Tuesday, February 14, 2012

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

Feds Plosser on the Wires

Posted: 14 Feb 2012 07:34 AM PST

Says:

  • ‘Uncertainty’ on impact of expanding fed assets
  • Public may expect more from Fed than it can deliver
  • U.S. has ‘very serious economic imbalances’
  • Monetary policy shouldn’t be used as ‘A crutch’
  • Fed is doing ‘everything we can’
  • ‘Pressure is enormous’ on fed to think short term
  • Fed begins treasuries under maturity extension program

 

GBPUSD tests support trend line

Posted: 14 Feb 2012 07:11 AM PST

The GBPUSD is testing the support trendline at the 1.5672 level. The GBPUSD has had a down/up/down day today.   Moody’s warned the UK that their AAA rating might be in jeopardy as a result of debt concerns.  This led to the early pressure in the Asian session.  It rallied in the London morning session in sympathy with the EURUSDs rise. The NY session so far has seen the downside reestablished.   Nevertheless, the support against the trendline should slow the decline at least termporarily.

On the topside a move above the 1.5683 early London trading low, will need to be overtaken to scare some shorts.

US Business Inventories Slightly Lower 0.4% vs Survey of 0.5%, Prior of 0.3%

Posted: 14 Feb 2012 07:02 AM PST

Dec 11′ vs Nov 11′
Retail Inventories:  0.2% vs 0.4%
Ex Autos:  0.2%  vs 0.3%
Motor Vehicles:  0.1% vs 0.6%
Furniture:  0.2% vs 0.1%
Building Material: -0.5%  vs -0.6%
Food and Beverage:  0.3%  vs 0.1%
Clothing: 0.4%  vs 0.1%
General Merch: 0.6% vs 0.2%
Dept Stores: 0.6%  vs -0.5%

USDJPY tests next target resistance

Posted: 14 Feb 2012 06:59 AM PST

The 200 day MA hurdle has been broken at the 78.03 level. THe 61.8% of the move down from the post BOJ intervention at the end of October is the next hurdle to clear. The price is also near highs from Decembers trade. In January the high reached 78.27 but this break was quickly reversed.

EURUSD in up and down day. GBPUSD pressured on warning. USDJPY moves higher on BOJ QE

Posted: 14 Feb 2012 06:42 AM PST

EU Rehn says should soon be able to decide on 2nd Greek bailout

Posted: 14 Feb 2012 06:40 AM PST

The EURUSD is up testing the 50% and 100 bar MA at the 1.3171 level. A move above this level will muddy the technical trading waters for the bulls and bears in an down and up and down and up type of day.

Plosser says no need for further policy accomodations

Posted: 14 Feb 2012 05:48 AM PST

  • Encouraged by receent employment
  • Opposes tying policy to calendar dates
  • Fed has caused substantial long term inflation risk.

The dollar has risen on his upbeat comments.

Retail Sales: Weaker headline, Better Ex Auto. Revisions not so good. Dollar higher

Posted: 14 Feb 2012 05:36 AM PST

The Retail Sales were less than expected on the headline (0.5% vs 0.8%) but better ex autos (0.7% vs 0.5%).  What is disturbing is the revision to the prior month took the less auto to -0.5% from -0.2% and the headline down to 0.0% from +0.1%. So overall, I have to swing the results to the downside.  The market is wanting to see the newly employed consumer to spend and spur on more hiring.

The US dollar initial move was to the upside, but there is some retracement now off the lows.

US Import Price Index at expectations while Advance Retail Sales higher yet lower than expected

Posted: 14 Feb 2012 05:35 AM PST

Import Price Index(MoM):  Survey:  0.3%    Actual:  0.3%%    Prior:  -0.1%    

Import Price Index(YoY):  Survey: 7.2%    Actual: 7.1%%    Prior:  8.5%      

Advance Retail Sales:  Survey:  0.8%   Actual: 0.4%%   Prior:   0.1%    Revised:   0.0%

Retail Sales Less Autos:  Survey:  0.5%    Actual:  0.7%     Prior:  -0.2%   Revised: -0.5%   

Retail Sales Ex Autos & Gas:   Survey:  0.5%    Actual:  0.6%   Prior: 0.0% Revised: -0.2%

Bobbys Corner-Open Market-Feb.14.2012

Posted: 14 Feb 2012 05:28 AM PST

Good Morning:

Moody’s downgraded Spain, Italy, Portugal, Slovakia, Slovenia and Malta overnight.  They also  placed France, Austria and the UK on  negative watch.  The cuts were not a surprise to the markets-and bond auctions in the region did well today.

