Daily FX Commentary: (Morning Report)
EUR/USD
The Euro dips below today’s range floor and Fib 61.8% of 1.2996//1.3138 bounce at 1.3055, unable to regain 1.3100 handle. Negative hourly structure sees the downside favored, with 1.3000 support in focus. Break here to confirm completion of 4h H&S pattern and trigger fresh extension of reversal from 1.3300, with next downside targets standing at 1.2980, 50% of 1.2660/1.3307 and 1.2950, daily Ichimoku cloud top. Daily high at 1.3094 offers initial resistance, reinforced by descending 20 day EMA.
Res: 1.3060, 1.3094, 1.3138, 1.3150
Sup: 1.3020, 1.3000, 1.2980, 1.2950
GBP/USD
The pair remains under pressure, as corrective rally from 1.6000, 04 Jan low is now fully retraced. Penetration through 1.6000 tested 1.5990, daily Ichimoku cloud base, so far, with negative near-term structure seeing potential for further weakness. Clear break below pivotal 1.6000 support is required to confirm and open 1.5960 Fib 76.4% of 1.5826/1.6380, and 1.5900, 200 day MA.
Res: 1.6030, 1.6074, 1.6100, 1.6126
Sup: 1.5990, 1.5960, 1.5911, 1.5900
USD/JPY
Near-term bulls off 86.81 base are gaining pace, as the pair continues to travel north and regains important 86.80 level, yesterday’s high and Fib 61.8% of 88.40/86.80 descend, after breaking above 4h 20 day EMA at 87.47. This gives more credibility to the current recovery, with clearance and close above 88.00 barrier seen as confirmation. Positive near-term studies support the notion, with intraday lows and higher platform at 87.40, reinforced by ascending hourly 20 day EMA, offering solid support.
Res: 88.00, 88.40, 89.00, 89.14
Sup: 87.57, 87.40, 87.20, 87.00
USD/CHF
The pair resumes recovery from 0.9200, breaking above today’s consolidation top at 0.9255 and looking for test of next barriers at 0.9285, 07 Jan high / Fib 76.4%, to possibly fully retrace near-term 0.9302/0.9207 corrective phase. Hourly studies maintain positive tone, however, lack of bullish momentum, seen on 4h chart, may see hesitation on approach to 0.9285, also trendline resistance and key near-term barrier at 0.9300, break of which is required near-term base and allow for stronger recovery. Ascending 20 day EMA at 0.9237, underpins the action, ahead of 55 day one at 0.9210, reinforcing 0.9200 base.
Res: 0.9285, 0.9300, 0.9339, 0.9381
Sup: 0.9255, 0.9230, 0.9200, 0.9180
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Daily Market Commentary: (Evening Report)
Index closes at highest level since 2008
Market Movers
techMARK 2,193.52 +0.91%
FTSE 100 6,098.65 +0.74%
FTSE 250 12,709.06 +0.59%
Market Movers
techMARK 2,193.52 +0.91%
FTSE 100 6,098.65 +0.74%
FTSE 250 12,709.06 +0.59%
UK markets closed significantly higher on Wednesday, up 45 points equal to 11.41bn pounds, with the index closing at its highest level since May 22nd 2008.
The gains were led by banking stocks after UBS hiked its targets for the Lloyds, Barclays and RBS, saying 'the UK is over its experiment of combining fiscal and monetary austerity'.
The broker revised its price target on Lloyds to 60p from 50p, for Barclays to 315p from 255p and RBS to 410p.
This came in anticipation of an expected improvement in mortgage lending and a reduced need to raise capital after the Basel committee on banking supervision last Sunday eased financial institutions’ liquidity requirements.
The result, which has ‘read-across’ to other countries is that “Britain’s experiment of combining fiscal and monetary austerity may be over and the incoming Bank of England governor’s openness to monetary policy innovation may not even need to be tested if,” as UBS expects, banks return to lending.
On a more realistic note – sombre even - plenty of long-term policy challenges remain.
UK shop prices steady, food inflation still an issue
The gains were led by banking stocks after UBS hiked its targets for the Lloyds, Barclays and RBS, saying 'the UK is over its experiment of combining fiscal and monetary austerity'.
The broker revised its price target on Lloyds to 60p from 50p, for Barclays to 315p from 255p and RBS to 410p.
This came in anticipation of an expected improvement in mortgage lending and a reduced need to raise capital after the Basel committee on banking supervision last Sunday eased financial institutions’ liquidity requirements.
The result, which has ‘read-across’ to other countries is that “Britain’s experiment of combining fiscal and monetary austerity may be over and the incoming Bank of England governor’s openness to monetary policy innovation may not even need to be tested if,” as UBS expects, banks return to lending.
On a more realistic note – sombre even - plenty of long-term policy challenges remain.
UK shop prices steady, food inflation still an issue
Related Articles
Shop price inflation remained unchanged at a 1.5% year-on-year pace in December, according to the latest data released today by the British Retail Consortium (BRC).
More specifically, food inflation fell to 4.1% in December from 4.6% in November. Non-food prices were broadly flat in December after falling 0.3% in November.
Meanwhile, the Recruitment and Employment Confederation's (REC) seasonally adjusted index of permanent staff placements fell to 53.2 in December from 56.0 in November. That was the highest since April 2011. Readings above 50 indicate growth compared to a month earlier.
