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04/03/2015 11:56 (Christopher Vecchio, Currency Strategist)
Event risk is heavy the through the end of the week; today the focus is on the Canadian and US Dollars. »
04/03/2015 07:24 (Asma Ashimi)
Global equities turned lower on Tuesday renewed worries over Greece returns to the spotlight. US stocks closed lower, the Standard & Poor’s 500 Index fell to 2,107.78 points (0.45%), while […] The post Stock Market Review 4th March appeared first on | HY Markets Official blog. »
04/03/2015 06:22 (Asma Ashimi)
The EUR/USD moved lower on Tuesday, March 3, at a time when the difference between the yields on government bonds in the U.S. and the eurozone widened. Currency fluctuations The […] The post EUR/USD Declines Slightly Amid Rising Yield Differential appeared first on | HY Markets Official b... »
04/03/2015 06:16 (Asma Ashimi)
U.S. stocks moved lower on Tuesday, March 3, after major indices rose to record highs the day before. Stock fluctuations The Nasdaq Composite Index was down 0.9 percent for the […] The post US Stocks Retreat After Rising to New Records appeared first on | HY Markets Official blog. »
04/03/2015 04:35 (John Kicklighter, Chief Currency Strategist)
Talking Points: Dollar Holds its Range as Traders Look to SPX and NFPs as Loaded Catalysts Euro: Is There More Easing from a Well-Priced ECB Stimulus Program? Australian Dollar Refuses to Break 0.79 Despite RBA Hold, Data, China Improvement Dollar Holds its Range as Traders Look to SPX and NFPs as Loaded Catalysts Event risk to start this week has not been concentrated enough to drive the Dollar from its five-week range. Monday’s round of economic indicators was the most potent hit. Manufacturing and construction activity reports bowed to the personal income and spending data for January. Spending eased, but adjusted for inflation driven by items like cheaper gas prices, this foundation for GDP actually grew (0.3 percent). More interesting from this mix was the income component which reinforces the earnings figures seen in the January NFPs data run with another 0.3 percent increase. As for the inflation statistics that are derived from this consumer data – the Fed’s preferred PCE measures – the core figure held steady at 1.3 percent. Moving forward, the focus for Dollar traders should remain on two particular themes: counterpart strength and anticipation for Friday’s labor data. With the ECB set to activate its QE program this week, the PBoC surprising with a cut over the weekend and other major counterparts keeping a weak path; the Dollar looks slightly more attractive each day. But that marginal gain in popularity will be dampened as traders nervously await the Bureau of Labor Statistics to report February jobs numbers. Euro: Is There More Easing from a Well-Priced ECB Stimulus Program? The Euro faces a similar quandary to the Dollar: how efficiently have the markets priced in future policy changes? For the Greenback, the market is trying to price the probability and impact of a rate hike sometime ‘mid-2015’. For the Euro, the question is how much depreciation should be wrung from the introduction of a QE program. The ECB confirmed an open stimulus program at its last meeting and speculation of its arrival drove the currency down well in advance of the approval. So, how much further does the market run on established trajectories? That depends on the bearings of its counterparts, the details (particularly triggers for upgrade) of the program and the revival of other factors like Greece. Australian Dollar Refuses to Break 0.79 Despite RBA Hold, Data, China Improvement A range of fundamental event risk these past 48 hours has contributed to a measurable improvement in the Australian Dollar’s prospects. And yet, AUDUSD has proven incapable of returning to 0.7900 – much less overtake it. An unexpected hold from the RBA led some doves to shake some of their bearish exposure while 4Q GDP figures that were generally inline with a moderate trend of expansion offer a foundation for the carry currency. Meanwhile, better than expected Chinese PMI figures and easing by the PBoC engendered limited indirect strength. Chinese Renminbi Hits 6.30 Versus Dollar After Weekend PBoC Rate Cut The Chinese Yuan hit a two-and-a-half year low against the US Dollar to start this week. The USDCNH surge was