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Daily FX Commentary: (Morning Report)
AUD/USD
The upside remains in near-term focus, as the pair breaks above 1.0440, bear-trendline, connecting 1.0623 and 1.0479 peaks / Fib 61.8% of 1.0623/1.0148 descend and dents near-term congestion top at 1.0479. Immediate target lies at 1.0500/11, round figure / Fib 76.4% retracement, break of which to open way towards the upper boundaries of 4-month 1.0148/1.0623 range. Gains, however, may be delayed, due to overbought 4h conditions and hourly RSI/MACD bearish divergence that suggests corrective/consolidative action. Initial support lies at 1.0467, 23 Nov high / today’s low, reinforced by 20 day EMS, while more significant 1.0438/23 zone, yesterday’s low / Fib 38.2% of 1.0337/1.0488 / 20 Nov high, is expected to contain any stronger reversal.
Res : 1.0488, 1.0500, 1.0511, 1.0518
Sup : 1.0467, 1.0438, 1.0430, 1.0423
USD/CAD
Bears are regaining control of the near-term outlook, following stall of two month recovery rally from 0.9631 at 1.0055 and false break above 200 day MA. Return below parity level, now focuses initial target at 0.9913, 23 Nov low, break of which to complete hourly head and shoulders like shape and open 0.9900, round figure support / near Fib 38.2% of 0.9631/1.0055 ascend and breakpoint at 0.9880 zone, 07 Nov low / 03 Oct high, below which to trigger deeper reversal. Prevailing negative tone on lower timeframes studies could be minimized by regain of initial barrier at 0.9958, yesterday’s spike high, while only clear break above parity, would shift focus higher.
Res: 0.9930, 0.9958, 0.9980, 1.0000
Sup: 0.9913, 0.9900, 0.9883, 0.9873
Daily Market Commentary: (Evening Report)
London close: Markets pare gains as investors digest Greek deal
Market Movers
- techMARK 2,075.70 +0.54%
- FTSE 100 5,799.71 +0.22%
- FTSE 250 11,867.18 +0.20%
- OECD cuts growth estimates
- Footsie comes off day's highs by the close
After a solid start for the Footsie following last night's Greek bailout deal, gains were pared by the close of trade on Tuesday with some saying that the agreement just kicks the can down the road for the heavily indebted nation.
The FTSE 100 index finished the session at 5,800, up 13 points on the day (+0.22%) but under the intraday high of 5,822 reached this morning.
Eurozone finance ministers yesterday finally inked out an agreement on Greece, giving the green light to the disbursement of the next €43.7bn bailout tranche (€34.4bn will be issued next month and the remaining monies will be disbursed in the first quarter of 2013).
Market strategist Ishaq Siddiqi from ETX Capital said that the deal was widely priced in to markets given the subdued reaction. "Traders feel all EU leaders have done here is kick the can way down the road with the measures perhaps still not as affective to solve Greece's problems."
Similarly, the agreement was labelled a "new can-kicking world record" by Societe Generale chief currencies strategist Kit Juckes. "The key issue for Greece, as for the rest of the Eurozone, is the lack of growth. Today's optimistic mood will in due course be reversed unless someone comes along with a magic growth potion."
Meanwhile, a barrage of broadly better-than-expected economic data Stateside failed to give equities a boost this afternoon, with markets shrugging off decent readings of consumer confidence, durable goods orders, retail sales and home prices. Benchmarks on Wall Street opened more or less flat.
Europe Market Report
Europe midday: Cool reaction from analysts to Greek agreement
-Cool reaction from analysts to Eurogroup agreement on Greece
-Greek 10 year bond yields fall 18bp to 16.45 per cent
-ECB's Hansson says worth examining a negative deposit rate
-Euro/dollar rebuffed at 1.30
FTSE-100: 0.41%
Dax-30: 0.50%
Cac-40: 0.29%
FTSE-Mibtel 30: 0.26%
Ibex 35: 0.27%
Stoxx 600: 0.39%
The main Eurozone equity benchmarks are now trading slightly higher following the cool reaction from economists to the 'breakthrough' achieved at last night's meeting of Eurozone finance ministers, the so-called Eurogroup.
The 'deal' appears quite ambitious but still faces various hurdles. The assembled ministers agreed to lower the country's stock of debt to below 124% of gross domestic product (GDP) by 2020. Furthermore, they agreed to bring Athens's mountain of liabilities down to "substantially lower" than 110% of GDP in 2022.
Amongst the measures agreed on to achieve the above were: reductions on the interest-rate paid on loans to Athens, the European Central Bank (ECB) returning the profits earned on its holdings of Greek debt and a buyback of Greek debt at sharply discounted prices.
It is the success of the latter which seems to worry observers the most (although it is not the only source of preoccupation), as the entire package - and the International Monetary Fund's (IMF) involvement - seems to hinge on it. Furthermore, without the IMF's backing Brussels could be left scrambling to find how to plug another significant gap in the Mediterranean nation's financing needs.
In that regard, Kathleen Brooks, Director of Research at Forex.com had this to say: "As usual when it comes to meetings with European Union (EU) officials, they tend to under-deliver. They didn't actually reduce Greece's debt burden and no official holders of Greek debt like the ECB or European governments have had to take haircuts on their debt holdings. Thus, Greece's debt reduction is still reliant on its economic performance, which remains dismal and is likely to continue to be enveloped in recession for many more years."
In a similar vein, Fabio Fois from Barclays Research remarked that: "some of the measures are steps in the right direction; however, we think that, as they were announced last night, they will be not sufficient to reduce public debt substantially and so to restore debt solvency by 2020. We also found surprising the fact that no fresh funds were committed, not even for the debt relief. On this specific point, we think it is worth noting the comment made by Christine Lagarde: "Once progress has been made on specifying and delivering on the commitments made today, in particular implementation of the debt buybacks, I would be in a position to recommend to the IMF Executive Board the completion of the first review of Greece's program."
