Daily FX Commentary: (Morning Report)
EUR/USD
The single currency remains in a near-term consolidative mode, following repeated failure at 1.3477 that keeps key 1.3500 zone intact for now. With the lower boundary of near-term range and 55 day EMA, coming under pressure, further easing is seen likely, as hourly studies are negatively aligned. From the other side, positive tone on 4h chart, keeps the upside in focus, with possible extension into 1.3400/1.3370, Fib 38.2% / 50% of 1.3264/1.3477, seen preceding fresh rally. Only slide below 1.3300, psychological support at Fib 38.2% of larger 1.2996/1.3477, would be harmful for near-term bulls.
Res: 1.3459, 1.3477, 1.3485, 1.3490
Sup: 1.3425, 1.3400, 1.3370, 1.3345
GBP/USD
Cable maintains negative near-term tone, with steady descent from 02 Jan’s peak at 1.6380, losing another support at 1.5700. Yesterday’s close below the latter, suggests further easing towards next targets at 1.5634 and 1.5600. Corrective bounce on oversold hourly conditions faces good resistance at 1.5745, previous low and 50% of 1.5825/1.5673 downleg, with 1.5800 zone expected to cap recovery attempts, as 4h studies remain in red. However, appearance of bullish divergence on 4h chart RSI and MACD, cannot rule out stronger rally that requires break above 1.5800/25 to confirm near-term base and put immediate bears on hold.
Res: 1.5745, 1.5784, 1.5800, 1.5823
Sup: 1.5673, 1.5660, 1.5634, 1.5600
USD/JPY
Hourly structure is neutral, as the pair moves within 90.40/91.00 range, following repeated failure at 91.00 yesterday. More downside risk is seen on 4h chart studies that are in descending mode, from overbought zone, with immediate risk seen on a break below 90.40/23, overnight’s low / 20 day EMA / previous high, as well as psychological 90.00 level, loss of which would trigger stronger corrective action. Conversely, regain of 91.00 would open 91.24 and possible resumption of larger uptrend.
Res: 91.00, 91.08, 91.24, 91.50
Sup: 90.58, 90.40, 90.23, 90.00
USD/CHF
Near-term bears remain in play, as the price slides after yesterday’s recovery failure on approach to psychological 0.9300 barrier, on recovery attempt from 0.9220, last Friday’s fresh low. With 61.8% of 0.9220/91 rally being retraced so far, immediate focus comes at 0.9220/00 support zone, loss of which to signal further retracement of the larger 0.9109/0.9387 rally that so far reversed 61.8%. Negative 1 and 4h chart studies support the notion and only sustained break above 0.9300 barrier, reinforced by daily Ichimoku cloud top, would ease immediate bear-pressure.
Res: 0.9266, 0.9291, 0.9300, 0.9323
Sup: 0.9245, 0.9220, 0.9200, 0.9175
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Daily Market Commentary: (Evening Report)
London close: Markets at five-year high after US earnings
Market Movers
- techMARK 2,259.98 +0.13%
- FTSE 100 6,339.19 +0.71%
- FTSE 250 13,107.56 -0.19%
After a subdued morning session, the FTSE 100 rallied in afternoon trade to finish at its highest level since early 2008, helped by upbeat earnings from corporate heavyweights in the US.
The Dow Jones Industrial Average in New York was also trading at a five-year high today after pharmaceutical group Pfizer, refiner Valero Energy and home-builder DR Horton all topped analysts' estimates.
The FTSE 100 has extended gains seen since the start of 2013 and has now risen around 7.5% in January alone.
According to technical analyst Bill McNamara from Charles Stanley this afternoon: "the UK index isoverbought (its 14-day relative strength index is now above 80%) but that in itself does not represent a sell signal in a strong bull phase and it now looks pretty likely that we will see a test of the May 2008 peak, at 6,376, before this move reaches any kind of conclusion."
However, he warned that a correction – "when it comes" – will probably be "fairly sharp" after the Footsie's recent strong run.
The markets' focus is now starting to turn to tomorrow's economic growth data and a policy rate decision in the US. The world's biggest economy is expected to have grown at an annualised rate of 1.1% in the fourth quarter of 2012, according to preliminary estimates, well below the 3.1% growth in the third quarter.
