Dollar on Edge with Deficit Deadline, ISM Report Stokes Volatility
By John Kicklighter, Currency Strategist
- Dollar on Edge with Deficit Deadline, ISM Report Stokes Volatility
- Euro Drawn Between Dollar Volatility, EU Trouble, Upcoming ECB Decision
- Australian Dollar Readies for RBA Decision as Risk Trends Pick Up
- British Pound Tumbles with Risk, Helped Along by Manufacturing Contraction
- Japanese Yen Looking at More Volatility as Intervention Rhetoric Heats Up
- Swiss Franc Solidifies Gains After Economics Minister Says Strength to Stay
- Gold Ramps up the Volatility as Market Debates US Financial Rescue Effort
Dollar on Edge with Deficit Deadline, ISM Report Stokes Volatility
Given the volatility the FX and capital markets demonstrated through the close on Friday and the running countdown for the US to surpass the legal limit on its deficit; excitement was guaranteed through for the opening day of the new trading week. Volatility on the dollar-based majors and broader capital markets stepped it up yet again – though direction is still as lacking as ever. Through Monday’s open, the greenback was once again under pressure as risk appetite started off strong. In fact, S&P 500 futures gapped up 1.2 percent on the Asian open from Friday’s close. In contrast, the dollar didn’t produce such a dramatic jump; but it did lose ground through much of the Asian and early European sessions as news that Congressional leaders reached a compromise on the budget deficit that could offer quick relief to tense financial and credit markets. Though, the fact that the Dow Jones FXCM Dollar Index (ticker = USDollar) slipped as a viable debt solution seemed to be in the works should reflect on the skepticism that is still prevalent in the markets.
This cynicism that a debt deal would be pushed through or that it would offer the dollar an immediate boost could have weighed the greenback indefinitely had a wave of risk aversion not leveraged the currency’s battered safe haven appeal. As the day wore on, data from China, Australia, Japan, the Euro Zone and the United Kingdom reflected a slowing in factory activity that seems to be reflecting a downshift in global growth. The concern was nagging; but fear that a serious economic slump could be in the works didn’t really set in until the US ISM manufacturing activity survey for July crossed the wires. The 50.9 reading was a substantial miss (below even the lowest economist forecast from Bloomberg) and threatened the primary source of growth the US economy has drawn from since the recovery was established back in 2009. In turn, the S&P 500 Index would turn a remarkable bullish gap on the open into an eventual 2.5 percent retracement through the first half of the day.
The ISM indicator, along with the other manufacturing readings from the around the world, are an important reminder that economic activity is cooling. The feeble health of the developed world’s consumer is finally meeting the global shift towards austerity (China, Euro Zone, UK). That leaves the US in a unique position: either join the stimulus withdrawal and suffer the economic slowdown; or pursue financial responsibility and potentially turn a slowdown into a double dip recession. This is another layer of complication to the deficit debate at hand. According to the original timeline; the window is supposed to close by the coming session. That said, it seems that the revised two-stage program that has garnered support from Congressional leaders and already passed the House looks to have a good chance of making it all the way through. Yet, it is still under heavy debate as to whether the planned cuts would be enough to prevent a downgrade by the major credit rating agencies. Such an outcome would surely be dollar negative. Though if this effort tips the global economy, there could be a redeeming value to the greenback.
Euro Drawn Between Dollar Volatility, EU Trouble, Upcoming ECB Decision
Fortunately for the euro, headlines about the US deficit debate are still crowding out many of the updates surrounding the Euro Zone’s own troubles. Notable for the day was the fact that the Italian 10 year government bond yield closed at a record high 6.00 percent while the Spanish equivalent advanced to 6.20 percent. Remember, Greece, Ireland and Portugal required bailouts not long after breaching the 7.00 percent level. In the meantime, volatility in risk trends contributed to dramatic losses for European benchmark equity indexes. It will be interesting to see how this combination of funding troubles and the economic slowdown influences the ECB’s decision later this week. Can then keep ignoring it?
Australian Dollar Readies for RBA Decision as Risk Trends Pick Up
We are quickly approaching the RBA rate decision; and rate expectations are somewhat mixed. Looking at overnight index swaps; we see that there is a 16 percent probability of a 25 bps rate cut yet the 12 month forecast is pricing in 27 bps of easing. If we recall the last meeting, Governor Stevens leveraged the importance of CPI; and the 2Q figures a two-and-a-half year high 3.6 percent. Is that enough to make a call?
British Pound Tumbles with Risk, Helped Along by Manufacturing Contraction
It seems much of the world is on the same path of austerity and economic slowdown that the UK pioneered with its self-imposed deficit efforts. Under these circumstances, it isn’t good to be first; because it is exponentially harder to recovery from a slowdown that was ahead of the global curve. We were reminded of this Monday when the UK factory activity reading turned negative for the first time since September 2009.
Japanese Yen Looking at More Volatility as Intervention Rhetoric Heats Up
Talk of Japanese intervention is picking up amongst policy officials, economists and traders. According to Nikkei news group, the central bank is preparing for FX intervention; and an independent move could be quickly followed by a coordinated effort. Should we take these warnings seriously? The short-term impact can certainly generate volatility; but fighting larger trends (like dollar selling) is always a losing game.