-Greek 10 year bond yields fall 18bp to 16.45 per cent
-ECB's Hansson says worth examining a negative deposit rate
-Euro/dollar rebuffed at 1.30
FTSE-100: 0.41%
Dax-30: 0.50%
Cac-40: 0.29%
FTSE-Mibtel 30: 0.26%
Ibex 35: 0.27%
Stoxx 600: 0.39%
The main Eurozone equity benchmarks are now trading slightly higher following the cool reaction from economists to the 'breakthrough' achieved at last night's meeting of Eurozone finance ministers, the so-called Eurogroup.
The 'deal' appears quite ambitious but still faces various hurdles. The assembled ministers agreed to lower the country's stock of debt to below 124% of gross domestic product (GDP) by 2020. Furthermore, they agreed to bring Athens's mountain of liabilities down to "substantially lower" than 110% of GDP in 2022.
Amongst the measures agreed on to achieve the above were: reductions on the interest-rate paid on loans to Athens, the European Central Bank (ECB) returning the profits earned on its holdings of Greek debt and a buyback of Greek debt at sharply discounted prices.
It is the success of the latter which seems to worry observers the most (although it is not the only source of preoccupation), as the entire package - and the International Monetary Fund's (IMF) involvement - seems to hinge on it. Furthermore, without the IMF's backing Brussels could be left scrambling to find how to plug another significant gap in the Mediterranean nation's financing needs.
In that regard, Kathleen Brooks, Director of Research at Forex.com had this to say: "As usual when it comes to meetings with European Union (EU) officials, they tend to under-deliver. They didn't actually reduce Greece's debt burden and no official holders of Greek debt like the ECB or European governments have had to take haircuts on their debt holdings. Thus, Greece's debt reduction is still reliant on its economic performance, which remains dismal and is likely to continue to be enveloped in recession for many more years."
In a similar vein, Fabio Fois from Barclays Research remarked that: "some of the measures are steps in the right direction; however, we think that, as they were announced last night, they will be not sufficient to reduce public debt substantially and so to restore debt solvency by 2020. We also found surprising the fact that no fresh funds were committed, not even for the debt relief. On this specific point, we think it is worth noting the comment made by Christine Lagarde: "Once progress has been made on specifying and delivering on the commitments made today, in particular implementation of the debt buybacks, I would be in a position to recommend to the IMF Executive Board the completion of the first review of Greece's program."
INSEE's French consumer confidence gauge for the month of November has come in at 84, the same as last month (Consensus: 83).
Italian hourly wages rose by 0.2% month-on-month in October, following a gain of 0.1% in the previous month.
Slight gains in single currency
The euro/dollar is now falling by 0.27% to the 1.2964 dollar mark.
Front month Brent crude futures are now rising by 0.090 dollars to the 111.02 dollar mark on the ICE.
US Market Report
US open: Stocks lower despite upbeat data
-Better than expected economic data
Dow Jones Industrials: -0.13%
Nasdaq Composite: -0.19%
S&P 500: -0.09%
The main US equity benchmarks are now trading slightly lower.
That despite the release of better than expected durable goods orders data out this morning and last night's announcement out of Greece.
Corning is moving sharply higher after raising its outlook for the LCD glass supply chain.
Discount retailer Dollar General will replace health care product maker Cooper Industries in the S&P 500.
Packaged food manufacturer ConAgra announced it is to acquire Ralcorp for $5bn.
Industrial conglomerate United Technologies reaffirmed its earnings per share forecast for the year.
Goldman Sachs is moving lower despite positive comments on it out from analysts at Citi.
Shares of McMoRan Exploration are plummeting by another 23%, following on from yesterday's crash.
Dow Jones Industrials: -0.13%
Nasdaq Composite: -0.19%
S&P 500: -0.09%
The main US equity benchmarks are now trading slightly lower.
That despite the release of better than expected durable goods orders data out this morning and last night's announcement out of Greece.
Corning is moving sharply higher after raising its outlook for the LCD glass supply chain.
Discount retailer Dollar General will replace health care product maker Cooper Industries in the S&P 500.
Packaged food manufacturer ConAgra announced it is to acquire Ralcorp for $5bn.
Industrial conglomerate United Technologies reaffirmed its earnings per share forecast for the year.
Goldman Sachs is moving lower despite positive comments on it out from analysts at Citi.
Shares of McMoRan Exploration are plummeting by another 23%, following on from yesterday's crash.
Total durable goods orders remained flat in October (Consensus: -0.6% month-on-month), but bookings for non-defence capital goods, excluding aircraft, a widely followed leading indicator for the economy, rose by 1.7% on the month, the most since May.
The Conference Board institute's gauge of consumer confidence rose to 73.7 in November, after a reading of 73.1 in the previous month (Consensus: 73).
The Federal Housing Finance Agency's (FHFA) house price index for the month of September registered an increase of 0.2% month-on-month and of 4.4% versus a year ago.
Weekly retails sales grew at a 3.3% pace in the week ending last August, according to the latest ICSC survey data, and by 4% versus a year ago, the best reading since last May on the back of Thanksgiving Day shopping.
The Federal Reserve bank of Richmond's manufacturing gauge for the month of November rose to 9 points, from -7 a year ago (Consensus: -10).
The S&P Case-Shiller index of home prices for the twenty largest cities in the country increased by 0.39% month-on-month in September (Consensus: 0.40%).
Slight gains in crude futures
Front month West Texas crude futures are now rising by 0.07% to the $87.80/barrel mark on the NYMEX.
10 year US Treasury yields are now flat at 1.66%.
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