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FOREX, COMMODITIES, STOCKS OUTLOOK February 26th : Cliff's Two Minute Drill





Note: The below is an abridged version of the Daily Outlook. For full details go to: FOREX, COMMODITIES, STOCKS OUTLOOK February 26th : Analysis, Key Events, Trends, Trades

Stocks: Prior Day: Asia down, Europe up, USA down Today: Asia, Europe up , Risk Rally struggles ahead ,overcoming bad data from the US, on positive Asia results. Many Daily Charts near or penetrating Strong Support/Resistance as risk assets reverse higher.

- 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], as risk assets' oversold bounce (as the S&P 500 has pulled away from its lower Bollinger Band) stalls

- Main events: WED: EUR: Industrial New Orders m/m+, USD Fed Chairman Bernanke Testifies**--, New Home Sales-, THURS: AUD Private Capital Expenditure q/q, NZD: NBNZ Business Confidence, Building Consents-, USD: Core Durable Goods-, Unemployment-, FRI: GBP Nationwide HPI m/m, Revised Q4 GDP q/q, CHF KOF Econ. Barometer, USD: Prelim GDP Q4 m/m, Existing Home Sales

- Big Theme: Stocks up, commodities, fx mixed, as markets seek direction, struggle to climb, mostly range trading in stocks, other risk assets

STOCKS:

US: The S&P 500 gapped down near the open and traded with a 1.7% loss at its session low, but stocks rallied on an oversold bounce off strong support at the 1080 level into the afternoon. The major indices were able to reverse nearly all of their losses and finish near session highs despite disappointing jobless claims, durable goods orders, housing prices, and a threatened Moody's downgrade of Greek bonds.

Asia: Down TOKYO, Feb 26 (Reuters) – Asia up as Japan's Nikkei average rose 0.5 percent on Friday, with stronger-than-expected domestic output helping counter investor jitters after weak U.S. data reinforced concerns about a global economic recovery.

European Stock Outlook: LONDON, Feb 26 (Reuters) - European shares were higher in early trade on Friday, after U.S. markets staged a late recovery in the previous session and with Spain's Telefonica higher after full-year results.

At 0808 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.7 percent at 1,004.11 points. The index fell 1.7 percent on Thursday, on worries about Greece's debt, and weak U.S. economic data.

Commodities Outlook: Mixed in Thursday, early Friday trade reflecting mixed action in risk assets

Crude Oil Daily Outlook: Down Thursday into early Friday as weak US data sparks demand concerns. Renewed worries about economic recovery pressured the energy market. Crude oil tumbled to as low as 77.05 before closing at 78.17, down -2.3%. Decline in heating oil and gasoline were even steeper, by -7.3% and -2.9%, respectively. See special report: IS OIL FLASHING A WARNING FOR STOCKS AGAIN?

Gold Daily Outlook: Down Tuesday into early Wednesday European trade along with the general pullback in risk assets from Tuesday's negative economic data noted in the above section on US stocks.

FOREX Daily Outlook: Bias to safety FX as most risk assets from Tuesday's negative economic data noted in the above section on US stocks.

US Dollar Daily Outlook: Thursday into early Friday: No clear theme, as the Dollar is up vs. some riskier currencies, down vs. others USD down vs. EUR, NZD, JPY CHF, up vs. GBP, CAD steady vs. AUD, The picture clouded by Yen strengthening on rumors of Chinese Yuan revaluing, commodity dollar currencies reporting good data, but falling crude pressures the CAD, AUD.

Euro Daily Outlook: Thursday into early Friday: up vs. the JPY, AUD, USD, GBP steady vs. the CHF, as the Euro benefits from Thursday's selloff in the USD on Dovish Fed comments, bad data, Euro gets another technical oversold bounce higher: See special report: Six Reaons We’re Bearish the EUR/USD For the Coming Months

Yen Daily Outlook: Thursday into early Friday- Up vs. all majors as rumors of Chinese Yuan revaluation higher, which would make Japanese exports more competitive, have boosted the Yen vs. all majors despite the lack of strong risk aversion at this time.

British Pound Daily Outlook: Thursday into early Friday- Dropping vs. all majors as it losses even vs. the Euro as traders prefer it despite the EU's troubles just because the BoE is still openly considering additional stimulus that would further devalue the GBP.

Australian Dollar Daily Outlook: Thursday into early Friday: Down vs. the USD, JPY, GBP, CHF up vs. the EUR

Reserve Bank of Australia Deputy Governor Battelino maintained an upbeat tone in remarks yesterday.

New Zealand Dollar Daily Outlook Thursday into early Friday- up vs. the USD, mostly following the AUD otherwise

Canadian Dollar Daily Outlook: Thursday into early Friday- Down vs. the USD as oil, stocks struggle.

Swiss Franc Daily Outlook: Thursday into early Friday- Up vs. the EUR, USD, AUD, JPY on SNB intervention concerns, recovering somewhat vs. the JPY

CONCLUSIONS & Big Picture: Short term: markets in flat tight range despite on negative economic news from Europe and the US, in addition to ongoing concerns on the EU debt crisis and slowing growth in China and the developed world, awaiting clues on EU debt mess. See Special Reports links above for details. Also the full version Daily Outlook for full details and trade recommendations at: FOREX, COMMODITIES, STOCKS OUTLOOK February 26th : Analysis, Key Events, Trends, Trades

DISCLOSURE: NO POSITIONS