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Bobbys Corner-Open Market-Sept.8.2011

admin — Wed, 07 Sep 2011 15:17:36 +0000

Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
FXDD provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record.
Past performance is no guarantee of futures results and FXDD specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

forex.fxdd.com

Wall Street down on Europe; bear market fears grow

admin — Tue, 06 Sep 2011 14:15:23 +0000

By Edward Krudy

NEW YORK | Tue Sep 6, 2011 5:01pm EDT

NEW YORK (Reuters) – Wall Street fell for a third day on Tuesday on fears Europe still has failed to tackle its debt crisis, prompting worries the market is headed to new lows for the year.

Investors channeled cash into less risky assets as doubts resurfaced over the political will of Italy and Greece to push through tough budget measures and as Germany hardened its stand against providing more aid. The worries over the European debt crisis renewed fears that the global economy could fall into recession.

The S&P 500 is now down 14.5 percent from its highest point in 2011, reached at the end of April. Though investors have periodically taken heart from signs that Europe has carved out a plan to deal with its festering crisis, confidence has been repeatedly walloped every time there is a development showing that the problems have not been solved.

“We have got a shot at trading the S&P under 1,100 again,” said Nick Kalivas, an equity index analyst at MF Global in Chicago. “I don’t sense that people are really going to defend the market until something like that occurs.”

A similar pattern of fractured confidence exists in bank stocks. Major U.S. banks were among the biggest decliners on Tuesday, with the KBW Bank index off nearly 2 percent. Late on Friday, the Federal Housing Finance Agency sued 17 large U.S. banks over subprime mortgage-backed bonds, compounding fears about the health of the sector.

JPMorgan and Bank of America, both subjects of the suit, fell more than 3 percent on Tuesday.

The CBOE Volatility Index, or Vix, a measure of expected market turbulence, posted its biggest gain in nearly two weeks, climbing 9.4 percent to 37.08.

“Right now there is a tremendous amount of uncertainty,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut. “There is a decent chance that we are in a bear market.”

The Dow Jones industrial average dropped 100.96 points, or 0.90 percent, to 11,139.30. The Standard & Poor’s 500 Index fell 8.73 points, or 0.74 percent, to 1,165.24. The Nasdaq Composite Index lost 6.50 points, or 0.26 percent, to 2,473.83.

Traders are monitoring lows set by major global indexes during the selloff in the first half of August. So far, only Germany’s DAX, down nearly 25 percent this year, and Japan’s Nikkei have fallen below those levels.

The S&P 500 hit a 2011 low of 1,101 on August 9.

European shares extended losses on Tuesday, after falling more than 4 percent on Monday, hitting their lowest close in more than two years on worries the euro zone debt crisis was deteriorating. The PHLX Europe sector index slumped 3.5 percent. U.S.-listed shares of Credit Suisse fell 12.9 percent to $23.84.

Gold stocks got a lift as the price of gold jumped to a record high above $1,920 after Switzerland pegged its currency to the euro in an effort to prevent its rapid appreciation in an extended spat of safe-haven buying. The precious metal then retreated 2 percent from that level as investors took profits.

The Arca Gold Bugs index, which measures the performance of 16 U.S.-listed gold miners, rose 0.6 percent. Eldorado Gold Corp was the biggest percentage gainer, up 2.4 percent to $21.36.

The Financial Times reported several big U.S. banks, in talks with state officials on settling claims of improper mortgage practices, were offered a deal to limit legal liability in return for a multibillion-dollar payment.

Several brokerages including Nomura cut their price targets on big lenders.

Bank of America Corp lost 3.6 percent to $6.99 and JPMorgan Chase & Co fell 3.4 percent to $33.44.

Among gainers, Sunoco Inc rose 5.3 percent to $38.03 after the energy company said it plans to exit its refining business and focus on its logistics operations.

Packaging company Temple-Inland Inc jumped 25 percent to $30.85 after International Paper Co agreed to buy it for $32 per share. International Paper rose 8.9 percent to $27.77.

Trading volume was lower than usual at 7.9 billion shares on the New York Stock Exchange, the American Stock Exchange and Nasdaq.

Decliners beat advancers by nearly than three-to-one on the New York Stock Exchange. On Nasdaq, decliners beat advancers by about two-to-one.

