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Daily FX Commentary: (Morning Report)
EUR/USD
The near-term upward momentum sees potential for further gains, as the pair cracked important 1.2800 resistance yesterday. The price action stabilizes at 1.2800 zone, following sharp sell-off from 1.2818 fresh high, to 1.2763, where 55 day EMA contained dips. With 4h chart studies indicating further recovery, sustained break above 1.2800 to open next strong resistance zone at 1.2880/1.2900, with interim barrier at 1.2843, Fib 38.2% of 1.3138/1.2660 descend. Higher platform at 1.2760 zone, also Fib 38.2% of 1.2660/1.2818 upleg, offers good support and should ideally contain pullbacks, while potential slide below here would signal a failure swing and trigger deeper reversal.
Res: 1.2810, 1.2818, 1.2843, 1.2880
Sup: 1.2781, 1.2760, 1.2740, 1.2720
GBP/USD
The pair maintains positive tone, following yesterday’s close slightly above 1.5900 mark. Near-term price action is still limited by yesterday’s fresh high and 50% of 1.6174/1.5826, at 1.5922, hovering around 55 day EMA. Fresh momentum, emerging on 4h chart, indicates further extension higher. Lift above 1.5922 to focus Fibonacci 38.2% barrier at 1.5959, ahead of more significant 1.6000 level, psychological resistance and main bear-trendline off 1.6308. Consolidation range floor at 1.5885, also Fib 38.2% of 1.5826/1.5922 rally, is expected to contain, otherwise, further corrective easing towards 1.5874/63, Fibonacci supports, would soften near-term structure.
Res: 1.5922, 1.5959, 1.5978, 1.6000
Sup: 1.5892, 1.5885, 1.5874, 1.5863
USD/JPY
The pair continues to move sideways, consolidating the latest gains that peaked at 81.58. Appearance of Doji candle, along with weakening hourly studies and overbought 4h conditions, would suggest further hesitation on approach to the next target at 82.00. Initial support lies at 81.00, Fib 23.6% / 20 day EMA, ahead of 80.67, previous high / Fib 38.2% that should ideally contain any dips.
Res: 81.42, 81.58, 82.00, 82.20
Sup: 81.09, 81.00, 80.89, 80.67
USD/CHF
Near-term structure weakens further, as the price retests important 0.9400 support, on a slide from last Friday’s upside rejection at 0.9489. Brief dip and daily close below 0.9400, 200 day MA, could be a signal for fresh weakness, as near-term indicators are in the negative territory and see the downside favored for now. Slide below 0.9385 breakpoint is seen as a trigger, with bearish EMA’s crossover at 0.9436, offering initial barrier. Only lift above 0.9450, would ease immediate bear pressure.
Res: 0.9436, 0.9452, 0.9489, 0.9500
Sup: 0.9400, 0.9393, 0.9385, 0.9365
Daily Market Commentary: (Evening Report)
London close: Stocks rebound as 'Glenstrata' deal pushed through
Market Movers
- techMARK 2,056.18 +0.29%
- FTSE 100 5,748.10 +0.18%
- FTSE 250 11,820.83 +0.65%
- Xstrata shareholders approve merger with Glencore
- Hamas official says ceasefire has been agreed
- Eurogroup meeting on Greece kicks off in Brussels
After a poor start on Tuesday, UK stocks rallied in afternoon trade to finish broadly flat after shareholders approved the merger between FTSE 100 constituents Xstrata and Glencore; meanwhile, reports of easing tensions in the Middle East could have helped to lift sentiment late on.
Hamas official Ayman Taha said this afternoon that Israel and Gaza militants have agreed on a ceasefire. He said: "An agreement for calm has been reached. It will be declared at nine o'clock (19:00 GMT) and go into effect at midnight (22:00 GMT)." However, Israeli government spokesman Mark Regev told CNN this afternoon that the "ball is still in play" and a deal has not been finalised.
The FTSE 100 closed only slightly higher this afternoon though, following an impressive 2.36% surge the day before on the back of increased hopes that US politicians will be able to deal with the 'fiscal cliff' before automatic spending cuts and tax increases come into effect at the start of 2103.
Markets started on the back foot this morning as investors reacted to the news that Moody's last night stripped France of its prized 'AAA' rating. The US rating agency said that the move was due to "the risk to economic growth, and therefore to the government's finances, posed by the country's persistent structural economic challenges."
