Market Snapshot 24.07.08
USD
Brief:
1.Today's US economic releases, -forecast- US Initial jobless claims -July- (380k) and US Existing home sales -June- (4.94M).
2.USD strengthens today as the euro weakens after report shows Germany, France and Italy business confidence fell as higher fuel cost, appreciating euro and demand slowdown from US and Japan diminished confidence.
3.The dollar strengthens today after the US House of Representatives approved legislation for Fannie and Freddie bill, sending the bill to the Senate which are designed to shore up confidence in Fannie Mae and Freddie Mac and stem the record surge in mortgage foreclosures.
4.USD rose to a 4 weeks high against the yen and strengthened versus the euro as a US government rescue of Fannie Mae and Freddie Mac moved closer to congressional passage and as crude oil prices fell.
5.The dollar remains strong recently on signs of stability in the financial industry fueled bets that the Fed will raise interest rates in September.
6.Fed Bank of Philadelphia Charles Plosser said in an interview yesterday that policy makers must increase borrowing costs before inflation expectations become unhinged. Yesterday's Fed Beige Book publication noted the economy was generally weak in April and May.
On the upside:
•Further recover on euro weakness.
•Cross currency weakness. (EUR, JPY, NZD and AUD)
On the downside:
•Possible events that might led to speculation on a possible economic slowdown in US.
•Some selling pressure after recent gains as investors exit position on profit taking.
To monitor:
•Today's US economic releases.
•Senate decision on Fannie and Freddie bill.
•Fed Geithner and SEC Cox testify before house committee.
•Fed members outlook and statements/comments.
•News/statements related to Major institution.
•Major financial companies' earnings report.
•US indexes movement.
•Other Central bank member’s statements/comments.
•Cross currency strength and weakness. (GBP, EUR, AUD, NZD, CAD and JPY –Main-)
Suggested pairs of the day:
Short: AUD/USD - NZD/USD - GBP/USD – EUR/USD –
Long: USD/JPY - USD/CHF –
Possible main pairs are: – AUD/USD - GBP/USD – EUR/USD – USD/JPY – NZD/USD -
-According to 12.20GMT price-
JPY
Brief:
1.JPY strengthens today as stock markets in Europe fell after Germany business confidence fell 3.7 points, the most since September 2001 and lower commodity prices hurt mining and energy shares.
2.The yen remains weak today amid a government report shows Japan's year on year exports unexpectedly fell to 138.6B Yen in June, the the first decline in more than four years, led by a drop in demand from the US and Europe.
3.Yesterday's Japan economic releases, -actual- Japan Adjusted merchandise trade balance -June- (135.4B Yen) and Japan Merchandise trade balance -Total-June- (138.6B Yen).
4.The yen fell to a 4 weeks low versus the dollar and weakens against most currencies yesterday as US stock markets rose as oil retreated, Fannie and Freddie bill are getting nearer for senate approval and earnings reports from AT&T Inc and Pfizer Inc eased concern that the profit slump will worsen.
On the upside:
•Negative news related to major corporate.
•European markets retreat on weaker growth outlook.
•US stock might slightly retreat on profit taking after recent gains.
On the downside:
•US stocks further rallies on positive news.
•Cross currency strength. (USD and GBP)
To monitor:
•Today's US economic releases.
•Fed Geithner and SEC Cox testify before house committee.
•Fed members outlook and statements/comments.
•News related to major institution.
•Major corporate fiscal reports.
•Central bank member’s statements/comments.
•US stock indexes movement.
•Economist comments on US/Japan economy, economic releases or sector growth.
Suggested pairs of the day:
Long: USD/JPY - GBP/JPY – AUD/JPY - EUR/JPY –
Possible main pairs are: –GBP/JPY - USD/JPY – AUD/JPY – EUR/JPY -
-According to 12.20GMT price-
EUR
Brief:
1.Today's Euro-zone economic releases, -actual- France Business confidence indicator -July- (98), France Production outlook indicator -July- (-34), Germany PMI -Manufacturing- (47.3), Germany PMI -Services- (47.0), Italy Business confidence -July- (83.5), Germany IFO Business climate -July- (97.5), Germany IFO Current assessment -July- (105.7), Germany IFO Expectations -July- (90), Euro-zone PMI -Manufacturing- (47.5), Euro-zone PMI -Services- (48.3) and Euro-zone Current account -May- (-7.3B Euros).
2.Tomorrow's Euro-zone economic releases, -forecast- Euro-zone M3 -YoY- (10.3%).
3.EUR weakens against the dollar today after reports shows Germany business confidence fell 3.7 points, the most since the Sept 11 terrorist attacks as higher oil prices, a stronger euro and a global slowdown sapped corporate earnings while a separate report shows European manufacturing and services shrank, increasing the risk of a recession across the euro region.
