Forex Market Updates & Commentary |  |
- Canada Ivey PMI Stronger
- EU Rehn says situation in finacial markets is serious
- Italy may need new austerity plans for ECB to continue buying bonds
- CNBC reports that Fed Conptroller, FDIC asked banks to stress test
- EURUSD tests 200 day MA at the 1.4017 level
- Canada Ivey PMI Data Due at 10AM
- Bank of Canada leaves rates unchanged. Statement more dovish.
- Bank of Canada Intereset Rate Stays Unchanged at 1.00%
- Bobbys Corner-Open Market-Sept.7.2011
- UBS Chief European Economist reported saying Greece is insolvent
- Bank of Canada interest rate decision at 9 AM today
- Canada Interest Rate Decision Due at 9AM
- Irish fin. minister says Eurozone bailout fund is too small.
- Greek 10 year bond yield rises to 10 year record of 20%
- German industrial production (m/m) 4.0% vs 0.6% forecast.
| Posted: 07 Sep 2011 07:17 AM PDT Came in at 57.6 vs expectations of 52.2 and rises from the 45.4 reading last month. Aug vs. July 2011 |
| EU Rehn says situation in finacial markets is serious Posted: 07 Sep 2011 06:54 AM PDT Stress increased over the summer. He also commented that the implementation of EFSF reform is essential. |
| Italy may need new austerity plans for ECB to continue buying bonds Posted: 07 Sep 2011 06:47 AM PDT This is according to Italian Senate Finace Chairman Baldassarri. Meanwhile EU Juncker is saying he does not see risk of EU entering recession. The EURUSD moved below the 200 day MA at the 1.4017 level – reching a low price of 1.4014 – but the price quickly rebounded back above key level.
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| CNBC reports that Fed Conptroller, FDIC asked banks to stress test Posted: 07 Sep 2011 06:38 AM PDT Included Bank of America, JP Morgan and Morgan Stanley asked to submit capitalization plans. |
| EURUSD tests 200 day MA at the 1.4017 level Posted: 07 Sep 2011 06:28 AM PDT
The EURUSD tested the 100 hour MA earlier today and fell off. Since that time, the price is back down and looks to test the 200 day MA at the 1.4017 level. The price moved below this key level yesterday but found support against the long term trendline on the daily chart at the 1.4072 level.
Looking at the 5 minute chart the 1.4017 is also a level where floors and ceilings have formed over the last 24 hours. Key level for todays trading.
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| Canada Ivey PMI Data Due at 10AM Posted: 07 Sep 2011 06:10 AM PDT
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| Bank of Canada leaves rates unchanged. Statement more dovish. Posted: 07 Sep 2011 06:01 AM PDT The Bank of Canada announced that rates would remain the same this month. Their statement was a touch more dovish as they commented that the need to withdraw stimulus was dimished. Below is the statement from the Bank of Canada website.
—————————————————————————————————————————————– Ottawa, Ontario - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The global economic outlook has deteriorated in recent weeks as several downside risks to the projection in the Bank's July Monetary Policy Report (MPR) have been realized. The European sovereign debt crisis has intensified, a broad range of data has signalled slower global growth, and financial market volatility has increased sharply. Recent benchmark revisions show that the U.S. recession was deeper and its recovery has been shallower than previously reported. In combination with recent economic data, this implies that U.S. growth will be weaker than previously anticipated. The Bank expects that American household spending will be even more subdued in the face of high personal debt burdens, large declines in wealth and tough labour market conditions. Fiscal stimulus in the United States will also soon turn into material fiscal drag. Acute fiscal and financial strains in Europe have triggered a generalized retrenchment from risk-taking and could prompt more severe dislocations in global financial markets. Resolution of these strains will require additional significant initiatives by European authorities. Growth in emerging-market economies has been robust, although its rate and composition will be affected by weakness in major advanced economies. While commodity prices have declined owing to diminished global growth prospects, they remain relatively high. Largely due to temporary factors, Canadian economic growth stalled in the second quarter. The Bank continues to expect that growth will resume in the second half of this year, led by business investment and household expenditures, although lower wealth and incomes will likely moderate the pace of investment and consumption growth. The supply and price of credit to businesses and households remain very stimulative. However, financial conditions in Canada have tightened somewhat and could tighten further in the event that global financial conditions continue to deteriorate. Net exports are now expected to remain a major source of weakness, reflecting more modest global demand and ongoing competitiveness challenges, in particular the persistent strength of the Canadian dollar. Slower global economic momentum will dampen domestic resource utilization and inflationary pressures. The Bank expects total CPI inflation to continue to moderate as temporary factors, such as significantly higher food and energy prices, unwind. Core inflation is expected to remain well-contained as labour compensation growth stays modest, productivity recovers, and inflation expectations remain well-anchored. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished. The Bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2 per cent inflation target over the medium term. |
| Bank of Canada Intereset Rate Stays Unchanged at 1.00% Posted: 07 Sep 2011 06:00 AM PDT |
| Bobbys Corner-Open Market-Sept.7.2011 Posted: 07 Sep 2011 05:53 AM PDT
