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  • JOBLESS NUMBERS ON THE HORIZON
     USD

    The USD went into the weekend with a weak stance after faltering again versus the EUR and GBP. The overhang that exists from the belief that the Federal Reserve may initiate another round of quantitative easing continues to roil the currency markets globally. October started with mixed data as the Revised Consumer Sentiment reading beat expectations slightly, but the ISM Manufacturing PMI missed its estimated mark. Today Pending Home Sales and Factory Orders are on the calendar from the States. While investors will certainly look at the housing data, traders know that this week includes the Non Farm Employment Change numbers on Friday and therefore the jobless data will take center stage.

    Now that October is underway, investors will also face a barrage of political rhetoric going into the crucial Congressional elections that will be held in early November. Though it is doubtful any major shifts in policy will come this month as politicians will likely remain as moderate as possible before the vote, investors will certainly gear themselves to the underlying dimensions that resonate from any speeches from Federal Reserve officials. The jobless data this week will be crucial also and is certain to create a sounding board for various discussions and debates. Tomorrow the ISM Non Manufacturing PMI results will be released. The U.S., like their counterparts have provided mixed economic results the past few week, but Wall Street has managed to remain relatively calm and turn in gains. The USD has found itself battered the past few weeks and is now at the weakest parts of its range versus many of the major currencies.

    EUR

    The EUR continues to find strength under a dollar centric shadow. The European Union has been consistently providing mixed economic results like their counterparts, but the last few weeks has seen sentiment shift away from a focus on the debt and austerity pitfalls that are part of the E.U. landscape and center on a possible move by the Federal Reserve in the States. Europe will issue its broad Sentix Investor Confidence reading today and a mark of 8.3 is expected. Tomorrow Final Services PMI data and Retail Sales outcomes will be published.  However it is likely that the EUR will continue to trade within the boundaries of a dollar centric tide this week, particularly with the American jobless numbers on the horizon. The EUR has done remarkably well as it has taken a strong pose the past few weeks and until a shift comes about in investor sentiment traders are likely to find more tests.

    GBP

    The Sterling has found a remarkably stable avenue in recent trading as it has trended higher against the USD. Data from the U.K. has been lackluster, but the rather weak outcomes have not put a dent in the GBP. Today Construction PMI will be released and is estimated to have a result of 51.6, which would be below the previous month’s mark. Tomorrow the Services PMI will be brought forth and the Halifax HPI is tentatively waiting in the wings. While the Sterling has enjoyed a steady climb in value the past few weeks, the reasons for this are not exactly because the outlook for the U.K. economy is so bullish. The dollar centric trading sentiment that pervades most of the broad markets has definitely has an effect on the GBP and this story will remain the same until a new focus is found.

    JPY & AUD

    Both the JPY and AUD remain very interesting for a variety of reasons. The JPY finds itself at the strongest parts of its range as the effects from the BoJ have NOT produced its desired result. The JPY did in fact trade to the weaker side of its range immediately after the intervention, but has since been drawn like a magnate back to its stronger values. The AUD remains strong as it mirrors the happenings within the Gold price. The precious metal has maintained the highest parts of its momentum and finds itself standing at the center of attention going into this week as investors look at physical assets with a possible speculative flair.

    Tags: GOLD, OIL, USD
    Oct 05 4:44 AM | Link | Comment!
  • GERMAN ZEW & U.S. RETAIL SALES
     USD

    The USD lost ground to the EUR in early trading on Monday as the effects of the Basel III accord brought clarity into the markets – supposedly. The U.S. did not release much in the way of data yesterday leaving the broad markets without much direction as the day progressed. Sentiment remains fragile and investors may be gearing themselves towards today’s Retail Sales figures, which are supposed to nearly match last month’s outcome. Tomorrow the Empire State Manufacturing Index and Industrial Production numbers will be brought forth. Traders on Wall Street have thus far enjoyed a good September and the today’s Retail Sales figures could have an impact.

    The crux of the matter for investors remains the economic prospects for the States. Warren Buffet was quoted yesterday as saying he believes that the U.S. economy is not about to suffer a double dip recession and that his portfolio of companies within Berskshire Hathaway are performing well and have good outlooks. The Basel III accord that was hammered out over the weekend may have given the markets some support as investors continue to seek any signs of financial stability. But as always, the proof will have to be in the pudding for the new banking regulations, and with plenty of time to comply there is little in the way of hardship being spoken about now. The big question down the road is what will be allowed to be counted as capital when accounting for reserve totals and that remains unanswered. The USD has found itself losing some ground to the EUR, the JPY, and commodity based currencies, but it may prove difficult to critique the short term marketplace. Retail Sales numbers will be watched closely today to in order to gauge the tenacity of the American consumer and what it means for the American economy.