(Reporting by Edward Krudy; Editing by Leslie Adler)

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Risk appetite fades over speculation of weaker housing market in US

admin — Mon, 23 Aug 2010 04:21:02 +0000

Market Brief

The JPY advanced against all 16 major counterparts before reports this week forecast to show US existing home sales fell and Japan’s export growth slowed in July. Australia’s currency weakened after the election failed to deliver a majority government for the first time in 70 years. The EURUSD traded near a five-week low ahead of European data that may show growth in the EU’s services and manufacturing industries fell to 56.3 (prev. 56.7). The EURJPY dropped to 108.50, USDJPY fell to 85.36 and EURUSD traded at 1.2711 after it reached 1.2664 on Friday, the lowest since July 13, AUDUSD slipped 0.3% to 0.8911 and AUDJPY dropped 0.6% to 76.08. Sales of US existing homes probably dropped 12.9% to 4.68 million annual pace, Japan’s exports probably advanced 21.8% (prev. 27.7%) slower than last month according to data to be released on Aug. 25. Gains in the JPY were sustained after reports said currency intervention wasn’t discussed between Prime Minister Naoto Kan and BOJ Governor Masaaki Shirakawa in their telephone conference today. The Nikkei 225 retreated 0.8% to 9,108.58, the lowest since November, MSCI Asia Pacific Index fell 0.1% while S&P 500 Index futures climbed 0.2%.

The EURGBP declined to a seven-week low after France’s government last week cut its forecast for economic growth next year as President Nicolas Sarkozy prepares for the biggest budget squeeze in at least two decades. France will probably grow 2% (prev. 2.5%) in 2011, slower than previous forecast. France has pledged to cut the budget deficit to 6% of the GDP next year and to 3% by 2013 from about 8% in 2010. Europe’s sovereign risks may re-emerge amid lingering concerns about its fiscal health, giving further strength to a case of a weak EUR. ECB council member Axel Weber said on Aug. 20 that the ECB should help banks through end-of-year liquidity tensions before deciding when to withdraw emergency lending measures triggering concern about Europe’s recovery.


Global Indexes	Current Level	% Change
Nikkei 225 Index	9116.69	- 0.68
Hang Seng Index	20895.17	- 0.41
Shanghai Index	2640.24	- 0.08
FTSE futures	5194.00	- 0.35
DAX futures	6015.00	+ 0.06
DJIA futures	10219.00	+ 0.17
S&P future	1072.70	+ 0.19


World Markets	Current Level	% Change
Gold	1229.85	+ 0.17
Silver	18.07	+ 0.37
Crude wti	74.05	+ 0.31
VIX	25.49	- 3.59
USD Index	82.93	- 0.16


Todays Calender	Estimates	Previous	Country / GMT
GE PMI Manufacturing	60.5	61.2	EUR/0730
GE PMI Services	56.3	56.5	EUR/0730
EU PMI Composite	56.3	56.7	EUR/0800
EU PMI Manufacturing	56.1	56.7	EUR/0800
EU PMI Services	55.4	55.8	EUR/0800
EU Consumer Confidence	-14	-14	EUR/1400

Currency Tech

EURUSD
R 2: 1.3250
R 1: 1.3000
CURRENT: 1.2725
S 1: 1.2680
S 2: 1.2540

USDJPY
R 2: 87.20
R 1: 86.80
CURRENT: 85.37
S 1: 85.00
S 2: 84.50

GBPUSD
R 2: 1.5925
R 1: 1.5750
CURRENT: 1.5608
S 1: 1.5525
S 2: 1.5350

AUDUSD
R 2: 0.9200
R 1: 0.9070
CURRENT: 0.8925
S 1: 0.8810
S 2: 0.8725

S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot

Published on Mon, Aug 23 2010, 09:14 GMT

fxstreet.com

The superpower’s labor market continuous deterioration may be slightly easing but remains nowadays major obstruction…

admin — Thu, 29 Apr 2010 02:02:24 +0000

The present recovery path is gaining momentum gradually throughout most of the economic activities and conditions of the world’s superpower, as what was already attested throughout the last Fed’s Beige Book and yesterday’s FOMC Rate Decision, having manufacturing, services and housing conditions expanding recently across the country along with better than-forecasted first-quarter results posted these days by huge well-known U.S corporations.

Not forgetting that the U.S stocks managed to close in green yesterday, despite the fact that the S&P downgraded the credit-rating for Greece, Portugal, and Spain yesterday, where better-than forecasted first-quarter results reported by huge U.S. corporations such as Dow Chemical Co. and Owens Corning Inc., in addition to the Federal Reserve’s pledge to keep interest rates at a record low, helped in boosting confidence in equity markets.

