Ken Veksler, Senior Sales Trader, Saxo Bank
Little news of any significance overnight outside of the fact that gold posted new record highs yet again and dragged (in some part) the remaining commodity market with it. We also had the BOJ inject the first round of liquidity into the system in over a year perhaps as a sign that that they are indeed serious on acting on their recent rhetoric (wouldn’t that make a pleasant change).
However the USDJPY was little moved and despite opening a little better bid this morning I still see enough natural supply coming in at 87.50 to keep this move capped. I would be wary of entering into shorts towards that level simply because the bulk of the market sees the same thing I do and stop loss orders sitting above there would significant enough to trip the cross up to 88 or close to it fairly quickly.
In the other majors, we see risk appetite firmly back in favor after the Dubai nonsense seems to be petering out. The DXY is returning to recent lows and the greenback is suffering as a result. The EURUSD is benefiting as a result and still looks on course for the 1.5164 level. Dips could be seen as good opportunities to get long once more, however, don’t be surprised to see this thing retrace all the way to 1.4970/80.
We have now also had persistent rumors for the second day in a row of a large order in the Cable, but no one seems to be able to attach a credible name to the flow let alone pin point what other cross this is being expressed against.
Talk abounded of EURGBP, GBPCHF and straight Cable, but to this point nothing has really come of it and my gut says that traders are simply trying to explain away a move that they clearly missed. On the topic of the Cable I remain a seller of rallies and would today expect moves higher to extend all the way into 1.6650/80. Punters should consider scaling into shorts around those levels and placing stops above 1.6730.
Returning briefly to the gold story (and oil for that matter) the obvious impact is being felt in the USDCAD, this coupled with a weaker USD will see us testing formidable support (also the bottom end of the recent range) at 1.0430, a break here opens up 1.0380. I suggest intraday jumps into 1.0530 and above to be faded looking for the above mentioned targets.
On the data front it promises to be a quiet day with the only releases of note being the UK Construction PMI, US ADP employment change (not a lot of significance) and later tonight the Fed’s beige book. None of the above should throw any shocks into the mix and the day looks to be equity driven once again.
02 prosince 2009
01 prosince 2009
1/12 Ekonomický komentár - Kúp, predaj, podrž
Pripravil Karol Piovarcsy, Saxo Bank
KOVY
Svetove trhy pochytila chut k riziku, ktora sa preniesla najma do obchodovania na komoditnych trhoch. Z hladiska investovania su tieto trhy vhodnym prostriedkom pre diverzifikaciu portfolia a rovnako sluzia aj ako ochrana voci padu USD. Dnes vidime potencial rast k hodnote $1192/tr.uncu.
Obchodovanie tento tyzden sa vsak bude niest v ocakavani Non.Farm payrolls, ktore budu vyhlasene v piatok.
ZLATO
Za posledne tri mesiace zlato stuplo o viac ako 17 percent. Rast dopytu po tejto komodite ukazuje nielen priama cena zlata. Prudko rastie aj cena prepravy, co znamena ze nejde len o operacie financnych trhov, ale ide aj o silny zaujem o fyzicke dodavky, najma zo strany rozvijajucich sa trhov. Ocakavame, ze najblizsi mesiac bude pomerne volatilny, co bude aj dosledkom slavenia vianocnych sviatkov, pocas ktorych zvycajne dochadza k ubytku likvidity. V buducich mesiacoch vsak ocakavame rastuci trend, v ktorom zlato moze otestovat $1300/tr.uncu.
ROPA
Reralny dopyt po rope a energiach je nadalej slaby, no ocakavania investorov udrzuju ropu stale v mierne rastucom pasme. Pokial sa ropa udrzi nad urovnou $75/barrel, vidime potencial dalsieho rastu.
