NB: THE FOLLOWING IS AN ABRIDGED VERSION FOR FULL ANALYSIS AND CHART ILLUSTRATIONS OF RECOMMENDED TRADES GO TO http://fxmarketanalysis.wordpress.com/ AND SELECT " Analysis, Key Events, Trends, Trade Ideas " FOR TODAY
Stocks: Prior day: Asia down, Europe up. Today: Asia, Europe up. Stocks up on good data from Asia, Germany.
.- FX: Slight bias against 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 stocks essentially flat, USD gains against fellow safeties and the Euro, but mixed vs. commodity dollars (and the GBP on better than expected Q4 UK GDP).
- Main events: TUES: GBP Final GDP q/q+, USD CB Consumer Confidence+, WED AUD Building Approvals-, Retail Sales-, NZD NBNZ Bus. Confidence-, CHF KOF Econ Barometer USD ADP Non-Farm Payrolls, CAD GDP m/m, JPY Tankan Mfg Index AUD Trade Balance CNY Mfg PMI GBP Mfg PMI USD Unemployment Claims, Challenger Job Cuts, USM Mfg PMI, FRI: USD NFP & Unemployment Rate
- Big Theme: Risk assets higher despite the customary caution ahead of US Job Reports, compounded by ongoing disturbing news from the EU including Greek bank downgrades (suggests same for other major PIIGS block banks, as shown by yesterday’s Irish bank bailouts) and the failure of the much hailed EU contingency plan to bolster demand for the latest Greek bond sale. Should Greece struggle, it will make things that much harder for the rest of the PIIGS block as their bond sales come up.
US: Down- Disappointing ADP Employment and Chicago PMI figures hampered stocks for the entire session, which concluded on a relatively weak note.
Asia Stock Outlook: UP: As of the close early Thursday GMT, Asian stocks rose to an 11-week high on Thursday as China's manufacturing industry picked up and foreign buying boosted the technology-heavy markets of Taiwan and South Korea.
European Stock Outlook Up At the open early Thursday GMT: As of the close early Thursday GMT. By 0705 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares rose 0.6 percent to 1,084.75 points, recouping the previous session's losses after the index closed 0.1 percent lower on Wednesday.
Commodities Outlook: Up: In Wednesday and early Thursday trade GMT on continued rising risk appetite, falling USD
Crude Oil Daily Outlook: Up: In Wednesday and early Thursday trade GMT, futures at new 52 week highs over $84 on rising equities, despite rising inventories.
Gold Daily Outlook: Up: In Wednesday and early Thursday trade GMT, following equities higher, and breaking above its 50 day SMA in a significant penetration of key resistance, futures over $1116
FOREX Daily Outlook: In Wednesday and early Thursday trade GMT: Continuing bias to risk currencies as risk assets advance with positive news out of Asia, which is considered a key driver of global growth. However the picture remains mixed as not all risk currencies gain on the relatively safer ones.
US Dollar Daily Outlook: In Wednesday and early Thursday trade GMT: Down vs. the EUR, all commodity dollars, CHF, GBP, up vs. the JPY. USD falls vs. all but the JPY as poor ADP jobs data, Chicago PMI, and rising stocks pressure. This news overrode other news that should have been positive for the USD, including:
Euro Daily Outlook: In Wednesday and early Thursday trade GMT: Up vs. the USD, JPY, down vs. the GBP, CHF, steady but dropping vs. the commodity dollars
Yen Daily Outlook: In Wednesday and early Thursday trade GMT: Down vs. the CAD, USD EUR, GBP, CHF, and AUD
British Pound Daily Outlook: In Wednesday and early Thursday trade GMT: Continuing up vs. everything except the CHF, on better than expected Q4 GDP which, given its oversold nature, left it ripe for a bounce on any kind of positive news. Over the past weeks attempting to carve out a bottom for now.
Australian Dollar Daily Outlook: In Wednesday and early Thursday trade GMT: Down or flat vs. most FX except for the JPY as poor retail and building data pressure it as many suspect the RBA will not continue to raise rates for the near future.
New Zealand Dollar Daily Outlook: In Wednesday and early Thursday trade GMT: Unchanged from yesterday - Up vs. the USD, JPY, down vs. the GBP. Under pressure today, down about 1% overall, after the IMF reports that the NZD is overvalued by 25%
Canadian Dollar Daily Outlook: In Wednesday and early Thursday trade GMT: Up or steady vs. everything except down vs. the GBP.
Swiss Franc Daily Outlook: In Wednesday and early Thursday trade GMT: Up vs. all other major FX on good data, continued lack of intervention by SNB.
CONCLUSIONS & Big Picture: Short term bias for risk assets, The S&P 500, our key risk asset barometer, like other major stocks, holding on at/near 52 week highs Also, FX and commodities continuing their range trading. Long Term Bias Down, especially in July, when 2 major events hit: Spain needs to sell about 30 bln euros in bonds AND a massive wave of US mortgage rate resets not seen since 2007 begins. The last time we saw this magnitude of rising mortgage rates markets stalled out and ultimately crashed. NB: Never fight the trend, no matter how irrational, as markets can stay irrational longer than you can stay solvent (Keynes). Therefore, as anyone who follows our trade recommendations knows, we always wait for some breach of key support/resistance as a signal to enter a position as odds appear to be in our favor, and even then only when the likely target is more than 2x as far away as out stop loss (which we ALWAYS USE, RIGHT?) so that our winning trade profits exceed out losses by at least 2:1.
Disclosure: No positions