Swiss Franc Solidifies Gains After Economic Minister Says Strength to Stay
There are many examples of failed efforts of intervention; but some of the worst results have to fall to the Swiss National Bank which has come under significant scrutiny due to the losses on its reserves fighting the market tide. The futility of this effort seems to be setting in, however, as we had the nation’s Economic Minister warned the high exchange rate is here to stay and it means “extremely tough years” for exporters ahead.
Gold Ramps up the Volatility as Market Debates US Financial Rescue Effort
Like the US dollar and Treasuries, gold put in for an exceptionally volatile session through Monday. Through that same comparison, though, the metal was just as lacking for direction. To stoke capital flows into the metal once again (or away from it should there be palatable deficit resolution); we need an unmistakable view of the United States’ fiscal position: destined for downgrade or slow return to prudence.
**For a full list of upcoming event risk and past releases, go to www.dailyfx.com/calendar
Next 24 Hours
|1:30||AUD||House Price Index (YoY) (Q2)||-3.0%||-0.2%||Lower expected house index may suggest softening real estate sector|
|1:30||AUD||House Price Index (QoQ) (Q2)||-1.0%||-1.7%|
|1:30||AUD||Building Approvals (MoM) (JUN)||3.0%||-7.9%||A mild recovery in building recoveries despite prices fall points to future recovery|
|1:30||AUD||Building Approvals (YoY) (JUN)||-10.3%||-14.4%|
|1:30||JPY||Labor Cash Earnings (YoY) (JUN)||0.4%||1.0%||Japanese labor market still soft|
|4:30||AUD||Reserve Bank of Australia Rate Decision||4.75%||4.75%||Major event of the day: Q2 CPI came in higher than expected despite record-high AUD; RBA may change their commentary on rate hikes|
|6:30||AUD||RBA Commodity Price Index (JUL)||109.4||Commodities price index may hit new high on record strength of metals|
|6:30||AUD||RBA Commodity Index SDR (YoY) (JUL)||28.2%|
|7:15||CHF||Retail Sales (Real) (YoY) (JUN)||-4.1%||Previous was lowest since March 2009|
|7:30||CHF||SVME-Purchasing Managers Index (JUL)||52.5||53.4||PMI expected to be hurt by strong franc|
|8:30||GBP||Purchasing Manager Index Construction (JUL)||53.1||53.6||Index may fall due to government cuts|
|9:00||EUR||Euro-Zone Producer Price Index (MoM) (JUN)||0.1%||-0.2%||Index correlated with consumer prices expected to weaken on a long-term basis on slower recovery, demand|
|9:00||EUR||Euro-Zone Producer Price Index (YoY) (JUN)||5.9%||6.2%|
|12:30||USD||Personal Income (JUN)||0.2%||0.3%||Consumption driver of the US economy expected to stay relatively flat as overall economy still weak, uncertain|
|12:30||USD||Personal Spending (JUN)||0.2%||0.0%|
|12:30||USD||Personal Consumption Exp Deflator (YoY) (JUN)||2.5%|
|12:30||USD||Personal Consumption Exp Core (MoM) (JUN)||0.2%||0.3%|
|12:30||USD||Personal Consumption Exp Core (YoY) (JUN)||1.4%||1.2%|
|21:00||USD||Total Vehicle Sales (JUL)||11.85M||11.41M||A small pick-up in vehicle sales may be due to beginning of 2nd half purchasing by institutions|
|21:00||USD||Domestic Vehicle Sales (JUL)||9.25M||8.95M|
|23:01||GBP||BRC Shop Price Index (YoY) (JUL)||2.9%||Retail sales index may indicate CPI|
|23:30||AUD||AiG Performance of Service Index (JUL)||48.5||Service sector at post-recession levels|
|GBP||Halifax Plc House Prices s.a. (MoM) (JUL)||0.0%||1.2%||House prices watched by BoE may support further lax policies to support economic recovery|
|GBP||Halifax House Price (3MoY) (JUL)||-2.8%||-3.5%|
|GMT||Currency||Upcoming Events & Speeches|
|12:30||USD||Annual Revisions: Personal Income and Spending|
SUPPORT AND RESISTANCE LEVELS
CLASSIC SUPPORT AND RESISTANCE – 18:00 GMT
CLASSIC SUPPORT AND RESISTANCE –EMERGING MARKETS 18:00 GMTSCANDIES CURRENCIES 18:00 GMT
|Resist 2||13.8500||1.8235||7.4025||7.8165||1.3650||Resist 2||7.5800||5.6625||6.1150|
|Resist 1||12.5000||1.7425||7.3500||7.8075||1.3250||Resist 1||6.5175||5.3100||5.7075|
|Support 1||11.5200||1.6500||6.5575||7.7490||1.2000||Support 1||6.0800||5.1050||5.3040|
|Support 2||11.4400||1.5725||6.4295||7.7450||1.1800||Support 2||5.8085||4.9115||4.9410|
INTRA-DAY PIVOT POINTS 18:00 GMT
INTRA-DAY PROBABILITY BANDS 18:00 GMT
Written by: John Kicklighter, Senior Currency Strategist for DailyFX.com
- US Dollar Traders Have to Monitor Debt Talks, Euro Market, Risk Trends (managemenresiko.wordpress.com)
- FOREX: Dollar Can’t Recover Ground on Holiday Trading Conditions (managemenresiko.wordpress.com)
By David Rodriguez, Quantitative Strategist
Euro trades Sharply Higher on Greek Deal – What’s Next?
