Intraday Market Thoughts Archives

INTERMARKET INSIGHTS is the Premium service offering analysis, charts and signals, to which you can subscribe in this link: http://www.ashraflaidi.com/products/sub01/ Are Premium Insights the same as IMTs ? How to make sure you do NOT miss new Premium trades? Examples?

** PREMIUM INSIGHTS ARE NOT THE SAME AS INTRADAY MARKET THROUGHTS (IMTs) **

Intraday Market Thoughts (IMTs) are FREE previews and reviews released 2-3 times per day, aimed at preparing and summarizing traders of the day’s more important events in G10 currencies. They are primarily written by and . Reading these IMTs every day provides a basic but consistent awareness of the fast-moving events in currencies. You can subscribe to these FREE IMTs via the newsletter (upper right corner of the website by registering for a username/password).

** HOW DO I KNOW WHEN PREMIUM INSIGHTS ARE UPDATED ? **

There are 3 ways to do this:

1. Premium subscribers can subscribe to the SMS Premium service. The SMS Premium alerts are messages sent to your mobile phone consisting of an Internet link (url) to the latest post of the Intermarket Premium Insight, which contains Premium trades, charts and technical/fundamental commentary. As long as you have your mobile device with you, this is the BEST WAY to ensure that you do not miss the latest release of the Premium trades (such as being away from your laptop).

EXAMPLE of an SMS ALERT:

AshrafLaidi.com: Latest Premium Trades EURUSD, GBPUSD, Gold http://ashraflaidi.com/p

2. We use the Intraday Market Thoughts (IMTs) to let recipients know that a new set of Premium trades are ready. You can subscribe to the IMTs newsletter FREE at the upper right corner of AshrafLaidi.com and you check on "Intraday Market Thoughts". These IMTs are written by Ashraf and his staff ( and ) – they go out 2-3 times per day to those who subscribe to them. Each time Ashraf completes the premium trades/analysis in the Intermarket Insights, he writes a short IMT alerting subscribers that the new trades are up and ready, including the direct link to the analysis/trades.

3. Each time the Premium Intermarket Insights are updated

** PERFORMANCE, ACCURACY & LIMITS/STOPS **

About 59%-63% of our trades hit all targets.

Our methodology tends to be on the conservative side. Some of our trades may have hit 99% of our target range before being stopped out and therefore will be categorized as stopped out even though they may have hit all but the last 5 or 8 pips of the limit range. Those trades we deem not have hit all targets are those which did not hit the full range of our limits (we use ranges for entry & limits but 1 single stop).

One example was a recent trade "(NEW) Long USDCAD between 1.0040-1.0080, for limit between 1.0110-1.0150, stop at 1.0000". The market went as high as 1.0148 before dropping back to 1.0040. If the market drops all the way back to 1.0000, then the trade will be deemed stopped out even though those who chose to take profit in the mid-range of our Limit (1.0110-1.0150) have exited at a profit. So in this case, we call this a trade a failure, and include in our losing trades.

Here is ANOTHER EXAMPLE: say we have a limit/target on short gold at 1720-1710 and gold drops from say 1750 to only as low as 1713 before rebounding to hit our stop, we would consider that trade to have been stopped out although it hit more than half of the range in our limit/range ie it did not go all the way to 1710. Therefore, such trade would go to our losing trades, while many may have used this as a winning trade had they set their targets between 1720 and 1713.

Due to the strict approach used, we judge some trades to have been stopped out when they may have in fact hit targets for several traders.

The 14-pt decline in the June NY manufacturing survey to 6-month lows joins the deterioration in other regional surveys (Chicago, Philadelphia & Richmond) and confirms the macro case for further Fed action, beyond liquidity-driven reasons such as Eurozone debt woes. Chatter of liquidity-creating measures by the major central banks is seen as assurances by the authorities to intervene in the event that event-risk from Greece elections breaks liquidity and spurs up the fear factor. BUT SYSTEM LIQUIDITY credit market metrics show no need for liquidity injections or FX swaps as was the case in December 2011 or Summer 2008. We will show these metrics in Sunday's edition of the Premium Intermarket Insights. The 1st of our EURUSD longs hit the 1.2650 target from Wednesdays Premium Insights, while golds 1635 target remains in waiting. Both cable and AUDUSD longs hit all targets. We will bring a special WEEKEND EDITION of Premium Intermarket Insights ahead of Sundays Greece Elections. For direct access to Wednesdays trades, click here: here: http://ashraflaidi.com/products/sub01/acces/?a=646 Get a 1week trial here: http://ashraflaidi.com/products/sub01

