12/2 Easy-Forex - News and Reports

Please add updates@feedmyinbox.com to your address book to make sure you receive these messages in the future. Easy-Forex - News and Reports Daily Forex Outlook - Gold Tops $1200 an Ounce December 1, 2009 at 7:47 pm CURRENCY TRADING SUMMARY - 2nd December (00:30GMT) U.S. Dollar Trading (USD) never gained traction as global stocks markets roared back to life and risk was put 'back on'. November ISM Manufacturing was weaker than forecast at 53.6 vs. 55.7 but this offset by October Pending Homes Sales at +3.7%. DJIA +126 points closing at 10471, S&P +13 points closing at 1108 and NASDAQ +31 points closing at 2175. Looking ahead, ADP National Employment forecast at -155k vs. -203k previously. Also released, Crude Oil Inventories forecast at -0.4% vs. 1% previously. The Euro (EUR) was strong after testing support below 1.5000 in Early Europe went on to trade above 1.5100 resistance. EUR/JPY was extremely well supported in Asia on BOJ speculation and held those gains to close comfortably above 130. October German retail sales were +0.5% as forecast. Overall the EUR/USD traded with a low of 1.4970 and a high of 1.5119 before closing at 1.5090. Looking ahead, October PPI forecast at 0.0% vs. -0.4% previously. The Japanese Yen (JPY) had a very eventful day as the BOJ held an unscheduled meeting and the this led USD/JPY to soar on speculation they would increase QE or cut rates from 0.1%. When they did neither the market was disappointed and bought back the Yen pushing the USD/JPY from 87.50 to 86.60. Crosses were all higher as risk appetite led by the AUD/JPY. Overall the USDJPY traded with a low of 86.26 and a high of 87.51 before closing the day around 86.65 in the New York session. The Sterling (GBP) was bought aggressively in Europe as November Nationwide House Prices were +0.5% and continued to show a price recovery was in place in the UK housing sector. Cable finished above 1.6600 and was well supported at highs. Overall the GBP/USD traded with a low of 1.6389 and a high of 1.6650 before closing the day at 1.6620 in the New York session. The Australian Dollar (AUD) had a volatile day as the RBA raised rates (0.25%) but left the door open for future pauses and this led the market to take profit until the start of Europe. As gold and US stocks rallied the pair found support and quickly resumed its uptrend pushing above 0.9200. Overall the AUD/USD traded with a low of 0.9104 and a high of 0.9273 before closing the US session at 0.9250. Oil & Gold (XAU) finally traded above $1200 an ounce on USD weakness. Overall trading with a low of USD$1174 and high of USD$1202 before ending the New York session at USD$1195 an ounce. Oil tracked the rest of the market higher. Crude Oil was up $1.09 ending the New York session at $78.37. TECHNICAL COMMENTARY Currency Sup 2 Sup 1 Spot Res 1 Res 2 EUR/USD 1.4828 1.4964 1.5080 1.5117 1.5144 USD/JPY 84.83 85.87 86.70 88.01 88.63 GBP/USD 1.6273 1.6381 1.6610 1.6647 1.6746 AUD/USD 0.8947 0.9097 0.9250 0.9323 0.9406 XAU/USD 1138.00 1164 1198.00 1201.00 1250.00 OIL/USD 75.00 78.00 78.20 80.00 82.00 Euro - 1.5080 Initial support at 1.4964 (Nov 30 low) followed by 1.4828 (Nov 27 low). Initial resistance is now located at 1.5117 (Dec 1 high) followed by 1.5144 (Nov 25 high) Yen - 86.70 Initial support is located at 85.87 (Nov 30 low) followed by 84.83 (Nov 27 low). Initial resistance is now at 88.01 (Oct 7 low) followed by 88.63 (Nov 25 High). Pound - 1.6610 Initial support at 1.6381 (Nov 30 low) followed by 1.6273 (Nov 27 low). Initial resistance is now at 1.6647 (Dec 1 high ) followed by 1.6746 (Nov 25 high). Australian Dollar - 0.9250 Initial support at 0.9097 (Nov 30 low) followed by the 0.8947 (Nov 27 low). Initial resistance is now at 0.9323 (Nov 25 high) followed by 0.9406 (Nov 16 high). Gold - 1198 Initial support at 1164 (Nov 30 low) followed by 1138 (Nov 27 low). Initial resistance is now at 1201 (Dec 1 high) followed by 1250 (Key level). Oil - 78.20 Initial support at 78.00 (Intraday support) followed by 75.00 (Intraday support). Initial resistance is now at 80 (intraday resistance) followed by 82 (Year highs). Special FX Report - ECB to hold rates steady, outline an exit strategy December 1, 2009 at 12:55 pm The European Central Bank (ECB) will hold a policy meeting on Thursday December 3rd. The ECB is expected to maintain steady interest rate policy and outline an exit strategy from extraordinary liquidity measures. Last week, ECB President Trichet said that the ECB would cautiously begin to exit strategies that helped provide liquidity during the global financial crisis that could pose inflation