KOVY
Svetove trhy pochytila chut k riziku, ktora sa preniesla najma do obchodovania na komoditnych trhoch. Z hladiska investovania su tieto trhy vhodnym prostriedkom pre diverzifikaciu portfolia a rovnako sluzia aj ako ochrana voci padu USD. Dnes vidime potencial rast k hodnote $1192/tr.uncu.
Obchodovanie tento tyzden sa vsak bude niest v ocakavani Non.Farm payrolls, ktore budu vyhlasene v piatok.
ZLATO
Za posledne tri mesiace zlato stuplo o viac ako 17 percent. Rast dopytu po tejto komodite ukazuje nielen priama cena zlata. Prudko rastie aj cena prepravy, co znamena ze nejde len o operacie financnych trhov, ale ide aj o silny zaujem o fyzicke dodavky, najma zo strany rozvijajucich sa trhov. Ocakavame, ze najblizsi mesiac bude pomerne volatilny, co bude aj dosledkom slavenia vianocnych sviatkov, pocas ktorych zvycajne dochadza k ubytku likvidity. V buducich mesiacoch vsak ocakavame rastuci trend, v ktorom zlato moze otestovat $1300/tr.uncu.
ROPA
Reralny dopyt po rope a energiach je nadalej slaby, no ocakavania investorov udrzuju ropu stale v mierne rastucom pasme. Pokial sa ropa udrzi nad urovnou $75/barrel, vidime potencial dalsieho rastu.
1/12 Daily Market Commentary
Ken Veksler, Senior Sales Trader, Saxo Bank
Interesting news and movements overnight led by two factors out of the APAC region. First cab off the rank was the RBA which as the market had already priced in hiked rates by another 25bps (for what was historically the third consecutive month in a row). However this news coupled with a relatively dovish (neutral) accompanying comment and worse than expected building approval data meant that the AUDUSD was quickly sold off on the back of the release and has since then failed to really come back and leave any positive impression on the market.
I remain bearish the cross and look for spikes especially into year end towards 0.9330/50 as good opportunities to sell with what I believe a range of 0.8850/90 to 0.9250 being established into January.
Otherwise we had the BOJ call for an extraordinary meeting at which the idea of emergency QE was being touted with more liquidity measures to be added. Not to be forgotten the topic of a weaker Yen was also on everyone’s lips and that dirty word “intervention” was bandied around quite a bit too.
The long and short of it is that there will be an official press conference at 8am London time today to shed more light on the topic. Initially we had USDJPY spike fairly strongly tot eh tune of a big figure hitting natural supply at the 87.50 level. I still feel that this level should hold for now unless we actually see definitive measures being adopted by the bank. If we do then be assured there are significant stop orders sitting all the way between 87.50 and 87.80/90 which if triggered could see us run another 75bps quite quickly.
On the day we are a little data heavy and the Euro zone leads the charge with unemployment and PMI numbers. The market is currently relatively bullish but I personally think we’ll be seeing a worse unemployment rate printed which could halt the EURUSD progress in its tracks around resistance at 1.5065/70. A break here (unlikely) would take us back (slowly) to 1.5130.
We also have US data in the form of ISM Manufacturing and Construction spending, the ISM number here is of most importance, but as always risk appetite dictates the USD direction.
For your guide I remain short the AUDNZD and now look for 1.2670 to break to confirm the appropriateness of this trade.
And finally as a side note I believe it’s worth keeping an eye on the GBPCAD which has now definitely broken 1.7390 and is firmly setting its sights lower.
www.saxobank.cz
Interesting news and movements overnight led by two factors out of the APAC region. First cab off the rank was the RBA which as the market had already priced in hiked rates by another 25bps (for what was historically the third consecutive month in a row). However this news coupled with a relatively dovish (neutral) accompanying comment and worse than expected building approval data meant that the AUDUSD was quickly sold off on the back of the release and has since then failed to really come back and leave any positive impression on the market.
I remain bearish the cross and look for spikes especially into year end towards 0.9330/50 as good opportunities to sell with what I believe a range of 0.8850/90 to 0.9250 being established into January.
