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Daily FX Commentary: (Morning Report)
EUR/USD
The Euro maintains near-term bulls, following last Friday’s rally to the levels near psychological 1.3000 barrier, where daily Ichimoku cloud top limited gains and weekly close above 1.2955, Fib 61.8% of 1.3138/1.2660 descend. Corrective easing, seen overnight, was contained at 1.2942, for now, however, loss of initial bullish momentum, seen on hourly chart, may signal further consolidation, before fresh attempt higher. Clearance of 1.2989, last Friday’s peak and more important 1.3000 barrier, to open way for fresh bullish extension towards the next targets at 1.3020, 25/31 Oct double-top and 1.3070, 05 Oct peak, 1.3084, tentative bear-trendline, connecting 1.3170/38 peaks. Any stronger dips need to be contained at/above 1.2900, psychological support, reinforced by ascending 20 day EMA, to keep bullish structure intact.
Res: 1.2989, 1.3000, 1.3020, 1.3070
Sup: 1.2942, 1.2913, 1.2900, 1.2874
GBP/USD
Last Friday’s strong rally through 1.6000 barrier and weekly close above here, keeps the near-term bulls off 1.5826, 15 Nov low, in play. Fresh strength so far retraced over 61.8% of 1.6174/1.5826 decline on a break below 1.6041, Fib 61.8% and 07 Nov high. Technical pullback has so far been contained by ascending 20 day EMA, above 1.6000, with fresh bulls gaining pace, as break above last Friday’s fresh peak at 1.6048, to open 1.6100 zone, round figure / Fib 76.4%. Positive structure on 4h chart, supports the notion, with any deeper dips, to be contained at 1.6000 zone, previous barrier and broken main bear-trendline.
Res: 1.6048, 1.6060, 1.6092, 1.6100
Sup: 1.6014, 1.6000, 1.5977, 1.5946
USD/JPY
The pair remains in a corrective phase, as repeated attempt at 82.00 support / 50% of 81.12/82.83 upleg, keeps near-term focus at the downside. Hourly indicators are in the negative territory, with 10 day EMA bearish crossover below 20/55 day ones and 4h indicators descending towards the midlines, see the downside favored in the near-term. Loss of 82.00 to confirm failure swing and open way towards next support at 81.58, 19 Nov high / 4h 55 day EMA, also near Fib 38.2% of 79.06/82.83 ascend. Only break above last Friday’s high at 82.61, would avert immediate downside risk.
Res: 82.37, 82.50, 82.61, 82.83
Sup: 82.05, 81.77, 81.58, 81.28
USD/CHF
Fresh bearish extension through psychological 0.9300 support and weekly close below here, keep bears in play for full retracement of 0.9213/0.9511 rally. Loss of the last support at 0.9275, confirms bearish stance. However, corrective action, preceding fresh slide, cannot be ruled out, as hourly indicators are emerging from oversold zone and more indicative for the near-term outlook, 4h studies, are overextended. Initial resistance lies at 0.9300, also overnight high, with more significant 0.9335, 22 Nov low / Fib 38.2% of 0.9456/0.9263, expected to cap any stronger bounce.
Res: 0.9300, 0.9335, 0.9355, 0.9366
Sup: 0.9275, 0.9263, 0.9237, 0.9213
Daily Market Commentary: (Evening Report)
London close: Stocks dragged into the red by Barclays
- Market Movers
techMARK 2,064.58 -0.51%
FTSE 100 5,786.72 -0.56%
FTSE 250 11,843.60 -0.38%
- Osborne names Canadian as new Bank of England chief
- Agreement on Greece a real possibility tonight
- Barclays leads bank stocks lower
UK equities ended the day firmly lower, with banks weighing heavily on the Footsie after Deutsche Bank AG and Goldman Sachs agreed to sell as many as 303.3m shares in the group at 244p a time - at the lower end of the range they expected to sell at.
Today's big news was of course the appointment of Canada's Mark Carney as the next Governor of the Bank of England.