Plus, the Federal Open Market Committee decided yesterday to keep its benchmark interest rate unchanged and low between 0.0% and 0.25% as what was already highly expected, knowing that the Feds still strongly believe that low rates will support the economy and help boost growth since the current recovery is still taking place but at a slow and a gradual pace.

In fact, the Committee attested that the overall economic activity has continued to gain momentum and that the labor market deterioration is starting to ease, while growth in household spending has currently enhanced but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit conditions.

Accordingly it is clear that the labor market throughout this past period has showed some slender signs of revival but continues on being deteriorated and corroded by the ongoing downside pressures of the economic predicament, and accordingly, it will probably delay a full strong healing of the country from the present recession, having in mind that this is a key sector behind overall economic growth.

Still, later on today we may see further signs of slender enhancement of this deteriorated key sector as the overall number of people filing for unemployment benefits may have slightly plummeted, knowing that the Initial Jobless Claims for the week ending April 24, may have dropped cheerfully to 445 thousand from 456 thousand, while that the Continuing Claims for April 17 could have dropped to 4618 thousand from 4646 thousand.

Published on Thu, Apr 29 2010, 12:05 GMT

fxstreet.com

Hyundai posts record Q1 net on emerging market

admin — Wed, 21 Apr 2010 16:12:14 +0000

SEOUL (Reuters) – Hyundai Motor Co’s (005380.KS) strong performance in emerging economies and growing U.S. market share drove it to a record net profit in the first quarter and should cushion it from a stronger won and rising input costs.

Asian Markets

South Korea’s Hyundai was one of the few winners during an industry-wide slump last year, winning customers with a line-up of smaller, cheaper models and clever marketing that helped it consistently exceed analysts’ forecasts.

It beat forecasts again on Thursday with a five-fold rise in March quarter earnings as Toyota Motor Co (7203.T) grappled with its safety and recall crisis.

“Looking at such a big rise in sales, Hyundai may have succeeded in grabbing market share from Toyota,” said Ryosuke Okazaki, chief investment officer of ITC Investment Partners in Tokyo.

“If Hyundai can continue taking market share as Toyota lags behind, I’m sure Hyundai can continue to post strong results throughout the rest of the year.”

But with the won rising, steelmakers looking to pass on higher costs and government subsidies in its lucrative home market cut, Hyundai faces a tougher time in the second half.

Hyundai’s impressive earnings came as Moody’s Investors Service cut Toyota’s credit ratings, saying it expected low profitability at the world’s largest automaker to continue and that litigation costs related to its recalls could be significant.

Toyota is set to report January-March results on May 11.

Hyundai, with affiliate Kia Motors (000270.KS) the world’s fifth largest carmaker, scored record sales in the United States last month with the launch of the revamped Sonata sedan and Tucson sport utility vehicle.

NEW MODELS TO BOOST PROFIT

Hyundai said it would not respond head-on to Toyota’s generous sales incentives in the U.S. market, which boosted the Japanese carmaker’s sales last month.

“We will increase market share with new model launches which will gather pace from the second half and strengthen cost management to shore up profitability,” Hyundai said in a statement.

Hyundai scaled back U.S. sales incentives on YF Sonata and Tucson ix by 34 percent in the first quarter, driving its profit margin to 8.3 percent from 2.5 percent a year ago.

Upgraded models tend to carry higher price tags even with simple addition to functions, therefore boosting margins.

The company is due to introduce the upgraded models of compact Elantra, its best-selling foreign car, and Azera in the coming months.

COST PRESSURE

“Hyundai is expected to keep showing quarterly profit growth on more capacity and a better product mix, although growth may slow a bit,” said Hong Seong-yeob, head of equity management division at KB Asset Management.

Hyundai’s cost structure is set to improve as more new cars are built on an integrated platform, while an increase in overseas production will ease the blow from the stronger won, analysts say.

Hyundai earned a 702.7 billion won ($634.4 million) operating profit in the quarter ended March, versus 153.8 billion won a year ago, it said on Thursday.

The results easily beat a mean forecast of 573.6 billion won from 25 analysts surveyed by Thomson Reuters I/B/E/S. Net profit jumped five-fold to a record 1.1 trillion won from a year ago.

Sales at its China unit, in which Hyundai has a 50 percent stake, grew 23 percent and profit more than doubled.