Otherwise we had the BOJ call for an extraordinary meeting at which the idea of emergency QE was being touted with more liquidity measures to be added. Not to be forgotten the topic of a weaker Yen was also on everyone’s lips and that dirty word “intervention” was bandied around quite a bit too.
The long and short of it is that there will be an official press conference at 8am London time today to shed more light on the topic. Initially we had USDJPY spike fairly strongly tot eh tune of a big figure hitting natural supply at the 87.50 level. I still feel that this level should hold for now unless we actually see definitive measures being adopted by the bank. If we do then be assured there are significant stop orders sitting all the way between 87.50 and 87.80/90 which if triggered could see us run another 75bps quite quickly.
On the day we are a little data heavy and the Euro zone leads the charge with unemployment and PMI numbers. The market is currently relatively bullish but I personally think we’ll be seeing a worse unemployment rate printed which could halt the EURUSD progress in its tracks around resistance at 1.5065/70. A break here (unlikely) would take us back (slowly) to 1.5130.
We also have US data in the form of ISM Manufacturing and Construction spending, the ISM number here is of most importance, but as always risk appetite dictates the USD direction.
For your guide I remain short the AUDNZD and now look for 1.2670 to break to confirm the appropriateness of this trade.
And finally as a side note I believe it’s worth keeping an eye on the GBPCAD which has now definitely broken 1.7390 and is firmly setting its sights lower.
www.saxobank.cz
1/12 Daily Market Commentary
Ken Veksler, Senior Sales Trader, Saxo Bank
Interesting news and movements overnight led by two factors out of the APAC region. First cab off the rank was the RBA which as the market had already priced in hiked rates by another 25bps (for what was historically the third consecutive month in a row).
However this news coupled with a relatively dovish (neutral) accompanying comment and worse than expected building approval data meant that the AUDUSD was quickly sold off on the back of the release and has since then failed to really come back and leave any positive impression on the market. I remain bearish the cross and look for spikes especially into year end towards 0.9330/50 as good opportunities to sell with what I believe a range of 0.8850/90 to 0.9250 being established into January.
Otherwise we had the BOJ call for an extraordinary meeting at which the idea of emergency QE was being touted with more liquidity measures to be added. Not to be forgotten the topic of a weaker Yen was also on everyone’s lips and that dirty word “intervention” was bandied around quite a bit too.
The long and short of it is that there will be an official press conference at 8am London time today to shed more light on the topic. Initially we had USDJPY spike fairly strongly tot eh tune of a big figure hitting natural supply at the 87.50 level. I still feel that this level should hold for now unless we actually see definitive measures being adopted by the bank. If we do then be assured there are significant stop orders sitting all the way between 87.50 and 87.80/90 which if triggered could see us run another 75bps quite quickly.
On the day we are a little data heavy and the Euro zone leads the charge with unemployment and PMI numbers. The market is currently relatively bullish but I personally think we’ll be seeing a worse unemployment rate printed which could halt the EURUSD progress in its tracks around resistance at 1.5065/70. A break here (unlikely) would take us back (slowly) to 1.5130.
We also have US data in the form of ISM Manufacturing and Construction spending, the ISM number here is of most importance, but as always risk appetite dictates the USD direction.
For your guide I remain short the AUDNZD and now look for 1.2670 to break to confirm the appropriateness of this trade.
And finally as a side note I believe it’s worth keeping an eye on the GBPCAD which has now definitely broken 1.7390 and is firmly setting its sights lower.
Interesting news and movements overnight led by two factors out of the APAC region. First cab off the rank was the RBA which as the market had already priced in hiked rates by another 25bps (for what was historically the third consecutive month in a row).
