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Market Snapshot 19.2.08
USD
Brief:
1.Today’s US economic releases, -forecast- NAHB Housing market index –MoM- (19) and US ABC Consumer confidence (-42)
2.USD traded near a 2 weeks low against EUR on early trading session before a government report tomorrow that may show US housing recession is deepening.
3.GBP felled against USD yesterday after BOE policy maker Timothy Besley said UK banks reluctance to lend money after the collapse of the US subprime mortgage market will restrain consumer spending and economic growth, signaling further rate cuts in the near term is an option.
4.USD retreats from early gains yesterday in a quiet trading session amid US is on President’s day holiday
5.Investors and economists are betting the Fed will cut its benchmark rate by a half point to 2.5% at its next meeting (March), while a majority forecast an additional quarter point cut in April base on surveys and CBOT futures
On the upside:
•Recovery on profit taking after last week weakness.
•Cross currency weakness. (JPY and GBP)
On the downside:
•Further negative views towards US economy by economists.
•Cross currency recovery. (AUD and NZD)
•More rate cut speculation on weaker economic outlook.
To monitor:
•Tomorrow’s US economic releases figure speculation.
•Fed members comment.
•Other Central banks statements
•Cross currency strength and weakness. (GBP, EUR, AUD, NZD, CAD and JPY –Main-)
Suggested pairs of the day: (-Cautious-)
Short: GBP/USD – EUR/USD – NZD/USD – AUD/USD –
Long: USD/JPY – USD/CHF – USD/CAD
Possible main pairs are: – EUR/USD – USD/JPY – GBP/USD – USD/CAD – USD/CAD
-According to 12.30GMT price-
JPY
Brief:
1.JPY rose against most currencies amid European capital markets fell on writedowns caused Barclays report a 21% drop in second-half profit and Credit Suisse said writedowns will cut net income by $1 Billion.
2.Late today’s BOJ Monetary Policy meeting minutes for January.
3.JPY weakens as Asian and European stock rose on buying interest and on speculation that tomorrow’s US economic releases will further pressure Fed to cut its interest rate on next FOMC meeting (March).
4.Japan may enter a recession for one or two quarters this year, limiting gains in the yen, said Toyoo Gyohten in an interview who was Japan’s former top currency official.
5.Japan’s demand for services had its biggest drop in three months in December as higher oil prices forced consumers and companies to pare spending and demand for stock trading declined.
On the upside:
•Cross currency weakness. (GBP and EUR)
•Capital markets might fall if before tomorrow’s US economic releases.
On the downside:
•US capital markets rally on favorable outlook for tomorrow’s US economic releases.
•Cross currency recovery. (USD, NZD and AUD)
•Slowing Japan’s economy.
To monitor:
•Tomorrow’s US economic releases figure speculation.
•US/Japan economic releases forecast.
•Cross currency strength and weakness (-Main- USD, EUR, AUD, NZD and GBP)
•Global capital markets movement, particularly US. (Main)
•Fed or its members statements that might affect capital markets and its currency
•Economist comments on US/Japan economy, economic releases or sector growth.
Suggested pairs of the day:
Long: USD/JPY - GBP/JPY - EUR/JPY – AUD/JPY– NZD/JPY–
Possible main pairs are: – AUD/JPY – NZD/JPY – USD/JPY – GBP/JPY –
-According to 12.30GMT price-
EUR
Brief:
1.EUR traded near a 2 weeks high against USD on speculation US housing recession is deepening which might add pressure for Fed to lower its interest rate on next meeting (March).
2.Today’s economic releases, -actual- Italian trade balance EU (-853.5M Euros) and Italian trade balance –Total- (-1972.0M Euros).
3.Tomorrow’s euro-zone economic releases, -forecast- Germany Producer prices –MoM-YoY- (0.3% - 2.8%) and Italy industry orders –MoM-YoY- (6.0% - -1.9%)
4.EUR slightly recovers against USD yesterday on a quiet trading session amid US President’s Holiday.
5.ECB council member Axel Weber last week said investor bets that the ECB will cut interest rates are misguided because they overlook policy makers’ determination to prevent an inflation spiral.
On the upside:
•Cross currency weakness. (JPY and GBP)
•Rate raise speculation after long-delayed interest rate increases to curb inflation.
On the downside:
•Cross currency recovery. (USD, NZD and AUD)
•Weaker Euro-region economy outlook.
To monitor:
•ECB or its member’s statements/comments.
•Euro zone economic releases forecast/actual.
•Cross currency strength and weakness.
•Highly influential news from US, UK and Euro zone.
•Euro - zone economy outlook and sector performance.
Suggested pairs of the day:
Short: EUR/USD – EUR/GBP – EUR/NZD – EUR/AUD
Long: EUR/JPY - EUR/CHF –
Possible main pairs are: EUR/USD – EUR/JPY – EUR/AUD – EUR/NZD – EUR/CHF
-According to 12.30GMT price-
Crude oil
Brief:
1.Crude oil rose to its highest in more than 5 weeks on speculation OPEC will curb production and refinery disruptions may limit fuel supplies.