Its fully-owned India and Czech plants swung to profits, logging a 21 percent and 59 percent jump in sales, respectively.

Shares in Hyundai, which leapt to a record earlier this month, were little changed after the results, closing up 0.4 percent versus a 0.5 percent fall in the KOSPI .

Ahead of the results, Hyundai was forecast to post a 9 percent rise in operating profit to 2.4 trillion won this year, according to Thomson Reuters I/B/E/S. Based on 2011 earnings forecasts, it trades on a price to earnings ratio of about 8.9 times versus Toyota at 25.3 and Honda (7267.T) at 15.2 times.

Chung Mong-koo, the 71-year-old chairman of Hyundai Motor, has been making trips to the company’s global assembly lines and sales networks every month in an effort to maintain the company’s strong growth.

His only son and deputy chairman of the carmaker, Chung Eui-sun, tends to make presentations for its new cars in almost every auto show, in contrast to his father who largely avoids the public spotlight.

($1=1107.6 Won)

(Additional reporting by Chikafumi Hodo in TOKYO and Cheon Jong-woo in SEOUL; Editing by Jonathan Hopfner and Lincoln Feast)

Asian Markets

feeds.reuters.com

The market waiting for today’s fundamentals

admin — Thu, 08 Apr 2010 06:33:51 +0000

Consolidation dominated the currencies market in today’s Asian session, after major pairs sharply declined last week. Still the dollar appear to be the biggest winner and the USDIX rose slightly in the Asian session recording a high of 81.74 and a low of 81.58, while it is currently trading around 81.65.

The euro dollar pair is consolidating between the 1.3400 levels and the 1.3305 levels recording a high of 1.3341 and a low of 1.3312, having the union currency trading around 1.3330. The pair breached the strong support of 1.3440 last week to signal a sharp decline, while the daily momentum indicators still supporting the down trend. The support could be found at 1.3270, while the resistance could be found at 1.3460, and if the pair breached the support, it may drop to the 1.3195 levels. Moreover, the ECB will release its rate decision today that will move the market.

Regarding the pound dollar pair, it is trading between a high of 1.5236 and a low of 1.5211, having the royal currency trading around 1.5225. The pair is having a support at 1.5125, along with a resistance at 1.5270, and the pair may show further declines today according to the daily stochastic oscillator. However, the BOE will announce its rate decision that will move the pair on release.

Finally, the Dollar Yen recorded a high of 93.42 and a low of 93.15, and it is currently trading around 93.25. Today’s support could be found at 92.70, while the resistance could be found at 94.80, while momentum indicators on the four hour and daily charts are supporting the downside. Yet, data concerning the labor market in the U.S will be released today that will affect the pair.

Published on Thu, Apr 8 2010, 07:17 GMT

fxstreet.com

Bobbys Corner-Open Market-March.31.2010

admin — Wed, 31 Mar 2010 10:52:25 +0000

Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
FXDD provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of futures results and FXDD specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

forex.fxdd.com

Europe’s Greek plan gets lukewarm market response (AP)