The appointment of Carney, who is currently Governor of the Bank of Canada, shocked pundits, not least because he ruled himself out of the role in August. Mr. Carney also happens to be the current Chair of the Financial Stability Board (FSB).
Chancellor George Osborne said Carney was, "the outstanding candidate to be Governor of the Bank of England and help steer Britain through these difficult economic times. He is quite simply the best, most experienced and most qualified person in the world to do the job".
Acting as a backdrop, the Institute of Fiscal Studies (IFS) said the Treasury could have to raise valued added tax (VAT) to 25% as tax revenues falter and the economy continues to struggle. Osborne may also have to abandon one of his fiscal targets – that overall UK debt should be falling in 2015–16, as well as pushing austerity measures into 2018, the IFS report added.
"Since the budget, the outlook for the UK economy has deteriorated and government receipts have disappointed by even more than this year's weak growth would normally suggest," said IFS deputy director Carl Emmerson. "The planned era of austerity could run for eight years - from 2010-11 to 2017-18," he added.
In other news, it was reported today that the public's inflation expectations for the next 12 months fell to 2.8% in November from 3.0% in the previous month, according to a survey by polling company YouGov.
Tonight's Eurogroup meeting
There can be little doubt
that what was forefront and centre on market's minds was tonight's
meeting of Eurozone finance ministers (the so-called Eurogroup), with an
agreement that would allow for the disbursement of the next tranche of
aid to Greece thought to be a real possibility.- Agreement on Greece a real possibility tonight
- Barclays leads bank stocks lower
UK equities ended the day firmly lower, with banks weighing heavily on the Footsie after Deutsche Bank AG and Goldman Sachs agreed to sell as many as 303.3m shares in the group at 244p a time - at the lower end of the range they expected to sell at.
Today's big news was of course the appointment of Canada's Mark Carney as the next Governor of the Bank of England.
The appointment of Carney, who is currently Governor of the Bank of Canada, shocked pundits, not least because he ruled himself out of the role in August. Mr. Carney also happens to be the current Chair of the Financial Stability Board (FSB).
Chancellor George Osborne said Carney was, "the outstanding candidate to be Governor of the Bank of England and help steer Britain through these difficult economic times. He is quite simply the best, most experienced and most qualified person in the world to do the job".
Acting as a backdrop, the Institute of Fiscal Studies (IFS) said the Treasury could have to raise valued added tax (VAT) to 25% as tax revenues falter and the economy continues to struggle. Osborne may also have to abandon one of his fiscal targets – that overall UK debt should be falling in 2015–16, as well as pushing austerity measures into 2018, the IFS report added.
"Since the budget, the outlook for the UK economy has deteriorated and government receipts have disappointed by even more than this year's weak growth would normally suggest," said IFS deputy director Carl Emmerson. "The planned era of austerity could run for eight years - from 2010-11 to 2017-18," he added.
In other news, it was reported today that the public's inflation expectations for the next 12 months fell to 2.8% in November from 3.0% in the previous month, according to a survey by polling company YouGov.
Tonight's Eurogroup meeting
Europe Market Report
Europe midday: Weak economic data weighs on stocks
-Olli Rehn (EU) says Spanish deficit will rise to 6.4 per cent in 2014 after 6 per cent in 2013
-ECB and EU Comission say Spanish banks qualify for EFSF and ESM
-Banks deposit 233.6bn euros overnight at ECB
FTSE-100: -0.64%
Dax-30: -0.38%
Cac-40: -0.87%
FTSE Mibtel 30: -0.63%
Ibex 35: -0.72%
Stoxx 600: -0.61%
The main European equity benchmarks were registering moderate losses by the midday mark. That ahead of tonight's meeting of Eurozone finance ministers, with an agreement that would allow for the disbursement of the next tranche of aid to Greece thought to be a possibility.
In fact, the European Union's Economic Affairs Commissioner, Olli Rehn, has this morning indicated that an agreement on Greece is "fully possible."
In what would apparently amount to a worst case scenario, Finland indicated that an agreement may not be reached until a meeting on December 3rd.