Swiss nationals welcomed the decision by the Swiss Nat’l Bank to halt the appreciation of the CHF. The exporting sector has been reeling the past few weeks with the appreciation of the CHF-as the cost of chocolates,cheese, Swiss knifes, watches, and all other exported products reached sky high levels. In other FX news-the USD lost steam, as equity markets rallied. The Euro was stronger after a German court rejected constitutional changes to Germany’s participation in the Euro Zone’s rescue package. President Obama will also be making a speech tomorrow evening to a joint session of Congress to propose a new jobs program. This program is being started with a $300 billion infusion into the economy next year. The infusion will come in the form of tax cuts, direct aid to state and local governments, along with a infrastructure spending bill. Equity markets are higher-as is Oil and Gold is off $40/oz. HAVE A GREAT DAY & GOOD LUCK
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| UBS Chief European Economist reported saying Greece is insolvent Posted: 07 Sep 2011 05:42 AM PDT Remember the EURUSD has the 100 day MA at the 1.4017 level today. |
| Bank of Canada interest rate decision at 9 AM today Posted: 07 Sep 2011 05:24 AM PDT The Bank of Canada will announce their interest rate decision today at 9 AM. No change is expected for the country as the strong C$ and slowing global growth is likely to keep the rate low for an extended period of time. About one third of the Canadian economy is dependent on exports. Below is the announcement from last month. In that announcement, although they outlined the risks, they still felt that taking away some of the stimulus would be withdrawn in order to keep inflation in check. This paragraph may be toned down given the increasing headwinds in the global economy. Ottawa - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The global economic expansion is proceeding broadly as projected in the Bank's April Monetary Policy Report (MPR), with modest growth in major advanced economies and robust expansions in emerging economies. The U.S. economy has grown at a slower pace than expected and continues to be restrained by the consolidation of household balance sheets and slow growth in employment. While growth in core Europe has been stronger than expected, necessary fiscal austerity measures in a number of countries will restrain growth over the projection horizon. The Japanese economy has begun to recover from the disasters that struck in March, although the level of economic activity in that country will remain below previous expectations. In contrast, growth in emerging-market economies, particularly China, remains very strong. As a consequence, commodity prices are expected to remain at elevated levels, following recent declines. These high prices, combined with persistent excess demand in major emerging-market economies, are contributing to broader global inflationary pressures. Widespread concerns over sovereign debt have increased risk aversion and volatility in financial markets. In Canada, the economic expansion is proceeding largely as projected, although the expected rotation of demand is somewhat slower than had been anticipated. Household spending remains solid and business investment robust. Net exports remain weak, reflecting modest U.S. demand and ongoing competitiveness challenges, particularly the persistent strength of the Canadian dollar. Despite increased global risk aversion, financial conditions in Canada remain very stimulative and private credit growth is strong. Following an anticipated slowdown in growth during the second quarter due to temporary supply chain disruptions and the impact of higher energy prices on consumption, the Bank expects growth in Canada to re-accelerate in the second half of 2011. Over the projection horizon, business investment is expected to remain strong, household spending to grow more in line with disposable income, and net exports to become more supportive of growth. Relative to the April projection, growth in household spending is now projected to be slightly firmer, reflecting higher household income, and net exports to be slightly weaker, reflecting more subdued U.S. activity. Overall, the Bank projects the economy will expand by 2.8 per cent in 2011, 2.6 per cent in 2012, and 2.1 per cent in 2013, returning to capacity in the middle of 2012. Total CPI inflation is expected to remain above 3 per cent in the near term, largely reflecting temporary factors such as significantly higher food and energy prices. Core inflation is slightly firmer than anticipated, owing to temporary factors and to more persistent strength in the prices of some services. Core inflation is now expected to remain around 2 per cent over the projection horizon. Total CPI inflation is expected to return to the 2 per cent target by the middle of 2012 as temporary factors unwind, excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers, and inflation expectations remain well-anchored. The Bank's projection assumes that authorities are able to contain the ongoing European sovereign debt crisis, although there are clear risks around this outcome. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered. |
| Canada Interest Rate Decision Due at 9AM Posted: 07 Sep 2011 04:22 AM PDT
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| Irish fin. minister says Eurozone bailout fund is too small. Posted: 07 Sep 2011 03:43 AM PDT |
| Greek 10 year bond yield rises to 10 year record of 20% Posted: 07 Sep 2011 03:16 AM PDT The 2 year note meanwhile rises to 53.27% another record The EU says Troika reviewing Greek measures and that more additional work needed to be done by Greece.
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| German industrial production (m/m) 4.0% vs 0.6% forecast. Posted: 07 Sep 2011 03:09 AM PDT |
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