Daily FX Commentary: (Morning Report)
EUR/USD
The single currency bounces higher off today’s / last Friday’s lows at 1.2885/76, after consolidating at 1.2900 zone. Fresh gains filled the overnight’s gap, however, lacking strength to regain initial barrier and breakpoint at 1.2950, reinforced by 55 day EMA. Break here and 1.2970/80, Fib 38.2% of 1.3125/1.2876 / 20/55 day EMA’s bearish crossover, is needed to confirm recovery and signal near-term base, for possible attack at psychological 1.3000 barrier. However, 4h chart studies are still in the negative territory and would keep the downside favored as long as 1.2970/80 zone stays intact, with risk seen on slide below 1.2900/1.2880 that would open way for further retracement towards initial 1.2839, Fibonacci support.
Res: 1.2940, 1.2950, 1.2971, 1.3000
Sup: 1.2916, 1.2900, 1.2885, 1.2876
GBP/USD
Near-term outlook regains bullish tone, as the pair strongly bounced off today’s higher low at 1.6012 and approached 1.6100 barrier, also Fib 76.4% of 1.6127/1.6000 descend. This averts downside risk and turns near-term focus higher, however, pause in current rally would be seen on overbought hourly studies, with good support seen at 1.6060 zone, previous strong resistance and 4h Ichimoku cloud base that should contain dips in order to keep bullish structure intact. As 4h studies are approaching their midlines, further extension higher gets more credibility, with break through initial 1.6100 hurdle required to confirm and re-open recent double-top at 1.6127/29.
Res: 1.6095, 1.6100, 1.6119, 1.6129
Sup: 1.6060, 1.6042, 1.6012, 1.6000
USD/JPY
Repeated failure at 82.80 range top, has triggered fresh pullback below 82.50/20 supports that weakened hourly structure. However, initial recovery signal is seen on hourly Stochastics bounce and RSI starting to point higher, along with 4h chart studies holding positive tone that may prevent the pair of testing initial 82.00 support and 81.70 range floor. Clearance of minimum 82.50 is seen as a trigger for possible fresh attack at 82.80/83.00, key near-term barriers.
Res: 82.36, 82.50, 82.63, 82.83
Sup: 82.10, 82.00, 81.68, 81.58
USD/CHF
The pair entered near-term corrective phase, signaled by overbought hourly conditions, retracing so far over 38.2% of 0.9254/0.9381 rally and testing important 0.9320 support. As hourly studies slid into negative territory, the downside remains vulnerable, however, while psychological 0.9300 support and bullish 20/55 day EMA’s crossover stays intact, hopes for fresh rally exist. Ideally, reversal at 0.9320/00 zone, would keep initial bulls off 0.9250 zone in play, with regain of important 0.9400 barrier, required to confirm and resume recovery. Otherwise, slide below 0.9300 would confirm bears are taking control for possible re-visit of 0.9239, 03 Dec low.
Res: 0.9350, 0.9368, 0.9381, 0.9400
Sup: 0.9325, 0.9315, 0.9300, 0.9284
Daily Market Commentary: (Evening Report)
London close: Stocks rally on 'fiscal cliff' optimism
Market Movers
- techMARK 2,124.90 +0.09%
- FTSE 100 5,921.63 +0.12%
- FTSE 250 12,178.15 -0.08%
- Obama-Boehner meeting sparks optimistic mood
- Italian PM steps down
- Economic data from Asia comes in mixed
Optimism that US law-makers can agree over the impending 'fiscal cliff' managed to offset concerns regarding political uncertainty in Italy, with the FTSE 100 rallying to finish with small gains by the close.
Markets started Monday's session in the red after Mario Monti, Italy's current technocrat Prime Minister, announced this weekend that he would step down as soon as parliament passes a budget bill, paving the way for an early generation election in spring next year. Monti explained that he made the decision based on constant criticism from what had been his largest source of support in Parliament: Il Popolo della Libert party (PDL), run by ex-PM Silvio Berlusconi.
Market strategist Ishaq Siddiqi from ETX Capital said this afternoon that Monti's departure has sparked fears about who will lead the country next year - "pro-austerity government or anti-austerity government?"
He said: "The early general election remains a major event risk in 1Q 2013 and one that markets perhaps didn't expect so soon, but for now, the outcome seems supportive of a government that will continue Monti's work."