in response to an unexpected policy move by the People’s Bank of China (PBoC) on Saturday. The second cut to the country’s benchmark lending rate in four months (to 5.35 percent) is showing an uncharacteristic preference for broad monetary policy tools where historically the group has used more directed tool. This may be a sign of concern for the country’s economic slowdownand raises the probability of a shift to more unorthodox means. Canadian Dollar Traders Question Whether BoC Can General More Volatility than RBA After the tepid follow through from the speculative ranks after the RBA decision, interest surrounding today’s Bank of Canada (BoC) policy meeting is likely to be more reserved. Even before the Australian group surprised with a hold on policy, the market was cooler to the idea that Canadian authorities were going to pursue consecutive rate cuts. Looking at consensus forecasts from Bloomberg-polled economists, 22 percent expect the group to lower the benchmark another 25 percent. That creates a more distinct scenario break for market impact however. Holding will have an even more subtle impact on the Loonie than the RBA did on the Aussie. That said, should they actually cut, a far greater portion of the market would be caught off guard and thereby would need to reposition. Emerging Markets: Brazilian Real Hits Decade Low Ahead of Rate Decision, Ukraine Raises Benchmark Rate to 30% The Emerging Markets have seen an exceptionally busy start to the week. While the capital markets measured by the MSCI ETF may not reflect the tumult on the newswires, currencies are proving more sensitive. So far this week, the top news aside from the PBoC rate cut was Ukraine’s announcement that it would lift its benchmark rate from 19.5 to 30 percent in an effort to curb capital outflows. Meanwhile, the Russian Ruble gained 1.0 percent on the Dollar as international coverage over Ukraine moved off financial media outlets’ first pages. In monetary policy news, the Reserve Bank of India (RBI) announced an unexpected 25bp cut to its repo rate to 7.50 percent this morning. The Brazilian Real was the biggest movie on the day with a 1.3 percent drop versus the USD ahead of its own central bank decision (expected to be a 50 bp hike). Gold Returns to $1,200 but is There Greater Value in a Stimulus-Destabilized World? Gold lost traction on its record breaking run after the Federal Reserve’s first wave of stimulus leveled off. When the pace of expansion of the central bank’s balance sheet started to level off and its limitations made known, the precious started to lose significant ground. The US Dollar represents the world’s reserve currency, so its debasement was a strong motivation to drive funds already reeling from the Great Financial Crisis to an alternative store of wealth. Today, the Greenback has rallied substantially but many of its most liquid counterparts are attempting to compensate. With the ECB starting a QE program while the BoJ continues with its own and the PBoC makes pre-stimulus moves, the alternative appeal of the precious metal builds. Yet, perhaps that tipping point for a market made skeptical by congestion would be a disaster borne of the world’s cumulative stimulus efforts. From futures we saw open interest more than double from the late-2008 low to late-2010 peak of 651,000 contracts. Today, that interest stands at 407,000 with ETF demand slowly trying to rebuild. Perhaps there is interest/fear.**Bring the economic calendar to your charts with the DailyFX News App. ECONOMIC DATA GMT Currency Release Survey Previous Comments 00:01 GBP BRC Shop Price Index (YoY) (FEB) -1.2% -1.3% Contraction might be contributing to below target inflation growth. The current figure is the most negative since May 2013 00:30 AUD Australia GDP (QoQ) (4Q) 0.6% 0.3% GDP growth on a QoQ basis has been trending lower. 00:30 AUD Australia GDP (YoY) (4Q) 2.5% 2.7% 1:35 JPY Markit Japan Services PMI (FEB) 51.3 Figures showed a decline from prior figures, but it didn’t move the yen crosses or the Nikkei. 1:35 JPY Markit Japan Composite PMI (FEB) 51.7 1:45 CNY HSBC China Composite PMI (FEB) 51.0 Composite PMI has been trending lower since Sep 2014. 1:45 CNY HSBC China Services PMI (FEB) 51.8 8:45 EUR Markit/ADACI Italy Services PMI (FEB) 51.4 51.2 Has showed expansion for 10 months in 2014. 