    EUR
    The EUR managed to gain in the early sessions on Monday and held on to the stronger part of its range. There was little data from Europe yesterday,  but today the German ZEW Economic Sentiment report will be released and while the ECB and many politicians have been talking up the health of Germany it will be interesting to see what the outcome is. Also Industrial Production numbers for Europe will be brought forth. Talk of a possible dip recession within Europe has been dismissed widely by officials, but as pointed out yesterday investors should look at numbers and pay less attention to public pronouncements. Tomorrow CPI data will come from Europe, but it is today’s ZEW report from Germany that will be coupled with a dollar centric sentiment that will either stir or kill risk appetite.

    GBP
    The Sterling continued to be under pressure on Monday as mixed data once again showed its ugly head. The RICS House Price Balance showed a significant drop to minus -32%, far below the estimate of minus -11%. However the Nationwide Consumer Confidence reading was slightly better than anticipated with a mark of 61 compared to the estimate of 59. Today the U.K. will release its CPI numbers and this will be of interest to investors because inflation has been stronger than projected even as growth has been weak. The GBP has found headwinds for the past month as investors have began to ponder the cruel dynamic of lackluster growth prospects coupled with severe austerity measures and higher taxes.

    JPY & AUD 
    The JPY has found itself taken to the very height of its strength versus the USD as investors have continued to test the resolve of the Bank of Japan and officials.  The Japanese ruling party held a vote earlier today and maintained its current leadership. The AUD continues to also trade near its highs, but for entirely different reasons as commodities, a stable economy, and political clarity have helped. However what traders of the AUD may ask soon, is where valuation constraints stand as obstacles?

    Tags: GOLD, USD
    Sep 14 11:35 AM | Link | Comment!
  • DAILY FUNDAMENTAL ANALYSIS: BUSY WEEK ON DECK

    USD

    The USD finished off on a strong note going into the weekend as cautious trading stayed the ‘golden rule’ without much in the way of economic data to examine. Adding to the rather tentative nature of the broad markets was a shortened week due to the Labor Day celebration’s earlier. Wall Street gained on Friday, but the numbers were unconvincing and plenty of doubts remain regarding the strength of any bull runs. Data this week will be more important, however today will remain quiet, but tomorrow Retail Sales figures will be brought forth and on Wednesday the Empire State Manufacturing numbers will be published.

    The crux of early market sentiment today may be focused on the Basel III accords that have been outlined regarding capital reserves for banking. The requirements for reserves will be nearly tripled although compliance will not be enforced for a considerable amount of time. In essence part of the new Basel accords are trying to create a stronger fundamental foundation to guard against another financial crisis and part of the new stipulations will make banks think twice about their core business practices. Also factoring into the markets over the next few days and surely the next couple of months will be the amount of political hyperbole that is beginning to become elevated as elections approach in November. Both Democrats and Republicans are turning up the rhetoric and certainly promises are sure to follow. The USD had a good week of trading, but the markets continue to move under the impetus of risk sentiment and with important data coming, participants could find volatility.


    EUR

    The EUR finds itself at an interesting juncture entering Monday’s trading. The EUR suffered a rather risk adverse backlash last week as investors again began to raise questions about debt issues across the continent. However, the Basel III accords that have began to come to light as of late last evening will likely be a factor in EUR trading early on this week - as investors react to the possibility of more financial clarity. Fundamental data today will be lacking, but tomorrow the German ZEW Economic Sentiment reading is on the schedule. Also sure to make news this week will be the Greek government, which will be offering a new round of debt. Investors who will be asked to ‘buy’ the Greek debt however are likely to focus on fundamental numbers and pay less attention to government ‘chatter’. The EUR found itself within the weaker parts of its range last week, but there are enough ‘sentiment’ scenarios that could play out to create rather interesting range movement.

    GBP

    The Sterling struggled on Friday as investors punished the GBP because of rather lackluster data from the whole of the week. Today the Nationwide Consumer Confidence reading will be published and carries an estimated mark of 59, also the RICS House Price Balance figures are on the calendar. Tomorrow CPI data will be brought forth and Wednesday will be followed up with the Claimant Count statistics and the possibility of an Inflation Report Hearing with BoE Governor Mervyn King. The Sterling has essentially run into headwinds as risk adverse trading has increased and investors are feeling less buoyant about the austerity measures when weighed against rather meek growth forecasts.

    JPY & AUD 
     

    The JPY continues to find itself mired in the strongest parts of its range versus the USD. The AUD has climbed steadily in the past few trading sessions and is at highs. The AUD has not only been helped by the political looking glass becoming more clear, but has also found some backing on commodity based factors as metals have performed well. Traders should also monitor Crude Oil this week, it too is at highs, now while some of this is certainly based on positive speculation, it should also be known that a major pipeline between Canada and the USA was closed recently for repairs and inventory concerns have scared traders. However, the pipeline will not stay closed forever. 
    Tags: RISK, USD
    Sep 13 11:18 AM | Link | Comment!
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