Daily FX Commentary: (Morning Report)
EUR/USD
The Euro holds near-term positive tone, as recovery from 1.3255, retraces over 76.4% of corrective 1.3400/1.3255 pullback. Despite gains being interrupted by 1.3376/1.3332 pullback, where 10 day EMA contained dips, hourly structure remains positive and keeps focus at near-term key barrier at 1.3400. However, lack of bullish momentum on 4h chart requires caution, as failure to extend to 1.3400, would risk further hesitation and return to initial 1.3332 support and more significant 1.3300 level.
Res: 1.3376, 1.3386, 1.3401, 1.3485
Sup: 1.3332, 1.3316, 1.3300, 1.3284
GBP/USD
The pair breaks again below strong 1.6000 support, also daily Ichimoku cloud base and yesterday’s fresh low at 1.5974, after recovery attempt was capped by initial resistance at 1.6030 zone. This confirms negative near-term structure, as fresh weakness next target at 1.5960, Fib 76.4% of 1.5826/1.6380 rally and increases risk of test of psychological / 200 day MA support at 1.5900. On the upside, day’s high at 1.6038, also Fib 38.2%, offers good barrier and only clear break here would delay immediate bears.
Res: 1.5985, 1.6000, 1.6016, 1.6038
Sup:1.5954, 1.5900, 1.5882, 1.5826
USD/JPY
Recovery rally from 87.78, yesterday’s low, nearly fully retraced corrective 89.66/87.78 descend, as gains extended to 89.55 so far. Near-term price action hesitates ahead of previous high, as hourly studies reach overbought zone, however, improved 4h chart situation, see the upside favored for now. Any dips should be ideally contained above 89.00 zone and 20 day EMA, to keeps bullish bias intact.
Res: 89.55, 89.68, 90.00, 90.39
Sup: 89.21, 89.00, 88.66, 88.40
USD/CHF
The pair remains congested within 0.9300/50 range, following repeated failure to sustain break above 0.9345, Fib 61.8% of 0.9511/0.9109 descend. Rather neutral tone is seen on hourly chart, while 4h structure remains bullish, however, approaching overbought zone requires caution. Clearance of 0.9355 to open next targets at 0.9381/0.9400, possibly 0.9430, 200 day MA, while slide below near-term range floor and 55 day EMA at 0.9290 zone, would be an initial signal for stronger corrective action of 0.9109/0.9353 rally and would expose 0.9260, Fibonacci 38.2% retracement level.
Res: 0.9353, 0.9381, 0.9400, 0.9430
Sup: 0.9317, 0.9300, 0.9284, 0.9260
====================================================================
Daily Market Commentary: (Evening Report)
Stocks boosted by upbeat US data
Market Movers
techMARK 2,201.42 +0.76%
FTSE 100 6,132.36 +0.46%
FTSE 250 12,847.61 +0.66%
Market Movers
techMARK 2,201.42 +0.76%
FTSE 100 6,132.36 +0.46%
FTSE 250 12,847.61 +0.66%
Following a subdued morning session, stocks across Europe raced into positive territory on Thursday afternoon on the back of some decent economic data Stateside.
Better-than-expected US housing starts and jobless claims figures lifted the mood this afternoon, prompting a strong start on Wall Street, as investors shrugged off some disappointing fourth-quarter earnings from banking heavyweights Bank of America and Citigroup.
However, as market strategist Ishaq Siddiqi from ETX Capital explained: “Markets on both sides of the Atlantic leapt higher with market participants moving out of the sidelines to build positions, latching on the positives; solid Spanish auction which propelled the euro and eased peripheral bond yields;expectations of strong China data due in the early hours of tomorrow morning which is supporting commodity prices at the moment and the fact that we have had some relatively upbeat earnings from Europe, particularly out of the UK retailers.”
Better-than-expected US housing starts and jobless claims figures lifted the mood this afternoon, prompting a strong start on Wall Street, as investors shrugged off some disappointing fourth-quarter earnings from banking heavyweights Bank of America and Citigroup.
However, as market strategist Ishaq Siddiqi from ETX Capital explained: “Markets on both sides of the Atlantic leapt higher with market participants moving out of the sidelines to build positions, latching on the positives; solid Spanish auction which propelled the euro and eased peripheral bond yields;expectations of strong China data due in the early hours of tomorrow morning which is supporting commodity prices at the moment and the fact that we have had some relatively upbeat earnings from Europe, particularly out of the UK retailers.”
