*****Daily Market Review*****

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Market Review - 27/03/2013 21:46GMT

Euro drops to fresh 4-month low on Italian political deadlock and Cyprus concerns

The single currency continued its recent losing streak and dropped to a fresh 4-month low against the dollar on Wednesday as a political deadlock in Italy and ongoing crisis in Cyprus weighed on the currency.

Although euro gained initial respite in Asian morning, price came under renewed selling pressure at Asian midday and price resumed its recent decline in European morning as demand fell at a sale of Italy's bonds. Intra-day decline accelerated and the single currency fell below 1.2800 and eventually to a fresh 4-month low at 1.2750 in New York morning as the lack of progress in forming a new government in Italy and continued concerns over Cyprus increased risk aversion. Later, the pair briefly recovered to 1.2790 before trading narrowly.

Italy sold a total of 3.9 billion euros of 5-year bonds at a yield of 3.65%, up from 3.59% at a previous auction.

The British pound traded narrowly in Asia and briefly recovered to 1.5181 in European morning before penetrating previous day's low at 1.5135 after an Office for National Statistics report confirmed the U.K. economy shrank in Q4, putting the nation on course for another recession. Cable eventually hit session low of 1.5092 in New York morning before staging a short-covering rebound to 1.5133 ahead of NY close.

U.K. GDP Q/Q and Y/Y for Q4 came in at -0.3% and 0.2% respectively.

Versus the Japanese yen, although the greenback rose to session high at 94.91 ahead of European opening on speculation that BoJ Governor Haruhiko Kuroda will add to stimulus measures in the bank's next meeting, price tumbled in European session and hit an intra-day low at 94.02 in New York morning on yen's broad-based strength. However, price pared intra-day losses and rebounded to 94.53 before stabilising in New York afternoon.

In other news, Italy centre-left leader Pier Luigi Bersani said he 'intends to report outcome of political talks to President Napolitano by Thursday.'

On the data front, EU economic sentiment and consumer confidence came in at weaker-than-expected at 90.0 and -23.5 vs forecasts of 90.5 and -23.0 respectively.

Data to be released on Thursday :

Japan's retail sales, U.K. Gfk consumer confidence, German retail sales and unemployment rate, Canada's GDP, U.S. GDP, jobless claims and Chicago PMI.

 

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Euro rises on short-covering and quarter-end positioning: March 29, 2013

Market Review - 28/03/2013 22:49GMT

Euro rises on short-covering and quarter-end positioning

The euro pared recent losses and rose against the dollar on Thursday on short-covering and month- and quarter-end positioning.

Earlier in Asia, although the single currency traded with a steady tone and recovered to 1.2815 in early European morning, price dropped briefly but sharply to 1.2755 after release of poor Germany unemployment data. However, failure to penetrate yesterday's 4-month low at 1.2750 triggered broad-based short covering and euro rallied to session high at 1.2845 in New York morning before retreating, euro traded around 1.2816 near New York close.

Germany unemployment change came in worse-than-expected at 13K vs forecasts of -4K.

The British pound strengthened to 1.5150 in Asian morning before rising further to 1.5176 in European morning, however, price dropped briefly but sharply to an intra-day low at 1.5112 on active cross-selling of sterling versus euro (eur/gbp rose from 0.8416 to 0.8476). Later, cable pared intra-day losses and rallied in tandem with euro to session high at 1.5201 in New York morning, due partly to the rise in U.S. equities, price maintaied a firm undertone and traded around 1.5193 near New York close.

Versus the Japanese yen, the greenback came under selling pressure in Asian morning and dropped below Wednesday's 94.02 low to 93.98. Despite a brief rebound to 94.26 in European morning, dollar met renewed selling there and fell to session low at 96.88. Later, price pared intra-day losses and recovered to 94.39 on cross-selling in yen, however, dollar's broad-based weakness in New York morning due to the rise in U.S. weekly jobless claims pressured the pair to 93.96, however, dollar ratcheted higher in New York afternoon.