However this news coupled with a relatively dovish (neutral) accompanying comment and worse than expected building approval data meant that the AUDUSD was quickly sold off on the back of the release and has since then failed to really come back and leave any positive impression on the market. I remain bearish the cross and look for spikes especially into year end towards 0.9330/50 as good opportunities to sell with what I believe a range of 0.8850/90 to 0.9250 being established into January.
Otherwise we had the BOJ call for an extraordinary meeting at which the idea of emergency QE was being touted with more liquidity measures to be added. Not to be forgotten the topic of a weaker Yen was also on everyone’s lips and that dirty word “intervention” was bandied around quite a bit too.
The long and short of it is that there will be an official press conference at 8am London time today to shed more light on the topic. Initially we had USDJPY spike fairly strongly tot eh tune of a big figure hitting natural supply at the 87.50 level. I still feel that this level should hold for now unless we actually see definitive measures being adopted by the bank. If we do then be assured there are significant stop orders sitting all the way between 87.50 and 87.80/90 which if triggered could see us run another 75bps quite quickly.
On the day we are a little data heavy and the Euro zone leads the charge with unemployment and PMI numbers. The market is currently relatively bullish but I personally think we’ll be seeing a worse unemployment rate printed which could halt the EURUSD progress in its tracks around resistance at 1.5065/70. A break here (unlikely) would take us back (slowly) to 1.5130.
We also have US data in the form of ISM Manufacturing and Construction spending, the ISM number here is of most importance, but as always risk appetite dictates the USD direction.
For your guide I remain short the AUDNZD and now look for 1.2670 to break to confirm the appropriateness of this trade.
And finally as a side note I believe it’s worth keeping an eye on the GBPCAD which has now definitely broken 1.7390 and is firmly setting its sights lower.
30 listopadu 2009
30/11 Ekonomický komentár - Kúp, predaj, podrž
Pripravil Martin Kadlec, Saxo Bank
ROPA
Zostava stale po vplyvom nie velmi vyrazneho ekonomickeho ozivenia a pokracujom raste nezamestnanosti v USA. Mierne posuny v cene zapricinuje postoj investorov k riziku a a celkovo vyvoj cien komodit. Obchodovanie vidime stale v pasme 75-80.00 USD/barel.
Dnes mame na ropu mierne pozitivny vyhlad. Doporucujeme nakup po prelomeni urovne 76.70 s cielom na 78.50 USD/barel. Stop pod 75.75.
ZLATO
Zlato sa posunulo mierne nizsie pocas piatkoveho obchodovania, co bolo zapricinene posilnenim USD.
V priebehu tyzdna by zlato malo profitovat z oslabenia USD a posunut sa vyssie urovne. Nevylucujeme vsak korekciu k urovniam 1120 – 1100 USD/uncu s naslednym posunom na 1300 v priebehu nasledujucich tyzdnov.
Dnesny vyhlad na zlato je mierne pozitivny. Doporucujem nakupy po poklesoch smerom ku 1165 s cielom na 1180 USD/uncu. Stop pod 1158.
Zlato v priebehu posledneho mesiaca atakovalo urovne okolo 1195 USD/uncu. Hlavnym dovodom bolo vyrazne oslabenie USD co bolo zapricinene moznostou vykonavania tzv. Carry Trade obchodov, spekulaciami ako aj diverzifikaciou aktiv niektorymi centralnymi bankami.
Investori si poziciavaju peniaze v mene s nizkymi urokmi (USD), nasledne predavaju USD a investuju do vynosnejsich nedolarovych aktiv. To vedie k velkemu vypredaju USD a jeho oslabeniu.
Zlato predstavovalo v minulom mesiaci vybornu ochranu proti slabnucemu USD co potvrdzuje aj jeho zhodnotenie.