Analyst Michael Hewson from CMC Markets said this afternoon: "Markets have pretty much taken this in their stride given that Moody's isn't telling the markets anything they don't already know, however markets have drifted off their highs, as yesterday's blind optimism gives way to some more pragmatic caution, ahead of this evening's Eurogroup meeting on Greece."
Eurozone finance ministers are meeting in Brussels to discuss whether or not to release the next tranche of aid for Greece. However, minutes before the start of the meeting, Eurogroup President Jean-Claude Juncker claimed not to be entirely sure that a deal would take place tonight.
"We must still reach an understanding on several details and I would expect that the chances are good that we will come to a final and joint solution this evening. But I'm not entirely certain about the matter," he said.
- Hamas official says ceasefire has been agreed
- Eurogroup meeting on Greece kicks off in Brussels
After a poor start on Tuesday, UK stocks rallied in afternoon trade to finish broadly flat after shareholders approved the merger between FTSE 100 constituents Xstrata and Glencore; meanwhile, reports of easing tensions in the Middle East could have helped to lift sentiment late on.
Hamas official Ayman Taha said this afternoon that Israel and Gaza militants have agreed on a ceasefire. He said: "An agreement for calm has been reached. It will be declared at nine o'clock (19:00 GMT) and go into effect at midnight (22:00 GMT)." However, Israeli government spokesman Mark Regev told CNN this afternoon that the "ball is still in play" and a deal has not been finalised.
The FTSE 100 closed only slightly higher this afternoon though, following an impressive 2.36% surge the day before on the back of increased hopes that US politicians will be able to deal with the 'fiscal cliff' before automatic spending cuts and tax increases come into effect at the start of 2103.
Markets started on the back foot this morning as investors reacted to the news that Moody's last night stripped France of its prized 'AAA' rating. The US rating agency said that the move was due to "the risk to economic growth, and therefore to the government's finances, posed by the country's persistent structural economic challenges."
Analyst Michael Hewson from CMC Markets said this afternoon: "Markets have pretty much taken this in their stride given that Moody's isn't telling the markets anything they don't already know, however markets have drifted off their highs, as yesterday's blind optimism gives way to some more pragmatic caution, ahead of this evening's Eurogroup meeting on Greece."
Eurozone finance ministers are meeting in Brussels to discuss whether or not to release the next tranche of aid for Greece. However, minutes before the start of the meeting, Eurogroup President Jean-Claude Juncker claimed not to be entirely sure that a deal would take place tonight.
"We must still reach an understanding on several details and I would expect that the chances are good that we will come to a final and joint solution this evening. But I'm not entirely certain about the matter," he said.
Europe Market Report
Europe midday: Eurogroup still undecided on Greece
-Moody's downgrades France's debt rating
-French 10 year bond yields rise by 5 basis points
-EFSF could delay 3 year bond issue after Moody's action
FTSE 100: -0.20%
Dax-30: 0.19%
Cac-40: -0.27%
FTSE-Mibtel 30: -0.71%
Ibex 35: -0.59%
Stoxx 600: -0.13%
For the most part European equities are now giving back a little bit of yesterday's enormous gains, as might have been expected.
That ahead of this evening's meeting of Eurozone Finance Ministers and after rating agency Moody's decision to downgrade France's debt to AA1 from AAA. Of particular importance, the rating agency's decision may have negative implications for the EFSF rescue fund, although not for the European Stability Mechanism (ESM) it is thought.
Regarding the former, so-called Eurogroup finance ministers are thought to be near a political agreement to disburse the next loan tranche to Greece early in December, although divisions remain over how exactly to place the country's debt stock on a sustainable downwards trajectory.
Greece's European partners are willing to give the country more time to meet its obligations -but not more money- whereas the International Monetary Fund believes that Greece's debt load should not increase any further.
The Eurogroup gathers today at 16:00 London time.
According to Greek daily Ekathimerini, sources close to Greece's Prime Minister, Antonis Samaras, expect a tranche of €31.5bn in aid by December 5th and another €13bn in January. Finland's Finance Minister, Jutta Urpilainen, however, has stated today that his country is ready to give Greece more time to achieve its financing programme targets, but not to give it more money.
As for France, Moody's last night said that: "France's fiscal outlook is uncertain as a result of its deteriorating economic prospects, both in the short - term due to subdued domestic and external demand" and "structural rigidities" in the longer term.