2.CnocoPhillips said it will shut a unit at its oil processing facility in Sweeny, Texas for required maintenance. The Sweeny refinery can process 247,000 barrels of crude oil a day, according to the US Energy Department.
3.Crude oil felled yesterday, snapping its four trading session rally amid Iran’s oil minister said OPEC may reduce production when it meets next month.
4.An explosion rocked Alon USA Energy Inc’s refinery in Big Spring, Texas, early yesterday, a dispatcher with the local sheriff’s department said, the refinery can process 70,000 barrels of oil a day.
5.Crude oil fell yesterday even as Iran’s Oil minister said OPEC may reduce production when the organization meetings take place next month in Vienna and explosion at the USA Energy Inc’s Big Spring refinery, Texas, failed to push crude oil price higher on concern that Japan’s slowing economy would curb fuel demand.
On the upside:
•Tomorrow’s economic releases figure speculation might give crude oil a temporary boost.
•OPEC members mentioning a production cut.
On the downside:
•Weaker economy outlook. (Japan, US, China and Euro-region)
•Selling pressure on slowing economy outlook.
To monitor:
•Tomorrow’s US economic releases figure speculation.
•Forecast on near-term US economic releases.
•Economist forecast on near-term US economy.
•US capital markets.
•Fed or its member’s statements/comments.
•OPEC member’s comments on March meeting.
Trade suggestion:
“Short” Crude oil around mid $97 and high $97
- (Suggest) Exits all positions before market closes-
-According to 12.30GM price-
Time lapse prediction: (according to current situation)
14PM – 16PM GMT:
•USD recovers on early trading session.
•US capital markets recovers on early trading session.
•JPY weakens, following capital markets surge.
•EUR weakens on early trading session.
•Crude oil slightly retreats on early trading session.
16PM – 18PM GMT:
•USD strengthens further during mid session.
•US capital markets remains or slightly rises on mid trading session.
•JPY remains or slightly weakens following US capital markets movement.
•EUR slightly weakens on mid trading session.
•Crude oil remains or slightly rises on mid trading session.
18PM – 22PM GMT:
•USD remains or slightly weakens by late trading session
•US capital markets further rises on late trading session.
•JPY remains or slightly weakens tracking US capital markets movement.
•EUR remains or slightly recovers by late trading session.
•Crude oil falls on late trading session on selling pressure.
Loh Chang Yuen,
Brief:
1.Today’s US economic releases, -forecast- NAHB Housing market index –MoM- (19) and US ABC Consumer confidence (-42)
2.USD traded near a 2 weeks low against EUR on early trading session before a government report tomorrow that may show US housing recession is deepening.
3.GBP felled against USD yesterday after BOE policy maker Timothy Besley said UK banks reluctance to lend money after the collapse of the US subprime mortgage market will restrain consumer spending and economic growth, signaling further rate cuts in the near term is an option.
4.USD retreats from early gains yesterday in a quiet trading session amid US is on President’s day holiday
5.Investors and economists are betting the Fed will cut its benchmark rate by a half point to 2.5% at its next meeting (March), while a majority forecast an additional quarter point cut in April base on surveys and CBOT futures
On the upside:
•Recovery on profit taking after last week weakness.
•Cross currency weakness. (JPY and GBP)
On the downside:
•Further negative views towards US economy by economists.
•Cross currency recovery. (AUD and NZD)
•More rate cut speculation on weaker economic outlook.
To monitor:
•Tomorrow’s US economic releases figure speculation.
•Fed members comment.
•Other Central banks statements
•Cross currency strength and weakness. (GBP, EUR, AUD, NZD, CAD and JPY –Main-)
Suggested pairs of the day: (-Cautious-)
Short: GBP/USD – EUR/USD – NZD/USD – AUD/USD –
Long: USD/JPY – USD/CHF – USD/CAD
Possible main pairs are: – EUR/USD – USD/JPY – GBP/USD – USD/CAD – USD/CAD
-According to 12.30GMT price-
JPY
Brief:
1.JPY rose against most currencies amid European capital markets fell on writedowns caused Barclays report a 21% drop in second-half profit and Credit Suisse said writedowns will cut net income by $1 Billion.
2.Late today’s BOJ Monetary Policy meeting minutes for January.
3.JPY weakens as Asian and European stock rose on buying interest and on speculation that tomorrow’s US economic releases will further pressure Fed to cut its interest rate on next FOMC meeting (March).
4.Japan may enter a recession for one or two quarters this year, limiting gains in the yen, said Toyoo Gyohten in an interview who was Japan’s former top currency official.
5.Japan’s demand for services had its biggest drop in three months in December as higher oil prices forced consumers and companies to pare spending and demand for stock trading declined.
On the upside:
•Cross currency weakness. (GBP and EUR)
•Capital markets might fall if before tomorrow’s US economic releases.