Fundamental Forecast for the Euro: Neutral
- European leader’s summit sends euro sharply higher against US Dollar
- Key euro technical support resides at 1.4300 for next week
- German Consumer Price index data is a top forex event in week ahead
The Euro rallied sharply against the US Dollar on a breakthrough agreement on further aid for Greece, closing a great deal of uncertainty surrounding the at-risk country and for the broader euro zone. Officials released details of a far-reaching agreement and offered concrete details on further fiscal aid for periphery nations. A pronounced rally across European bond markets and the euro itself underlined that plans were well-received, but a key week for European economic data could ultimately decide euro price action in the days ahead.
Euro zone periphery debt crises are far from over, but the recent agreement ostensibly puts market focus back on economic fundamentals and not on government solvency. Key German Unemployment Change, Consumer Price Index, and Retail Sales figures could subsequently force sharp moves across euro pairs.
The euro had strengthened significantly against the US Dollar and other major counterparts as markets predicted the European Central Bank would be among the most aggressive to raise interest rates from record-lows. Indeed, the ECB has since hiked target rates by 0.50 percent, and Overnight Index Swaps have priced in another 33bps through the coming 12 months. The US Federal Reserve, by comparison, has left interest rates at record lows and traders predict a mere 17bps in interest rate increases through the same stretch. Interest rate differentials favor further EURUSD strength, but it will be important to see momentum remain in favor of further euro gains—especially on key data.
Expectations call for German and broader European Consumer Price Index inflation remained above the ECB’s official target of 2.0 percent through July, and central bank president Jean Claude Trichet has been resolute in calling for fairly aggressive monetary policy measures on elevated price pressures. It will be important to watch for surprises in CPI results as well as employment figures, as both are likely to figure into future ECB moves.
Ultimately, the euro’s direction against key counterparts should depend on traditional fundamentals—not ongoing struggles with periphery nation debt. There remain details that need to be sorted out with the new deal on Greek debt, and individual parliaments must ratify the deal. Yet the long-term nature of the deal suggests troubles with Greece are less relevant to day-to-day price action. Spanish and Italian bond yield surges remain a concern, but stability at or around current levels would decrease fears of further debt stresses.
The Euro/US Dollar has traded to key resistance at a falling trendline from May lows, and whether or not the pair can move above $1.44 could set the tone for the coming months of trade. We will watch European data with great interest, while ongoing developments surrounding US debt ceiling concerns could likewise affect USD pairs. – DR
- How Greece’s Ongoing Drama Could Undo the Euro (time.com)
- Will Greece, the IMF and the ECB figure things out in time? (beta.tradingfloor.com)
- Economix: Economist Q.&A. on Europe’s Debt Accord (economix.blogs.nytimes.com)
- News Analysis: E.C.B. May Be Winner in Debt Talks (nytimes.com)
- Euro Zone Moves Toward Greek Deal – Wall Street Journal (news.google.com)
- 6 Month Euro Forecast: Looking for the EURUSD at 1.25 (managemenresiko.wordpress.com)
By Christopher Vecchio, Junior Currency Analyst
With the last full week of July ahead, there is significantly more event risk on the docket than the third week in July. Now, as the markets have begun to digest the results of the new bailout of Greece, price action will largely be dictated by key events on the docket, including American and British growth figures, Australian and German consumer price indexes, and a rate decision from the most southern antipodean nation. Still, the markets will continue to listen to jabbering between Democrats and Republicans, as the debt ceiling debacle has still yet to find resolution ahead of the ‘hard’ August 2 deadline.
• United Kingdom Gross Domestic Product (YoY) (2Q A): July 26 – 08:30 GMT
The British economy has experienced growth of at least 1.5 percentin each of the past four quarters, on a year-over-year basis, going back to the second quarter of 2010. Surveys indicate that the GDP growth figure released on July 26 will come in at 0.8 percent, well below last quarter’s 1.6 percent pace, on a yearly-basis. Growth forecasts have been revised downwards as the economy has failed to pick up momentum in recent weeks and months, as most recently noted by the Bank of England minutes, released this past week.
Contributing to the downturn has been the persistent Euro-zone debt crisis, which has curtailed investment overseas and demand for British goods. Inflation continues to be stubbornly high at 4.5 percent, more than double the inflation target rate as set by the Bank of England. Although a decline in output should deter further inflation, the priority remains to accelerate economic growth, which is why the central bank has held rates at 0.50 percent for twenty-nice consecutive months.
• United States Durable Goods Orders (JUN): July 27 – 12:30 GMT
U.S. Durable Goods Orders are expected to have risen only 0.3 percent after increasing a promising 2.1 percent in May, already revised up from the 1.9 percent initial reading. The increase is still welcomed following a 2.7 percent drop in orders in April. The recent upswing in the closely watched economic indicator is rooted mainly in easing disruptions to factory production in the United States, as supply chain disruptions as a result of the aftermath of the Japanese natural disasters and ensuing earthquake weakened demand. In the fragile U.S. economy, manufacturing has been one of the key areas of strength since the recession abated.