Bank of Japan left their interest rates unchanged, they will increase their asset buying program, and will introduce a 1% cap on consumer inflation.

In other news-the price of oil on the NY Merc jumped to over $101/bbl as nervous market participants continue to fear supply disruptions from Iran.  It seems that the US Navy’s 5th feet which is based out of Bahrain are prepared to take steps to keep the Strait of Hormuz open for shipping. 

Gold and silver are lower-while oil is on the rise.

Asian equity markets were mixed-as European and US Futures are lower at this time.

HAVE A GREAT DAY & GOOD LUCK

Overnight major developments

Posted: 14 Feb 2012 05:21 AM PST

  • Moody’s downgraded 6 European nations:  Italy, Spain, Portugal, Malta, Slovenia, Slovakia. Some of the downgrades brought the ratings in line with those of S&P and Fitch. However, Portugal and Spain were lowered to below equivalent ratings by the other rating agencies.  Portugal’s bond rating is now in junk territory.  Moody’s did not lower France or Austria, choosing to keep them at AAA. S&P had downgraded each. What was  a surprise was they warned the UK that their AAA status might be in jeopardy.  They are concerned about weakening ability to implement debt cutting measures. The EURGBP strengthened on the news.
  • Despite the ratings downgrades Italy’s debt auction of 2014 bonds went well. The troubled nation was able to sell the maximum amount of 4 billion at a yield of 3.41%. This was lower than the 4.83% at the last auction last month The ECB will open up the spigots (more LTRO capital to be offered)  at the end of the month and banks may be yield hunting for carry trade instruments.
  • Germany’z ZEW Economic Sentiment index moved back to positive with a 5.4 reading (expectations was for -11.8).  This was a 10 month high for the index.   Global growth and improved EU debt crisis was cited for the increase.
  • UK inflation fell by the as expected -0.5% MoM and 3.6% YoY.  Inflation is still above target but is getting closer to the sub 3% desired by the BOE.  Inflation is expected to cont. to fall in coming months as high numbers from last yr fall out of the equation.
  • EU Industrial Prod. fell by -1.1% (vs -1.2%).
  • Outside of Europe, the USDJPY (and Yen crosses)  rose on the back of the BOJ announcing and additiional 10 trillion yen ($128 Billion) to their asset purchase program. They also set an inflation goal of 1%.  Japans YoY inflation is at -0.2% currently.
  • US Retail Sales and Business Inventories will be released at 8:30 and 10 AM respectively. Retail sales are expected to rise by +0.8 (vs 0.1% last mo). Ex Auto a gain of 0.5% is expected. Inventories are expected to rise by 0.5%.

EURUSD rebounds overnight on Italy auction. BOJ adds liquidity. Moody downgrades.

Posted: 14 Feb 2012 05:11 AM PST

Chinese Premier Wen says the Euro is a main investment for diversifying FX reserves.

Posted: 14 Feb 2012 02:59 AM PST

BOE’s King says UK inflation to fall to around 2% by the end of 2011.

Posted: 14 Feb 2012 02:32 AM PST

  • MPC judged GBP 50 bln QE to be appropriate due to downside risks in the medium term.
  • Economic re-balancing has a long way to go, there is a limit to what monetary policy can achieve when real adjustments are required.
  • Pace and extent of CPI fall remain hihgly uncertain, determined by waged, firm’s profit margins and oil prices.
  • MPC will watch Euro area prospects and implications for banks and credit conditions.
  • Spare capacity likely to continue to bear down on wagedsand prices beyond 2012.

Euro firmer after better than expected ZEW readings.

Posted: 14 Feb 2012 02:28 AM PST

The euro broke through the 1.3200 handle following the release with the next stop higher, on the hourly chart, being 1.32233.
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