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FOREX, COMMODITIES, STOCKS Outlook 2/9: Two Minute Drill


FOREX, COMMODITIES, STOCKS Outlook 2/9: Two Minute Drill


US: Monday: US stocks DOWN around 1% - the late rally Friday was not the sign of support. Instead, it was due to the of rumors of a Greece bailout combined with short covering ahead of the "Monday Effect" – 20 out of the last 22 Mondays have seen sharp opening jumps and closed with gains, making short seller unwilling to hold positions into the weekend. Thus stocks remain in downtrend, and thus is our bias towards all risk assets and currencies. Greek strikes, Trichet cutting short Asia trip, adds to concern.

Asia: Down Tuesday: After sharp losses Monday, mixed towards the close in Asia, as concerns of the Euro debt crisis pressure markets lower worldwide.

European Stock Outlook: UP Monday: Up on technical oversold bounce. Tuesday: UP: European shares open higher on Tuesday despite lingering concerns over debt problems in the euro zone.

Commodities Outlook: Monday – UP Despite lower US stocks, commodities were still able to book strong gains. As such, the CRB Commodity Index advanced to a 1.2% gain. Early Tuesday- UP on risk asset bounce

Crude Oil Daily Outlook: Tuesday: UP on risk asset bounce. Monday-Oil sank below $72 a barrel on Tuesday, after rising nearly 1 percent the day before, weighed down by nagging worries over an uncertain demand outlook and the fiscal health of some euro zone countries.

Gold Daily Outlook: Gold futures prices rising from $1,060 to 1069 on Tuesday, but sentiment continued to be hurt by worries over fiscal stability in Europe, curbing appetite for riskier assets such as commodities.

FOREX Daily Outlook: Early Tuesday: Bias to risk currencies on oversold bounce. Monday Bias to safety currencies as concerns on Euro debt crisis weigh on all risk assets and currencies, as the late Friday rally in New York proves to be a temporary jump on short sellers closing positions and false rumors of a bailout for Greece. Beware oversold risk asset bounce currently under way early Tuesday on rumors of Greek bailout.

US Dollar Daily Outlook: Tuesday: DOWN:Overall down slightly in early Tuesday trade: Little changed Monday into Tuesday, no clear theme, slightly down vs. some risk currencies, up vs. others. Over the past 2 days, down vs. the Euro, British Pound, up vs. the Yen, in tight range vs. other major FX despite stocks dropping.

Euro Daily Outlook: Tuesday: UP on risk asset bounce early Tuesday. Monday, early Tuesday vs. US Dollar, British Pound, Japanese Yen, steady vs. Swiss Franc, on oversold reaction bounce despite lower equities, growing global concern over Southern Europe debt, Greek strikes, Trichet cutting Asia trip short.

Yen Daily Outlook: Tuesday: Down Monday and into Tuesday vs. the Euro, US. Dollar, Australian dollar.

British Pound Daily Outlook: Tuesday: Monday and into early Tuesday steady vs. the US Dollar, up vs. the Yen, down vs. the AUD and Euro.

Australian Dollar Daily Outlook: Tuesday: Up Monday and into early Tuesday vs. the USD, Yen, AUD, GBP, steady vs. the Euro,

New Zealand Dollar Daily Outlook: Up slightly in early Tuesday vs. the USD. Virtually unchanged Friday through early Tuesday vs. the US dollar, moving up slightly against it in early Tuesday trade.

Canadian Dollar Daily Outlook:Tuesday: Up in early Tuesday trade vs. the USD. In tight range vs. the USD, flat since Friday.

Swiss Franc Daily Outlook: Early Tuesday: Steady vs. the EUR as the EURCHF nears the 1.4600 level, which the SNB has defended in the past in order to keep Swiss. Up vs. the USD since Monday.

CONCLUSIONS & Big Picture: Most risk assets dropping Monday into early Tuesday on Euro debt concerns, but EUR, AUD, CAD rising on oversold bounce vs. the US dollar. Watch the S&P 500 and EURUSD to gauge risk appetite and USD strength. Scheduled news events very light this week, so barring new Euro debt trouble, there could be a consolidation or risk asset oversold bounce kind of week.