Daily FX Commentary: (Morning Report)
EUR/USD
Near-term structure turns negative, as the pair loses 1.3100 and cracks1.3050/40 supports, following corrective pullback off yesterday’s fresh high at 1.3125. Immediate focus lies at 1.3031, Fib 38.2% of 1.2879/1.3125, with increased risk of re-visiting psychological 1.3000, reinforced by 55 day EMA and 1.2970, Fib 61.8% / daily Ichimoku cloud top. Negative hourly studies support the notion, with bearish 20/55 day EMA’s crossover at 1.3068, seen capping. Only regain of 1.3090, yesterday’s intraday low, would avert risk of deeper correction.
Res: 1.3062, 1.3076, 1.3089, 1.3100
Sup: 1.3031, 1.3020, 1.3000, 1.2970
GBP/USD
Bears are taking control of near-term outlook, as the price slides below 1.6100, unable to sustain gains for test of 1.6174/78 double top. Strong support at 1.6050, previous barrier / broken bear trendline, comes under pressure, as hourly indicators slide into negative territory and signal possible stronger corrective action that would be triggered on a break below 1.6050, also near 50% of 1.5960/1.6135 ascend and expose another significant support at 1.6000.
Res: 1.6100, 1.6119, 1.6129, 1.6174
Sup: 1.6065, 1.6050, 1.6025, 1.6000
USD/JPY
Hourly studies remain positive, while 4h structure holds neutral tone as bounce of 81.70, range floor, approaches initial barrier at 82.74. However, larger picture still shows the pair entrenched within 81.70/82.83 range, with near-term tone aligned towards the upside boundary. Break above 82.83 and regain of psychological 83.00, is required to signal resumption of broader uptrend from 79.06.
Res: 82.60, 82.74, 82.83, 83.00
Sup: 82.35, 82.00, 81.68, 81.58
USD/CHF
The pair remains within 0.9239/0.9300 consolidative range as repeated recovery attempt fails at 0.9300, where 55 day EMA / Fib 61.8% of 0.9339/0.9239 downleg and daily Ichimoku cloud base, keep the upside capped for now. Hourly studies are flat, while 4h chart situation shows slight improvement with break above 0.9300 and regain 0.9340, 28 Nov high / Fib 38.2% of 0.9511/0.9239 downleg, required to confirm recovery and avert immediate downside risk. Otherwise, near-term focus will remain at initial 0.9339 and key 0.9213 support.
Res: 0.9277, 0.9300, 0.9315, 0.9339
Sup: 0.9254, 0.9248, 0.9239, 0.9213
Daily Market Commentary: (Evening Report)
Stocks edge higher as markets look to US jobs report
Market Movers
techMARK 2,117.17 +0.15%
FTSE 100 5,901.42 +0.16%
FTSE 250 12,149.23 +0.38%
Market Movers
techMARK 2,117.17 +0.15%
FTSE 100 5,901.42 +0.16%
FTSE 250 12,149.23 +0.38%
London's blue-chip index finished with
slight gains on Thursday after central banks in the UK and Europe
announced that they had kept policy on hold, with the market's focus
now turning to the key employment report in the US due out tomorrow.
As expected, the Bank of England's Monetary Policy Committee voted to maintain the Bank Rate at 0.5% at today's meeting and left its asset purchase programme unchanged at £375bn, the Bank announced at noon. Meanwhile, the European Central Bank (ECB) held the main refinancing rate at 0.75%, the deposit rate at zero and the marginal lending rate at 1.5%, as anticipated.
The market reaction to the central banks' decisions was pretty subdued but the focus was on the subsequent press conference with ECB President Mario Draghi in which he hinted that the ECB did in fact discuss the possibility of a rate cut at this month's meeting.
"He turned slightly dovish on the rate front, with expectations now building for a cut early next year," said ETX Capital's head of trading Joe Rundle.
Looking ahead to tomorrow's session, all eyes will be on the US employment report with the consensus predicting a 90,000 gain in non-farm payrolls in November, much worse than the 171,000 increase seen in October. The unemployment rate is expected to remain at 7.9%.
However ETX's Rundle said that it is "difficult to put firm guesstimate on the outcome given the mixed data signals out of the US this week [weaker ADP, better non-mfg ISM, poor ISM mfg] – but the reaction should be seen as a litmus test for upside momentum heading into the year-end.
"If markets shrug off a weaker reading and continue their positive bias, a Santa rally may return," he said.
As expected, the Bank of England's Monetary Policy Committee voted to maintain the Bank Rate at 0.5% at today's meeting and left its asset purchase programme unchanged at £375bn, the Bank announced at noon. Meanwhile, the European Central Bank (ECB) held the main refinancing rate at 0.75%, the deposit rate at zero and the marginal lending rate at 1.5%, as anticipated.
The market reaction to the central banks' decisions was pretty subdued but the focus was on the subsequent press conference with ECB President Mario Draghi in which he hinted that the ECB did in fact discuss the possibility of a rate cut at this month's meeting.
"He turned slightly dovish on the rate front, with expectations now building for a cut early next year," said ETX Capital's head of trading Joe Rundle.