4.EUR weakens against the dollar yesterday as a government rescue bill of Fannie Mae and Freddie Mac moved closer to congressional passage and as crude oil prices fell, easing concerns that major corporate yearlong profits will be erode by higher fuel cost.
5.The dollar remains strong yesterday amid Fed Bank of Philadelphia Charles Plosser said that policy makers must increase borrowing costs before inflation expectations become unhinged, following previous day Fed Gary Stern call for a rate raise, even before housing market recovers.
6.EUR weakens against the dollar earlier yesterday as reports showed France consumer spending fell in June as surging food and oil prices curbed purchases of goods meanwhile a separate report shows European industrial orders dropped more than expected in May.
On the upside:
•Cross currency weakness. (JPY).
On the downside:
•Further retreat on investors selling pressure amid outlook on Euro-zone economic growth weakens.
•Cross currency strength. (GBP and USD)
To monitor:
•Today's US economic releases.
•Fed Geithner and SEC Cox testify before house committee.
•Major corporate fiscal reports.
•News related to major corporate.
•Fed members statement/comments.
•ECB members' statements/comments.
•US stock indexes movement.
•Cross currency movement. –Main- (USD)
•Other central banks member’s statements/comments.
Suggested pairs of the day:
Short: EUR/USD – EUR/AUD – EUR/GBP -
Long: - EUR/JPY - EUR/CHF – EUR/CAD (Light) -
Possible main pairs are: – EUR/USD – EUR/GBP – EUR/JPY – EUR/AUD – EUR/CHF -
-According to 12.20GMT price-
Crude oil
Brief:
1.Crude oil is little changed near a 7 weeks low today as a stronger US dollar reduces the appeal of commodities as a currency hedge and data showed faltering demand in the US and Japan.
2.Crude oil falls below $125 per barrel yesterday as the dollar strengthens and after Energy Department storage report showed gasoline stockpiles increased as consumption tumbled to the lowest in more than a year
3.Crude oil inventories decreased by 1.6Million barrels last week, gasoline inventories increased by 2.9Million barrels last week, while distillate inventories increased by 2.4Million barrels last week.
4.US crude oil imports averaged at 9.8Million barrels per day last week, down almost 1Million barrels per day from the previous week and refineries operated at 87.1% of their capacity last week, down 2.4% from the previous week, the lowest level since May 9.
5.Crude oil remains weak amid Hurricane Dolly came ashore in southern Texas yesterday, but was downgraded to a Category 1 storm as it made landfall in southern Texas according to NOAA.
On the upside:
•Atlantic ocean hurricanes activities.
•Supply/production disruption in Nigeria/Brazil/Gulf of Mexico.
•The dollar might experience light retreat on profit taking after recent gains.
On the downside:
•Dollar strengthens.
•Yesterday's storage report further backed speculation that high oil price are causing weaker consumption among consumers.
To monitor:
•Today's US economic releases.
•Fed Geithner and SEC Cox testify before house committee.
•US indexes movement.
•Hurricane Dolly.
•USD movement.
•Atlantic ocean hurricane activities and weather report. (Sensitive)
•News related to Nigeria/Brazil/Mexico oilfields and/or workers strike. (Sensitive)
•Geopolitical risk.
•Fed members statements/comments.
•OPEC members' comments/statements. (Sensitive)
•Forecast on near term US economic releases and economic growth.
Trade suggestion: (Light)
“Long” Crude oil around high $124 and low $125 (Today's US economic releases, Atlantic Hurricane activities, USD movement and US indexes movement)
-Exit all positions before market closes-
-According to 12.20GMT price-
Time lapse prediction: (according to current situation)
Present (12.20PM) – 16PM GMT:
•USD remains or slightly weakens on early trading session.
•US capital market remains or slightly recovers on early trading session.
•JPY remains or slightly retreats following US indexes movement.
•EUR remains or slightly recovers on early trading session.
•Crude oil rises on early trading session.
16PM – 18PM GMT:
•USD remains or slightly strengthens on mid trading session.
•US capital markets remains or slightly rises on mid trading session.
•JPY remains or slightly weakens following US capital markets movement.
•EUR remains or slightly weakens on mid trading session.
•Crude oil remains or slightly weakens by mid trading session.
18PM – 22PM GMT:
•USD remains or slightly weakens by late trading session.
•US capital remains or slightly retreats by late trading session.
•JPY slightly strengthens following US capital markets movement.
•EUR remains or slightly strengthens by late trading session.
•Crude oil remains or slightly rises by late trading session.
Loh Chang Yuen,
Junior Strategist
All rights reserved: Admiral Markets Ltd
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