Daily FX Commentary: (Morning Report)
EUR/USD
Near-term bulls returned fully in play, as the price accelerated on a break above 1.3100/38 barriers, to penetrate psychological 1.3200 resistance. With gains retraced near 76.4% of 1.3300/1.2996 descend, near-term focus shifts towards very strong 1.3300 barrier that capped several attempts in December. Studies on 4h chart are in ascending mode and see room for further extension higher, however, overextended hourly conditions could anticipate corrective action that has not been signaled yet. Daily close above 1.3200 handle would be seen as supportive element.
Res: 1.3218, 1.3227, 1.3260, 1.3282
Sup: 1.3200, 1.3160, 1.3150, 1.3138
GBP/USD
The pair bounces above 1.6100 barrier, also 55 day EMA that avoids immediate downside risk of penetrating important 1.6000 support, with rally to 1.6118 so far, nearly fully retracing 1.6126/1.5991, 08/09 Jan descend. Lift above 1.6126 and Fibonacci 38.2% at 1.6140 is required to confirm break above near-term 1.6126/1.6000 range and open way for stronger recovery, as currents movements could be described rather consolidative. Fresh bullish momentum on 4h chart is sen supportive, while hourly studies moved in the positive territory. Initial supports lie at 1.6080/70 zone, approx mid-point of today’s rally and should ideally contain any corrective dips.
Res: 1.6118, 1.6126, 1.6140, 1.6185
Sup: 1.6081, 1.6074, 1.6034, 1.6000
USD/JPY
The pair consolidates recent gains within 88.32/00 range, just ahead of key near-term barrier and recent high at 88.40. Today’s close above 88.00 would be supportive for fresh attempt and break above 88.40 to open 89.00 next. Near-term structure maintains positive tone, however, risk would be seen on a loss of 88.00 handle that may signal near-term double top and trigger stronger correction, as overextended daily studies require caution.
Res: 88.32, 88.40, 89.00, 89.14
Sup: 88.00, 87.85, 87.71, 87.40
USD/CHF
The pair lost traction on approach to 0.9280/0.9300 barriers, with subsequent reversal accelerating losses on a break below initial 0.9230 and more significant 0.92000 support. With fresh weakness retracing 61.8% of 0.9080/0.9300 rally at 0.9160, more risk is now seen towards the downside, as strong supports at 0.9100 and 0.9080 base are coming in near-term focus. As 4h chart indicators slide below the midlines, scope is seen for possible re-visit of 0.9100/0.9080, with oversold hourlies signaling corrective action that may precede fresh bears. However, no firm signal of reversal seen yet. Previous supports at 0.9200/0.9230 now revert to resistance and being reinforced by 55/20 day EMA’s respectively.
Res: 0.9200, 0.9230, 0.9241, 0.9265
Sup: 0.9160, 0.9130, 0.9100, 0.9080
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Daily Market Commentary: (Evening Report)
London close: Markets flat as central banks hold rates
Market Movers
- techMARK 2,192.46 -0.05%
- FTSE 100 6,101.51 +0.05%
- FTSE 250 12,730.78 +0.17%
The FTSE 100 swung between gains and losses for most of Thursday's session as investors digested a host of economic data, bond auctions in the Eurozone and policy decisions by the Bank of England (BoE) and European Central Bank (ECB).
Nevertheless, the Footsie managed to finish in positive territory, extending a near four-year high from the day before. The index finished at 6,099 on Wednesday and at 6,102 today, its highest closing level since May 22nd 2008.
Chinese trade rebounded strongly last month, boosting sentiment early on. The trade surplus totalled $31.6bn in December, well ahead of the $19.6bn surplus reported in November and the $20bn forecast. Exports jumped by 14.1% year-on-year, ahead of the 5% estimate, while imports also beat expectations rising by 6%, ahead of the 3.5% estimate.