STRIEBRO
Dnesny vyhlad na striebro je mierne negativny. Doporucujeme predaje po prelomeni urovne 18.00 s cielom na 17.75 USD/uncu. Stop nad 18.10.
www.saxobank.cz www.saxobank.sk
ROPA
Zostava stale po vplyvom nie velmi vyrazneho ekonomickeho ozivenia a pokracujom raste nezamestnanosti v USA. Mierne posuny v cene zapricinuje postoj investorov k riziku a a celkovo vyvoj cien komodit. Obchodovanie vidime stale v pasme 75-80.00 USD/barel.
Dnes mame na ropu mierne pozitivny vyhlad. Doporucujeme nakup po prelomeni urovne 76.70 s cielom na 78.50 USD/barel. Stop pod 75.75.
ZLATO
Zlato sa posunulo mierne nizsie pocas piatkoveho obchodovania, co bolo zapricinene posilnenim USD.
V priebehu tyzdna by zlato malo profitovat z oslabenia USD a posunut sa vyssie urovne. Nevylucujeme vsak korekciu k urovniam 1120 – 1100 USD/uncu s naslednym posunom na 1300 v priebehu nasledujucich tyzdnov.
Dnesny vyhlad na zlato je mierne pozitivny. Doporucujem nakupy po poklesoch smerom ku 1165 s cielom na 1180 USD/uncu. Stop pod 1158.
Zlato v priebehu posledneho mesiaca atakovalo urovne okolo 1195 USD/uncu. Hlavnym dovodom bolo vyrazne oslabenie USD co bolo zapricinene moznostou vykonavania tzv. Carry Trade obchodov, spekulaciami ako aj diverzifikaciou aktiv niektorymi centralnymi bankami.
Investori si poziciavaju peniaze v mene s nizkymi urokmi (USD), nasledne predavaju USD a investuju do vynosnejsich nedolarovych aktiv. To vedie k velkemu vypredaju USD a jeho oslabeniu.
Zlato predstavovalo v minulom mesiaci vybornu ochranu proti slabnucemu USD co potvrdzuje aj jeho zhodnotenie.
STRIEBRO
Dnesny vyhlad na striebro je mierne negativny. Doporucujeme predaje po prelomeni urovne 18.00 s cielom na 17.75 USD/uncu. Stop nad 18.10.
www.saxobank.cz www.saxobank.sk
30/11 Weekly comment
Prepared by Ken Veksler, Senior Trader, Saxo Bank
Last week came to an interesting end and this week promises to offer similar if not slightly more subdued price action. The excitement all stemmed from thin liquidity while the American’s were stuffing themselves full of turkey and Dubai was slowly sinking under the weight of the Palm’s development and mounting unserviceable debt. Neither event should come as a shock to anyone (definitely not the former), at least not to anyone that has a concept of global macroeconomic developments.
Most people should have at least been aware if not entirely wary of the fact that the cranes in Dubai have stood still and silent for almost 9 months now with life practically coming to a standstill in what was going to be the fastest developing economic zone/region of the world.
The lonely emirate was caught up in all the excitement of an overheating economy and decided that now was the time to capitalize and begin massive capital works projects including building the world’s biggest airport to service the hordes of people they were expecting to come through the nation in the coming years.
But as we all know things took a definitive nosedive and understandably this demand that they had counted on had waned significantly, so it should come as no surprise (although clearly on Thurs/Fri it did) that things we going to fall down sooner or later. Things were further complicated not only by thin liquidity and nervous markets not wanting to give away gains made over the last 9 months but also a religious holiday in the region that left no one minding the shop front and able to offer any comment on the issue. Understandably risk firmly fell off the menu and the greenback made a stellar recovery…..
We walk in this morning to the tune of overnight news from the UAE that they will not let the tiny sovereign nation fail and in fact have heard pledges from the UAE central bank regarding helping with liquidity and evaluating on an ad hoc basis the need to cover the odd monthly payment in order to help Dubai out. Shock me! And of course everything has come back in on the news meaning that the greenback is sold off once more (hello risk, my old friend), Dubai CDS have tightened by a factor of about 10% and the markets now look for the ominous month end fixing due later this afternoon.