Acting as a backdrop, and in the United States, retail spending in stores and online rose by 13% to $59.1bn in the four days starting November 22nd, trade group National Retail Federation announced yesterday. A year ago sales advanced by 16% over the holiday weekend.
As regards regional elections in Catalonia over the weekend; these seem to have been somewhat inconclusive, with barely any change in the balance of power between pro-independence and non-independence parties. But two trends seemed clear: a shift towards left-wing and anti-austerity political formations and a greater polarisation in the distribution of votes towards each extreme.
-ECB and EU Comission say Spanish banks qualify for EFSF and ESM
-Banks deposit 233.6bn euros overnight at ECB
FTSE-100: -0.64%
Dax-30: -0.38%
Cac-40: -0.87%
FTSE Mibtel 30: -0.63%
Ibex 35: -0.72%
Stoxx 600: -0.61%
The main European equity benchmarks were registering moderate losses by the midday mark. That ahead of tonight's meeting of Eurozone finance ministers, with an agreement that would allow for the disbursement of the next tranche of aid to Greece thought to be a possibility.
In fact, the European Union's Economic Affairs Commissioner, Olli Rehn, has this morning indicated that an agreement on Greece is "fully possible."
In what would apparently amount to a worst case scenario, Finland indicated that an agreement may not be reached until a meeting on December 3rd.
Acting as a backdrop, and in the United States, retail spending in stores and online rose by 13% to $59.1bn in the four days starting November 22nd, trade group National Retail Federation announced yesterday. A year ago sales advanced by 16% over the holiday weekend.
As regards regional elections in Catalonia over the weekend; these seem to have been somewhat inconclusive, with barely any change in the balance of power between pro-independence and non-independence parties. But two trends seemed clear: a shift towards left-wing and anti-austerity political formations and a greater polarisation in the distribution of votes towards each extreme.
Shares of German steel maker Thyssen Krupp are now registering some of the largest falls after analysts at Credit Suisse lowered their rating on the company's stock to neutral from outperform.
The world's largest cement maker, Lafarge, is retreating on the back of the recent instability in Egypt.
From a sector stand-point the worst performance is now to be seen in the following sectors: Banks (-1.07%), Construction (-1.04%) and Oil&Gas (-0.82%).
Weak Italian consumer confidence
Italy's consumer confidence index for the month of November has come in at 84.8 (Consensus: 86.3), versus 86.2 for the previous month.
The GfK consumer confidence survey for Germany has come in at 5.9 points for December, versus expectations for a rise to 6.2 after a reading of 6.1 for November.
Spanish mortgages for house purchase dropped by 32% year-on-year in September, following a reading of 28.5% in the month before.
Slight fall in the single currency
The euro/dollar is now dropping by 0.13% to t e1.2967 dollar mark.
Front month Brent crude futures are now retreating by 0.279 dollars to the 111.07 dollars level on the ICE.
US Market Report
US open: Stocks off slightly following last week's rise
-Mc.Graw Hill to sell education unit for $2.5bn
-Goldman Sachs adds Yahoo to Conviction Buy list
-Citi starts Apple at buy
Dow Jones Industrial: -0.55%
Nasdaq Composite: -0.16%
S&P 500: -0.51%
The main US equity market averages are now registering modest falls.
The above came on the heels of the large bounce-back seen in share prices last week and with investors fixated on the resumption of negotiations between Democrats and Republicans over the impending "fiscal cliff". In this regard, prominent figures from both sides of the aisle could be heard over the weekend arguing in favour and against raising taxes, despite which equity strategists continue to expect an agreement to be forthcoming before Christmas.
Economic data slips a little
The Federal Reserve Bank of Chicago's national activity index for the month of October fell to -0.56 from -0.00 in the month before.
The Federal Reserve Bank of Dallas's manufacturing activity index for the month of November has come in at -2.8 (Consensus: 2.5), versus 1.8 for the previous month.
Moderate fall in crude quotes
10-year US Treasury yields were falling by four basis points, to the 1.65% mark.
Front month West Texas crude futures were down by 0.80% to the $87.56 per barrel mark on the NYMEX.
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