Meanwhile, solid debt auctions in Spain and Italy also provided some support this morning, as Eurozone peripheral bond yields on the secondary market plunged. Specifically, Spanish benchmark 10-year yields dropped below 5% for the first time since March 2011.
At midday, the BoE announced that it has kept its official Bank Rate at 0.5% and its asset purchase programme at £375bn. Analyst Philip Shaw from Investec said that 'on-hold' decision was widely expected. "We characterise recent economic data as mixed rather than gloomy and share some of the MPC's optimism over the potential effects from the FLS. Accordingly we consider the chances that the committee sanctions more QE to be less than 50-50, especially as we expect inflation to exceed 3% later this year."
Shortly after, the ECB also decided to keep rates on hold at 0.75%. In the following press conference, ECB President Mario Draghi reiterated that medium-term inflation expectations remained well anchored and that he expected inflation to come in below or very close to the 2% target this year. While he said that risks to the economic outlook remain on the downside, the Eurozone recovery is expected to begin at the year.
Markets looked like they would finish higher today, but disappointing jobless claims figures in the USerased gains in afternoon trade. Claims for unemployment benefits increased to 371,000 last week, higher than the 365,000 consensus forecast.
Nevertheless, the Footsie managed to finish in positive territory, extending a near four-year high from the day before. The index finished at 6,099 on Wednesday and at 6,102 today, its highest closing level since May 22nd 2008.
Chinese trade rebounded strongly last month, boosting sentiment early on. The trade surplus totalled $31.6bn in December, well ahead of the $19.6bn surplus reported in November and the $20bn forecast. Exports jumped by 14.1% year-on-year, ahead of the 5% estimate, while imports also beat expectations rising by 6%, ahead of the 3.5% estimate.
Meanwhile, solid debt auctions in Spain and Italy also provided some support this morning, as Eurozone peripheral bond yields on the secondary market plunged. Specifically, Spanish benchmark 10-year yields dropped below 5% for the first time since March 2011.
At midday, the BoE announced that it has kept its official Bank Rate at 0.5% and its asset purchase programme at £375bn. Analyst Philip Shaw from Investec said that 'on-hold' decision was widely expected. "We characterise recent economic data as mixed rather than gloomy and share some of the MPC's optimism over the potential effects from the FLS. Accordingly we consider the chances that the committee sanctions more QE to be less than 50-50, especially as we expect inflation to exceed 3% later this year."
Shortly after, the ECB also decided to keep rates on hold at 0.75%. In the following press conference, ECB President Mario Draghi reiterated that medium-term inflation expectations remained well anchored and that he expected inflation to come in below or very close to the 2% target this year. While he said that risks to the economic outlook remain on the downside, the Eurozone recovery is expected to begin at the year.
Markets looked like they would finish higher today, but disappointing jobless claims figures in the USerased gains in afternoon trade. Claims for unemployment benefits increased to 371,000 last week, higher than the 365,000 consensus forecast.
Related Articles
Europe Market Report
Europe midday: Periphery bond yields move lower
-Investors wating for ECB press conference
-Successful Spanish and Italian Treasury debt auctions
-Spanish 10 year bond yields drop 18bp to 4.95 per cent
FTSE-100: 0.09%
Dax-30: 0.21%
Cac-40: 0.23%
FTSE Mibtel: 0.68%
Ibex 35: -0.05%
Stoxx 600: -0.05%
The tone to trading on the main European equity benchmarks has improved somewhat but remains mixed ahead of European Central Bank President Mario Draghi's press conference, which is scheduled to start at 13:30.
Both the European Central Bank and the Bank of England opted to maintain their current monetary policy settings.
It will be interesting to see if the Basel Committee on Banking Supervision's decision to relax the requirements for bank's liquidity buffers –taken this past Sunday – influences the ECB's thinking.
Both the Spanish and Italian treasury auctions this morning have been successful.