Europe Market Report
European Markets Climbed On U.S. Economic Data
The European markets finished in the green on Thursday, after the release of some better than expected economic data in the United States. The surge in U.S. Housing Starts and the larger than expected decrease in weekly jobless claims provided a boost to the markets in the afternoon. Investors will be watching for the Chinese fourth-quarter GDP data, which is scheduled to be released tomorrow.
The ECB said in its monthly bulletin that the Euro-area economy will begin a gradual recovery later in 2013 because of the accommodative monetary policy, together with significantly improved financial market confidence and reduced fragmentation.
The International Monetary Fund on Wednesday decided to release the next slice of bailout money to Greece after the euro member successfully carried out a bond buyback and passed further budget measures to ease the country's debt load.
After announcing the Executive Board's decision to disburse EUR 3.24 billion to Greece, IMF Managing Director Christine Lagarde said "the program is moving in the right direction" though it encountered a delay in implementation due to political crisis initially.
Lagarde said Wednesday that Greece has made progress with structural reforms, which is reflected in recent actions to reduce non-wage labor costs and reform the product market. "However, much more remains to be done to achieve the critical mass of reforms needed to boost productivity and lower prices."
Separately, the IMF granted EUR 838.8 million loan disbursement to Portugal, under a EUR 78 billion bailout package approved in 2011. IMF Deputy Managing Director and Acting Chair Nemat Shafik said that Portugal has made "considerable progress in fiscal and external adjustment."
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.51 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.19 percent.
The DAX of Germany climbed by 0.58 percent and the CAC 40 of France rose by 0.96 percent. TheFTSE 100 of the U.K. advanced by 0.41 percent and the SMI of Switzerland gained 1.64 percent.
Euro area construction fell further in November, data released by Eurostat, the statistical office of the European Union, showed on Thursday.
Construction output declined a seasonally adjusted 4.7 percent year-on-year in November, after falling a revised 3.3 percent in October. Building construction fell 5.3 percent, while civil engineering output declined by 3.3 percent.
A leading indicator of the Spanish economy increased for the third successive month in November, indicating that the pace of contraction in the Spanish economy may ease in the near term, data from a survey by the Conference Board showed Thursday.
The leading economic index increased 0.5 percent month-on-month to 103.7 in November, marking the third monthly growth in a row. The largest contributions to the index came from the order books survey and Spanish contribution to Euro M2.
US Market Report
Stocks have moved mostly higher over the course of the trading day on Thursday after moving roughly sideways in recent sessions. The markets have benefited from a positive reaction to upbeat employment and housing reports.
The major averages are currently posting notable gains, near their highs for the session. The Dow is up 67.62 points or 0.5 percent at 13,578.85, the Nasdaq is up 16.08 points or 0.5 percent at 3,133.62 and the S&P 500 is up 6.92 points or 0.5 percent at 1,479.55.
With the gains on the day, the Dow and the Nasdaq have reached three-month highs, while the S&P 500has risen to its best intraday level in five years.
The strength on Wall Street is partly due to the release of a report from the Labor Department showing that initial jobless claims fell to a five-year low last week.
The report showed that jobless claims fell to 335,000 in the week ended January 12th from the previous week's revised figure of 372,000. Economists had been expecting jobless claims to show a much more modest decrease to 368,000.
With the much bigger than expected drop, jobless claims fell to their lowest level since the week ended January 19, 2008.
Buying interest was also generated by a separate report from the Commerce Department showing a much bigger than expected increase in housing starts in the month of December.
The Commerce Department said housing starts jumped 12.1 percent to an annual rate of 954,000 in December from the revised November estimate of 851,000. The increase lifted housing starts to their highest annual rate since June of 2008.
However, a negative reaction to quarterly results from Bank of America (BAC) and Citigroup (C) has helped to limit the upside for the markets, with the financial giants down by 3.7 percent and 2.9 percent, respectively.
Bank of America reported fourth quarter earnings that fell year-over-year but exceeded analyst estimates, while Citigroup reported much weaker than expected fourth quarter earnings.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. While Japan's Nikkei 225 Index inched up by 0.1 percent, Hong Kong's Hang SengIndex edged down by 0.1 percent.
Meanwhile, the major European markets all moved to the upside on the day. The French CAC 40 Index jumped 1 percent, while the German DAX Index and the U.K.'s FTSE 100 Index advanced by 0.6 percent and 0.5 percent, respectively.
In the bond market, treasuries have come under pressure on the heels of the upbeat economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.7 basis points at 1.871 percent.
|
