Market Snapshot 31.07.08
USD
Brief:
1.Today's US economic releases, -actual- US GDP -2ndQ- (1.9%), US Personal consumption -2ndQ- (1.5%), US Core personal consumption expenditure -2ndQ- (2.1%), US Employment cost index -2ndQ- (0.7%), US Initial jobless claims (448k). Today's US economic releases, -forecast- Chicago PMI -July- (49.0) and US NAPM-Milwaukee -July- (45). Early tomorrow's US economic releases -forecast- US Total vehicle sales -July- (No forecast figures).
2.USD weakens today after data showed US initial jobless claims rose more than expected and a government report shows the US economy expanded 1.9%, less than expected but at a faster pace in the 2nd quarter as the temporary stimulus of federal tax rebates offset the drag from housing and rising unemployment.
3.USD is little change against the euro yesterday amid the Fed extended its emergency lending programs to Wall Street firms through January after policy makers judged that markets are still “fragile”.
4.USD retreats from early gain against the euro yesterday as oil as crude oil rose more than $4 after Energy department storage report showed an unexpected draw in gasoline inventories.
5.The dollar briefly traded near a 1 month high against the euro yesterday after an ADP Employer Services report showed US companies unexpectedly added 9000 jobs in July.
On the upside:
•Further recovery on euro weakness.
•Cross currency weakness. (EUR, JPY, NZD and CAD)
On the downside:
•Possible events that might led to speculation that US economic slowdown will worsen.
•Some selling pressure by traders on profit taking after recent gains.
To monitor:
•Today's US economic releases. (Important)
•Early tomorrow's US economic releases.
•Fed members outlook and statements/comments.
•News/statements related to major corporate.
•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: – GBP/USD – EUR/USD – USD/JPY – USD/CAD – NZD/USD -
-According to 12.50GMT price-
JPY
Brief:
1.Tomorrow's Japan economic releases, -forecast- Japan Vehicle sales -YoY- (No forecast figures).
2.JPY strengthens today as Asian and European capital markets retreats on weaker growth outlook and as oil advance yesterday raise concerns that oil price would continue its uptrend and prolong global economic growth.
3.JPY fell to a 1 month low against the dollar yesterday as US stock markets rallied, led by energy producers after oil jumped by more than $4 and a private report by ADP showed an unexpected increase of 9000 jobs in July, defied economists' forecasts for a decrease of 60,000 jobs.
4.JPY strengthens against most currencies yesterday as US stock markets fell after the IMF said there is no end in sight to the housing slump and warned that worsening credit conditions may prolong the economic slowdown.
On the upside:
•Negative news related to major corporate.
•European markets retreats on weaker growth outlook..
On the downside:
•US stocks rallies on positive news/events.
•Cross currency strength. (USD and GBP)
To monitor:
•Today's US economic releases.
•Tomorrow's Japan economic releases.
•Fed members' comments/statements.
•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 – EUR/JPY – NZD/JPY -
-According to 12.50GMT price-
EUR
Brief:
1.Today's Euro-zone economic releases, -actual- Germany Unemployment change -July- (-20k), Italy CPI -YoY-MoM- (4.1% - 0.5%), Italy CPI EU-Harmonized -YoY-MoM- (4.1% - -0.5%), Euro-zone CPI Estimate -YoY- (4.1%) and Euro-zone Unemployment rate -June- (7.3%).
2.Tomorrow's Euro-zone economic releases, -forecast- Germany Retail sales -YoY-MoM- (-0.8% - -0.5%), Italy PMI -Manufacturing- (46.0), France PMI -Manufacturing- (47.3), Germany PMI -Manufacturing- (50.9), Euro-zone PMI (47.5) and Italy Budget balance -YTD- (No forecast figures).
3.EUR strengthens against the dollar after after data showed inflation in the region accelerated to 4.1%, the fastest pace in 16 years.
4.EUR remains strong against the dollar today today after a report shows US economy expanded less than estimated in 2nd quarter and a separate report showed US initial jobless claims rose more than expected.
5.EUR is little change against the dollar yesterday amid a private survey by ADP showed an unexpected increase of 9000 jobs in July and the Fed extended its emergency lending programs to Wall Street firms through January.
6.EUR weakens most currencies early yesterday after reports shows Europeans' confidence in the outlook for the economy dropped 5.3 points to 89.5 this month, the most since late 2001 as soaring energy costs and the euro's advance against the dollar rattled consumers and executives.
On the upside:
•Cross currency weakness. (JPY and CAD).
•ECB members' probably shows support for a rate raise this year as inflation in the region continues to accelerates.
On the downside:
•Weaker outlook on Euro-zone economic growth.
•Cross currency strength. (GBP and USD)
To monitor:
•Today's US economic releases.
•Tomorrow's Euro-zone economic releases.
•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 -
Possible main pairs are: – EUR/USD – EUR/GBP – EUR/JPY – EUR/CHF -
-According to 12.50GMT price-
Crude oil
Brief:
1.Crude oil fell today amid the dollar weakens on speculation that high prices and slowing economic growth will further reduce demand in the US.
2.Crude oil rose more than $4 yesterday the biggest gain since July 10, after the US Energy Department reported gasoline inventories fell by 3.53Million barrels, the first decline in 5 weeks.
3.Crude oil remains strong yesterday amid the dollar stabilized on short-covering as investors' exits position to take profit after recent decline.
4.Crude oil inventories fell 100k barrels, gasoline inventories decreased by 3.53Million barrels and distillate inventories rose 2.4Million barrels.
5.Refineries operated at 87.2% of their maximum capacity, up 0.1% from the previous week. US crude oil imports averaged at 10Million barrels per day last week, up 199k barrels per day from the previous week.
On the upside:
•Atlantic ocean hurricanes activities.
•Further attacks by militants on Nigeria pipelines.
On the downside:
•Stronger/Stabilizing dollar.
•Further selling pressure amid weaker consumption on high fuel price.
•Stock markets rally reduces commodities appeal as an investment hedge.
To monitor:
•Today's US economic releases.
•News related to Nigeria/Brazil oilfields and/or workers strike. (Sensitive)
•US indexes movement.
•USD movement.
•Atlantic ocean hurricane activities and weather report. (Sensitive)
•Geopolitical risk.
•Fed members statements/comments.
•OPEC members' comments/statements.
•Forecast on near term US economic releases and economic growth.
Trade suggestion:
“Short” Crude oil around high $125 and low $126 (Atlantic Hurricane activities, USD movement and US indexes movement)
-Exit all positions before market closes-
-According to 12.50GMT price-
Time lapse prediction: (according to current situation)
Present (12.50PM) – 16PM GMT:
•USD slightly recovers on early trading session.
•US capital market remains or slightly weakens on early trading session.
•JPY remains or slightly strengthens following US indexes movement.
•EUR slightly retreats on early trading session.
•Crude oil remains or slightly rises on early trading session.
16PM – 18PM GMT:
•USD strengthens on mid trading session.
•US capital markets remains or slightly recovers on mid trading session.
•JPY slightly weakens following US capital markets movement.
•EUR weakens on mid trading session.
•Crude oil falls by mid trading session.
18PM – 22PM GMT:
•USD remains or slightly rises by late trading session.
•US capital rises by late trading session.
•JPY weakens following US capital markets movement.
•EUR remains or slightly weakens by late trading session.
•Crude oil remains or slightly weakens by late trading session.
Loh Chang Yuen,
Junior Strategist
All rights reserved: Admiral Markets Ltd
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