admin — Sun, 28 Mar 2010 06:03:30 +0000

LONDON – The euro rebounded from a 10-month low on Friday but European stocks dropped, as markets gave an initially lukewarm response to the eurozone’s bailout program for
, which would extend loans only as a last resort and involve the International Monetary Fund.
Investors’ reaction was mixed because while the program does provide a backstop, it rules out any immediate loans and lays bare the structural problems in Europe’s economic union. Furthermore, while the crisis may be averted, several EU countries face years of slow growth as they try to balance their budgets.
By late afternoon London time, the euro was up 1 percent on the day at $1.3404 — above its ten-month low of $1.3268 earlier.
Stocks, however, showed less enthusiasm. Britain’s FTSE 100 benchmark stock index closed down 24.63 points, 0.4 percent at 5,703.02 while
fell 12.9 points, or 0.2 percent, at 6,120.05. The CAC-40 in France ended 11.55 points, or 0.3 percent, lower at 3,988.93.
traded slightly higher, with investors seemingly unaffected by figures showing that the U.S. economy grew by less than anticipated in the fourth quarter of 2009 — government figures showed the world’s largest economy grew by an annualized rate of 5.6 percent in the fourth quarter, down on the 5.9 percent rate previously estimated, but still more than double the 2.2 percent rate seen in the previous three month period.
was up 3.03 points, or less than 0.1 percent, at 10,844.24 around midday New York time while the broader Standard & Poor’s 500 index rose 0.14 point to 1,165.87.
However, the main focus in the markets remained on Greece following Thursday’s confirmation of a financial package for the debt-laden country from its 15 partners in the eurozone.
The deal would provide individual loans from other eurozone countries and funding from the International Monetary Fund. However, it sets out strict conditions, saying it could only be used as a last resort, and requires unanimous agreement of all eurozone members.
borrowing costs, allowing the country to tap the
from about 330 a day ago.
In the long run that sort of premium would not be acceptable for the Greek government, so all involved parties will be watching how the bond markets move over the coming week or two.
.
Much rests on Greece’s next bond sale in the coming weeks; a positive response in the markets could help take the heat off the country as it tries to bring its massive deficit down while a poor response would make it more likely that Greece will have to take advantage of Thursday’s agreed package.
and this could intensify the pressures on the new support mechanism, on
and on the euro,” said Jane Foley, research director at
Forex.com
.
“The euro is thus not out of the woods yet,” added Foley.
ratings agency gave Portugal some breathing space by affirming its A+ rating on its sovereign debt though it continued to warn that the outlook was negative. Earlier this week, Fitch had downgraded Portugal’s debt.
agency was the uncertainty created by the political wrangling that preceded the deal — from week to week the message coming out of the eurozone seemed to change.
“The key credit question is whether, over the coming weeks and months, market confidence will be strengthened by the support package or whether it will be weakened by contentious conditions under which this package was agreed,” said Pierre Cailleteau, managing director for sovereign risk at
in London.
In Asia, stocks were mixed in early trade before turning higher later in the day. Japan’s benchmark
stock average gained 167.52 points, or 1.6 percent, to 10,996.37.
rose 252.02, or 1.2 percent, to 21,030.57 and South Korea’s Kospi added 9.33 points, or 0.6 percent, to 1,697.72. Markets in Australia, Indian and
also gained.
contract for May delivery was down 56 cents at $79.97 a barrel.
AP Business Writer Carlo Piovano in London contributed to this report.

us.rd.yahoo.com

Market Facing Substantial Headwinds

admin — Fri, 26 Mar 2010 19:37:09 +0000

Fri, Mar 26 2010, 05:31 GMT
In our view the market is seriously overestimating the strength of the economy as the usual drivers of a sustainable recovery, namely consumer spending and housing, are in no condition to provide the catalyst that leads to steady growth. The statistical growth we have witnessed to date is merely a bounce back from the brink of a potential financial disaster that was averted by massive stimulus.
However, the lingering after-effects of the credit crisis are creating strong headwinds against a typical post-war type of recovery.
The rise in consumer spending in recent months is nowhere near as strong as the media and the Street would have you believe. The extremely sharp decline in consumer spending during the recession was caused by both negative fundamental factors and outright fear of a collapse. Now the fear is gone, but the negative fundamentals remain. Unemployment remains high, jobs are hard to get and credit is tight. Moreover the consumer has barely begun to pay down the enormous debt accumulated over the last decade, and the deleveraging has a long way to go. Savings rates are still low by historical standards and will take time to return to normal.
The housing industry is still in serious trouble and appears to have turned down again after the bump created by the home buyer tax credit. Existing home sales were down 0.6% in February, the third consecutive drop. Sales are back to the depressed level that existed before the start of the tax credit. In addition new listings were up 10% to the highest level since September while inventories rose to an 8.6 months supply.
The problems were also reflected in new home sales, which were down 2.2% and have now been lower in six of the last seven months to a record low of 308,000 units. Inventories rose 1.3% to a 9.2 months supply despite the fact that new housing starts have been bumping along the bottom. The extension and expansion of the original tax credit does not seem to have given much of a boost to sales and, any event, the credit expires on April 30th. It is also important to note that reported inventories do not include the so-called “shadow inventories” of homes where mortgages are in default but have not been foreclosed as well as the 23% of homes with mortgages that are “underwater” but have not yet defaulted.
Furthermore we are just now entering a period where a rising number of adjustable rate mortgages are undergoing automatic rate increases that will put additional mortgages in jeopardy of default and foreclosure.
The aforementioned foreclosure problems will put significantly more homes on the market and result in further declines in home prices.
This will also have the adverse effect of creating more toxic assets at financial intuitions and further restricting their ability to lend.
At the same time a lot of the government stimulus is coming off. As we’ve previously mentioned the Fed program to buy 1.25 trillion of MBS is ending on March 31st and the housing purchase tax credit is ending on April 30th. A major portion of the economic recovery to date has been supported by massive stimulus and we doubt that the growth is sustainable on its own. While the possibility of even more stimulus exists, the angry sentiment against further increases in the budget deficit makes this difficult to accomplish.
The festering of the Greek financial crisis is illustrating the continued overhang of global credit problems that threaten to spread. As we write, the EU has announced a draft agreement to rescue Greece with the help of the IMF. Our initial impression is that the agreement, at this point, is very vague. The parties have agreed to bail out Greece only if it’s necessary, and it will take a unanimous vote on the part of the EU members to decide. As we’ve stated in previous comments there are no good options and any proposed solution has serious side effects.
Overall, the market has been on a virtual parabolic rise since last year’s low and the recent jump above 1150 on the S&P 500 has led to an apparent give-up by the doubters. The action seems to be spurred by a combination of true believers, pure momentum players and those who are just going along for the ride and ready to exit at the any negative sign. This is more in tune with an impending top than substantial new highs. The market is now selling at about 18.5 times our smoothed trendline GAAP earnings, a P/E ratio associated with market peaks for almost 200 years prior to the last decade