Somewhat ironically, the above comes soon after the country unveiled a set of structural reform measures.
The initial reaction in French debt markets was quite muted, with yields on French long-term debt little changed. They are now up by 5 basis points to 2.12%.
Spain's Treasury has placed €4.9bn in 12 and 18 month bills, well ahead of the €4.5bn expected, even if the bid-to-cover ratio for the 1 year debt on offer fell to 2.1 from 2.71.
-French 10 year bond yields rise by 5 basis points
-EFSF could delay 3 year bond issue after Moody's action
FTSE 100: -0.20%
Dax-30: 0.19%
Cac-40: -0.27%
FTSE-Mibtel 30: -0.71%
Ibex 35: -0.59%
Stoxx 600: -0.13%
For the most part European equities are now giving back a little bit of yesterday's enormous gains, as might have been expected.
That ahead of this evening's meeting of Eurozone Finance Ministers and after rating agency Moody's decision to downgrade France's debt to AA1 from AAA. Of particular importance, the rating agency's decision may have negative implications for the EFSF rescue fund, although not for the European Stability Mechanism (ESM) it is thought.
Regarding the former, so-called Eurogroup finance ministers are thought to be near a political agreement to disburse the next loan tranche to Greece early in December, although divisions remain over how exactly to place the country's debt stock on a sustainable downwards trajectory.
Greece's European partners are willing to give the country more time to meet its obligations -but not more money- whereas the International Monetary Fund believes that Greece's debt load should not increase any further.
The Eurogroup gathers today at 16:00 London time.
According to Greek daily Ekathimerini, sources close to Greece's Prime Minister, Antonis Samaras, expect a tranche of €31.5bn in aid by December 5th and another €13bn in January. Finland's Finance Minister, Jutta Urpilainen, however, has stated today that his country is ready to give Greece more time to achieve its financing programme targets, but not to give it more money.
As for France, Moody's last night said that: "France's fiscal outlook is uncertain as a result of its deteriorating economic prospects, both in the short - term due to subdued domestic and external demand" and "structural rigidities" in the longer term.
Somewhat ironically, the above comes soon after the country unveiled a set of structural reform measures.
The initial reaction in French debt markets was quite muted, with yields on French long-term debt little changed. They are now up by 5 basis points to 2.12%.
Spain's Treasury has placed €4.9bn in 12 and 18 month bills, well ahead of the €4.5bn expected, even if the bid-to-cover ratio for the 1 year debt on offer fell to 2.1 from 2.71.
French car orders rose by 6% in May.
German producer prices were flat versus the previous month in October (Consensus: 0.1%).
Dutch consumer confidence dropped to -37 points in November, after -32 in the previous month (Consensus: -35).
Switzerland's trade surplus rose to 2.8bn Swiss francs in October, versus 1.9bn francs in September.
Crude futures back off a little
The euro/dollar is now at 1.2812, up by 0.25% on the day.
Front month Brent crude futures are now down by 0.125 dollars to the 111.56 dollar mark on the ICE.
US Market Report
Stocks Nearly Flat On The Heels Of Mixed Catalysts
Stocks have turned in a lackluster performance over the course of the trading day on Tuesday after ending the previous session substantially higher. A mixed batch of news has contributed to the choppy trading on Wall Street.
After seeing initial weakness, the major averages have climbed back near the unchanged line. While the Dow remains down 5.18 points or less than a tenth of a percent at 12,790.78, the Nasdaq is up 2.61 points or 0.1 percent at 2,918.68 and the S&P 500 is up 1.87 points or 0.1 percent at 1,388.76.
The early weakness on Wall Street was partly due to news that Moody's Investors Service downgraded France's government bond rating by one notch to Aa1 from Aaa. The ratings agency added that the outlook remains negative.
Moody's said France's long-term economic growth outlook is negatively affected by multiple structural challenges and said the fiscal outlook is uncertain as a result of the deteriorating economic prospects.
Nonetheless, selling pressure remained subdued following the release of a report from the Commerce Department showing an unexpected increase in U.S. housing starts.
The report said housing starts climbed 3.6 percent to a seasonally adjusted annual rate of 894,000 in October, reaching their highest level in over four years.
While the markets have subsequently recovered from the initial downward move, lingering uncertainty about the looming fiscal cliff has limited the upside for the markets.
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