threats in the future. Trichet warned EU banks not to get addicted to cheap credit provided by the ECB and he indicated that liquidity measures will be phased out in a timely and gradual fashion to counter any threat to price stability over the medium and long-term. Trichet indicated that the ECB will tighten collateral criteria for the March auction. The tightening of collateral criteria is seen as the first step in an exit strategy by the ECB. Note in Trichet's statement above his focus on the impact of extraordinary liquidity measures on price stability. Monday, the EU reported that CPI rose for the first time in seven months. The rise in EU inflation may influence Thursday's ECB policy decision. The rise in the EU CPI could encourage ECB officials to move the timeframe of an exit strategy forward as inflation pressures may be starting to build. The trade will be closely monitoring what Trichet say about the ECB's 12 month auctions in the press conference following the ECB policy announcement. The ECB will likely confirm that the 12 month auctions will be allowed to lapse and that liquidity operations may be for shorter term loans. This would signal the start of the ECB's exit strategy. Over the past several months ECB officials have indicated that they see a distinction between exiting extraordinary liquidity measures and decisions about monetary policy and interest rates. ECB interest rates remain at an historic low 1%. The trade will be looking for comments from Trichet as to whether he sees current interest rates as "appropriate". A statement that interest rates are appropriate would be confirmation that ECB plans to maintain low yields for some time to come. The ECB will likely further amplify this distinction at the December policy meeting confirming that the exit strategy will be gradual and interest rates to remain low. Recent EU economic data suggest that the EU economy is emerging from recession. Tuesday the EU reported that manufacturing PMI rose to a 20 month high. The EU also reported that unemployment rate rose to 9.8%. The rise in EU CPI coupled with report of improving EU PMI may encourage the ECB to shift to a slightly more hawkish bias in its monetary policy outlook. Continued high EU unemployment will constrain the ECB from aggressive monetary policy tightening anytime soon. The ECB will also announce it's economic and inflation forecasts for 2010 and 2011 at Thursday's policy meeting. The ECB is expected to upgrade its 2010 growth forecast to 1% and 1.5% for 2011. Despite the upgrade in growth forecasts the EU faces a weak recovery. The outlook for weak recovery should limit any rush by the ECB to hike interest rates. The ECB is also expected to upgrade its inflation outlook. The trade will be looking to see whether or not the ECB expects inflation to remain below the ECB's 2% into 2011. The ECB will be under less pressure to raise interest rates if its inflation forecast remains below target.  We expect the ECB to maintain interest rates at record low level 1% and present details of a gradual withdrawal of extraordinary liquidity measures, phasing out the 12 month auctions. The 12 month auctions will likely be replaced by shorter refinance operations. The impact of ECB meeting for EUR should be limited as a steady rate announcement and gradual exit from unconventional policy measures is widely expected. If the ECB announces a significant upgrade in its inflation outlook the ECB will likely need to raise rates sooner than the markets now expect. ECB rate hike speculation could spark additional short-term gains for the EUR. The trade will also be looking at comments by Trichet about the strength of the EUR. EU officials have expressed concern that the strength of the EUR may choke off the recovery. We expect Trichet to repeat his prior statement about the risks excessive FX volatility presents for the global economy and note that strong EUR may reduce EU growth. Trichet's comments about EUR strength should have limited impact on the direction of the EUR. Daily Forex Report - USD trades lower as risk appetite improves, stocks rally December 1, 2009 at 12:05 pm USD: Lower, China's PMI rises, optimism about Dubai debt restructuring, pending home sales rise JPY: Lower, BOJ expands its funding operations by ¥10trln for three months EUR: Higher, EU manufacturing PMI rose to 20 month high, unemployment continues to rise as well GBP: Higher, UK PMI unexpectedly declines, house prices rise, warning on UK debt ignored CAD and AUD: AUD & CAD higher, RBA hikes interest rates, gold trades at a record high, stocks rally Overview   USD traded lower Tuesday