AL

Coordinated action reports; UK construction output falls and trade deficit widens; Eurozone employment declines but trade surplus higher. Market turns to Empire state manufacturing, TIC data, capacity utilization, industrial production and UoM consumer confidence. The latest on Greece is that voter polls will close Sunday 17:00 BST, (19:00 Athens time). Although there will be exit polls, media experts say they are often misleading. Initial results are expected around 20:00 BST, with a more detailed picture expected to emerge 2 hours later. Greek municipal workers plan to strike and disrupt voting centers. Find out below why Wednesdays Premium Intermarket Insights were titled Maintaining Risk-on.

USD is weaker against most majors. European equity indices are gaining between 0.5% and 1.5% and the relative strength winners are NZD and JPY while EUR lags.

Risk trades are being supported by reports that G20 is preparing coordinated action plan to inject liquidity if it is necessary after Sunday's Greek elections and also by the latest news that New Democracy is slightly ahead in the polls ahead of Syriza. It seems that additional comments about contingency plans are likely.

Ashraf mentioned that flat USD LIBOR suggests that the system is not in need of any FX swap intervention by the major central banks. He adds that the reports about central banks potentially intervening , are a statement of assurance by the authorities to step in just in case Greece event risk triggers contagion.

The BoE governor Mervyn King said yesterday that the case for further monetary easing is growing. Today's data confirm this as April construction output fell sharply in April and UK's trade deficit widened to GBP 10.1 bln from previous GBP -8.7 bln which is the second widest deficit on record. Exports to EU as well as non EU countries fell dramatically. GBPUSD fell to 1.5475 but recovered all losses and currently trades around 1.5540.

Eurozone Q1 employment declined 0.2% q/q and 0.5% y/y and the trade surplus rose in April to EUR 6.2 bln from downward revised EUR 3.7 bln. Annual exports rose 6% while imports declined 1%. EURUSD fell back to 1.2610 after trading as high as 1.2645.

The NY session starts at 8:30 am ET with Empire state manufacturing that is expected to decline in June to 13.6 from previous 17.1 followed by net long term TIC flows at 9:00 am that are seen higher in April at USD 45.3 bln from USD 36.2 bln.

At 9:15 am the Federal Reserve will release May capacity utilization that is seen steady at 79.2% and industrial production that is anticipated to decline to 0.1% from previous 1.1%.

The last report is UoM consumer confidence that comes at 9:55 am and is expected to decline in June to 77.5 from 79.3.

Wednesdays AUDUSD longs hit all, while EURUSD & gold longs are near completion. More detail on these and other trades & gold multitime frame charts, get direct access here: http://ashraflaidi.com/products/sub01/acces/?a=646 Non subscribers can join here: http://ashraflaidi.com/products/sub01

Lower US CPI and higher jobless claims argue for more Fed QE. SNB keeps rate steady; Eurozone CPI declines; Spanish 10 year yield hit 7% despite EURUSD stabilization. hits euro highs; Italian auction; OPEC. Focus turns to CPI, jobless claims and Canadian NHPI and capacity utilization. Last night's Premium Intermarket Insights titled "Maintaining Risk-on" are discussed in the last paragraph of this IMT.

USD is slightly lower against all majors in the ongoing session. Major European equities are trading within -0.4% to +0.1% and the relative strength winner is NZD that recovered all of the losses from yesterday's NY session.

The SNB left the 3 month libor target range unchanged between 0% and 0.25% and reiterated that it will continue to enforce the CHF cap with utmost determination. It also noted that it is ready to take further measures as it expects a significant slowdown in 2012 and sees exceptionally high risks for the economy. As these comments were hardly surprising, the CHF barely responded.

Eurozone CPI in May was in line with expectations at 2.4% from 2.6% y/y (core CPI unchanged from April at 1.6%). Q1 labor cost rose 2% y/y.

Spanish 10 year yield hit 7% which is the highest level since the launch of the common currency. Rumors that the ECB was checking prices helped to push the yield marginally lower to current 6.93%.

Italy reached a full take-up as it was able to sell various bonds totaling EUR 4.5 bln. The average yields rose and cover declined. Italian 10 year yield pushed to 6.34% before easing to 6.23%.