The week ahead….
Well in a nut shell I expect more volatility, this time however it will focus on data/event risk rather than American’s on holiday or nations’ reneging on debt payments. Otherwise for the most part it should be business as usual, the S&P will slowly grind its way towards 1121, the EURUSD will move accordingly but will be rejected on first attempt at 1.5150/60 and the DXY will very likely look for the lows it found recently.
Data wise as noted above we’re going to be fairly busy this week and the highlights include;
Monday: CAD GDP
Euro Zone CPI
Tuesday: RBA Rate decision (market is 60% pricing in another 25bps)
US ISM Manufacturing
Thursday: ECB Rate decision
UK PMI
Euro zone GDP
Friday: US NFP
CAD Unemployment
So I hear you all ask, what’s my view on the majors? Well I’m glad you asked because here it is;
EURUSD: As noted above this thing is still a buy on dips but I warn of deeper corrections, happy to start averaging in longs from 1.4950 down to 1.4830, looking for 1.5164
GBPUSD: Still a sell on rallies and even these rallies are beginning to finally look tired. 1.6700/50 presents great selling and I look for a return to 1.6250.
USDJPY: Still looks ugly and anything into 87.00/50 is just begging to get hit. No matter the amount of verbal intervention the JPY government is still not prepared to do anything and while this is the case the cross is going looking for 85 and perhaps even lower.
AUDUSD: Strange to keep repeating myself but I sell the cross on rallies into the safety of the previously rejected zone around 0.9300/50 and recommend trading the range looking to pick it back up into 0.9000.
EURGBP: Despite what I wrote above and intuitively you would expect this cross higher, but I suggest keeping an eye on it this week as I think 0.9190/00 marks solid enough resistance to see this thing correct short term into 0.9050.
USDCAD: Looks healthy if you enjoy playing a range based on good macro rationale. 1.0700/50 is great selling territory as I noted late last week and traders should look for the bottom of the range 1.0450/80 to fix profits.
GBPCHF: I remain short half of original position and look to fade the move lower probably closing out the rest of the position gradually looking for 1.6420/50 as the average for profit taking.
AUDNZD: Those following my commentaries will be aware that I am now short this cross at an average of 1.2755 and look for the move below 1.2670 to confirm my suspicions.
www.saxobank.cz
Last week came to an interesting end and this week promises to offer similar if not slightly more subdued price action. The excitement all stemmed from thin liquidity while the American’s were stuffing themselves full of turkey and Dubai was slowly sinking under the weight of the Palm’s development and mounting unserviceable debt. Neither event should come as a shock to anyone (definitely not the former), at least not to anyone that has a concept of global macroeconomic developments.
Most people should have at least been aware if not entirely wary of the fact that the cranes in Dubai have stood still and silent for almost 9 months now with life practically coming to a standstill in what was going to be the fastest developing economic zone/region of the world.
The lonely emirate was caught up in all the excitement of an overheating economy and decided that now was the time to capitalize and begin massive capital works projects including building the world’s biggest airport to service the hordes of people they were expecting to come through the nation in the coming years.
But as we all know things took a definitive nosedive and understandably this demand that they had counted on had waned significantly, so it should come as no surprise (although clearly on Thurs/Fri it did) that things we going to fall down sooner or later. Things were further complicated not only by thin liquidity and nervous markets not wanting to give away gains made over the last 9 months but also a religious holiday in the region that left no one minding the shop front and able to offer any comment on the issue. Understandably risk firmly fell off the menu and the greenback made a stellar recovery…..
We walk in this morning to the tune of overnight news from the UAE that they will not let the tiny sovereign nation fail and in fact have heard pledges from the UAE central bank regarding helping with liquidity and evaluating on an ad hoc basis the need to cover the odd monthly payment in order to help Dubai out. Shock me! And of course everything has come back in on the news meaning that the greenback is sold off once more (hello risk, my old friend), Dubai CDS have tightened by a factor of about 10% and the markets now look for the ominous month end fixing due later this afternoon.