However, stocks on Wall Street started strongly this afternoon as investors reacted to the news that US President Barack Obama and House Speaker John Boehner had an unscheduled face-to-face meeting yesterday to discuss the 'fiscal cliff'.
"This is the first time that the pair have met at the White House in a couple of month's to discuss the fiscal cliff so naturally investors are a little more optimistic on the matter," said market analyst Craig Erlam from Alpari.
"This does not necessarily mean that any progress has been made however it shows that both are willing to enter serious negotiations on a deal, which can only be positive for the markets," he said.
Though there was little significant economic data out today in the UK and US, there was there was plenty from Asia for investors to sink their teeth into: Japan officially entered recession in the third quarter; while industrial production in China beat forecasts in October, though exports were weak.
Meanwhile, Greece has announced that it will extend its debt repurchase plan by one more day in order to receive additional offers from bond holders. "We have decided to extend the invitation to offer designated securities for exchange to 11 December 2012," Stelios Papadopoulos, the head of the Public Debt Management Agency, said in a statement.
- Italian PM steps down
- Economic data from Asia comes in mixed
Optimism that US law-makers can agree over the impending 'fiscal cliff' managed to offset concerns regarding political uncertainty in Italy, with the FTSE 100 rallying to finish with small gains by the close.
Markets started Monday's session in the red after Mario Monti, Italy's current technocrat Prime Minister, announced this weekend that he would step down as soon as parliament passes a budget bill, paving the way for an early generation election in spring next year. Monti explained that he made the decision based on constant criticism from what had been his largest source of support in Parliament: Il Popolo della Libert party (PDL), run by ex-PM Silvio Berlusconi.
Market strategist Ishaq Siddiqi from ETX Capital said this afternoon that Monti's departure has sparked fears about who will lead the country next year - "pro-austerity government or anti-austerity government?"
He said: "The early general election remains a major event risk in 1Q 2013 and one that markets perhaps didn't expect so soon, but for now, the outcome seems supportive of a government that will continue Monti's work."
However, stocks on Wall Street started strongly this afternoon as investors reacted to the news that US President Barack Obama and House Speaker John Boehner had an unscheduled face-to-face meeting yesterday to discuss the 'fiscal cliff'.
"This is the first time that the pair have met at the White House in a couple of month's to discuss the fiscal cliff so naturally investors are a little more optimistic on the matter," said market analyst Craig Erlam from Alpari.
"This does not necessarily mean that any progress has been made however it shows that both are willing to enter serious negotiations on a deal, which can only be positive for the markets," he said.
Though there was little significant economic data out today in the UK and US, there was there was plenty from Asia for investors to sink their teeth into: Japan officially entered recession in the third quarter; while industrial production in China beat forecasts in October, though exports were weak.
Meanwhile, Greece has announced that it will extend its debt repurchase plan by one more day in order to receive additional offers from bond holders. "We have decided to extend the invitation to offer designated securities for exchange to 11 December 2012," Stelios Papadopoulos, the head of the Public Debt Management Agency, said in a statement.
Europe Market Report
Europe open: Italian political manouvering dents periphery stocks
-Italian 10 year bond yields up 27 basis points to 4.8 per cent
FTSE-100: -0.14%
Dax-30: -0.38%
Cac-40: -0.49%
FTSE Mibtel 30: -2.33%
Ibex 35: -2.15%
Stoxx 600; -0.36%
For the most part the main European equity benchmarks began the week with small losses, following some mixed economic reports out over the weekend and this morning in China.
On the periphery however it was a whole other matter, following Italian Prime Minister Mario Monti's unexpected announcement that he will hand in his resignation at year's end. That came after Silvio Berlusconi's party's which has lost a large part of its following - decision to withdraw support from the government last week, he said, which means that the next elections will have to be brought forward slightly.
While it may just be a case of political manouvering, even analysts who believe that stability will eventually be restored are warning that: "Overall, Italy should be very careful not to erode the credibility capital accumulated by PM Monti's government so far."
On a more positive note, speaking to The Wall Street Journal the head of the country's largest political formation, Pier Luigi Bersani, indicated that he would honour all of the commitments made by his predecessor, should he win. That may assuage worries of the reform-friendliness of any centre-left government or coalition that might coalesce.