WTI is consolidating in a narrow range ahead of the OPEC meeting that starts in Vienna today. The output ceiling is likely to be maintained as concerns about global growth outweigh calls for cuts to stem falling prices, Bloomberg reports.

US US May CPI -0.3%, core CPI +0.2% for +1.7% y/y (vs exp 1.8%) and +2.3% y/y respectively. Jobless claims +6k to 386k vs expected 377K.

Canadian new housing price index due at 8:30 am is expected to rise 0.4% from 0.3% and capacity utilization is seen higher at 80.9% from 80.5%.

GBP volatility could increase at 2:00 pm when the BOE governor Mervyn King delivers a speech in London.

We added fresh longs to EURUSD & GBPUSD in last nights Premium Intermarket Insights after Mondays traders hit targets. Same goes for gold, which is nearing the 1635 target. More detail on these and other trades & gold multitime frame charts, get direct access here:: http://ashraflaidi.com/products/sub01/access/?a=646 Non subscribers can join here: http://ashraflaidi.com/products/sub01

What does it mean when US retail sales posting their first back-to-back monthly decline since May-June 2010 -- a period coinciding with surging euro fears, which led to a temporary low in the single currency until markets rebounded on anticipation of QE2 by the Fed and which in turn materialized in Nov of that year? With receding inflation and renewed weakness in employment growth, the FOMC should reiterate its readiness to deliver further easing measures, rather than begin a new set of Operation Twist at next weeks FOMC meeting. Find out in tonights Intermarket Insights whether we are maintaining our risk-on bias. Direct subscribers access is found here: http://ashraflaidi.com/products/sub01/access/?a=646 Non subscribers click here: http://ashraflaidi.com/products/sub01/

AL

Eurozone industrial production fell; German CPI unrevised; Swiss PPI declined. Spanish and Italian yields push higher initially but eased later. Focus turns to retail sales, PPI and RBNZ rate decision at the end of the session. Premium longs in EURUSD, AUDUSD & gold near their Monday targets. See more below. Also fond below is the LINK TO YESTERDAYs 60-min WEBINAR with Ashraf Laidi (on FX, gold, oil & S&P500), George Cavaligos & Fari Hamzei.

Risk appetite improved during the London session which sent the buck lower against most majors. Considering the looming Greek elections it is difficult to imagine such trend will continue further.

ُُEurozone industrial production fell 0.8% in April from -0.1% but this was still better than 1.2% decline that analysts expected. On annual basis production dropped 2.3% from previous -1.5%. Sharp rebound in energy production (nearly 7%) helped to negate the decline of all other components of the index. Worryingly, Germany experienced the second largest decline among EMU members (-2.0%) right after Portugal (-6.5%).

In other news we learned that German final CPI for May was confirmed at 1.9% y/y and -0.2% m/m in line with initial estimate; that Swiss PPI declined 0.2% in May from previous -0.1% but the annual rate remained at -2.3% and that Greeks continue to withdraw funds ahead of Sunday's election at a rate between EUR 500-800M a day.

Spanish 10 year yield rose to 6.74% and Italian to 6.21% before they both declined slightly.

The US session starts at 8:30 am ET with May retail sales that are expected to decline 0.1% from previous +0.1% m/m (core sales seen steady at 0.1%). Producer inflation that is due at the same time is anticipated to ease in May to 1.2% from April's 1.9% but core PPI is seen rising to 2.8% from 2.7% y/y.

By the end of the session at 5:00 pm, RBNZ will announce its cash rate decision which is expected to remain unchanged at 2.5%. Nevertheless, the kiwi could weaken after the statement is published as it is likely to be dovish and could signal a coming rate cut.

Longs in EURUSD, AUDUSD and gold are nearing their targets from Mondays Intermarket Insights. Only one of the long GBPUSD was filled and hit all targets. Direct Access here: http://ashraflaidi.com/products/sub01/access/?a=645 Non subscribers can join here: http://ashraflaidi.com/products/sub01

LINK TO LAST NIGHTS WEBINAR BY Ashraf Laidi, George Cavaligos & Fari Hamzei http://eduwebs.hamzeianalytics.com/AL_GC_FH_061212.wmv

Here is the link to Ashraf's 60-minute webinar on trading strategies based on fundamentals & technical intermarket dynamics (FX, S&P500, Dow-30, gold and US crude). The webinar was part of a TRIO-WEBINAR on Equities (Fari Hamzei), Bonds (George Cavaligos) & FX (Ashraf Laidi). As part of AshrafLaidi.com's efforts to educate and inform, we continue to povide a hist fo webinars, multi-lingual TV interviews and 2-3x daily IMTs . http://eduwebs.hamzeianalytics.com/AL_GC_FH_061212.wmv