Meanwhile, while the Federal Open Market Committee (FOMC) meeting is expected to be a "complete non-event", according to Jefferies, traders will keep an eye on any comments regarding the length of the current asset purchase programme.
The Dow Jones Industrial Average in New York was also trading at a five-year high today after pharmaceutical group Pfizer, refiner Valero Energy and home-builder DR Horton all topped analysts' estimates.
The FTSE 100 has extended gains seen since the start of 2013 and has now risen around 7.5% in January alone.
According to technical analyst Bill McNamara from Charles Stanley this afternoon: "the UK index isoverbought (its 14-day relative strength index is now above 80%) but that in itself does not represent a sell signal in a strong bull phase and it now looks pretty likely that we will see a test of the May 2008 peak, at 6,376, before this move reaches any kind of conclusion."
However, he warned that a correction – "when it comes" – will probably be "fairly sharp" after the Footsie's recent strong run.
The markets' focus is now starting to turn to tomorrow's economic growth data and a policy rate decision in the US. The world's biggest economy is expected to have grown at an annualised rate of 1.1% in the fourth quarter of 2012, according to preliminary estimates, well below the 3.1% growth in the third quarter.
Meanwhile, while the Federal Open Market Committee (FOMC) meeting is expected to be a "complete non-event", according to Jefferies, traders will keep an eye on any comments regarding the length of the current asset purchase programme.
Europe Market Report
Europe midday: Spain must continue consolidation efforts, Minister says
- Spain´s tax revenues rose by 4 per cent in 2012
- Southern European countries have yet to regain competitiveness -IFO
- EU could soften Spain´s budget consolidation timeline
FTSE-100: 0.11%
Dax-30: -0.18%
Cac-40: -0.21%
FTSE Mibtel 30: -0.66%
Ibex 35: -0.56%
Stoxx 600: 0.00%
European equities are trading 'mixed' ahead of tomorrow´s US Federal Reserve policy meeting and a barrage of economic data due out in the rest of the week. Not least is the US monthly employment, which is scheduled for release this next Friday.
Of great interest, the European Union´s Economic Affairs Commissioner Olli Rehn yesterday signaled that the possibility exists that the EU might tolerate modifying the timeline for Spain to consolidate its budget.
Speaking today in Madrid however Spain´s Finance Minister, Cristobal Montoro, indicated that for now the above remains to be seen and efforts must be maintained to meet Brussels´s targets. In that same vein, Montoro added that Spanish tax revenues actually grew by 4.2% in 2012, reaching €168.67bn thanks to the new Budget consolidation measures put in place.
Also worth pointing out are the remarks to be heard this morning out of the German IFO Institute´s Chief Economist, Hans Werner Sinn, according to whom most southern European nations hit by the crisis have not yet undertaken sufficient measures so as to regain lost competitiveness.
Swedish tool and equipment maker Sandvik has reported fourth quarter profit of 728m kronor, missing the market's average forecast.
Software AG has reported fourth-quarter profit of €50.7m, missing analysts' estimates moderately. Revenue in the fourth quarter, however, came in at €276m, well below forecasts.
Spain's Telefonica has asked its banks to extend the maturity of €1.25bn ($1.7bn) of an existing €2bn loan that expires in July 2016, according to Reuters.
Still on the equity front, but from a sector stand-point, the best performing industrial groups are: Basic resources (0.89%), Oil (0.48%) and Telecommunications (0.43%).
- Southern European countries have yet to regain competitiveness -IFO
- EU could soften Spain´s budget consolidation timeline
FTSE-100: 0.11%
Dax-30: -0.18%
Cac-40: -0.21%
FTSE Mibtel 30: -0.66%
Ibex 35: -0.56%
Stoxx 600: 0.00%
European equities are trading 'mixed' ahead of tomorrow´s US Federal Reserve policy meeting and a barrage of economic data due out in the rest of the week. Not least is the US monthly employment, which is scheduled for release this next Friday.
Of great interest, the European Union´s Economic Affairs Commissioner Olli Rehn yesterday signaled that the possibility exists that the EU might tolerate modifying the timeline for Spain to consolidate its budget.
Speaking today in Madrid however Spain´s Finance Minister, Cristobal Montoro, indicated that for now the above remains to be seen and efforts must be maintained to meet Brussels´s targets. In that same vein, Montoro added that Spanish tax revenues actually grew by 4.2% in 2012, reaching €168.67bn thanks to the new Budget consolidation measures put in place.