For its part the Spanish Treasury sold €5.8bn in debt instruments, versus the €5bn that were expected. The bid-to-cover ratio for the 5 year debt on offer rose to 2.6, versus 1.57 last time, and to 2.9 for the tranche of 13 year debt being sold, versus 2.06 the last time around. "Influenced by this past Sunday's decision from the Basel Committee on Banking Supervision?" economists at Digital Look are asking.
Acting as a backdrop, speaking on Bloomberg TV PIMCO's Andrew Bosomworth forecast that the ECB will cut rates, but not at today's meeting.
-Successful Spanish and Italian Treasury debt auctions
-Spanish 10 year bond yields drop 18bp to 4.95 per cent
FTSE-100: 0.09%
Dax-30: 0.21%
Cac-40: 0.23%
FTSE Mibtel: 0.68%
Ibex 35: -0.05%
Stoxx 600: -0.05%
The tone to trading on the main European equity benchmarks has improved somewhat but remains mixed ahead of European Central Bank President Mario Draghi's press conference, which is scheduled to start at 13:30.
Both the European Central Bank and the Bank of England opted to maintain their current monetary policy settings.
It will be interesting to see if the Basel Committee on Banking Supervision's decision to relax the requirements for bank's liquidity buffers –taken this past Sunday – influences the ECB's thinking.
Both the Spanish and Italian treasury auctions this morning have been successful.
For its part the Spanish Treasury sold €5.8bn in debt instruments, versus the €5bn that were expected. The bid-to-cover ratio for the 5 year debt on offer rose to 2.6, versus 1.57 last time, and to 2.9 for the tranche of 13 year debt being sold, versus 2.06 the last time around. "Influenced by this past Sunday's decision from the Basel Committee on Banking Supervision?" economists at Digital Look are asking.
Acting as a backdrop, speaking on Bloomberg TV PIMCO's Andrew Bosomworth forecast that the ECB will cut rates, but not at today's meeting.
The euro/dollar is now edging higher by 0.35% to the 1.31 dollar mark.
Front month Brent crude futures are rising by 0,869 dollars to the 112.73 dollar per barrel mark on the ICE.
US Market Report
US open: Stocks waver at resistance
- Acampora sees multi-year advance on Wall Street
- In-line initial weekly unemployment claims
Dow Jones Industrials: 0.27%
Nasdaq Comp.: 0.42%
S&P 500: 0.34%
The major US equity benchmarks are now registering modest advances.
Helping to hold stocks aloft are the better than expected export figures which were released overnight in China.
Nevertheless, levels of technical resistance have yet to fall, with the S&P 500 having reached an intra-day high of 1,469, versus resistance at 1,471 which some analysts are now watching.
Of interest, technical analyst and Wall Street legend Ralph Acampora believes investor sentiment toward US stocks is poised to change for the better and contribute to a multi-year advance, Bloomberg reports.
- In-line initial weekly unemployment claims
Dow Jones Industrials: 0.27%
Nasdaq Comp.: 0.42%
S&P 500: 0.34%
The major US equity benchmarks are now registering modest advances.
Helping to hold stocks aloft are the better than expected export figures which were released overnight in China.
Nevertheless, levels of technical resistance have yet to fall, with the S&P 500 having reached an intra-day high of 1,469, versus resistance at 1,471 which some analysts are now watching.
Of interest, technical analyst and Wall Street legend Ralph Acampora believes investor sentiment toward US stocks is poised to change for the better and contribute to a multi-year advance, Bloomberg reports.
Weekly US initial unemployment claims rose by 4,000 to 371,000 (Consensus: 365,000). The previous week's reading was revised down by 5,000 to 367,000.
Front month West Texas crude futures are now rising by 1.19% to the 94.16 dollar level on the NYMEX.
10 year US Treasury yields are now rising by 3 basis points, to the 1.90%.
Front month West Texas crude futures are now rising by 1.19% to the 94.16 dollar level on the NYMEX.
10 year US Treasury yields are now rising by 3 basis points, to the 1.90%.
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