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Daily FX Commentary: (Morning Report)
EUR/USD
The single currency extends gains to post fresh daily high at 1.3073, also high of 23 Oct. Positive near-term studies, with 20 day EMA protecting the downside, keep bulls in play. The last hurdle on the way to 1.3100 lies at 1.3082, 22 Oct high / tentative bear-trendline, connecting 1.3170 and 1.3138 peaks, with clearance of 1.3100, expected to open key near-term barriers at 1.3138/70, 17 Oct / 17 Sep peaks. Today’s lows and higher base at 1.3020, offer initial support, ahead of 1.3000, Fib 38.2% / 55 day EMA.
Res: 1.3046, 1.3050, 1.3082, 1.3100
Sup: 1.3032, 1.3020, 1.3000, 1.2981
GBP/USD
Eventual break above one-week congestion top at 1.6050 zone, to emerge out of daily Ichimoku cloud and post fresh one-month high, just under our initial target at 1.6100. Bullish resumption is seen on break through 1.6100, as near-term studies remain positive, with initial barriers at 1.6133/42, 02 Nov/25 Oct highs, seen en-route to key barriers and double-top at 1.6178/74, 17 Oct / 01 Nov highs. Fresh momentum building-up on a larger picture, supports the notion. Previous strong barrier at 1.6050 zone, now reverts to initial support, ahead of Fibonacci levels at 1.6038 and 1.6023. Only slide below 1.6000 would put near-term bulls on hold.
Res: 1.6086, 1.6092, 1.6100, 1.6133
Sup: 1.6065, 1.6050, 1.6038, 1.6023
USD/JPY
The pair regained ground after reversal from 82.74 found support at 82.00, 55 day EMA and subsequent bounce reached 82.36, double-Fibonacci barrier, 50% of 82.74/81.98 and 76.4% of today’s slide from 82.49, daily high. Studies on 4h chart keep momentum for possible fresh extension higher and test of upper range boundaries at 82.74/83, while still weak hourly studies require push through the next barrier at 82.50 zone, to avert risk of lower top and fresh slide towards range floor. Violation of 82.00 would increase bear-pressure and re-focus pivotal 81.68, 28 Nov low.
Res: 82.36, 82.50, 82.74, 82.83
Sup: 82.20, 82.00, 81.90, 81.68
USD/CHF
Succession of fresh lows and brief corrective action, define the near-term downtrend, with the latest downleg from 0.9339, 28 Nov high, approaching key support at 0.9213, 17 Oct low. This also mark the floor of consolidative phase from mid-September, loss of which to signal fresh extension of larger downtrend from 0.9970, 24 July yearly high. Descending 20 day EMA on 4h chart, maintains bears while more significant barrier at 0.9300, 55 day EMA / daily Ichimoku cloud base, is seen capping for now.
Res: 0.9269, 0.9279, 0.9290, 0.9300
Sup: 0.9246, 0.9239, 0.9213, 0.9200
Daily Market Commentary: (Evening Report)
London close: Stocks pare gains after US ISM data
Market Movers
- techMARK 2,110.01 +0.15%
- FTSE 100 5,871.24 +0.08%
- FTSE 250 12,027.44 -0.06%
- US manufacturing sector in contraction
- Chinese and India data lifts markets early on
- Banking fall after BoE FLS details
The FTSE 100 index was set to finish Monday's session with decent gains until a worse-than-expected reading of US manufacturing caused markets across Europe to trim gains by the close.
"Europe's markets have once again struggled near their recent range highs with the FTSE 100 in particular underperforming, as investors try to dissect a raft of fairly mixed economic data from across Asia, Europe and the US," said market analyst Michael Hewson from CMC Markets.
Markets opened strongly this morning after the HSBC China purchasing managers' index (PMI) increased from 49.5 to 50.5 in November, in line with the preliminary estimates. Meanwhile, the official PMI from National Bureau of Statistics rose to a seven-month high of 50.6, up from 50.2 in October. Elsewhere, India's manufacturing PMI recorded its fastest growth in five months, coming in at 53.7.