pressured by optimism about the global recovery as China's manufacturing PMI rose at its fastest pace in five years and by optimism about the Dubai World debt. Dubai World says talks with creditors were constructive. Equity markets traded higher and gold rallied to new record high. AUD traded higher supported by RBA rate hike and rising metals prices. European currencies traded higher supported by improving risk appetite. GBP rallied despite report of weaker UK manufacturing PMI and concern about UK government debt. GBP was supported by improving risk appetite and rising UK house prices. JPY traded lower pressured by report that the BOJ held an emergency policy meeting and elected to expand its funding operations. US economic data was mixed with pending home sales rising for the ninth straight month, ISM manufacturing reported weaker than expected and construction spending unchanged. The rise in pending home sales may reflect the impact of a rush to beat the deadline for the home buyer's tax credit. Focus turns to Wednesday's release of US ADP employment report, the ECB meeting Thursday and Friday's release of US November Unemployment. The ECB is expected to leave monetary policy unchanged and announce details of its exit strategy. US unemployment is expected to remain at elevated levels but the pace of nonfarm payroll losses likely continued to slow last month. Today's US data: October construction spending was unchanged, a reading of 0.4% was expected. November ISM drops to 53.6, reading of 55 was expected. October pending home sales rose by 3.7%, Upcoming US data: ADP for November will be released on December 2nd expected at -185k compared to -203 k last month.  On December 3rd initial jobless claims for week ending 11/28 will be released expected at 480k compared to 466K last month along with Q3 final productivity and unit labor costs. Productivity is expected at 8.9% and unit labor costs expected -4.7%. November ISM nonmanufacturing index will be released on December 3rd as well expected 51 compared to 50.6 last month. November nonfarm payrolls and unemployment will be released on December 4th with the unemployment rate expected unchanged at 10.2% and nonfarm payrolls expected -145k compared to 190k last month. October factory orders will be released on December 4th expected at 0.2% compared to 0.9% last month. JPY JPY traded lower pressured by improving risk sentiment and report that the BOJ has expanded its funding operations. The improvement in risk sentiment is attributed to report of strong PMI manufacturing data from China and optimism about Dubai debt restructuring. China's PMI rose at its fastest pace in five years. The BOJ has been under significant pressure from the new Japanese government to take actions to boost the Japanese economy and to help limit JPY gains. The BOJ held an emergency meeting last night and elected to expand its funding operations by ¥10trln. Japanese officials have expressed concern about the JPY rise and how the strength of the JPY may impact Japan's inflation outlook and the economy. Japan's Finance Minister Fujii hailed the BOJ action and said it was quantitative easing. Japan's Strategy Minister Kan says that the BOJ action will help slow the JPY rise. The BOJ's new funding operation is small and is unlikely to have any significant impact on deflationary pressures or lasting impact on the Forex markets. The BOJ essentially is offering three-month loans to commercial lenders at 0.1%. Some analysts suggest that he BOJ decision to expand its funding operations was to take some of the recent government pressure off the BOJ. BOJ officials however said that the actions were not related to government pressure. BOJ Governor Shirakawa went on to say that the new funding operations are basically quantitative easing measures. Today's BOJ action may raise questions about the independence of BOJ policy as it appears that the BOJ has caved to Japanese government pressure to take action to try to boost liquidity. In the past central bank independence has been crucial for the support of nation's currency but the BOJ action will likely be seen as a minor capitulation to the Japanese government. JPY trimmed early losses after release of weaker than expected US manufacturing PMI and construction spending. Key technical levels to watch in USD/JPY include support at 85.75 the November 30th low and 84.50 the July 1995 low with resistance at 88.65 the November 25th high. EUR EUR traded higher supported by improving risk appetite as global equity markets and commodities rally in reaction to strong PMI manufacturing data from China and optimism