The week ahead….
Well in a nut shell I expect more volatility, this time however it will focus on data/event risk rather than American’s on holiday or nations’ reneging on debt payments. Otherwise for the most part it should be business as usual, the S&P will slowly grind its way towards 1121, the EURUSD will move accordingly but will be rejected on first attempt at 1.5150/60 and the DXY will very likely look for the lows it found recently.
Data wise as noted above we’re going to be fairly busy this week and the highlights include;
Monday: CAD GDP
Euro Zone CPI
Tuesday: RBA Rate decision (market is 60% pricing in another 25bps)
US ISM Manufacturing
Thursday: ECB Rate decision
UK PMI
Euro zone GDP
Friday: US NFP
CAD Unemployment
So I hear you all ask, what’s my view on the majors? Well I’m glad you asked because here it is;
EURUSD: As noted above this thing is still a buy on dips but I warn of deeper corrections, happy to start averaging in longs from 1.4950 down to 1.4830, looking for 1.5164
GBPUSD: Still a sell on rallies and even these rallies are beginning to finally look tired. 1.6700/50 presents great selling and I look for a return to 1.6250.
USDJPY: Still looks ugly and anything into 87.00/50 is just begging to get hit. No matter the amount of verbal intervention the JPY government is still not prepared to do anything and while this is the case the cross is going looking for 85 and perhaps even lower.
AUDUSD: Strange to keep repeating myself but I sell the cross on rallies into the safety of the previously rejected zone around 0.9300/50 and recommend trading the range looking to pick it back up into 0.9000.
EURGBP: Despite what I wrote above and intuitively you would expect this cross higher, but I suggest keeping an eye on it this week as I think 0.9190/00 marks solid enough resistance to see this thing correct short term into 0.9050.
USDCAD: Looks healthy if you enjoy playing a range based on good macro rationale. 1.0700/50 is great selling territory as I noted late last week and traders should look for the bottom of the range 1.0450/80 to fix profits.
GBPCHF: I remain short half of original position and look to fade the move lower probably closing out the rest of the position gradually looking for 1.6420/50 as the average for profit taking.
AUDNZD: Those following my commentaries will be aware that I am now short this cross at an average of 1.2755 and look for the move below 1.2670 to confirm my suspicions.
www.saxobank.cz
27 listopadu 2009
27/11 Daily Comment
Ken Veksler, Senior Sales Trader, Saxo Bank
The world has turned on its ear overnight and its all down to one very important story that has by my estimations been blown a little out of proportion. Clearly everyone has heard and read about the Dubai debt fears and this sentiment has completely taken out any enthusiasm in the risk markets for now. This story couple with thin liquidity on the back of an absent US market and yearend profit fixing after tremendous equity market growth is leading to massive sell off’s across the board.
All the usual suspects in terms of risk currencies are suffering and without going into extended detail now is definitely not the time to panic. Only one thing can in some part allay current fears and that is an official comment of some sort out of Dubai.
Problem here though is the fact that that part of the world is in the middle of their most religious holiday period and no such statement is going to be forthcoming any time too soon. In equity terms we need 1062/65 to hold on the S&P for any semblance of risk appetite returning in the coming days otherwise we’ll quickly be down at 1042/30 and looking a whole lot worse.
A quick rundown of overnight action in the majors looks a little like this:
USDJPY: HORRIBLE! This pair continues lower and is now looking for 84.70 having traded as low as 84.90 overnight. Natural supply comes in at 86.50. No amount of jawboning is helping this cross and despite best efforts to scare the market into thinking of mass global intervention the Japanese government is powerless to do anything.
USDCAD: Trades to the upper end of the recent downward corridor helped in large part to gold gapping and oil following suit. I am still a seller (cautiously albeit) into 1.0800 with stops about 1% above looking for an orderly if not boring return into 1.0550/0480.