In other news, Italy economy minister Vittorio Grilli said ' govt believes that even with revision of deficit targets can emerge fm excessive deficit procedure; will monitor budget to ensure deficit remains within 3%/GDP EU limit.' EU commission said 'imposing capital controls in Cyprus justified, in the public interest¡F restrictive measures to remain in force for seven days; wil monitor need to revise or extend capital control measures for Cyprus.'

On the data front, U.S. jobless claims rose to 357K from 332K previously, U.S. annualised GDP Q4 came in at 0.4% vs forecasts of 0.5% and previous reading of 0.1%. Chicago PMI was reported at 52.4, lower than expectations of 56.2.

Data to be released on Friday:

Japan's National CPI, Tokyo CPI and industrial production; U.S. personal income, PCE and University of Michigan consumer confidence.

 

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Euro drops as euro zone unemployment rises to record high : April 3, 2013

Market Review - 02/04/2013 21:48GMT

Euro drops as euro zone unemployment rises to record high

The single currency weakened against the dollar after data showed unemployment in the eurozone rose to a record high, adding to concern that the 17-nation currency bloc will struggle to emerge from recession.

Despite finding a wave of buying at Asian open and climbing to session high at 1.2878 in Asian morning, the single currency came under selling pressure and dropped to 1.2825 in European morning after eurozone unemployment climbed to a record high in February. Euro briefly recovered to 1.2856 before falling to 1.2812 in New York morning. Later, price pared intra-day losses and rebounded to 1.2847 due to the rise in European bourses. However, price fell again in New York afternoon to intra-day low of 1.2808 before staging a recovery.

Unemployment in the euro area rose to 12% and the January figure was revised up to the same level from 11.9% estimated earlier.

Versus the Japanese yen, although the greenback dropped to a fresh 1-month low at 92.57 in Asian morning, price pared intra-day losses and rebounded to 93.35 in European morning as investors expected BoJ Governor Haruhiko Kuroda to announce bold easing measures on Thursday. Dollar briefly retreated to 93.09 ahead of New York opening before rising to session high at 93.56 in New York morning, due partly to the rally in U.S. equities.

The British pound rose briefly to session high at 1.5259 in Asian morning before falling to 1.5215 at European open. Despite a rebound to 1.5240, cable tumbled on active cross-selling of sterling (eur/gbp rallied from 0.8426 to 0.8494) and as an industry report showed U.K. manufacturing output shrank more than economists forecast. Price eventually hit an intra-day low at 1.5099 near New York close.

A gauge of U.K. manufacturing based on a survey of purchasing managers was 48.3 in March from 47.9 in February.

In other news, a document listing Cyprus' bailout agreement stated 'Cyprus to have a primary deficit of 2.4%/GDP in 2013, no more than 4.25%/GDP in 2014, 2.1%/GDP in 2015; privatisation in Cyprus to raise at least 1.4 bln euros in 2013-2016; Cyprus to freeze public sector pensions, increase retirement age by 2 years.'

On the data front, Germany manufacturing PMI came in at 49.0, better than expectations of 48.9. EU manufacturing PMI was reported at 46.8 vs forecasts of 46.6.

Data to be released on Wednesday :

Australia new home sales, trade balance, China non-manufacturing PMI, HSBC services PMI, UK BRC shop price index, construction PMI, U.S. ADP employment and ISM non-manufacturing.

 

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Yen tumbles broadly on bold BoJ easing measures : April 5, 2013

Market Review - 04/04/2013 21:44GMT

Yen tumbles broadly on bold BoJ easing measures

The yen tumbled the most against the dollar since October 31 2011 as the Bank of Japan announced new stimulus measures that beat economists' forecasts.

Versus the yen, although the greenback traded sideways in Asian morning ahead of BoJ's rate decision and Governor Haruhiko Kuroda's press conference, price rallied after the central bank announced larger-than-forecast economic stimulus measures and rose to 95.68 in early European morning. Dollar found a fresh wave of buying at New York open and climbed to an intra-day high at 96.42 on active broad-based selling of the yen before stabilising.