about Dubai World debt restructuring. EUR was also supported by gains in cross trade to the JPY sparked by improving EU manufacturing PMI and the BOJ's announcement of new funding operations. EU November manufacturing PMI rose to a 20 month high at 51.2 compared to 50.7 last month. EU October unemployment however was revised higher to 9.8%. The manufacturing PMI rise suggests that the EU economy is expanding but the scope of that expansion may be limited by persistent high unemployment. Swiss economic data contributes to additional signs of economic recovery in Europe. Swiss November PMI rose to 56.9 compared to 54 last month and Swiss Q3 GDP rose 0.3%. This week's main focus will be the ECB policy meeting Thursday. The ECB is expected to leave interest rate policy unchanged at 1% and outline details of its exit strategy. Monday, the EU reported that CPI rose for the first time in seven months. The rise in EU CPI coupled with today's report of improving PMI data in the EU and Switzerland may encourage the ECB to shift to a slightly more hawkish bias in its monetary policy outlook. Continued high EU unemployment will likely constrain the ECB from aggressive monetary policy tightening anytime soon. On December 2nd EU October PPI will be released expected at -0.2% compared -0.4% last month. The technical outlook for the EUR is positive as the EUR trades above 1.5000. Expect EUR support at 1.4965 the November 30th low with resistance at 1.5145 the November 25th high. GBP GBP traded higher supported by report of a rise in UK house prices and improving risk sentiment as equity markets rally on optimism about restructuring of Dubai World debt. Dubai World is working on restructuring $26bln in debt. November Nationwide house prices rose by 0.5%. Today's GBP rally was impressive in light of the fact UK manufacturing PMI unexpectedly declined last month and Ambrose Evans Pritchard wrote a piece warning about the risk of capital flight out of the UK because of rising UK government debt. UK November manufacturing PMI declined 51.8 compared to 53.4 last month. Monday the UK reported an unexpected decline in consumer confidence. The decline in manufacturing PMI and consumer confidence may generate concern about the UK recovery and increase pressure on the BOE to expand its asset purchases. Mortgage lending rose last month and the rise in November house prices are bright spots for the UK economy The Ambrose Evans Pritchard piece appears in the Daily Telegraph. GBP was also supported by gains in cross trade to the JPY sparked by the BOJ's announcement of new funding operations. Apart from any additional news in regard to the Dubai debt crisis focus will turn next weeks BOE policy meeting. The BOE is expected to hold monetary policy unchanged and the level of its asset purchases unchanged at £200bln. This trade ignored an IMF statement that UK banks are the most exposed to Dubai debt. The technical outlook for GBP is mixed as GBP trades rallies above 1.6500. Expect near-term support at 1.6357 the November 27th low with resistance at 1.6650. CAD CAD traded higher supported improving risk appetite as global equity markets rally and in reaction to firmer commodity prices with crude oil trading back above $78 a barrel and gold trading at a new record high. As noted above strong manufacturing data from China and diminished fears that the Dubai debt crisis presents systemic risk contributed to today's improvement in risk appetite and gains in equity and commodity markets. There were no major Canadian economic reports today. CAD was supported in Monday's trade by the release of Canada's Q3 GDP which confirms that the Canadian economy is emerging from recession. Canada's Q3 GDP rose by 0.4% with exports reported to have risen by 3.6% q/q. Canadian exports are higher despite strength in the CAD. The quarterly export sales rise may help reduce some of the threat of BOC intervention. Canadian officials have expressed concern that the strength of the CAD could choke off the Canadian recovery. Canada's Finance Minister Flaherty said that Canada does not need to take special measures to curb the rise of the CAD that were taken by Japan to try to curb the JPY rise. Last week CAD was supported by report that Russia plans to diversify some reserves to the CAD. Russian officials indicated today that they plan to add CAD to the reserves over the next several months. CAD direction remains closely correlated to the price of commodities and risk sentiment. On December 4th November Ivey PMI will be released expected at 60 compared to 61.2 last month along with November employment. The November