Greece extended the deadline for its debt buy-back offer until tomorrow, so as to allow the country's banks time to make up for a small short-fall in the amount of debt offered. The government however is expected to be successful in its bid to lower the country's debt load by repurchasing the now cheaper debt on the secondary market. In turn, that will open the way for the Mediterranean nation to receive the next tranche of aid from its international lenders.
Meantime, and in Spain, reports indicate that the main business lobby CEOE- shifted its support in favour of the Prime Minister's cautiousness on formally asking the European Central Bank (ECB) for aid in lowering the country's financing costs. It is worried that in exchange for their help European governments may ask for an excessively rapid decline in borrowing.
FTSE-100: -0.14%
Dax-30: -0.38%
Cac-40: -0.49%
FTSE Mibtel 30: -2.33%
Ibex 35: -2.15%
Stoxx 600; -0.36%
For the most part the main European equity benchmarks began the week with small losses, following some mixed economic reports out over the weekend and this morning in China.
On the periphery however it was a whole other matter, following Italian Prime Minister Mario Monti's unexpected announcement that he will hand in his resignation at year's end. That came after Silvio Berlusconi's party's which has lost a large part of its following - decision to withdraw support from the government last week, he said, which means that the next elections will have to be brought forward slightly.
While it may just be a case of political manouvering, even analysts who believe that stability will eventually be restored are warning that: "Overall, Italy should be very careful not to erode the credibility capital accumulated by PM Monti's government so far."
On a more positive note, speaking to The Wall Street Journal the head of the country's largest political formation, Pier Luigi Bersani, indicated that he would honour all of the commitments made by his predecessor, should he win. That may assuage worries of the reform-friendliness of any centre-left government or coalition that might coalesce.
Greece extended the deadline for its debt buy-back offer until tomorrow, so as to allow the country's banks time to make up for a small short-fall in the amount of debt offered. The government however is expected to be successful in its bid to lower the country's debt load by repurchasing the now cheaper debt on the secondary market. In turn, that will open the way for the Mediterranean nation to receive the next tranche of aid from its international lenders.
Meantime, and in Spain, reports indicate that the main business lobby CEOE- shifted its support in favour of the Prime Minister's cautiousness on formally asking the European Central Bank (ECB) for aid in lowering the country's financing costs. It is worried that in exchange for their help European governments may ask for an excessively rapid decline in borrowing.
Italian industrial production contracted at a 1.1% month-on-month pace in October (Consensus: -0.3%).
French manufacturing output declined by 0.9% in October (Consensus: 0.2%).
The Eurozone Sentix index of investor confidence dropped to -16.8 in December (Consensus: -16.9), after a reading of -18.8 in the month before.
Germany's trade balance improved to 15.8bn in October (Consensus: 15.5bn). Small drop in single currency
The euro/dollar is now off by 0.15% to the 1.2907 dollar mark.
Front month Brent crude futures are rising by 0.53 dollars to the 107.59 dollar mark on the ICE.
US Market Report
US open: Obama and Boehner met over the weekend
- Both parties refuse to comment on weekend contacts
- Gap led falls on S&P 500
Dow Jones Industrials: 0.20%
Nasdaq Composite: 0.60%
S&P 500: 0.21%
The main US equity benchmarks were registering slight gains in the early going, as investors 'brushed off' the bad news out of Italy over the weekend.
Mario Monti's resignation as Italian Prime Minister initially dented market sentiment across the globe on Monday, and Wall Street was no exception at the start of the day, but it has since recovered.
Back in the US, markets were digesting news of an unscheduled face-to-face meeting yesterday between President Barack Obama and House Speaker John Boehner to discuss the 'fiscal cliff'. Yet both sides declined to comment on the result of those contacts.
"Negotiations over the fiscal cliff are going nowhere and with only three weeks now until the deadline, investors are getting jittery. While a deal is expected to be completed, it is entirely understandable that people are slowly but surely taking their money out of stocks," said market analyst Craig Erlam from Alpari.
Front month West Texas crude futures are now rising by 0.64% to the 86.50 dollar mark on the NYMEX.
10 year US Treasury yields are now falling by 1 basis point to the 1.61% mark.
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