UK trade gap narrowed in November
More specifically, food inflation fell to 4.1% in December from 4.6% in November. Non-food prices were broadly flat in December after falling 0.3% in November.
Meanwhile, the Recruitment and Employment Confederation's (REC) seasonally adjusted index of permanent staff placements fell to 53.2 in December from 56.0 in November. That was the highest since April 2011. Readings above 50 indicate growth compared to a month earlier.
UK trade gap narrowed in November
The UK's trade deficit closed in November as exports caught up slightly with imports, according to the Office for National Statistics.
The deficit on goods and services totalled £3.5bn in November, compared with £3.7bn in October. There was a deficit of £9.2bn on goods, partly offset by an estimated surplus of £5.7bn on services.
Income disparity 'biggest risk to global security'
The deficit on goods and services totalled £3.5bn in November, compared with £3.7bn in October. There was a deficit of £9.2bn on goods, partly offset by an estimated surplus of £5.7bn on services.
Income disparity 'biggest risk to global security'
The biggest single threat to global security in the next ten years is severe income disparity, according to the World Economic Forum’s annual Global Risks Report.
The survey of more than 1,000 experts from industry, government, academia and civil society, also found the risk that would cause the most damage - were it to happen - is major systemic financial failure.
Two risks appeared in the top five risk categories in terms of impact and likelihood – chronic fiscal imbalances and water supply crisis.
The survey of more than 1,000 experts from industry, government, academia and civil society, also found the risk that would cause the most damage - were it to happen - is major systemic financial failure.
Two risks appeared in the top five risk categories in terms of impact and likelihood – chronic fiscal imbalances and water supply crisis.
Europe Market Report
European Markets Climbed After Positive Report From Alcoa
The European markets finished in positive territory Wednesday. Banks were among the best performing stocks of the session. Investors were encouraged by the fourth quarter profit reported by aluminum producer Alcoa, which is viewed as the start of the earnings reporting season in the United States. Alcoa's earnings were in line with expectations, while sales topped estimates. The company also expects global aluminum demand to grow 7 percent this year, up from 6 percent in 2012.
Policymakers of the Bank of England are set to adopt a "wait and see" stance at the start of the year as policymakers see little compelling case for another stimulus.
The Monetary Policy Committee headed by Mervyn King is expected to keep the size of its bond buying program unchanged at GBP 375 billion and the interest rates unchanged at record low 0.50 percent on Thursday. The announcement is due at 7.00 am ET.
The Euro Stoxx 50 index of eurozone bluechip stocks increased by 0.57 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.75 percent.
The DAX of Germany climbed by 0.32 percent and the CAC 40 of France advanced by 0.31 percent. TheFTSE 100 of the U.K. rose by 0.74 percent and the SMI of Switzerland gained 1.09 percent.
Germany's industrial production rose 0.2 percent in November from a month ago, the Federal Ministry of Economics and technology showed Wednesday. Although it reversed a 2 percent fall logged in October, the growth rate was weaker than the 1 percent rise forecast by economists.
The U.K. visible trade deficit narrowed to GBP 9.2 billion in November from GBP 9.5 billion in October, the Office for National Statistics reported Wednesday. The deficit was seen at GBP 9 billion.
British shop price inflation remained at 1.5 percent for a third consecutive month in December, but food inflation eased noticeably, a report from the British Retail Consortium (BRC) showed Wednesday. Economists expected the shop price index to rise 1.7 percent year-on-year. Food inflation fell to 4.1 percent in December from 4.6 percent in November.
The U.K. visible trade deficit narrowed to GBP 9.2 billion in November from GBP 9.5 billion in October, the Office for National Statistics reported Wednesday. The deficit was seen at GBP 9 billion.
British shop price inflation remained at 1.5 percent for a third consecutive month in December, but food inflation eased noticeably, a report from the British Retail Consortium (BRC) showed Wednesday. Economists expected the shop price index to rise 1.7 percent year-on-year. Food inflation fell to 4.1 percent in December from 4.6 percent in November.
US Market Report
With quarterly results from Alcoa (AA) generating some optimism about the outlook for corporate earnings, stocks have moved mostly higher during trading on Wednesday after ending the two previous sessions in the red.
The major averages have moved roughly sideways in recent trading, hovering firmly in positive territory. The Dow is up 83.69 points or 0.6 percent at 13,412.54, the Nasdaq is up 17.49 points or 0.6 percent at 3,109.30 and the S&P 500 is up 6.21 points or 0.4 percent at 1,463.36.
The strength on Wall Street is partly due to a positive reaction to quarterly results from Alcoa, which unofficially kicked off the earnings season after the close of trading on Tuesday.
Alcoa reported fourth quarter adjusted earnings of $0.06 per share compared to a year ago loss of $0.03 per share, matching analyst estimates.
The aluminum giant also reported fourth quarter revenues that came in above expectations and forecast a 7 percent increase in aluminum demand in 2013.
While shares of Alcoa rose as much as 2.5 percent at the open and reached a three-month high, the stock has given back some ground since then. Alcoa is currently up by 0.7 percent.
The news from Alcoa has generated some optimism about the unfolding earnings season, although traders still seem reluctant to add to the substantial rally that was seen last week.
A lack of major U.S. economic data may also be keeping some traders on the sidelines, with today reflecting the third straight quiet day on the economic front.
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