Daily FX Commentary: (Morning Report)
EUR/USD
The Euro remains steady, trading in consolidative sideways mode, off fresh 11-month high at 1.3400, posted yesterday. Close above 1.3360, yesterday’s opening price, keeps the upside in near-term focus, however, further consolidation cannot be ruled out, as 4h studies are extended. Range floor at 1.3335 so far holds the downside, with further easing towards strong support at 1.3300, reinforced by ascending 20 day EMA, seen not harmful for near-term bulls, while only slide below 1.3247 higher platform and Fib 38.2% of 1.2996/1.3401 would delay. On the upside, clear break above 1.3400 is required to resume near-term bulls off 1.3000 base and open way towards 1.3485/1.3500, next targets.
Res: 1.3395, 1.3402, 1.3450, 1.3485
Sup: 1.3335, 1.3300, 1.3280, 1.3247
GBP/USD
Cable remains under pressure despite recovery from yesterday’s low at 1.6030, as gains failed to regain important 1.6200 barrier, where 55 day EMA caps for now. Negative hourly studies and 4h indicators sliding below the midlines, keep the downside vulnerable, with immediate support at 1.6030, ahead of very strong support zone at 1.6000/1.5991, loss of which would trigger fresh leg lower and expose 1.5960 and 1.5900. Conversely, bounce above 1.6200, would avert immediate downside risk.
Res: 1.6093, 1.6103, 1.6121, 1.6154
Sup: 1.6063, 1.6030, 1.6006, 1.5991
USD/JPY
The pair extends near-term corrective pullback off fresh high at 89.66, posted yesterday, following failure on renewed attempt higher and subsequent fall through initial support at 89.00. Dips so far retraced nearly 38.2% of 86.81/89.66 ascend at 88.62, with prevailing negative tone on hourly chart and 4h indicators descending from overbought zone that suggest further corrective action. Penetration through previous high at 88.40 would risk an extension towards 88.00, Fib 61.8% and 4h 55 day EMA, loss of which would put near-term bulls on hold in favor of stronger reversal of rally from September 2012.
Res: 89.08, 89.66, 90.00, 90.39
Sup: 88.62, 88.40, 88.00, 87.90
USD/CHF
Yesterday’s extension of recovery rally from 0.9100 support zone, eases bear-pressure, as gains retraced 76.4% of 0.9302/0.9109 decline at 0.9260. Improved near-term studies now shift focus higher, however regain of 0.9272 and 0.9300, is required to confirm base at 0.9100/0.9080 zone and allow for stronger correction. Pullback on overbought hourlies should be ideally contained at/above 0.9200, to keep bulls intact.
Res: 0.9260, 0.9272, 0.9300, 0.9345
Sup: 0.9220, 0.9200, 0.9191, 0.9165
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Daily Market Commentary: (Evening Report)
London close: Markets cautious as US debt fears resurface
Market Movers
- techMARK 2,181.78 -0.42%
- FTSE 100 6,117.31 +0.15%
- FTSE 250 12,774.79 +0.12%
- Anglo sinks into the red by the close
- Burberry jumps after Q3 update
- Debt ceiling concerns resurface, Obama takes hard-line approach
The FTSE 100 finished with only slight gains on Tuesday afternoon as markets continued to be range-bound with concerns over the US debt ceiling weighing on the mood.
"Today saw investors pause for breath and a degree of selling took place halfway through the session only for the losses to be reversed and the FTSE 100 has ended up back in positive territory," according to Angus Campbell, the head of market analysis at Capital Spreads.
"This degree of indecision has still yet to force the hands of those sellers in putting more downward pressure on stocks to create a more convincing retracement, whilst at the same time there is little impetus to send the markets higher for the next leg upwards."
He said that investors "seem to be sitting on their hands waiting for the next big event", reflected in the FTSE 100 trading within a narrow range of around 40-50 points over the last few days.
- Burberry jumps after Q3 update
- Debt ceiling concerns resurface, Obama takes hard-line approach
The FTSE 100 finished with only slight gains on Tuesday afternoon as markets continued to be range-bound with concerns over the US debt ceiling weighing on the mood.
"Today saw investors pause for breath and a degree of selling took place halfway through the session only for the losses to be reversed and the FTSE 100 has ended up back in positive territory," according to Angus Campbell, the head of market analysis at Capital Spreads.
"This degree of indecision has still yet to force the hands of those sellers in putting more downward pressure on stocks to create a more convincing retracement, whilst at the same time there is little impetus to send the markets higher for the next leg upwards."
He said that investors "seem to be sitting on their hands waiting for the next big event", reflected in the FTSE 100 trading within a narrow range of around 40-50 points over the last few days.
Debt ceiling fears resurface
President Barack Obama said last night that he would not negotiate with Republicans over raising the debt ceiling, declining to trade cuts in government spending in exchange for increasing the borrowing limit.
"If the goal is to make sure that we are being responsible about our debt and our deficit - if that's the conversation we're having, I'm happy to have that conversation," Obama told a news conference. "What I will not do is to have that negotiation with a gun at the head of the American people."
The ceiling will be reached within the next month or two, according to Treasury Secretary Tim Geithner.
"While this is at least a month away, there's already a sense of anxiety in the markets due to the inability in the past of US lawmakers to come to an agreement until the 11th hour," said market analyst Craig Erlam from Alpari.
Mixed newsflow elsewhere ensured that stocks lacked direction today, as traders reacted to disappointing growth figures in Germany, a solid bond auction in Spain and hints about further stimulus measures in Japan by the central bank governor.
