidence while clearly acknowledging the downside risk. It does sometimes strike me that half of the problem is confidence and mainly down to consumers. As I have often said, lose the confidence of the consumer and the economy will follow the States.
For now though the overall numbers emanating from Europe are of a mild but gentle pullback and this is likely to remain the status quo unless there is some other price shock.
States releases overnight:
February Forecast Actual
U.S. Consumer Credit USD 5.5bn 5.16bn
Consumer credit down and now we appear to be getting calls for a second fiscal package before the first has even hit the streets. The White House quickly poured dry ice over that suggestion saying that it is well too early.
The U.S. administration and the Fed have attempted to follow the same tack as the ECB in constantly voicing confidence over the economy and have only redirected the comments when external analysts have forced them to by sheer weight of argument derived from economic statistics.
The NBER head, Feldstein, not only announced his belief that the U.S. is in recession but backed it to extend to more than two quarters. He has a point. Very clearly the first half is looking like a dead duck and it will be touch and go whether the fiscal stimulus package will be able to drag the economy out of the mess in one quarter.
Interesting comments from Europe’s Juncker who declared that he will be sitting down with President Bush, no doubt with a cup of tea and a cake, to discuss the volatility in the Forex market – mainly about the excessive weakness in the Dollar.
Doesn’t sound that surprising ahead of the G7 meeting but additional comments highlight some confusion. He rules out concerted intervention and also said that unilateral action would be “doomed to failure.”
The first inconsistency is that the IMF has said once again that the Dollar is over valued, but Juncker insists that current rates do not reflect fundamentals.
Given the current global economic background what Juncker wants is a bit like a 6 year old child asking Santa Claus for a Porsche in his Christmas stocking… It just ain’t gonna happen… Unless of course the market begins to feel more confident about holding Dollars. If there is one market in the world that cannot be manipulated then Forex is that market. It is almost pure in its reflection of demand and supply.
And a little pointer of what is to come at this coming weekend’s G7 meeting the U.K. Financial Minister Darling is urging for more coordination on credit, repeating the call by the IMF. “G7 should lead the international response to these events” he declared.
He wrote in a letter, “It is essential that we have a clear plan of action… We should also consider the full range of policy options to ease current market conditions.”
The market continues to be suffering from exhaustion, confused by the bearish sentiment that just isn’t following-through, the outcome of Thursday’s ECB and BOE rate decisions and the G7 meeting at the weekend.
There is argument, counter argument and a double-back-flip argument, a 360 degree horizontal twist and failed slam dunks. But at the end of the day the market actually remains bearish – and seems lost as to know why…
There following releases are due from Asia due today:
Australia Prior
March NAB Business Confidence - 2.0
March NAB Business Conditions 11.0
Japan Prior
March Bankruptcies (YoY) 8.3%
March Eco Watchers Survey: Current 33.6
March Eco Watchers Survey: Outlook 39.5
Permalink
04.07.08
Posted in Currency, Forex, Forex Calendar, Forex Income, Forex Indicator, Forex Info, Forex News, Forex Signal at 6:49 am by yeop
203,88. GBP/JPY currency pair is in a consolidation after the last bullish movement. The volatility is high. Bollinger bands are flat. Oscillators are neutral. The price should find a resistance below 205,00. The consolidation should continue.
Resistances 204,30 - 205,00
Supports 203,20 - 202,20
Permalink
Posted in Currency, Forex, Forex Calendar, Forex Income, Forex Indicator, Forex Info, Forex News, Forex Signal at 6:48 am by yeop
1,9882. GBP/USD currency pair moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is high. Bollinger bands are deviated. 1H ForexSto (Modified Stochastic) indicate a bearish pressure on GBP USD. The downtrend should continue to gather momentum. The target is expected at 1,9750 (140 pips).
