Market snapshot 12.08.09
USD
Brief:
1. Today’s US economic releases, -forecast- US Trade balance –June- (-$28.40B), Publication of Monthly budget statement –July- and US FOMC Rate decision (0.25%).
2.Yesterday’s US economic releases, -actual- US Non-Farm productivity -2ndQ- (6.4%), US IBD/TIPP Economic optimism –Aug- (50.3), US Wholesale inventories –June- (-1.7%) and ABC Consumer confidence –Aug- (-47).
3. USD strengthen against most currencies but weakened against the yen today on speculation the Fed today affirm its commitment to keeping interest rates low, reducing the appeal of the dollar.
4. The dollar remained weak today as investors speculate policy makers may acknowledge economic growth will be faster than they anticipated today at FOMC meeting amid economists said the expansion in the coming year won’t be enough to prevent the unemployment rate from reaching 10% for the first time since 1983.
On the upside:
•Stocks may retreat today on selling pressure.
On the downside:
•Stocks may advance further if major corporate announces revenue that beats analysts estimate.
• Policy makers may US economy to grow in coming quarters and indicate Fed won’t be raising rates anytime soon to interfere with growth.
To monitor:
•Today’s US economic releases.
•FOMC Meeting.
•Fed/Treasury members' statements/comments.
•Major corporate earnings report.
•Other Central bank member’s statements/comments.
•US Indexes movement.
•News/statements related to major corporate.
•Cross currency strength and weakness. (GBP, EUR, AUD, NZD, CAD and JPY –Main-)
Suggested pairs of the day: (Light)
Long: EUR/USD – GBP/USD – AUD/USD – USD/JPY – NZD/USD –
Short: USD/CAD -
Possible main pairs are: EUR/USD – USD/CAD – USD/JPY – NZD/USD -
-According to 11:15GMT price-
JPY
Brief:
1. Today’s Japan economic releases, -actual- Japan Domestic goods price index –YoY-MoM- (-8.4% - 0.5%) and Japan Industrial production -June- (2.3%)
2. Tomorrow’s Japan economic releases, -forecast- Tokyo Department store sales –July- (-9.8%) and Japan Nationwide department store sales –July- (-6.5%).
3. JPY strengthens against most currencies today as Asian and European stocks extended a global slide in equities, reducing demand for carry trade, overshadowed a report earlier showed Japan’s economy grew last quarter for the 1st time in more than a year on rebounds in exports.
On the upside:
•US stocks may retreat on selling pressure.
On the downside:
•Stocks may rally further on speculation major corporate earnings will beat analyst estimate.
•Buying interest as policy makers may economy will grow at a favorable pace.
To monitor:
•Today’s US economic releases.
•FOMC rate decision.
•Fed/Treasury members' speech.
•US Indexes movement.
•Other central bank member’s statements/comments.
•Corporate fiscal report.
•BOJ Members' statements/comments.
•News related to major institution.
•Economist comments on US/Japan economy, economic releases or sector growth.
Suggested pairs of the day: (Light)
Long: GBP/JPY – EUR/JPY – AUD/JPY – USD/JPY -
Possible main pairs are: USD/JPY – EUR/JPY -
-According to 11:15GMT price-
EUR
Brief:
1.Today’s Euro-one economic releases, -actual- France CPI –July- (-0.4%), Italy CPI –YoY-MoM- (0.0% - 0.0%) and Euro-zone Industrial production –June- (-0.6%).
2. Tomorrow’s Euro-zone economic releases, -forecast- Germany GDP -2ndQ- (-0.2%), Germany GDP -2ndQ- (-7.6%), Publication of ECB monthly report –YoY-QoQ- (-5.1% - -0.5%).
3. EUR fell against most currencies today as stocks in Asia and Europe decline, boosting dollar appeal as safe haven, while ECB council member Erkki Liikanen said the global economy is through the worst of the crisis and the next months will show whether the euro area economy has bottomed out.
On the upside:
•Demand for the dollar as safe haven may fall on speculation the recession is nearing an end.
On the downside:
•US stocks may retreat on selling pressure.
•The dollar may continue to rise if Fed policy makers say US economy will grow at a fast pace/
To monitor:
•Today’s US economic releases.
•FOMC rate decision.
•Fed/Treasury members' statements/comments.
•Major corporate earnings report.
•ECB Member's statements/comments.
•US Indexes movement.
•News related to major corporate.
•Cross currency movement. –Main- (USD)
•Other central banks member’s statements/comments.
Suggested pairs of the day:
Long: EUR/JPY– EUR/USD – EUR/CHF -
Possible main pairs are: EUR/JPY - EUR/USD – EUR/CHF -
-According to 11:15GMT price-
Crude oil
Brief:
1. Crude oil fell below $69 today as equities declined and on speculation a report today may show supplies increased in the US as consumption weaken.
2. Oil prices remained weak today as analysts said before a report today will show US crude oil inventories rose by 1Million barrels on weaker fuel consumption, while gasoline inventories probably dropped 1.2Million barrels last week.
On the upside:
•Stocks may advance further if major corporate post better than expected earnings.
On the downside:
•The dollar may strengthen further on buying interest.
•Some retreat after recent gains.
To monitor:
•Today’s US economic releases.
•Today’s storage report.
•FOMC rate decision.
•Fed/Treasury members' statements/comments.
•US Indexes movement.
•OPEC members' comments/statements.
•USD movement.
•Geopolitical risk.
•Forecast on near term US economic releases and economic growth.
Trade suggestion:
“Long” Crude oil around mid $69 and high $69 (Today’s US economic releases, storage report US indexes movement, USD movement)
-Exit all positions before market closes-
-According to 11:15GMT price-
Time lapse prediction: (according to current situation)
Present (11:15AM) – 14PM GMT:
•USD slightly weakens in early trading session.
•US capital markets recovers in early trading session.
•JPY slightly weakens in early trading session.
•EUR slightly weakens in early trading session.
•Crude oil slightly rises in early trading session.
14PM – 18PM GMT:
•USD strengthens in mid trading session.
•US stock markets rises mid trading session.
•JPY weakens in mid trading session.
•EUR strengthens in mid trading session.
•Crude oil rises in mid trading session. (Depends on storage report)
18PM – 21PM GMT:
•USD slightly strengthens in late trading session.
•US capital markets slightly retreats in late trading session.
•JPY slightly recovers in late trading session.
•EUR slightly weakens in late trading session.
•Crude oil slightly weakens in late trading session. (Depends on storage report)
Loh Chang Yuen,
Junior Strategist
All rights reserved: Admiral Markets Ltd
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