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FOREX, COMMODITIES, STOCKS 1/29: Two Minute Overview

Stocks: Prior Day: Asia, Europe, USA down, Today: Asia, Europe down

-           FX: bias to safety currencies [JPY, USD, CHF in order of safety appeal] vs. risk currencies [AUD, NZD, CAD, EUR, GBP in order of risk appetite appeal], in early Tuesday trade, safety currencies as safe-havens remain in up trends vs. risk FX, beware risk bounce

-           Main event:  FRI: GBP- Nationwide Housing HPI, CHF-KOF Economic Barometer, CAD GDP m/m, USD-Advance GDP q/q

-     Big Theme: Has the oversold reaction bounce in risk assets arrived? Not Yet FOMC happy talk, Obama inspiration sparked attempted bounce, which failed in late Thursday trade. Portugal gets warning on debt, UK

 

STOCKS:

US: Losses among large-cap tech issues left the broader market mired in weakness, despite another big batch of generally better-than-expected earnings results. The latest economic data, Durable Goods and Initial Jobless Claims were below forecasts

Asia: Down following US drop, typically 1-2%.

European Stock Outlook:  Down following US drop, typically over 1%

Commodities Outlook: Falling along with stocks as risk aversion continues to send traders to safe-haven assets.

Crude Oil Outlook: Oil prices hovered near a six-week low below $74 a barrel Friday in Asia amid a strengthening U.S. dollar and a pullback in global stock markets. Strong support between $73- $74 from the 200 day SMA, its rising trend line from July, and the 76.4% Fibonacci retracement level

Gold Outlook: Spot Gold fell 0.16% as of the close Thursday in the Americas to 1081.90. In early Friday trade gold futures slightly down from yesterday's close to just below 1082. Gold has now fallen decisively below the 61.8% Fibonacci resistance at $1104, now testing support at the 76.4% Fibonacci level at $1077.57.

FOREX Daily Outlook: Risk aversion ruled Thursday as safety currencies gained on risk currencies in order of relative safety vs. risk status. Thus the Japanese Yen was up against all, the dollar up against all except the Yen, and the Australian and New Zealand Dollars the big losers. In early Friday trade, there is a modest reaction bounce in favor of risk assets, but will it fade once again?

US Dollar Daily Outlook:Higher vs. all but the Yen Thursday, early Friday trade shows slight retreat as risk assets attempt a bounce. We have seen similar attempts fail in recent days. Since U.S. equities have sold off and bond yields have fallen, it is clear that the rally in the dollar today is a reflection of fear and not optimism. Durable goods and jobs figures disappoint, layoff announcements belie Fed optimism.

 

Euro Daily Outlook: Down again Thursday, attempting a modest rally early Friday. Under additional selling pressure after a former adviser to the Chinese central bank said that China should not rescue Greece by buying its debt. PIIGS credit concerns weigh on Euro, as Economist Magazine reports EU discussing how to bail out Greece (and others).

Yen Daily Outlook: Up vs. everything Thursday, as the Yen continues to be the best performer over the past weeks despite little improvement in its economy, as risk aversion overrides all else. Retreating modestly in early Friday trade

British Pound Daily Outlook: Down Thursday vs. the US Dollar and Yen, up vs. riskier currencies like the Euro and AUD. That trend in mild reversal in early Friday trade as risk appetite attempts a modest bounce. S&P warns on UK credit rating, bearish for pound.

 

Australian Dollar Daily Outlook: As the most risk oriented currency from its highest yield, down vs. everything Thursday just like the Yen was up. Attempting a modest bounce along with other risk assets early Friday. Weak commodity prices hurt all the commodity dollars

New Zealand Dollar Daily Outlook:  As the second highest yielding currency, moving in step with the Australian dollar, for the same reasons. Down against virtually all majors Thursday. Attempting a modest bounce along with other risk assets early Friday. Weak commodity prices hurt all the commodity dollars

Canadian Dollar Daily Outlook: Moving with the other commodity dollars. Down vs. the US dollar and other safe havens Thursday, attempting a bounce Friday.

 

Swiss Franc Daily Outlook: Down hard yesterday vs. the US Dollar, attempting a modest bounce against it thus far in early European trade.

 

DISCLOSURE AND DISCLAIMER: OPINIONS EXPRESSED ARE NOT NECESSARILY THOSE OF AVAFX, AUTHOR HAS NO POSITIONS IN ABOVE INSTRUMENTS.