The Markit UK manufacturing PMI rose to 49.1 in November, up from a three-month low of 47.3 in October and above the consensus prediction of 48. However the sector still remains in contraction with figures staying below 50.
Markets gave a muted reaction to the details of Greece's bond buy-back offer today with the Footsie holding on to gains after Athens said this morning that it will be repurchasing up to €10bn of its own debt.
However, sentiment was dampened after the US Institute for Supply Management (ISM) PMI fell from 51.7 to 49.5 in November, well below the 51.4 forecast.
"Though construction spending in the US and vehicle sales from major auto giants rose sharply, the damage by the ISM number was enough to push the bulls to run for cover," said market strategist Ishaq Siddiqi from ETX Capital.
- Chinese and India data lifts markets early on
- Banking fall after BoE FLS details
The FTSE 100 index was set to finish Monday's session with decent gains until a worse-than-expected reading of US manufacturing caused markets across Europe to trim gains by the close.
"Europe's markets have once again struggled near their recent range highs with the FTSE 100 in particular underperforming, as investors try to dissect a raft of fairly mixed economic data from across Asia, Europe and the US," said market analyst Michael Hewson from CMC Markets.
Markets opened strongly this morning after the HSBC China purchasing managers' index (PMI) increased from 49.5 to 50.5 in November, in line with the preliminary estimates. Meanwhile, the official PMI from National Bureau of Statistics rose to a seven-month high of 50.6, up from 50.2 in October. Elsewhere, India's manufacturing PMI recorded its fastest growth in five months, coming in at 53.7.
The Markit UK manufacturing PMI rose to 49.1 in November, up from a three-month low of 47.3 in October and above the consensus prediction of 48. However the sector still remains in contraction with figures staying below 50.
Markets gave a muted reaction to the details of Greece's bond buy-back offer today with the Footsie holding on to gains after Athens said this morning that it will be repurchasing up to €10bn of its own debt.
However, sentiment was dampened after the US Institute for Supply Management (ISM) PMI fell from 51.7 to 49.5 in November, well below the 51.4 forecast.
"Though construction spending in the US and vehicle sales from major auto giants rose sharply, the damage by the ISM number was enough to push the bulls to run for cover," said market strategist Ishaq Siddiqi from ETX Capital.
Europe Market Report
Europe midday: Greek long-term bond yields slide
-Merkel said Greek debt hair-cut a possibility in the medium term
-Equity strategists waxed optimistic on 2013 outlook
-Noyer said inflation expectations well anchored
-Greek 10 year bond yields below 15 per cent, down 129 basis points
-Greece announced the details of its debt buy-back
FTSE-100: 0.52%
Dax-30: 0.94%
Cac-40: 0.99%
FTSE-Mibtel 30: 1.52%
Ibex 35: 0.08%
Stoxx 600: 0.59%
By midday European equities were trading moderately higher for both the day and the month. That after Greece unveiled the details of its bond buy-back offer - due to take place this next Friday – setting off a sharp decline in the country's long-term borrowing costs.
Yet as incredible as that may seem it was perhaps not what most caught investors' attention. Those were the remarks out from Germany's Chancellor, Angela Merkel, this past weekend, to the effect that euro-area leaders might consider writing off Greek debt once the country has a budget surplus. That marks an abrupt about-face for Germany.
Acting as a backdrop however, it remained to be seen whether investors might not react poorly to the less-than-constructive remarks out over the weekend from politicians on both sides of the aisle on Capitol Hill as regards the fiscal cliff.
Likewise, whether or not there would be a sufficient degree of take-up for Greece's exchange offer remained in doubt.
Despite the above, early Monday morning saw a torrent of positive remarks out from equity strategists on the positive outlook for equities in 2013, particularly in Europe. Amongst some of those brokers were names like Credit Suisse, Goldman Sachs, Morgan Stanley and JP Morgan.