Bank of Japan Governor Haruhiko Kuroda said 'took all steps needed to achieve 2% inflation in two years; will not hesitate to adjust policy further depending economy, price changes,' The central bank also said 'to bring forward timing of open-ended asset buying, extend duration of JGBs it buys for monetary easing; to switch policy target to monetary base fm overnight call rate; to increase monetary base at nominal pace of 60 to 70 trln yen; to double average duration of its JGBs holdings; will continue with quantitative, qualitative monetary easing as long as needed to achieve 2% inflation target in stable manner.'

The single currency traded narrowly in Asian morning and came under selling pressure in European morning and dropped to 1.2783 after EU and Germany services PMI came in weaker-than-expected. Despite a brief rebound to 1.2837 after ECB maintained its interest rate at 0.75%, euro briefly fell to a fresh 4-month low at 1.2745 due to ECB President Mario Draghi's intial dovish bias during his press conference.

However, the single currency pared intra-day losses and rallied to 1.2882 after Draghi reaffirmed his commitment to keeping the eurozone intact and reassuring that Cyprus is not a template for other countries within the euro area. Price eventually surged to an intra-day high at 1.2949 in New York afternoon on broad-based short covering in euro.

EU and Germany services PMI were reported weaker-than-expected at 50.9 and 46.4 vs forecasts of 51.6 and 46.5 respectively.

In his news conference, Draghi said 'ECB's monetary policy stance will remain accommodative for as long as needed; will monitor information very closely; will assess any impact of data on price stability; closely monitoring money mkt conditions; growth risks are on the downside; if anything, events in Cyprus have reinforced ECB determination to support euro; 'Cyprus is no template; sure Eurogroup Chief misunderstood.'

The British pound traded sideways in Asian and dropped in tandem with euro to session low at 1.5034 in European morning, however, cable rallied after the Bank of England refrained from adding more economic stimulus and kept its interest rate unchanged at 0.50%. Price eventually hit an intra-day high at 1.5218 in New York afternoon.

In other news, Fed's Richard Fisher said 'hard to compare Japan, U.S. situations; Japan must conduct monetary policy the way it sees fit; Japanese easing does not put pressure on Fed to continue its own easing.'

On the data front, U.S. jobless claims rose to 385K fm 357K previously.

Data to be released on Friday :

Japan leading indicators, EU retail sales, Germany factory orders, Canada unemployment rate, exports, imports, U.S. trade balance, non-farm payrolls, private payrolls, unemployment rate and avg. hourly earnings.

 

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Dollar falls broadly on weak Jobs data, yen hits fresh 3-1/2 year low versus dollar : April 8, 2013

Market Review - 06/04/2013 01:16GMT

Dollar falls broadly on weak Jobs data, yen hits fresh 3-1/2 year low versus dollar

The greenback dropped against major European currencies but gain versus the Japanese yen after U.S. employers added much fewer jobs in March than forecast, fueling speculation that growth in the country is stalling.

U.S. non-farm payrolls came in much weaker-than-expected at 88K vs forecasts of 190K n a previous revised figure of 268K whilst unemployment rate dropped to 7.6% from 7.7%.

Although the single currency traded sideways in Asia and edged lower to session low at 1.2900 in early European morning, price jumped at New York open after the release of poor U.S. jobs report and eventually rallied to an intra-day high at 1.3040 in New York morning.

Versus the Japanese yen, the greenback found good buying interest at Asian open and rose to as high as 97.20 after penetrating March's 3-1/2 year peak at 96.71. Dollar pared intra-day gains and retreated to 95.85 at European open before trading sideways. Despite a brief retreat to session low at 95.75 after the release of U.S. jobs report, price rallied to a fresh 3-1/2 year high at 97.84 in New York afternoon.

The British pound traded sideways in Asia and edged lower to session low at 1.5199 in European morning before rallying to an intra-day high at 1.5364 on dollar's broad-based weakness. Price later pared intra-day gains and retreated to 1.5321 before moving narrowly in New York afternoon.

In other news, credit ratings agency S&P affirmed U.K.'s rating at AAA and said 'outlook remains negative; U.K. gov't remains committed to implementing fiscal program, ratings supported by wealthy, diverse economy; U.K. negative outlook based on possibility of weaker-than-expected economic n fiscal performance.'