8:45 EUR Markit/ADACI Italy Composite PMI (FEB) 51.4 51.2 8:50 EUR Markit France Services PMI (FEB F) 53.4 53.4 This measures’ are final figures and not likely to be market moving. President Draghi is having a meeting on Thursday where he might discuss the proposed QE policy. 8:50 EUR Markit France Composite PMI (FEB F) 52.1 52.2 8:55 EUR Markit Germany Services PMI (FEB F) 55.5 55.5 8:55 EUR Markit/BME Germany Composite PMI (FEB F) 54.3 54.3 9:00 EUR Markit Eurozone Services PMI (FEB F) 53.9 53.9 9:00 EUR Markit Eurozone Composite PMI (FEB F) 53.5 53.5 9:30 GBP Markit/CIPS UK Services PMI (FEB) 57.5 57.2 Composite PMI has been trending lower but still shows strong expansion. Economic data has been recently outperforming economists’ expectations. 9:30 GBP Markit/CIPS UK Composite PMI (FEB) 56.7 10:00 EUR Retail Sales MoM (JAN) 0.2% 0.3% Not likely to change the market’s expectation of future ECB monetary policy. 10:00 EUR Retail Sales YoY (JAN) 2.3% 2.8% 12:00 USD MBA Mortgage Applications (FEB 27) -3.5% A volatile measure. 13:15 USD ADP Employment Change (FEB) 219K 213K US labor market has been improving in 2014. This measure might give us an indication of the strength of the NFP numbers. 14:45 USD Markit US Composite PMI (FEB F) 56.8 Final figures that isn’t likely to be market moving. 14:45 USD Markit US Services PMI (FEB F) 57.0 57.0 15:00 CAD Bank of Canada Rate Decision 0.75% 0.75% The BOC unexpectedly cut interest rates in the last meeting due to concerns over the oil sector. 15:00 USD ISM Non-Manf. Composite (FEB) 56.5 56.7 US economic data as indicated by the Citi US economic Surprise Index has been underperforming economists’ expectations. GMT Currency Upcoming Events & Speeches 14:00 USD Fed's Evans Speaks on Economy and Monetary Policy in Illinois 14:45 GBP BOE's Bailey Speaks at Treasury Committee Hearing 18:00 USD Fed Governor George Speaks on the U.S. Economy 19:00 USD U.S. Federal Reserve Releases Beige Book SUPPORT AND RESISTANCE LEVELS To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table CLASSIC SUPPORT AND RESISTANCE EMERGING MARKETS 18:00 GMT SCANDIES CURRENCIES 18:00 GMT Currency USD/MXN USD/TRY USD/ZAR USD/HKD USD/SGD Currency USD/SEK USD/DKK USD/NOK Resist 2 15.5900 2.6000 12.7000 7.8165 1.3800 Resist 2 8.7400 7.1000 8.4735 Resist 1 15.0000 2.5000 11.8750 7.8075 1.3650 Resist 1 8.4000 6.8500 7.8360 Spot 14.9182 2.4613 11.4851 7.7556 1.3568 Spot 8.3924 6.5787 7.5880 Support 1 14.3800 2.3900 10.2500 7.7490 1.3200 Support 1 7.5200 5.9100 7.2945 Support 2 13.6800 2.1900 9.3700 7.7450 1.2000 Support 2 7.3285 5.7775 6.7280 INTRA-DAY PROBABILITY BANDS 18:00 GMT \CCY EUR/USD GBP/USD USD/JPY USD/CHF USD/CAD AUD/USD NZD/USD EUR/JPY Gold Res 3 1.1455 1.5624 119.81 0.9601 1.2589 0.7965 0.7618 136.10 1232.94 Res 2 1.1427 1.5585 119.53 0.9577 1.2558 0.7943 0.7595 135.72 1227.00 Res 1 1.1399 1.5546 119.24 0.9553 1.2527 0.7920 0.7572 135.35 1221.06 Spot 1.1343 1.5469 118.66 0.9505 1.2464 0.7875 0.7527 134.60 1209.18 Supp 1 1.1287 1.5392 118.08 0.9457 1.2401 0.7830 0.7482 133.85 1197.30 Supp 2 1.1259 1.5353 117.79 0.9433 1.2370 0.7807 0.7459 133.48 1191.36 Supp 3 1.1231 1.5314 117.51 0.9409 1.2339 0.7785 0.7436 133.10 1185.42 --- »
04/03/2015 04:07 (Ilya Spivak, Currency Strategist)
The US Dollar may overlook ADP and ISM data releases as traders withhold directional conviction until after the Friday’s payrolls figures are revealed. »
04/03/2015 03:19 (Ilya Spivak, Currency Strategist)
Crude oil, gold, and the SPX 500 are treading water in familiar trading ranges as markets await a catalyst to break the dead-lock and offer direction cues. »
04/03/2015 02:57 (John Kicklighter, Chief Currency Strategist)
Today, we have PMIs, a BoC rate decision, Fed speakers, and the precursor to Friday's NFPs. There are likely opportunities in this mix, but the true potential rests with heavier themes a little further out. The ECB's »
04/03/2015 02:49 (Ilya Spivak, Currency Strategist)
To receive Ilya's analysis directly via email, please SIGN UP HERE Talking Points: EUR/JPY Technical Strategy: Short at 135.25 Support: 133.54, 132.04, 129.17 Resistance:137.64, 139.95, 142.... »
04/03/2015 02:49 (Ilya Spivak, Currency Strategist)
To receive Ilya's analysis directly via email, please SIGN UP HERE Talking Points: GBP/JPY Technical Strategy: Flat Support: 183.70, 182.92, 181.79 Resistance: 184.97, 186.00, 187.03 The B... »