A weaker domestic currency has boosted exports and encouraged manufacturers to continue to make long-term investments. The durable goods orders report is a leading indicator of economic health, and will thus be closely watched to gauge manufacturers’ sentiment and investment activity as the debt ceiling debate looms in the U.S.
•Reserve Bank of New Zealand Rate Decision (JUL 28): July 27 – 21:00 GMT
At its last meeting on June 8, the Reserve Bank of New Zealand decided to maintain its key benchmark interest rate at 2.50 percent, on the outlook that the economy is steadily improving following the earthquakes over the past few months. The central bank has determined that the most southern antipodean nation is still in need of stimulus to promote further strengthening. It is widely expected that the key rate will be kept at 2.50 percent at the next monetary policy meeting on July 28, with the Credit Suisse Overnight Index Swaps showing a mere 6.0 percent chance of a 25.0-basis point rate hike. Still, despite such weak expectations, the number of basis points priced into the Kiwi over the next 12-months, 94.0, has boosted the New Zealand Dollar since mid-March.
In spite of such a strong domestic currency, recent data releases indicate that the economy is undergoing robust growth and inflation has risen faster than expected. GDP growth figures released on July 13 came in at 1.4 percent, blowing past a forecast of 0.5 percent growth, while recent inflationary data showed inflation increasing to 5.3 percent, topping expectations of 5.1 percent, on a year-over-year basis. These two important economic indicators will play a major role in determining future the central bank’s cash rate decisions. If the recent growth continues, there is a high probability that there will be a rate hike in September to contain inflationary pressures.
• German Consumer Price Index (YoY) (JUL P): July 28 – 04:00 GMT
The German consumer price index has remained steady for the last six months and no change is expected in this figure at the next release next Thursday. According to a Bloomberg News survey, the initial forecast calls for a print of 2.3 percent on a year-over-year basis, matching the number of the previous month. This number is slightly higher than the European Central Bank’s target inflation of “below but close to 2 percent,” but the recent rate hikes enacted by the central bank are expected to help suppress further jumps in inflationary pressures: changes in interest rates take anywhere from two- to six-months to be felt by an economy.
Higher energy prices have been the primary driver keeping inflation above the 2.0 percent mark but “lower food and seasonal food prices can be in part held responsible for the benign pan-German reading.” Since Germany is the Euro-zone’s strongest and largest economy, this reading is closely watched by the European Central Bank as a determinant of their monetary policy decisions.
• United States Gross Domestic Product (Annualized) (2Q A): July 29 – 12:30 GMT
The U.S. economy is expected to have experienced very slow economic growth in the second quarter of 2011. The GDP data that will be released on July 29 is an indication that output is increasing at a decreasing rate, albeit at a decreasing rate. Forecasts call for a 1.7 percent growth in output versus a 1.9 percent growth experienced in the first quarter, according to a Bloomberg News survey. Two significant factors contributing to the slow recovery include high food and energy prices and supply chain disruptions following the Japan earthquake.
The ongoing debt ceiling debate has reduced consumer confidence as investors concerns grow about the possibility of a U.S. default. The lowered confidence levels have translated into reduced spending impacting the output produced by the world’s largest economy. At the most recent Federal Reserve monetary policy meeting, the FOMC revised GDP and unemployment forecasts downwards from their April projections. The change in growth forecasts for 2011 and 2012 have been revised from 3.3 percent to 2.9 percent and from 4.2 percent to 3.7 percent, respectively.
Written by Christopher Vecchio, Currency Analyst
- Dollar Ignores Budget Headway, Earnings and Suffers for Risk Rally (managemenresiko.wordpress.com)
- Bank of England minutes suggest rate hike not near (seattletimes.nwsource.com)
- Eurozone inflation to decelerate? (beta.tradingfloor.com)
- BOE Voted 7-2 as Most See Less Need for Near-Term Rate Rise (businessweek.com)
- Inflation spike looms closer but no interest rate rise, Bank of England minutes show (telegraph.co.uk)
6 Month Euro Forecast: Looking for the EURUSD at 1.25
By David Rodriguez, Quantitative Strategist
The Euro has done well through the first half of 2011, rallying to fresh multi-year highs against the US Dollar and strengthening against almost all G10 counterparts. There remain clear fundamental risks for the single currency in the second half of 2011, and we look for the Euro to fall. The major concern is whether several at-risk countries can remain stable despite clear debt crises. The European Central Bank’s next actions may prove pivotal—especially as the Euro has strengthened on robust interest rate forecasts and is at risk of losses on any significant downgrades. The number of risks to the Euro arguably outweighs those to the US Dollar, leaving us watching for further EURUSD declines. We look for the EUR/USD to end 2011 below 1.25.
European Sovereign Debt Crisis – Where Did We Start and Where Do We Stand?
The euro zone financial debt crisis continues to threaten EUR stability and remains a key risk through the second half of the year. At the forefront of traders’ minds is Greece—can the southern European state withstand market pressures and remain solvent?
Despite a €110 billion three year bailout agreement with the European Union and International Monetary Fund, Greece has yet to see the light at the end of the tunnel. The difficulty lies in the structure of the bailout deal. When the International Monetary Fund agreed to loans, it required that the Greek government return to the debt markets for its borrowing needs as soon as 2012. At the time, this request seemed reasonable. With backstops from the EU and IMF, international investors would be more likely to buy Greek debt. Yet the continuing sell-off in Greek bonds underline that few are willing to hold existing Greek debt—much less buy any newly-issued debt.