On the data front, U.S. private payrolls came in well below expectations at 95K vs forecast of 200K. Japan leading indicators rose to 97.5 from previous reading of 95.0.

Data to be released next week :

UK employment confidence, Japan current account, economic watch DI, Swiss industrial production and U.S. midwest manufacturing on Monday.

Australia business conditions, business confidence, China CPI, PPI, Swiss unemployment rate CPI, retail sales, Germany trade balance, current account, import, export, Japan machine tools orders, UK retail sales, industrial production, manufacturing production, trade balance, Canada housing starts, U.S. wholesale inventories and wholesale sales on Tuesday.

Australia Westpac consumer confidence, France industrial production, manufacturing production, Italy industrial production, manufacturing production and U.S. Fed budget on Wednesday.

Australia employment change, unemployment rate, Germany CPI final, HICP final, France HICP, U.S. import price index, jobless claims and Canada new housing price index on Thursday.

Japan tertiary industry index, France current account, Italy CPI, HICP, EU industrial production, U.S. retail sales, PPI, PPI core, U. of Michigan consumer confidence and business inventories on Friday.

 

[acetraderfx]

Yen gains on short-covering: April 23, 2013

Market Review - 22/04/2013 23:03GMT

Yen gains on short-covering

The greenback's recent rally against the Japanese yen stalled ahead of April's 4-year high at 99.95 and the key option barrier at 100.00. The pair was pressured in New York morning due to the weak U.S. existing home sales.

The greenback opened higher in New Zealand and rose to session high at 99.89 in Australia after the G20 gave Japan the nod to its aggressive monetary easing policies and continued to trade sideways throughout Asia. However, dollar met good resistance ahead of the key 100 barrier option, price fell to an intra-day low at 98.98 in New York morning due to long-liquidation together with the weak U.S. existing home sale and then traded narrowly in U.S. afternoon.

U.S. existing home sales in March dropped by 0.6% to 4.92M, weaker than the forecast of 5.01M.

Although the single currency opened higher and rose to 1.3093 in New Zealand due to cross-buying of eur/jpy, price retreated to 1.3054 ahead of Asian open. Despite a brief rebound to 1.3084 in Asian morning, euro retreated again on expectations of a possible interest rate cut from the European Central Bank and dropped to an intra-day low at 1.3015 in New York morning. Later, price pared intra-day losses and rebounded to 1.3069 in New York afternoon.

The British pound remained under pressure in New Zealand and dropped to session low at 1.5202, however, price rebounded to 1.5246 in Asian morning before retreating again to 1.5211 in early European morning. Later, cable strengthened on speculation UK will avoid a triple-dip recession and rose to an intra-day high at 1.5274 at New York midday.

In other news, ECB Vice-President Vitor Constancio said 'ECB interest rate cut is always a possibility, depends on information.'

On the data front, Chicago Fed nation activity index in March came in at -0.23, prior reading is revised to 0.76.

Data to be released on Tuesday:

Australia conference board leading index, China HSBC manufacturing PMI, Swiss trade balance, France business climate, manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, EU manufacturing PMI, services PMI, Italy consumer confidence, UK PSNCR, PS net borrowing, Canada retail sales, U.S. redbook retail sales, house price index and new home sales.

 

[acetraderfx]

Euro falls on weak German data : April 24, 2013

Market Review - 23/04/2013 22:45GMT

Euro falls on weak German data

The single currency tumbled against the greenback on Tuesday after poor German manufacturing and services PMI raised concerns about the eurozone economy, reviving speculation that the ECB could cut interest rates.

Earlier in Asia, although the single currency retreated to 1.3037 in Asian morning on risk aversion due to the drop in Chinese HSBC manufacturing PMI, euro briefly rebounded to session high at 1.3085 in early European morning, due partly to the release of better-than-expected France manufacturing PMI. However, price swiftly pared intra-day gains and tumbled after release of poor German manufacturing and services PMI, hitting an intra-day low at 1.2973 in European morning. Later, price staged a recovery to 1.3028 in New York morning due to the rise in U.S. equities before stabilising.