Looking ahead to tomorrow's session, all eyes will be on the US employment report with the consensus predicting a 90,000 gain in non-farm payrolls in November, much worse than the 171,000 increase seen in October. The unemployment rate is expected to remain at 7.9%.
However ETX's Rundle said that it is "difficult to put firm guesstimate on the outcome given the mixed data signals out of the US this week [weaker ADP, better non-mfg ISM, poor ISM mfg] – but the reaction should be seen as a litmus test for upside momentum heading into the year-end.
"If markets shrug off a weaker reading and continue their positive bias, a Santa rally may return," he said.
Europe Market Report
European Markets Held Gains After Central Bank Decisions
The European markets held on to their gains on Thursday, after both the European Central Bank and the Bank of England made no changes with regard to interest rates. Investors continue to watch the negotiations on the looming fiscal cliff with great interest. However, political tension in Italy grabbed the attention of investors today.
The European Central Bank left its benchmark interest unchanged at its final rate-setting session of this year after economic sentiment improved and borrowing costs eased for troubled members of the currency-bloc.
The central bank of 17 nations held the refinancing rate unchanged at 0.75 percent for a fifth successive month in December following the Governing Council meeting in Frankfurt on Thursday. The decision was in line with economists' expectations.
The European Central Bank on Thursday slashed the growth outlook for the 17-nation economy for this year and next, and unveiled its first projection for 2014 that showed a recovery in the currency-bloc.
The latest Eurosystem staff macroeconomic projections show annual real GDP growth in a range between -0.6 percent and -0.4 percent for 2012. This means the mid-point was lowered to -0.5 percent from -0.4 percent seen in September.
GDP growth is seen between -0.9 percent and 0.3 percent for 2013. This compares to -0.4 percent and 1.4 percent predicted three months ago. The economy is expected to recover in 2014 with GDP expansion seen between 0.2% and 2.2% that year.
European nations are unlikely to finalize a bank supervision framework this year, European Central Bank Executive Board member Jorg Asmussen reportedly said Wednesday. His remarks came a day after an attempt by European Union leaders to strike a deal on a single supervisor for euro area banks failed, largely due to rift between France and Germany.
Standard and Poor's on Wednesday lowered the credit rating on Greece to 'selective default' (SD) from 'CCC', days after the country announced a debt buyback plan to rid the country of its mounting debt. S&P said the decision follows the Greek government's invitation to private sector bondholders on December 3 to participate in a series of debt buyback auctions. Under S&P's criteria, this move amounted to a 'selective default.'
The Greek government's ambition is to bring 'spectacular change' to the struggling Eurozone member, Prime Minister Antonis Samaras said in an interview to German daily Bild on Thursday.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.45 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.72 percent.
The DAX of Germany climbed by 1.07 percent and the CAC 40 of France rose by 0.31 percent. The FTSE 100 of the U.K. gained 0.15 percent and the SMI of Switzerland advanced by 0.82 percent.
The euro area economy slid into recession in the third quarter, an updated report from Eurostat confirmed Thursday. The gross domestic product fell 0.1 percent from a quarter ago, when it dropped 0.2 percent. The figures matched the preliminary estimate released on November 15.
US Market Report
Stocks Moving Mostly Higher, Apple Shows Notable Rebound
While buying interest has remained relatively subdued, stocks have moved mostly higher over the course of the trading day on Thursday. Technology stocks have helped to lead the way higher, with Apple (AAPL) rebounding after ending the previous session sharply lower.
The major averages are all in positive territory, although the Nasdaq is outperforming its counterparts. The Nasdaq is up 20.99 points or 0.7 percent at 2,994.69, while the Dow is up 14.31 points or 0.1 percent at 13,048.80 and the S&P 500 is up 3.41 points or 0.2 percent at 1,412.69.
The modest upside for the markets is partly due to strength in the tech sector, as reflected by the more substantial gain by the tech-heavy Nasdaq.
Shares of Apple have shown a notable rebound, with the iPad and iPhone maker rising by 2.4 percent after tumbling by 6.4 percent on Wednesday.
The markets may also be benefiting from the release of a report from the Labor Department showing a bigger than expected drop by initial jobless claims in the week ended December 1st.
The Labor Department said jobless claims fell to 370,000, a decrease of 25,000 from the previous week's revised figure of 395,000. Economists had expected jobless claims to drop to 380,000 from the 393,000 originally reported for the previous week.
With the drop, jobless claims continued to settle down after seeing considerable volatility due to the impact of Superstorm Sandy.
Nonetheless, many traders remain on the sidelines ahead of tomorrow's closely watched monthly employment report.
Economists expect an increase of about 90,000 jobs in November following the addition of 171,000 jobs in October. The unemployment rate is expected to edge up to 8.0 percent from 7.9 percent.
Continued uncertainty about the looming fiscal cliff may also be helping to limit the upside for the markets, with lawmakers in Washington struggling to reach an agreement to avoid the approximately $600 billion in automatic tax increases in spending cuts due to take effect at the end of the year.
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