Meanwhile, the Centre for Economics and Business Research warned that Britain may be stripped of its AAA credit rating as national debt continues to soar through the roof.
"If the goal is to make sure that we are being responsible about our debt and our deficit - if that's the conversation we're having, I'm happy to have that conversation," Obama told a news conference. "What I will not do is to have that negotiation with a gun at the head of the American people."
The ceiling will be reached within the next month or two, according to Treasury Secretary Tim Geithner.
"While this is at least a month away, there's already a sense of anxiety in the markets due to the inability in the past of US lawmakers to come to an agreement until the 11th hour," said market analyst Craig Erlam from Alpari.
Mixed newsflow elsewhere ensured that stocks lacked direction today, as traders reacted to disappointing growth figures in Germany, a solid bond auction in Spain and hints about further stimulus measures in Japan by the central bank governor.
Meanwhile, the Centre for Economics and Business Research warned that Britain may be stripped of its AAA credit rating as national debt continues to soar through the roof.
Europe Market Report
Europe midday: Unlikely Spain will ask for a bail-out this year, Fitch says
- Fitch: Unlikely Spain will ask for a rescue in 2013
- Slight falls in most benchmarks
- German GDP contracted towards end of year
- Spanish long-term bond yields reverse course and fall
FTSE 100: 0.03%
Dax-30: -0.49%
Cac-40: -0.21%
FTSE Mibtel 30: 0.05%
Ibex 35: -1.05%
Stoxx 600: -0.07%
The main European equity benchmarks were trading slightly lower by midday for the most part.
This following a warning by ratings agency Fitch that a delay in increasing the US federal debt limit could put the country's triple A rating at risk. As well, Fitch has indicated that it does not expect Spain to petition the European Stability Mechanism (ESM) for a rescue this year.
That last observation seems to have been what weighed on Spanish bonds in the early going, despite what looked to have been a fairly successful auction of €5.7bn of bills.
Of interest as well, Bank of England Governor Sir Mervyn King was cited as insisting that a banking union is not the solution to the Eurozone's problems.
All of the above came after slight losses last night on Wall Street and the reappearance of tensions on Capitol Hill over the federal government debt limit and the need for fiscal consolidation.
Of interest, however, yesterday evening ratings agency Standard&Poor's (S&P) raised its outlook on the sovereign debt ratings for Finland and Luxembourg.
- Slight falls in most benchmarks
- German GDP contracted towards end of year
- Spanish long-term bond yields reverse course and fall
FTSE 100: 0.03%
Dax-30: -0.49%
Cac-40: -0.21%
FTSE Mibtel 30: 0.05%
Ibex 35: -1.05%
Stoxx 600: -0.07%
The main European equity benchmarks were trading slightly lower by midday for the most part.
This following a warning by ratings agency Fitch that a delay in increasing the US federal debt limit could put the country's triple A rating at risk. As well, Fitch has indicated that it does not expect Spain to petition the European Stability Mechanism (ESM) for a rescue this year.
That last observation seems to have been what weighed on Spanish bonds in the early going, despite what looked to have been a fairly successful auction of €5.7bn of bills.
Of interest as well, Bank of England Governor Sir Mervyn King was cited as insisting that a banking union is not the solution to the Eurozone's problems.
All of the above came after slight losses last night on Wall Street and the reappearance of tensions on Capitol Hill over the federal government debt limit and the need for fiscal consolidation.
Of interest, however, yesterday evening ratings agency Standard&Poor's (S&P) raised its outlook on the sovereign debt ratings for Finland and Luxembourg.
Germany's gross domestic product (GDP) grew at an 0.7% year-on-year pace in 2012, below the 0.8% pace expected and the previous year's rate of 3%.
Economic activity contracted at a 0.5% pace in the last three months of 2012 the country's Statistics Office added.
Italian consumer prices increased at a 2.3% year-on-year clip in December, versus a rise of 2.4% in November.
The Eurozone trade surplus for the month of November rose to €11bn, after a reading of €7.4bn for the previous month (Consensus: €8bn).
The Netherlands' trade surplus rose to €4.3bn in November, after a reading of €3.6bn for the month before.
The euro/dollar is now falling by 0.45% to the 1.3318 dollar mark. Deutsche Bank expects the single currency to reach 1.40 in its cross versus the US unit this year.
Front month Brent crude futures are down slightly, by 0,116 dollars, to the 112.17 dollar mark on the ICE.
US Market Report
Stocks Seeing Modest Weakness After Early Downward Move
After moving to the downside in early trading, stocks have seen continued weakness over the course of morning trading on Tuesday. The major averages remain stuck in negative territory after ending the previous session mixed.
The weakness on Wall Street comes as worries about continued gridlock in Washington regarding the debt ceiling has overshadowed a Commerce Department report showing stronger than expected retail sales growth.
Selling pressure has remained somewhat subdued, however, as traders continue to wait for earnings season to pick up steam before making any significant moves.
Nonetheless, computer hardware stocks are seeing notable weakness, with the NYSE Arca Computer Hardware Index down by 1 percent. Logitech is posting a steep loss after being downgraded to underperform by Credit Suisse.
Semiconductor and bio stocks have also moved to the downside on the day, while some strength is visible among gold stocks.
The major averages have moved to the upside in recent trading but remain in the red. The Dow is down 19.52 points or 0.1 percent at 13,487.80, the Nasdaq is down 16.24 points or 0.5 percent at 3,101.26 and the S&P 500 is down 3.07 points or 0.2 percent at 1,467.61.
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