On the data front, China HSBC manufacturing PMI dropped to 50.5 from 51.6 previously. France Manf. in Apr PMI came in at 44.4, better than the forecast of 44.1. German manufacturing PMI in Apr was 47.9, worse than the forecast of 49.0; German Services PMI came in at 49.2, weaker than expectation of 51.0.

Versus the Japanese yen, the greenback came under selling pressure after slow Chinese manufacturing growth triggers risk aversion and dropped to an intra-day low at 98.49 in European morning. However, dollar pared intra-day losses and rose to session high at 99.53. Despite a brief but sharp spike down to 98.59 after a 'bogus' report on the Associated Press Twitter account that there were 2 explosions in White House, price quickly recovered to 99.35 on the denial of any such incident.

The British pound also retreated to 1.5255 in Asian Morning on risk aversion before falling further to an intra-day low at 1.5196 in European morning. However, cable pared intra-day losses and rebounded to 1.5288 in New York morning due partly to cross-buying of sterling versus euro (eur/gbp fell from 0.8569 to 0.8511) before stabilising near 1.5250 in New York afternoon.

In other news, Bank of Italy official says 'sees downside risks to official gov't GDP forecasts of -1.3% in 2013, +1.3% in 2014; must avoid any doubt over breaching 3% GDP deficit limit in 2013.'

Data to be released on Wednesday:

New Zealand RBNZ rate decision, Australia CPI, Germany import price index, Ifo business climate, Ifo current assessment, UK BBA mortgage advances, CBI industrial trends, U.S. durable goods, ex. transport and ex. defense.

 

[acetraderfx]

April 25, 2013 : Euro rebounds from near 3-week low on short covering

Market Review - 24/04/2013 22:22GMT

Euro rebounds from near 3-week low on short covering

The single currency ended the day a little higher against the dollar on Wednesday after recovering from a near 3-week low on increased optimism surrounding Italy's political crisis.

Despite trading sideways in Asia, the single currency fell briefly but sharply to an intra-day low at 1.2954 in European morning after data showed Germany's business sentiment dropped for a second month in April, increasing concerns about an interest rate cut by the ECB. However, euro quickly pared intra-day losses on talk of buying by Asian central bank and rebounded to session high at 1.3034 in European morning before falling again to 1.2974 in New York morning. Later, price recovered to 1.3029 in New York afternoon on hopes that Italy can resolve its political gridlock.

Germany's Ifo business climate is released at 104.4, worse than the forecast of 106.2; Germany Ifo current conditions came in at 107.2, weaker than the expectation of 109.5.

Versus the Japanese yen. although the greenback rose to an intra-day high at 99.77 at Asian open, dollar pared intra-day gains and retreated to session low at 99.18 in Asian morning. Price staged a rebound to 99.67 in European morning, however, dollar met renewed selling interest there and dropped to 99.24 in New York morning due to the release of weaker-than-expected U.S. durable sales data before stabilising.

U.S durable good in Mar came in at -5.7%, weaker than the forecast -2.8%.

The British pound strengthened in Asian session and rose to an intra-day high at 1.5288 in European morning as Bank of England's decision to extend its program to provide cheaper loans to companies and consumers by one year revived hopes of an economic recovery in the country. However, cable pared intra-day gains and retreated to 1.5245 at New York midday before stabilising.

In other news, ECB's Constancio said 'Monetary policy is accommodative; Mon Pol will continue to be accommodative to respond to present situation where inflation is going down significantly.' Ifo economist Wohlrabe said 'German economy would grow more strongly in Q2 than in Q1 despite Ifo decline.'

On the data front, U.S durable good ex-transport is released -1.4%, worse than the expectation of -0.7%; U.S. durable good ex-defense came in at -4.7%, worse than the forecast of -2.3%. U.K. BBA mortgage approval in Mar came in at 31.2K, vs forecast of 31.4K.

Data to be released on Thursday :

U.K. GDP and U.S. weekly jobless claims.