The cost to insure against a Greek debt default has recently hit record-highs as seen through Credit Default Swaps, and current sovereign debt ratings imply a 50 percent chance of a Greek default within the coming five years.
A further bailout seems increasingly necessary and likely, but uncertainty over Greece’s ability to repay debts could likewise spread to other at-risk government treasuries.
Spain and Portugal Outlook Uncertain on Funding Needs
The key risk with periphery debt crises has and will always be contagion—will Greece’s troubles affect other periphery nations and even spill into the core through higher bond yields? In absolute terms, bailouts for Greece, Portugal, and Ireland have cost relatively little. Together, the three economies comprise approximately 5 percent of total euro zone Gross Domestic Product. If EMU titans Spain (8.9 percent of GDP) and Italy (12.8 percent of GDP) fall into trouble, however, European coffers may not be able to cope with the required fiscal aid.
The spread between benchmark Spanish and German government bond yields has recently widened to its largest since the inception of the euro—implying that Spain’s relative debt risk is worsening. And though a 10-year Spanish government bond yield of approximately 5.5 percent is low by historical standards, the widening gulf could further exacerbate government deficits. Much the same can be said for Italy. A key question is whether bond troubles in periphery nations can spread to the core, truly threatening the stability of the single currency zone.
Of course, there have been plenty of reasons that the euro has strengthened despite these readily apparent sovereign debt crises.
European Central Bank – Can They Continue to Hike Rates?
Expectations that the European Central Bank will be among the most aggressive central banks in raising interest rates has driven speculative interest in the euro, pushing the price up in the first half of this year. A key question will be whether the ECB will follow through on lofty forecasts and continue to raise interest rates, further supporting the currency.
Robust interest rate forecasts have driven the euro higher against the US Dollar and Japanese Yen—currencies that hold the dubious honor of the two lowest-yielding among the industrialized world.
Overnight Index Swaps, a tool used by major financial institutions to bet on and hedge against interest rate moves, show that traders expect the ECB could raise rates three times through the second half of 2012 in order to head off inflation in the Euro Zone. This compares to forecasts that the US Federal Reserve will leave interest rates roughly unchanged through the same stretch. The Bank of Japan is similarly forecast to leave monetary policy effectively unchanged and to keep Japanese short-term interest rates near zero.
Yet in markets nothing is guaranteed, and indeed we might argue that the euro has seen about all of the yield-linked support it will enjoy. That is to say, it would likely take a material improvement in ECB forecasts (and subsequent rate hikes) to continue driving EUR gains.
Can the European Central Bank continue to set hawkish monetary policy despite clear economic and fiscal struggles in periphery nations? ECB President Jean Claude Trichet has continued to emphasize that the central bank sets policy for the whole of the monetary union and cannot ignore mounting inflationary pressures. Yet with fiscal austerity packages guaranteed across the euro zone, demand-driven inflation could quickly abate and lessen the need for tightened policy.
All else remaining equal, the euro would almost certainly fall on a sharp downgrade in ECB interest rate expectations. Of course, nothing ever remains equal in financial markets and there are a number of mitigating factors that could strongly affect the single currency.
Financial Markets Continue to Drive Currencies
The euro remains a currency closely linked to equities markets, with the EUR/USD tending to rise with stocks, and tending to fall when stocks fall. Further market turmoil could almost certainly derail the recent EUR strength. The correlation between the Euro/US Dollar currency pair and the US Dow Jones Industrial Average has recently been trading near record levels; Dow variation has theoretically explained up to 45 percent of Euro movements. Part of this relationship is the US Dollar’s appeal as the currency of many popular “safe” investments—most notably US Treasury Bonds. On the other side of it, the euro is arguably among the most at-risk assets in financial market upheaval as debt market difficulties could further exacerbate the current European sovereign debt crises.
The Dow Jones Industrial Average limped into the second half of the year, declining for six consecutive trading weeks and posting its worst performance in nearly a decade. It should come as relatively little surprise that especially sharp equities sell-offs forced EURUSD weakness, and indeed a continuation could see the US Dollar further regain ground against its high-flying European counterpart.
Euro in Favorable Long-Term Trend but with Considerable Risks in the Second Half of 2011
The Euro remains well within a decade-long uptrend against the US Dollar, but the medium-term outlook is fraught with risk as doubts remain about euro zone economic and political stability. Of course, the US Dollar is not without its own issues and actual EURUSD price action will depend on a great number of different dynamics.
Whether or not the euro remains in its broader uptrend will greatly depend on developments in sovereign debt crises and market expectations regarding the European Central Bank. It seems that risks generally favor Euro losses, and indeed our forecast remains bearish into the end of 2011.
