NB: THE FOLLOWING IS AN ABRIDGED VERSION FOR A FAST OVERVIEW OF ALL MAJOR GLOBAL STOCK, FOREX, AND COMMODITY MARKETS -- FULL ANALYSIS AND CHART ILLUSTRATIONS OF RECOMMENDED TRADES GO TO http://fxmarketanalysis.wordpress.com/ AND SELECT "DAILY OUTLOOK" FOR TODAY
Stocks: Prior Day: Asia, Europe, USA up Today: Asia, Europe down, OVERSOLD BOUNCE FED BY GREEK BAILOUT HOPES, Many Daily Charts near or penetrating Strong Support/Resistance as risk assets reverse higher.
- FX: bias to risk currencies [JPY, USD, CHF in order of safety appeal] vs. risk currencies [AUD, NZD, CAD, EUR, GBP in order of risk appetite appeal], as risk assets' oversold bounce (as the S&P 500 has pulled away from its lower Bollinger Band) stalls
- Main event: WED: GBP Claimant Count-, MPC Meeting Minutes, USD: Building Permits=, FOMC Meeting Minutes+ THURS: BoJ Press Conference, CAD Core CPI, CPI m/m, US PPI m/m, Unemployment Claims, Philadelphia Fed Manufacturing Index, AUD RBA Gov Stevens Speaks
- Big Theme: Usual inter-market relationships break down: Stocks up Wednesday, but strong US data, positive Fed comments, and IMF gold sale both boost USD vs. all others, pressure risk currencies down in rare case of rising stocks, US Dollar, and falling risk currencies and commodities. Warnings on Italy debt by Nobel Prize winner Robert Mundell, father of the Euro, further pressure Euro.
US: Action this session was choppy and trade was both listless and thin, but stocks still put together a broad-based gain in the face of a strong rebound by the dollar.
Asia: Mostly Down Thursday except for the Nikkei, which rose slightly. Shanghai markets remain shut this week.
European Stock Outlook: Up European shares drifted lower in early trade on Thursday, with banking stocks lower after Societe Generale results disappointed, overshadowing gains in industrial engineers
Commodities Outlook: Down as multiple factors and IMF gold sale announcement combine to boost dollar, pressuring commodities
Crude Oil Daily Outlook: Down-0.57% Wednesday to $76.89, Oil prices hovered above $77 a barrel Wednesday in Asia after surging the previous day amid expectations a growing U.S. economy will fuel increased crude demand
Gold Daily Outlook: Wednesday: Futures down from $1125 to 1102 on news that the International Monetary Fund plans to start selling gold in the open market. Early Thursday gold prices steadied around $1,105 an ounce. The IMF announced it would begin phased open-arket sales of the remaining 191.3 tonnes of gold under a programme launched last year to raise new resources for lending.
FOREX Daily Outlook: Mixed despite rising equities as IMF gold sale pressures gold prices and commodity currencies downward, and the US Dollar upward as traders sell gold for US dollars. That added demand for US Dollars pressures Euro and adds pressure on the commodity dollars, because the primary counterpart for all these currencies is the US Dollar, thus its strength pressures these others, especially the Euro, because about 33% of ALL forex trade is the EURUSD
US Dollar Daily Outlook: Up Wednesday and early Thursday extending gains near to 7-month highs after positive Fed comments and economic data, and the International Monetary Fund said it planned to sell more gold in the market, pushing down bullion prices and commodity-linked currencies.
Euro Daily Outlook: Wednesday and early Thursday: Down vs. all majors as rising dollar from Fed comments and IMF gold sale announcement pressures Euro, along with continued uncertainty about the EU debt crisis made worse by Italy bad press comments.
Yen Daily Outlook: Wednesday & early Thursday: Down vs. the USD, and GBP. Up or steady vs. the EUR, and commodity dollars
British Pound Daily Outlook: Wednesday & early Thursday: Sterling edged down to $1.5650 vs. the USD, having shed 0.75 percent on Wednesday after minutes from the Bank of England's latest policy meet showed a dovish bias and UK unemployment data was soft, which compounded the USD's strength from both IMF gold sale news, positive US economic data and relatively hawkish Fed January meeting minutes. Also down vs. the AUD (despite IMF gold sale) and Yen. Up vs. the weakening Euro
Australian Dollar Daily Outlook: Wednesday & early Thursday: Down vs. most majors as IMF gold sale, pressures commodity dollars, boosts USD, further pressuring risk currencies.Said one trader: "The gold sale news is weighing on the Aussie especially against the U.S. dollar which is seeing a biddish tone,"
New Zealand Dollar Daily Outlook Wednesday & early Thursday: Down vs. most majors as IMF gold sale, pressures commodity dollars, boosts USD, further pressuring risk currencies.
Canadian Dollar Daily Outlook: Wednesday & early Thursday: Down vs. most majors as IMF gold sale boosts the US Dollar, which pressures commodities like oil and gold, and also the Euro, because the EUR/USD alone is 33% of all forex trade, so a rising dollar drives down the Euro. Falling commodity prices in turn pressures commodity dollars, which mostly trade vs. the USD, thus as these fall it further boosts USD. Down Wednesday for the first time in 6 trading sessions.
Swiss Franc Daily Outlook: Wednesday & early Thursday: Down vs. the rising USD, up vs. the Euro as the 1.4656 support level continues to hold on SNB intervention threats.
CONCLUSIONS & Big Picture: Markets are moving with US Dollar, IMF Gold news, and on the likelihood of a rescue for Greece and the rest of the PIIGS. Recently chopping up and down with changes in mood on this topic. Recent unexpectedly hawkish Fed comments and decent US economic data, along with the new IMF gold sale announcement, have further boosted the US Dollar on fundamental improvements unrelated to the EU debt mess. Remarks by Nobel Prize winner Robert Mundell, father of the Euro, in an interview Wednesday that Greece was not even the main EU debt threat, but rather Italy, did not help either. See the Euro section above for details
DISCLOSURE AND DISCLAIMER: OPINIONS EXPRESSED ARE NOT NECESSARILY THOSE OF AVAFX, AUTHOR HAS NO POSITIONS IN ABOVE INSTRUMENTS.