EURUSD: This thing is looking for and will soon find 1.4750 at which point I would think long and hard about initiating any new longs.
AUDNZD: Despite last night’s mess, this cross and my short are looking ok for now and continue to consolidate (run out of steam) on the top end.
GBPUSD: Refer below, but in short this thing is still a massive sell on rallies.
Of all those exposed most heavily to Dubai, the UK is worst off (refer below) and that in a major way explains the Cable decline overnight not least of which coupled with the broad based gains in the greenback overnight. Looking at the Dollar index we have recovered major losses and are now looking to press the top end of the recent downward channel in this index.
Gold also took a hit this morning gapping the better part of $20 with major stops being taken out of an overextended long market. Next target to the downside here 1125/30 and I must admit I have it firmly in my sights in the next 48 hours.
The view for the day is to stay the hell out of trouble and avoid the carnage that is presently the market. This thing is not over yet and the dust will only potentially begin to settle early next week.
European banks exposure to United Arab Emirates Billion of USD as of June 2009
Total 87.3
UK
49.5
France
11.3
Germany
10.2
Netherlands
4.7
Switzerland
4.3
Italy
1.9
Belgium
1.3
US
9.9
Japan
8.6
The world has turned on its ear overnight and its all down to one very important story that has by my estimations been blown a little out of proportion. Clearly everyone has heard and read about the Dubai debt fears and this sentiment has completely taken out any enthusiasm in the risk markets for now. This story couple with thin liquidity on the back of an absent US market and yearend profit fixing after tremendous equity market growth is leading to massive sell off’s across the board.
All the usual suspects in terms of risk currencies are suffering and without going into extended detail now is definitely not the time to panic. Only one thing can in some part allay current fears and that is an official comment of some sort out of Dubai.
Problem here though is the fact that that part of the world is in the middle of their most religious holiday period and no such statement is going to be forthcoming any time too soon. In equity terms we need 1062/65 to hold on the S&P for any semblance of risk appetite returning in the coming days otherwise we’ll quickly be down at 1042/30 and looking a whole lot worse.
A quick rundown of overnight action in the majors looks a little like this:
USDJPY: HORRIBLE! This pair continues lower and is now looking for 84.70 having traded as low as 84.90 overnight. Natural supply comes in at 86.50. No amount of jawboning is helping this cross and despite best efforts to scare the market into thinking of mass global intervention the Japanese government is powerless to do anything.
USDCAD: Trades to the upper end of the recent downward corridor helped in large part to gold gapping and oil following suit. I am still a seller (cautiously albeit) into 1.0800 with stops about 1% above looking for an orderly if not boring return into 1.0550/0480.
EURUSD: This thing is looking for and will soon find 1.4750 at which point I would think long and hard about initiating any new longs.
AUDNZD: Despite last night’s mess, this cross and my short are looking ok for now and continue to consolidate (run out of steam) on the top end.
GBPUSD: Refer below, but in short this thing is still a massive sell on rallies.
Of all those exposed most heavily to Dubai, the UK is worst off (refer below) and that in a major way explains the Cable decline overnight not least of which coupled with the broad based gains in the greenback overnight. Looking at the Dollar index we have recovered major losses and are now looking to press the top end of the recent downward channel in this index.
Gold also took a hit this morning gapping the better part of $20 with major stops being taken out of an overextended long market. Next target to the downside here 1125/30 and I must admit I have it firmly in my sights in the next 48 hours.
The view for the day is to stay the hell out of trouble and avoid the carnage that is presently the market. This thing is not over yet and the dust will only potentially begin to settle early next week.
European banks exposure to United Arab Emirates Billion of USD as of June 2009
Total 87.3
UK
49.5
France
11.3
Germany
10.2
Netherlands
4.7
Switzerland
4.3
Italy
1.9
Belgium
1.3
US
9.9
Japan
8.6
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