fxstreet.com

USD strength determines market direction ahead of EU meeting

admin — Fri, 26 Mar 2010 16:42:07 +0000

Thu, Mar 25 2010, 08:54 GMT
The S&P 500 Index dropped 0.6% to 1,167.72 yesterday, its first decline in three days while the DJIA lost 52.68 points, or 0.5%, to 10,836.15 on concern government deficits will hamper a global recovery as Fitch cut Portugal’s credit rating and a UBS economist said Greece will default. The Nikkei rose 0.1% to 10,830.63 as Japanese stocks fluctuated as makers of cars and electronics rose after the JPY weakened to a two-month low against the USD 92.40, while commodity-linked shares fell after oil and metal prices dropped. The JPY rose from a 10-week low against the USD climbing to 91.78 earlier today on speculation Japanese exporters took advantage of its biggest slide this year to buy the currency before the fiscal year end next week. China’s stocks fell the most in a week as the Shanghai Composite Index lost 0.8% to 3,031.56 on concern the government will step up efforts to cool asset bubbles. The NZD rose 0.3% to 0.7039 from the lowest in more than a week as the GDP rose 0.8% in Q4 2009, spurring prospects for the RBNZ to raise interest rates. RBNZ’s Bollard kept the rate at a record low on March 11 and said monetary stimulus would likely be removed around the middle of 2010 amid higher bank funding costs and a “relatively sluggish” economic recovery with traders betting the RBNZ will increase its interest rate by 180 basis points over the next 12 months. AUD recovered some of yesterday’s biggest drop in seven weeks climbing 0.4% to 0.9114 as RBA’s Lowe said the mortgage rate “is still around 0.5% lower than the average of the last 15 years” and that the benchmark rate needed to move gradually toward “more normal levels” to contain inflation. The EUR was also close to a record low against the CHF trading at 1.4282 on speculation the EU will fail to agree on decisive measures to help Greece tackle its fiscal deficits at the meeting starting today in Brussels. EUR could see further downside to 1.3000 levels on speculations that Spain could be the next fiscal crisis in the EU. With Germany and France backing the help of IMF for Greece, while Greece wanting to go with the EU aid, a split in opinion on the bailout could be the focus of the meeting due to start today and continue till tomorrow while markets would be watching very closely on the developments with a bearish view on the EUR as Germany holds the key to the bailout, being the strongest member of the EU. The UK February retail sales report will be released today, forecasting a rise of 0.8% after a decline in January and a lower than estimate figure could be fatal for the GBP which is already reeling under pressure to bounce back amid pressure from inflation, housing as well as uncertainty over elections to reduce UK’s budget deficit.
R 2: 1.3530
R 1: 1.3425
CURRENT: 1.3330
S 1: 1.3280
S 2: 1.3200
R 2: 93.80
R 1: 92.45
CURRENT: 92.02
S 1: 90.80
S 2: 89.60
R 2: 1.5278
R 1: 1.5190
CURRENT: 1.4897
S 1: 1.4784
S 2: 1.4580
R 2: 0.9329
R 1: 0.9252
CURRENT: 0.9116
S 1: 0.9066
S 2: 0.8945
R 2: 1.0400
R 1: 1.0320
CURRENT: 1.0233
S 1: 1.0070
S 2: 1.0000
S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot

fxstreet.com