Resistances 1,9970 - 2,0040
Supports 1,9890 - 1,9800
Permalink
Posted in Currency, Forex, Forex Calendar, Forex Income, Forex Indicator, Forex Info, Forex News, Forex Signal at 6:47 am by yeop
1,5668. EUR/USD currency pair moves without trend and swings around exponential moving averages (EMA 50 and 100). The volatility is low. Bollinger bands are flat. Oscillators are neutral. The price should continue to move in 1,5550 / 1,5760 range.
Resistances 1,5700 - 1,5760
Supports 1,5650 - 1,5580
Permalink
Posted in Currency, Forex, Forex Calendar, Forex Income, Forex Indicator, Forex Info, Forex News, Forex Signal at 2:05 am by yeop
European releases overnight:
February Forecast Actual
German Factory Orders (MoM) +0.8% - 0.5%
German Factory Orders (YoY) +6.7% +9.0%
Friday’s German factory orders data was rather strange seeing a far worse than expected MoM figure while the YoY figure was boosted by past revisions. Domestic orders were flat confirming the lack of consumer demand.
Several ECB officials offered the usual round up of often repeated statements, none of it of much consequence, that the U.S. economy is already in the midst of a recession and will overflow into the “real” economy and that could still cause a negative impact globally. One official, Alumnia, did suggest that the situation in Europe is not as bad as the IMF has suggested.
The U.K.’s Financial Times ran an article on the credit squeeze which it says has intensified and thus the chances of a rate cut on Thursday’s from the BOE have risen. This came in response to the BOE report which outlined a probable worsening in the squeeze on mortgages and corporate credit.
This has certainly placed more pressure on the Pound and while the medium term still looks bearish the prospect of a return to 2.0191 is certainly on the cards following Friday’s poor unemployment data from the States.
States releases overnight:
March Forecast Actual
U.S. Change in Non-Farm Payrolls - 50K - 80K
U.S. Change in Manufacturing Payrolls - 40K - 48K
U.S. Unemployment Rate 5.0% 5.1%
The non-farm payrolls were certainly pretty soft, the worst one month decline in five years in fact. It provoked a statement of disappointment from the White House. “Recession” has suddenly become a permitted word in officials’ statements now, used by both the White House and Paulson but always quickly followed by statements of growth in H2 as the fiscal stimulation package provides a positive impact. Paulson argued that while recession is possible the label is unimportant, preferring to focus on dealing with its practical effects.
It didn’t stop the CEO of PIMCO to take a swipe at the situation by saying that U.S. treasuries are the most overvalued assets globally given the level of inflationary expectations. I guess that highlights the difference between politics and investment strategy…
All in all it puts the Dollar onto its back foot again and does certainly look set to lose out again this week. The release calendar is not the most hectic but Thursday does see the BOE and ECB announce their rate decisions.
The ECB are almost certainly to announce an unchanged policy, caught still between the conflict provided by the high level of inflation and the need to ensure that the credit markets remain stable. The latter continues to reflect that while official comment is confident, their actions suggest otherwise.
The BOE rate decision has a little more uncertainty. U.K. figures have remained better that the doomsayers but there is still universal recognition that the U.K. economy is next most vulnerable to the credit crunch.
The conflict of the implications here make the rate decision less apparent. There is once again a rising cry for a rate cut on Thursday but BOE official comments do not really point to this at the moment. Things could change over the next few days but as of now the greater chance still appears to be an unchanged policy.
So as the week begins the Dollar should remain on the soft side with a decline towards recent lows on the cards. We do still have to be cautious even if the Euro penetrates the 1.5901 high as we are also approaching the G7 meeting at the weekend.
Concerted intervention does not appear to be favored by the central banks but there has been a growing lobby for such action to bring back some stability to exchange rates. Notably we have seen comments from French, German and Japanese officials that appear to be pushing this line.
Thus Dollar losses should be watch with some care but most likely this will be the overall preference shown by the market.
There following releases are due from Asia due today:
Australia
March AiG Performance of Construction Index
February Trade Balance AUD -2.5bn
February Building Approvals (MoM) +0.0%
March ANZ Job Advertisements
Japan
February Leading Economic Index (P) 50.0%
February Coincident Index (P) 44.4%
Permalink
Next entries »
