Forex Market Updates & Commentary

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• EURUSD reverses early against upside resistance
• Rumor that Spanish PM Zapatera has resigned
• Fitch says it is expecting that a Debt Ceiling would be extended
• NAHB Housing Market Index Improves
• Details of the Net TIC flows
• Total Net TIC Flows Drop
• Pimco Kashkari need shock and awe in EU
• Canada Security Transactions Rise & Motor Vehicle sales Fall
• NY Morning Forex Commentary for July 18th 2011
• Geithner speaks on CNBC. Highlights of comments
• Canada Motor Vehicle Sales & Foreign Securities Purchases Data Due at 8:30AM
• Moody’s says new fiscal reports are credit positive for the UK.
• Euro firmer following comments that Portugal may obtain lower loan rates from European rescue fund at the EU leaders meeting on Thursday.
• Spanish house price index (Q2) -1.4% vs. -2.5% previous.
• According to Irish Deputy PM, EU will seek a credible program to avoid contagion at Thursdays summit, adding that they cannot tamper with low corporate tax rate.

EURUSD reverses early against upside resistance Posted: 18 Jul 2011 07:23 AM PDT The EURUSD has moved lower, having rejected the trendline and 100 hour MA resistance quite convincingly. The trendline on the hourly chart came in at the 1.4098 level. The 100 hour MA (blue line in the chart above) came in at 1.4106. The high reached 1.4094 before reversing lower. The midpoint of last weeks trading range comes in at the 1.40588 level.

Rumor that Spanish PM Zapatera has resigned Posted: 18 Jul 2011 07:17 AM PDT This may be causing some of the weakness in the EURUSD in the last 30 minutes of trading. The rumor is unconfirmed and reportedly off a article in a publication saying the PM resignation would be for the good of the Spanish economy. Caution.

Fitch says it is expecting that a Debt Ceiling would be extended Posted: 18 Jul 2011 07:12 AM PDT

NAHB Housing Market Index Improves Posted: 18 Jul 2011 07:00 AM PDT NAHB Housing Market:  Survey: 14   Actual: 15   Piror:13

Details of the Net TIC flows Posted: 18 Jul 2011 06:05 AM PDT The data for May is indicative of less inflows than expectations at 23.6biilon vs 40 Bilion expected. The implications is that perhaps foreign investors are shunning US assets as a result of the risk. Looking at the details, in May Treasury bonds and notes were increased to 37.9 bill from 23.3 billion. Govt Agency bonds (FNMA, Freddie Mac, etc) fell sharply with a net outflow of 8.3 billion from a 7.5 inflow. THis is a net change of 15.8 billion. Investors are shunning the riskier debt of the US it seems. The lower number has the dollar on the defensive with worries that investors have less of an appetite for US asseta (at least the riskier assets).

Total Net TIC Flows Drop Posted: 18 Jul 2011 06:05 AM PDT Total Net TIC Flows-   Actual:  -67.5B   Prior:  68.2B   Revised:  66.6B Net Long-term TIC Flows-   Survey:  40.0B    Actual:  23.6B    Prior: 30.6  Revised:  30.6B

Pimco Kashkari need shock and awe in EU Posted: 18 Jul 2011 05:47 AM PDT He speaks of creating firewall that protects Italy and Spain. Let Greece, Ireland and Portugal work through their restructuring. Thinks there is enough capital to deal with the problems. Cites that debt to GDP is better in the EU

Canada Security Transactions Rise & Motor Vehicle sales Fall Posted: 18 Jul 2011 05:34 AM PDT International Securities Transactions:   Actual: 15.400B  Prior: 8.220B  Revised: 8.520B New Motor Vehicle Sales:  Survey: .50%   Actual: -6.10  Prior: -1.10%

NY Morning Forex Commentary for July 18th 2011 Posted: 18 Jul 2011 05:32 AM PDT

Geithner speaks on CNBC. Highlights of comments Posted: 18 Jul 2011 05:04 AM PDT Certain debt ceiling will be passed Need to make sure making steps toward long term deficit reductions Still working on the biggest deal possible No plausible way to not pay obligations for an extended period of time Only plan is for the Congress to act to raise the debt ceiling Catastrophic if the US defaulted, would be an unfair tax, and would bring the world on the edge of a recession again Want a comprehensive cross the board savings and tax reform, need to have a balanced package with some revenues includued. Not going to dismantle medicare or touch the tax burden of elderly or the poor McConnel plan takes default off the table and proposes a mechanism to make it easy for Congress to do difficult things.  Takes the politics out of sensible fiscal reforms No argument for blaming Dodd Frank for bank lending. Banks are more capitalized. Making progress that will lock in protections against banking crisis again Don’t listen to banks about the burdens of reporting. Geithner is concerned about protecting the American people Europe needs to act more forcefully to contain the risk.  THey have the means. It is in the interest of the globel economy.  The stimulus was deceive in pulling the US back from economic collapse We are a very strong economy but need to put into long term programs that would make us stronger in the short term too. Will be doing the job for the foreseeable future August 2nd is still the date for getting a deal done.

Canada Motor Vehicle Sales & Foreign Securities Purchases Data Due at 8:30AM Posted: 18 Jul 2011 04:04 AM PDT

Moody’s says new fiscal reports are credit positive for the UK. Posted: 18 Jul 2011 04:02 AM PDT GBP slightly stronger on the release.

Euro firmer following comments that Portugal may obtain lower loan rates from European rescue fund at the EU leaders meeting on Thursday. Posted: 18 Jul 2011 12:47 AM PDT

Spanish house price index (Q2) -1.4% vs. -2.5% previous. Posted: 18 Jul 2011 12:32 AM PDT

According to Irish Deputy PM, EU will seek a credible program to avoid contagion at Thursdays summit, adding that they cannot tamper with low corporate tax rate. Posted: 18 Jul 2011 12:00 AM PDT

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