When all said and done, EURUSD ended the day higher despite a new Eurozone-era record in Spanish 10-year yields. Indications that G20 policymakers will take steps to stem the European crisis elevated hopes on Tuesday. The New Zealand dollar led while the yen lagged as risk trades improved. The Asia-Pacific session features comments from the RBA governor. Ashrafs take on yields is below. Cable longs hit all targets, while longs in EURUSD and USDCAD remain in progress. More below in the final paragraph.

Spanish 10-yr yields hit a new Eurozone-era record of 6.83% after Fitch downgraded 18 Spanish banks, while adding that further Eurozone sovereigns remain under threat.

Here is from Ashraf: The latest run-up in Spanish yields drives up the spread over German 10 yr yields to 5.39%. It took 10 days of +5% spread between Spanish & German 10-year yields before Spain obtained a bailout. It took 16 days of +5% Greek spread over German yields for Athens to obtain its 1st bailout; 24 days of 5% Irish spread over German yields for Dublin to get bailed out; and 34 days of +5% Portuguese spreads over Germany before Lisbon was saved.

Comments from German and Mexican officials suggested the G20 hopes to adopt a plan to fight the European crisis at the meeting on June 17-18. The market is building expectations for greater IMF and EU funding backstops. This is a dangerous assumption because international meetings rarely end with grand bargains and action.

The overall optimistic theme clashed with a continued rout in the Spanish and Italian debt markets. Ten-year Italian yields hit 6.30% and the Spanish counterpart hit 6.85% (up from 6.01% at the weekly open).

The euro was relatively quiet. A fall to a fresh weekly low at 1.2439 failed to inspire follow-through selling and EUR/USD rebounded to 1.2506. The pound was especially buoyant and trades near the highest levels of the month.

The early focus in the upcoming session is on RBA governor Stevens as he speaks at an economic forum in Brisbane. At 2350 GMT, Japan releases April machine orders. Economists expect a 4.9% y/y rise after the 1.1% decline in March.

Only one of the long GBPUSD was filled and hit all targets, while the other was unfilled. EURUSD, GBPUSD, AUDUSD, USDCAD and gold remain in progress. Distinguishing between the short and medium long term in these trades remains key. Direct Access here: http://ashraflaidi.com/products/ sub01/access/?a=645 Non subscribers can join here: http://ashraflaidi.com/products/sub01

-AB & AL

Ashraf tells Nadine Hani of AlArabiya that action saw a rare divergence between a falling euro and rising equities (alongside risk currencies weighing on USD) before the Fitch downgrade triggered an-all round risk-off reversal. But the USD's inability to extend gain may tell us somehting. See the rest of the Synopsis under the clip. http://youtu.be/V1Ekq1JDsxs DON'T FORGET Ashraf's Webinar today at 17:00 EST (see previous IMT)

Join Ashraf for a webinar this evening at 17:00 EST (22:00 BST/London) as part of a TRIO-WEBINAR on Equities (Fari Hamzei), Bonds (George Cavaligos) & FX (Ashraf Laidi). Ashraf will go through the latest charts and trades in FX, S&P500 and gold. This is a FREE webinar. CLICK HERE to register: https://www1.gotomeeting.com/register/677913025

UK manufacturing production fell and industrial production was flat; Swiss SECO sees faster growth in 2012 but slower in 2013; Spanish and Italian 10 year yields rise. Market turns to import prices, IBD/TIPP economic optimism and budget deficit. Last nights longs in GBUSD, EURUSD & gold have been triggered and in progress. See the rest below.

USD gave up a portion of earlier gains throughout the Asian and London sessions. EURUSD continues to trade above 1.2500 after bouncing from 1.2450 and major European equities are gaining about 0.5%.

Euro is likely to trade within the existing range as traders are unlikely to want to open new positions ahead of this Sunday's Greek elections that are too close to call. See Ashraf's Premium Intermarket Insights on EURUSD below.