- ECB Bond-Buying Halt Tested as Italy Plans Auction: Euro Credit (businessweek.com)
- Currencies: Dollar, yen gain ahead of euro-zone meeting (marketwatch.com)
- Currencies: Dollar gains on euro on Greece contagion fears (marketwatch.com)
- Gold and Dollar Pop on Euro Debt Crisis (businessinsider.com)
- China rate hike talk takes the edge off risk in Asia (tradingfloor.com)
- IIF’s Dallara: Euro Zone Has Taken Big Step (online.wsj.com)
- Europe considers Greek default (theglobeandmail.com)
- Euro sovereign risk spreads jump wider ahead of ECB (tradingfloor.com)
Jumat, 24 Juni 2011
Minyak Rebound Setelah Merosot Terkait Rilis IEA
Harga minyak kembali pulih lebih dari 1 dollar setelah anjlok disesi sebelumnya terkait berita adanya pelepasan persediaan cadangan minyak mentah untuk ke 3 kalinya. Harga minyak mentah As menguat $1.17 menjadi $92.19/ barel. International Energy Agency atau IEA mengumumkan pada hari Kamis bahwa badan tersebut akan menambah persediaan minyak mentah dunia sebanyak 2.5% untuk bulan depan dan membawa harga turun, dengan harga minyak AS menghapus penguatan tahun ini.
Harga Emas Masih Kuat
Spot emas naik $2.80 di Asia menjadi $1,523.50/ons, pulih dari pelemahan di hari Kamis (23/06) terkait penguatan USD. National Australia Bank telah merevisi perkiraan spot emas untuk kuartal dua tahun 2011 menjadi rata-rata $1,497 dari perkiraan di bulan Mei di $1,450, sementara untuk kuartal ketiga meningkat menjadi $1,467 dari $1,450 di bulan Mei. NAB meningkatkan fokus pada pasar komoditi akibat adanya kemungkinan kegagalan masalah hutang Yunani. Bank tidak merubah perkiraannya dan masih memprediksi mengenai merosotnya harga dua tahun mendatang. “Diperkirakan harga akan sedikit menurun selama periode ini, permintaan diperkirakan akan terus meningkat bersamaan dengan stabilnya akumulasi oleh bank sentral dan melonjaknya permintaan untuk perhiasan terkait meningkatnya pendapatan di Cina dan India,” katanya.
Euro Bersiap Turun 3 Kali Pekan Ini
Euro telah bersiap untuk mengalami kejatuhan sebanyak 3 kali dalam seminggu terhadap dollar AS, pelemahan terlamanya dalam 4 bulan, sebelum para pimpinan Uni Eropa akan mencapai kesepatakan di Brussels hari ini terkait pendanaan hutang untuk Yunani. “Dalam perkiraan selama 6 bulan saya melihat level-level penurunan pada Euro”, dikatakan Michael McCarthy, seorang pimpinan market strategist dari CMC Markets. “Untuk situasi Yunani, salah satu masalah untuk pasar bahwa pemecahan masalah akan berlangsung beberapa bulan dan tahun untuk dilakukan”. Euro diperdagangkan di level $1.4263 di Tokyo dari sebelumnya $1.4256 di New York kemarin, bersiap untuk menyambut kejatuhannya 0.3% dalam mingguannya. Mata uang tersebut sempat berada di 114.680 Yen dari sebelumnya 114.78 Yen. Dollar As berada di level 80.54 Yen dari sebelumnya 80.51 Yen, bersiap untuk kenaikan 0.6% minggu ini.
Bursa Hong Kong Naik; Debut Prada Positif
Bursa saham Hong Kong naik pada awal perdagangan hari Jumat, dengan saham penerbangan yang naik tajam mengikuti aksi jual kontrak minyak mentah semalam, dan saham Prada spA mendapat penguatan dalam perdagangan perdananya. Indeks Hang Seng melaju 0.5% ke 21,876.99, sementara indeks Hang Seng Cina naik 1.1% ke level 12,196.00. Sentimen secara umum tertolong oleh berita kesepakatan bantuan untuk Yunani, tetapi saham penerbangan masih bertahan kuat, reli akibat dari anjloknya harga minyak mentah. China Eastern Airlines Corp menguat 4.4%, Air China Ltd naik 4.2% dan Cathay Pacific Airways Ltd bertambah 1.8%. Prada bergerak naik di perdagangan perdananya, naik 0.3% walau saham tersebut telah diperdagangkan melemah di luar bursa menjelang peluncurannya. Sementara indeks Shanghai sendiri naik 0.1% di awal perdagangan.
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Market Outlook 20 – 25 Juni 2011
15 dari 23 pedagang, investor, dan analis yang disurvei oleh Bloomberg mengatakan Komoditi Emas akan naik minggu ini. Komoditi Emas naik sebesar 7,5% tahun ini, mencapai harga tertingginya di $1,577.60/troy ounce pada tanggal 2 Mei 2011, karena investor mencari logam mulia sebagai perlindungan kekayaan terhadap kenaikan inflasi dan penurunan nilai mata uang.
Monetary Policy Meeting Minutes, RBA (Reserve Bank of Australia) pada 21 Juni 2011 pukul 08:30 WIB akan membahas kondisi ekonomi yang mempengaruhi keputusan mereka dalam menentukan tingkat suku bunga kedepan. Hasil yang positif akan men-support Aussie.
German ZEW Economic Sentiment dan German Ifo Business Climate Level indeks gabungan berdasarkan survei investor dan analis institusi Jerman, dan Level indeks gabungan terhadap manufaktur, bangunan, grosir dan pengecer. Laporan keduanya bulan ini di prediksi mengalami penurunan.