Also worth pointing out are the remarks to be heard this morning out of the German IFO Institute´s Chief Economist, Hans Werner Sinn, according to whom most southern European nations hit by the crisis have not yet undertaken sufficient measures so as to regain lost competitiveness.
Swedish tool and equipment maker Sandvik has reported fourth quarter profit of 728m kronor, missing the market's average forecast.
Software AG has reported fourth-quarter profit of €50.7m, missing analysts' estimates moderately. Revenue in the fourth quarter, however, came in at €276m, well below forecasts.
Spain's Telefonica has asked its banks to extend the maturity of €1.25bn ($1.7bn) of an existing €2bn loan that expires in July 2016, according to Reuters.
Still on the equity front, but from a sector stand-point, the best performing industrial groups are: Basic resources (0.89%), Oil (0.48%) and Telecommunications (0.43%).
Eurozone money supply below forecasts
The Gfk survey of German Consumer sentiment improved slightly in February, to 5.8 after 5.7 in the month before.
Spanish retail sales fell by 10.7% year-on-year in December.
INSEE´s French consumer confidence index remained on an even keel in January, unchanged at 86 points, as expected.
Spanish retail sales fell by 10.7% year-on-year in December.
INSEE´s French consumer confidence index remained on an even keel in January, unchanged at 86 points, as expected.
Other asset clases steady
The euro/dollar is now falling by 0.01% to the 1.3450 dollar mark.
Front month Brent crude futures are now lower by 0.071 dollars to the 113.40 dollar mark on the ICE.
US Market Report
Weaker than forecast consumer confidence numbers
- Ford leads fallers on prediction of losses in Europe
- Oil stocks lead gains
Dow Jones Industrials: 0.43%
Nasdaq Comp.: -0.01%
S&P 500: 0.32%
The main US equity averages are trading in a mixed fashion following a similarly mixed string of corporate quarterly results.
Amongst the heavyweights whose earnings pleased investors were those from Valero, Peabody and US Steel.
Drugmaker Pfizer was also moving higher after forecasting a 2013 profit of up to $2.30 a share, higher than analyst estimates.
Poor guidance from the likes of International Paper and Lexmark, on the other hand, were weighing on stocks.
Ford plummeted after saying that it expects to lose about $2bn in Europe in 2013 as due to the recession afflicting the region.
From a sector stand-point the worst performers were: Automobiles (-3.72%), Recreational products (-2.63%) and Electronic Office Equipment (-2.06%).
House prices rose by 5.5% year-on-year in November according to the latest Case Shiller 20 city price index (Consensus: 5.6%).
The US Conference Board´s consumer confidence index for the month of January came in at 58.6 points, after an upwardly revised reading of 66.7 for the month before (Consensus: 64).
Front month West Texas crude futures rose by 1.18% to the 97.58 dollar per barrel mark on NYMEX.
10 year US Treasury yields gained 1 basis point, with yields at 1.97%.
- Ford leads fallers on prediction of losses in Europe
- Oil stocks lead gains
Dow Jones Industrials: 0.43%
Nasdaq Comp.: -0.01%
S&P 500: 0.32%
The main US equity averages are trading in a mixed fashion following a similarly mixed string of corporate quarterly results.
Amongst the heavyweights whose earnings pleased investors were those from Valero, Peabody and US Steel.
Drugmaker Pfizer was also moving higher after forecasting a 2013 profit of up to $2.30 a share, higher than analyst estimates.
Poor guidance from the likes of International Paper and Lexmark, on the other hand, were weighing on stocks.
Ford plummeted after saying that it expects to lose about $2bn in Europe in 2013 as due to the recession afflicting the region.
From a sector stand-point the worst performers were: Automobiles (-3.72%), Recreational products (-2.63%) and Electronic Office Equipment (-2.06%).
House prices rose by 5.5% year-on-year in November according to the latest Case Shiller 20 city price index (Consensus: 5.6%).
The US Conference Board´s consumer confidence index for the month of January came in at 58.6 points, after an upwardly revised reading of 66.7 for the month before (Consensus: 64).
Front month West Texas crude futures rose by 1.18% to the 97.58 dollar per barrel mark on NYMEX.
10 year US Treasury yields gained 1 basis point, with yields at 1.97%.
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