unemployment rate is expected to rise to 8.7 from 8.6% of jobs created at 15k. The technical outlook for CAD has improved as USD/CAD trades below 1.0600. Look for near-term support at 1.0415 the November 12th low with resistance at 1.0780 the November 9th high. AUD AUD traded higher supported by improving risk appetite as concern about the Dubai debt crisis recedes. AUD was also supported by an RBA rate hike and a record rise in the price of gold. There is growing confidence that the Dubai debt crisis can be contained. The RBA raised interest rates 25 basis points to 3.75% as expected and said that the global economy is back to growth. The RBA went on to say that 2010 growth should be close to trend and inflation close to target. The AUD also benefits from report that China's manufacturing PMI rose at its fastest pace in five years. China is a major export destination for Australia. AUD was also supported by gains in cross to the JPY sparked by today's news that the BOJ has expanded its funding operations. AUD gains were limited by report of weaker than expected Australian building approvals, PMI data and profit-taking as the RBA rate hike was widely expected. Australia's October building approvals declined by 0.6%, a 1.8% rise was expected. November PMI declined by 0.5 points to 51.2, but unemployment and output posted improvement. Focus turns to Thursday's release of Australia's retail sales. The trade will likely take a closer look at upcoming Australian economic data to gauge whether RBA rate hikes slow the Australian economic recovery. On December 3rd October retail trade will be released expected at 0.6% compared to -0.2% last month. The technical outlook for the AUD is positive as the AUD rises to above 9000. Expect AUD support at 9105 the December 1st low with resistance at 9325 the November 26th high.     US Morning Notes - USD lower, JPY pressured by new BOJ funding operations December 1, 2009 at 8:13 am FX Highlights The USD is trading lower pressured by firmer equity market trade, higher commodity prices and optimism about UAE plans to support Dubai World debt, China's manufacturing PMI grew at its fastest pace in five years, Dubai World says it had "constructive" talks with its creditors, AUD supported by RBA rate hike announcement and fresh record high in the price of gold, EU manufacturing PMI revised higher, unemployment in the EU revised higher, GBP trades higher despite concern about UK debt and weaker UK manufacturing PMI, Swiss GDP and PMI post gains, JPY pressured by report that the BOJ is expanding its funding operations and improving risk appetite as stocks rally on China's PMI data and news on Dubai debt talks Focus turns to today's release of US construction spending, ISM, pending home sales and domestic vehicle sales RBA hikes rates 25bps to 3.75%, says global economy is back to growth, Australia's October building approvals fall 0.6%, November PMI drops 5 points to 51.2, AUD higher Dubai World reports constructive talks with banks, stocks rally, USD declines, IMF says UK banks most exposed to Dubai world, Asian bank exposure limited MOF officials in Japan expressed concern about FX price moves and the impact of strong JPY on Japan's inflation outlook and economy, BOJ held an emergency policy meeting and added ¥10trln in new funding operations, Japan's Finance Minister Fujii says BOJ action is quantitative easing, it is not clear if the BOJ emergency liquidity add will have lasting impact on JPY, JPY lower EU October unemployment rises to 9.8% from 9.7%, final November manufacturing PMI rises to a 20 month high at 51.2, EUR higher Ambrose Evans Pritchard warns of a full-blown debt crisis in the UK, UK November manufacturing PMI falls to 51.8 compared to 53.4 last month and Nationwide house prices were unchanged from October, GBP higher Swiss November PMI rises to 56.9 from 54 last month, Q3 GDP rises by 0.3%, SNB's Roth pledged continued Forex intervention as needed, CHF higher US equity markets set to open higher, European equities 2% higher, Nikkei closed 226 points higher Upcoming Events US - Tuesday, October construction spending will be released expected at -0.5% compared to 0.8% last month along with November ISM manufacturing index expected at 55 compared to 55.7 last month and October Pending home sales index expected at 109.5 compared to 110.1, November domestic auto sales are expected at 7.9mln CAN - Tuesday, no major Canadian economic data is due for release today   This email was sent to quincytjahyana@gmail.com.  Create Your Account Don't want to receive this feed any longer? 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