On the downside:
•US capital markets rally on favorable outlook for tomorrow’s US economic releases.
•Cross currency recovery. (USD, NZD and AUD)
•Slowing Japan’s economy.
To monitor:
•Tomorrow’s US economic releases figure speculation.
•US/Japan economic releases forecast.
•Cross currency strength and weakness (-Main- USD, EUR, AUD, NZD and GBP)
•Global capital markets movement, particularly US. (Main)
•Fed or its members statements that might affect capital markets and its currency
•Economist comments on US/Japan economy, economic releases or sector growth.
Suggested pairs of the day:
Long: USD/JPY - GBP/JPY - EUR/JPY – AUD/JPY– NZD/JPY–
Possible main pairs are: – AUD/JPY – NZD/JPY – USD/JPY – GBP/JPY –
-According to 12.30GMT price-
EUR
Brief:
1.EUR traded near a 2 weeks high against USD on speculation US housing recession is deepening which might add pressure for Fed to lower its interest rate on next meeting (March).
2.Today’s economic releases, -actual- Italian trade balance EU (-853.5M Euros) and Italian trade balance –Total- (-1972.0M Euros).
3.Tomorrow’s euro-zone economic releases, -forecast- Germany Producer prices –MoM-YoY- (0.3% - 2.8%) and Italy industry orders –MoM-YoY- (6.0% - -1.9%)
4.EUR slightly recovers against USD yesterday on a quiet trading session amid US President’s Holiday.
5.ECB council member Axel Weber last week said investor bets that the ECB will cut interest rates are misguided because they overlook policy makers’ determination to prevent an inflation spiral.
On the upside:
•Cross currency weakness. (JPY and GBP)
•Rate raise speculation after long-delayed interest rate increases to curb inflation.
On the downside:
•Cross currency recovery. (USD, NZD and AUD)
•Weaker Euro-region economy outlook.
To monitor:
•ECB or its member’s statements/comments.
•Euro zone economic releases forecast/actual.
•Cross currency strength and weakness.
•Highly influential news from US, UK and Euro zone.
•Euro - zone economy outlook and sector performance.
Suggested pairs of the day:
Short: EUR/USD – EUR/GBP – EUR/NZD – EUR/AUD
Long: EUR/JPY - EUR/CHF –
Possible main pairs are: EUR/USD – EUR/JPY – EUR/AUD – EUR/NZD – EUR/CHF
-According to 12.30GMT price-
Crude oil
Brief:
1.Crude oil rose to its highest in more than 5 weeks on speculation OPEC will curb production and refinery disruptions may limit fuel supplies.
2.CnocoPhillips said it will shut a unit at its oil processing facility in Sweeny, Texas for required maintenance. The Sweeny refinery can process 247,000 barrels of crude oil a day, according to the US Energy Department.
3.Crude oil felled yesterday, snapping its four trading session rally amid Iran’s oil minister said OPEC may reduce production when it meets next month.
4.An explosion rocked Alon USA Energy Inc’s refinery in Big Spring, Texas, early yesterday, a dispatcher with the local sheriff’s department said, the refinery can process 70,000 barrels of oil a day.
5.Crude oil fell yesterday even as Iran’s Oil minister said OPEC may reduce production when the organization meetings take place next month in Vienna and explosion at the USA Energy Inc’s Big Spring refinery, Texas, failed to push crude oil price higher on concern that Japan’s slowing economy would curb fuel demand.
On the upside:
•Tomorrow’s economic releases figure speculation might give crude oil a temporary boost.
•OPEC members mentioning a production cut.
On the downside:
•Weaker economy outlook. (Japan, US, China and Euro-region)
•Selling pressure on slowing economy outlook.
To monitor:
•Tomorrow’s US economic releases figure speculation.
•Forecast on near-term US economic releases.
•Economist forecast on near-term US economy.
•US capital markets.
•Fed or its member’s statements/comments.
•OPEC member’s comments on March meeting.
Trade suggestion:
“Short” Crude oil around mid $97 and high $97
- (Suggest) Exits all positions before market closes-
-According to 12.30GM price-
Time lapse prediction: (according to current situation)
14PM – 16PM GMT:
•USD recovers on early trading session.
•US capital markets recovers on early trading session.
•JPY weakens, following capital markets surge.
•EUR weakens on early trading session.
•Crude oil slightly retreats on early trading session.
16PM – 18PM GMT:
•USD strengthens further during mid session.
•US capital markets remains or slightly rises on mid trading session.
•JPY remains or slightly weakens following US capital markets movement.
•EUR slightly weakens on mid trading session.
•Crude oil remains or slightly rises on mid trading session.
18PM – 22PM GMT:
•USD remains or slightly weakens by late trading session
•US capital markets further rises on late trading session.
•JPY remains or slightly weakens tracking US capital markets movement.
•EUR remains or slightly recovers by late trading session.
•Crude oil falls on late trading session on selling pressure.
Loh Chang Yuen,
Junior Strategist
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