Existing Home Sales Jumlah bangunan yang terjual per tahun kecuali konstruksi yang baru di Amerika Serikat diprediksi akan mengalami penurunan, sebesar 4.83M, dari 5.05M. Apabila pada 21 Juni 2011 di rilis di bawah 4.83M, maka akan berdampak negatif bagi Dollar.
Monetary Policy Committee (MPC) meeting minutes, Bank of England (BOE) Pada tgl 22 Juni 2011 akan mengadakan pertemuan mengenai kebijakan moneter, yang mempengaruhi keputusan mereka dalam menentukan tingkat suku bunga kedepan. Hasil yang positif akan menguntungkan Sterling.
FOMC (Federal Open Market Committee) Statement Bank sentral Amerika Serikat pada tgl 22 Juni 2011 akan menyampaikan pernyataannya mengenai ekonomi Amerika, di barengi dengan penetapan tingkat suku bunga pada Federal Funds Rate. dilanjutkan dengan FOMC Press Conference. Diprediksi The Fed tetap mempertahankan tingkat suku bunga di bawah 0.25%.
Inflation Report Hearings, Gubernur BOE (Bank of England) dan beberapa anggota MPC (Monetary Policy Committee) Pada tanggal 23 Juni 2011 akan menyampaikan testimoni mengenai inflasi. Pernyataan yang optomistik akan berdampak positif bagi Poundsterling.
New Home Sales.
Jumlah rumah baru yang terjual di Amerika Serikat yang akan di rilis pada tgl 23 Juni 2011, di prediksi mengalami penurunan tipis, sebesar 311.000, dari 323.000. Apabila di rilis di bawah 311.000 maka akan berdampak negatif bagi Dollar.
BOE (Bank of England) Gov King Speaks, Gubernur Bank of England – Mervyn King Akan menyampaikan pidatonya pada 24 Juni 2011 pukul 16:30 WIB mengenai kebijakan moneter Inggris. Pernyataan yang optimistik akan menguntungkan Poundsterling.
Untuk indikator ekonomi global pada minggu ini tidak banyak rilis data ekonomi global yang penting, namun pengumuman suku bunga the Fed pada Rabu malam nanti akan jadi perhatian besar pasar, walau kemungkinan masih akan bertahan rate-nya. Secara umum agenda rilis data ekonomi yang kiranya perlu diperhatikan investor minggu ini, adalah:
• Dari kawasan Amerika: Berupa rilis data Existing Home Sales pada Selasa malam; kemudian pengumuman Federal Funds Rate yang keumungkinan besar bertahan di level 0.25% pada Rabu tengah malam; berlanjut dengan rilis New Home Sales serta rilis tenaga kerja Unemployment Claims mingguan yang biasa menjadi perhatian pasar pada Kamis malam; terakhir adalah Core Durable Goods Orders pada Jumat malam.
o Dari kawasan Inggris dan Eropa: berupa pengumuman German ZEW Economic Sentiment pada Selasa sore; serta German Ifo Business Climate di waktu Jumat petang.
Minggu lalu di Pasar Forex Nilai tukar mata uang dollar mengalami penguatan secara umum lebih di akibatkan melemahnya mata uang Euro di minggu yang kedua, di tengah menguatirkannya situasi menuju ‘default’ untuk Yunani.
Index dollar terpantau naik ke level 75.445 dari yang pernah di 73’an.
Minggu yang lalu Euro terus melemah di minggu yang kedua oleh situasi makin terkungkungnya perekonomian Yunani, yang kemudian rebound di akhir minggu dengan EUR/USD bertengger di level 1.4305. Untuk minggu ini market range-nya akan berada antara resistance pada 1.4690 dan 1.4940, sedangkan level support di 1.4253 dan kemudian pada 1.3970.
Poundsterling Pada minggu lalu juga terkoreksi terhadap dollar, walau tidak setajam Euro, dan berakhir di level 1.6177. Untuk minggu ini, level Resistance terdekat pada 1.6548 dan kemudian 1.6747, sedangkan Support kalau tembus 1.6059 akan berada pada 1.5932 dan kemudian 1.5752.
Untuk USD/JPY Secara umum minggu lalu melemah terbatas dan ditutup di 80.01, pasar di minggu ini berada di antara Resistance pada 82.27 dan 85.59, serta Support level pada 78.82.
Sementara itu Aussie dollar terpantau seminggu lewat menguat terbatas yang berakhir di 1.0617. Range minggu ini masih di antara resistance 1.0887 dan 1.10 sementara support level di 1.0440 dan 1.0288.
Untuk pasar di Stock Index Futures pada minggu lalu di regional Asia masih terus melorot di minggunya yang ketujuh secara umum, tertekan oleh kekuatiran akan sentiment situasi ekonomi di Yunani dan Eropa.
Indeks Nikkei sementara ini masih tetap konsolidasi, berakhir di 9375. Rentang pasar saat ini antara level resistance di 10300 dan kemudian ke level 10875, serta support pada level 9360 dan lalu 8370. Sementara itu,
Indeks Hangseng Berjangka di Hongkong minggu lalu ditutup melemah tajam ke level 21609. Minggu ini masih berada dalam range level resistance di 22617 dan berikutnya 23785, sementara support-nya di 21026 serta 20250.