-Equity strategists waxed optimistic on 2013 outlook
-Noyer said inflation expectations well anchored
-Greek 10 year bond yields below 15 per cent, down 129 basis points
-Greece announced the details of its debt buy-back
FTSE-100: 0.52%
Dax-30: 0.94%
Cac-40: 0.99%
FTSE-Mibtel 30: 1.52%
Ibex 35: 0.08%
Stoxx 600: 0.59%
By midday European equities were trading moderately higher for both the day and the month. That after Greece unveiled the details of its bond buy-back offer - due to take place this next Friday – setting off a sharp decline in the country's long-term borrowing costs.
Yet as incredible as that may seem it was perhaps not what most caught investors' attention. Those were the remarks out from Germany's Chancellor, Angela Merkel, this past weekend, to the effect that euro-area leaders might consider writing off Greek debt once the country has a budget surplus. That marks an abrupt about-face for Germany.
Acting as a backdrop however, it remained to be seen whether investors might not react poorly to the less-than-constructive remarks out over the weekend from politicians on both sides of the aisle on Capitol Hill as regards the fiscal cliff.
Likewise, whether or not there would be a sufficient degree of take-up for Greece's exchange offer remained in doubt.
Despite the above, early Monday morning saw a torrent of positive remarks out from equity strategists on the positive outlook for equities in 2013, particularly in Europe. Amongst some of those brokers were names like Credit Suisse, Goldman Sachs, Morgan Stanley and JP Morgan.
The Markit purchasing managers index for the Eurozone's manufacturing sector came in at 46.2 for
November (Consensus: 46.2), after a reading of 45.4 in October.
Slight gains in the single currency
The euro/dollar rose modestly, by 0.53% to the 1.3056 dollar mark.
Front month Brent crude futures were gaining by 0.135 dollars to the 111.39 dollar mark on the ICE.
US Market Report
US mid-morning: Weak ISM data brakes stocks
-Fitch: US fiscal ratings stable for 2013
-ISM quite a bit weaker than expected
-Hurricane Sandy did not affect ISM data
Dow Jones Industrials: -0.06%
Nasdaq Comp.: 0.16%
S&P 500: 0.06%
The main US equity benchmarks were trading mixed on Monday afternoon.
That following the release of apparently positive final Chinese manufacturing data for the month of November over the weekend and after Greece unveiled the details of its bond buy-back plan, this morning.
Nevertheless, and acting as a backdrop, even under the best scenario it is hard to describe the sound bites coming out from Washington as anything better than not-too-constructive.
Thus, US Treasury Secretary Timothy F. Geithner warned that it would be Republicans' fault if they refused to raise tax rates on the highest-income earners and in turn damaged the economy. The speaker of the House, Republican John Boehner, retorted that the White House is wasting time; which has left him "flabbergasted."
As well, some economic figures out this afternoon – such as the latest ISM report - were quite weak.
ISM goes into reverse, shows contraction
The US Institute for Supply Management's (ISM) purchasing managers' index for the month of November has come in at 49.5 versus 51.7 for the month before (Consensus: 51.4). The new orders sub-index dropped to 50.3 after 54.2 and the employment gauge fell back to 48.4 after 52.1. Only one sector - primary metals - cited the impact from Sandy as a factor behind the slowdown. On the other hand, respondents cited the fiscal cliff as a major source of concern and in general expected the slowdown in demand seen so far during the second half of 2012 to persist.
This is what Barclays Research has to say on the possible impact of hurricane Sandy on today's ISM data: "Some respondents mentioned that storms along the East Coast delayed shipments, and we expect that the lingering hurricane effects provided a slight drag. That said, even without the Sandy effect, the print would likely have remained close to the break-even level of 50."
Construction spending grew by 1.4% month-on-month in October (Consensus: 0.5%).
Crude and Treasuries more or less flat
Front month West Texas crude futures are now rising by 0.32% to the $89.23/barrel level on the NYMEX.
10 year US Treasury yields are now higher by 1 basis point, to the 1.63% level.
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