GBPUSD initially fell to 1.5452 but quickly recovered after UK manufacturing production declined 0.7% in April from previous 0.9% m/m but slowed the pace of a decline to -0.3% from -0.9% on annual basis. Monthly industrial production was flat while annual production fell 1% from previous -2.6%. If it was not for the unusually cold temperatures that lead to a surge in energy demand, the monthly results would be even weaker. Worse than anticipated prints not only suggest additional declines but also add pressure on the BOE to ease further.

Swiss SECO agency released its quarterly economic forecast in which it noted robust activity and resistant export industry. As the Swiss economy is performing better than anticipated, the 2012 growth forecast was raised from 0.8% to 1.4% with CPI forecast unchanged at -0.4%. Growth for 2013 was downgraded to 1.5% from 1.8% and CPI should rise 0.5% vs. the initial estimate of 0.4%.

In other news, Italian 10 year yield broke to 6.19% which is the highest level since 01/30 and Spanish 10 year rose to 6.65%. Fitch ratings noted that while LTRO3 is an option it does not see it in the near term. However, should Greece leave the EMU, new LTRO may be needed as it could lead to a wider euro break up.

Today's second tier US data is unlikely to have a lasting impact on trading. Import prices due at 8:30 am are expected to decline 1% in May from previous -0.5%, IBD/TIPP economic optimism due at 10:00 am is seen lower in June at 47.3 from 48.5 and budget balance due at 2:00 pm is anticipated to fall to USD -112.7 bln in May from April's USD 59.1 bln surplus.

GBP volatility could increase at 10:00 am when NIESR will release its May GDP estimate for the UK.

The latest Premium Intermarket Insights is titled Maintaining Consolidation View, include longs EURUSD, GBPUSD, AUDUSD, USDCAD and gold. No positions in US crude. Distinguishing between the short and medium long term in these trades remains key. Direct Access here: http://ashraflaidi.com/products/sub01/access/?a=645 Non subscribers can join here: http://ashraflaidi.com/products/sub01

Ashraf's take for ReutersInsider about Reuters' latest exclusive finding on Euro cash and where will the euro most likely be in a week for now and why http://reut.rs/Ly08za

The biggest euro flop was not on the football pitch, it was on trading floors where questions about the plan to save Spanish banks undercut the currency. The euro fell below 1.25 after surging to 1.2650 at the open. Lower-tier Japanese inflation and service sector data highlight a quiet calendar. Tonights Intermarket Insights titled Maintaining Consolidation View are out. See more info below.

A classic buy-the-rumour-sell-the-fact trade unfolded as the early details of the Spanish bank bailout were announced. The euro gapped higher at the weekly open but the gains were slowly pared until the euro was in a losing position. Commodity currencies and other risk trades followed suit while the pound found some support due to EUR/GBP selling.

Spain requested as much as 100 billion euros but questions about subordination and its growing debt load wrecked any optimism. Spanish 10-year yields fell to 6% at the open, then shot to 6.50%. The pessimism spread to Italy where yields rose to the highest since January. Spanish stocks posted an incredible turnaround, closing 0.8% lower after jumping 5.8% at the open.

Another story that weighed was a report that EU officials discussed capital controls if Greece exits the Eurozone. Oil fell to a one-week low on economic worries, a push from Saudi Arabia to hike output at the OPEC meeting on Thursday and exemptions to Iranian oil sanctions for several large consuming countries, including India.

There were no US or Canadian data and Fedspeak from Lockhart and Williams was similar to last week.

The Asian calendar is quiet until 2350 when the April Japanese tertiary industry index will be released. The consensus estimate is a 0.3% m/m gain. At the same time, the corporate goods price index is expected to fall 0.4% y/y in May.

See our latest Intermarket Insights in todays trades in EURUSD, GBPUSD, AUDUSD, USDCAD and gold. Direct Access here: http://ashraflaidi.com/products/sub01/access/?a=645 Non subscribers can join here: http://ashraflaidi.com/products/sub01

-AB

Rumblings of a weekend deal for Spain were already circulating on Friday, pushing most European and US equity indices higher earlier in the day, before a sharp turnaround ensued in a data-empty US session. Rather than delving into the long term effectiveness of such a bailout, traders are viewing the Spain news as part of a coordinated global approach towards staving off further volatility ahead of next weeks Greek elections. But the story remains choppy in FX as the USD regains fresh ground. See our latest Intermarket Insights in todays trades in EURUSD, GBPUSD, AUDUSD, USDCAD and gold. Direct Access here: http://ashraflaidi.com/products/sub01/access/?a=645 Non subscribers can join here: http://ashraflaidi.com/products/sub01