Bursa saham Wall Street minggu lalu masih sempat melemah namun rebound di akhir pekannya untuk menahan lanjutan pelemahan terpanjang sejak 2008, diwarnai dengan concern global terhadap ancaman resesi baru dunia.
Dow Jones Industrial berakhir di level 12004.30; saat ini dalam range resistance terdekat level 12573 dan kemudian 12876, sementara support di level 11566 dan pada 10950.
Index S&P 500 minggu lalu naik sedikit naik ke level 1271.50. Berikutnya, maka market range-nya akan berada di antara resistance level 1296 dan 1345, sementara level support berada di 1250 dan 1170.
Untuk Pasar Emas Minggu lalu terpantau menanjak terbatas di tengah munculnya kekuatiran ancaman resesi atas perekonomian global, dan berakhir di $1538.45/troy ounce, sesuai presdiksi sebelumnya. Untuk minggu ini Emas di perkirakan dengan bertahap masih berpeluang menguat kembali oleh kenaikan demand dan safe haven, dengan rentang berada antara Resistance pada $1574 dan $1580, sementara Support ada di $1460 serta berikut $1410/troy ounce. Di Indonesia, harga emas terpantau sedikit menguat di tengah terkoreksinya rupiah, ditutup di akhir pekan pada Rp 424,600
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- BOE Governor King remains resolutely dovish-despite higher inflation forecasts (tradingfloor.com)
- BOE Leaves Bank Rate Unchanged At 0.5% At June Meeting (forexlive.com)
- FX Update: Risk appetite suffering – AUDUSD to try below 1.05? (tradingfloor.com)
- Next Wk/US: Cent Bank Decisions,Non-Mfg ISM, Consumer Credit (forexlive.com)
- BOE Weale Makes Case For Hike In Bank Rate Now (forexlive.com)
- Forex: Euro Struggles To Hold Ground On Growth Concerns, British Pound Rebound To Gather Pace (businessinsider.com)
- FX Update: JPY weighed on by Japan’s trade data (tradingfloor.com)
- Here’s Why The Fed Still Can’t End Stimulus! (businessinsider.com)
- Yen Advances on Concern Over Europe Stress Tests, U.S. Slowdown (businessweek.com)
- Forex: Euro Eyes 1.4600 On Risk Appetite, BoE Votes 6-3 To Maintain Current Policy (businessinsider.com)
- Property market: How 2011 is shaping up (confused.com)
- Macro Updates: FOMC, BoE Minutes non-events? (tradingfloor.com)
- BOE Sentance: Weak Sterling Could Push CPI Over 5%: Bloomberg (forexlive.com)
- Forex: Euro Clears 1.4300, British Pound To Consolidate Ahead Of BoE Rate Decision (businessinsider.com)
- Forex: Euro To Maintain Trend Ahead Of ECB Rate Decision, British Pound Struggles To Hold Ground On Growth Concerns (businessinsider.com)
TODAY’S ANALYSIS FOREX
Dollar Australia menghentikan penurunan 2 hari berturut-turut pada hari Jumat setelah Kanselir Jerman Angela Merkel sepakat untuk berkompromi dan bekerja sama dengan European Central Bank dalam mengupayakan paket bailout baru untuk Yunani, yang memulihkan permintaan untuk aset beresiko.
Saturday, June 18, 2011 2:08 pm
TODAY’S FOREX ANALYSIS
The Australian dollar stopped down 2 days in a row on Friday after German Chancellor Angela Merkel agreed to compromise and cooperate with the European Central Bank in seeking a new bailout package for Greece, which restore the demand for risky assets.
Aussie also has recorded the biggest weekly gain in a month against the U.S. currency after China was reported to increase industrial productivity.
“Germany has softened and they would not formally ask for a private party for Greece, so we can see the sentiment against the risk of getting better,” said Charles St-Arnaud, abalis forex at Nomura Holdings Inc. in New York. “The appreciation of the Australian dollar this week was driven more by growth factors in China that do not seem to slow down as quickly as anticipated.”
Productivity of China’s industrial sector increased by 13.3% in the last month, which exceeded expectations of economists, with retail sales rising 16.9%, according to the statistics bureau report. The consumer price index also recorded an increase of 5.5% percent, which according to market expectations.
While banks have been instructed to set aside more money as reserves.
However, strengthening the currency of South Pacific countries that had higher yield this still seems to be limited as U.S. data weaker than expected prompted speculation that the recovery of the world’s largest economy was being shaken.
Currently AUD / USD traded at $ 1.0615, or about 0.5% higher than the opening price on Friday.
- Greek debt: Europe at the crossroads (independent.co.uk)
- Greek PM makes rival finance chief to shore up support – Reuters (news.google.com)
- Greek PM replaces finance minister (financialpost.com)
- European Finance Chiefs Split on Bondholder Role in Greek Rescue (businessweek.com)
- Greek Default: The Day After (blogs.wsj.com)
- Greek Default And The Markets (ritholtz.com)
- Euro Strengthens as Germany Signals Compromise on Greek Crisis (businessweek.com)
- Darkest before the Dawn (businessinsider.com)
- Trichet:Must Avoid Compulsion,Credit Event,Default For Greece (forexlive.com)
- Greek chaos fuels markets’ worst fears (ctv.ca)