Intraday Market Thoughts Archives

Could the question of whether Madrid seeking assistance from the EU/IMF and implementing reforms end up being a win-win situation for Spanish shares? Can the IBEX 30 reach 9,000...or even surpass it ? Here are the analysis and charts : http://www.cityindex.co.uk/market-analysis/market-news/75832012/ibex-9000/

EU commission working with Spain on reforms; UK public sector borrowing rose; SNB does not surprise. Market turns to Canadian CPI and FOMC Lockhart speech. The latest on our Premium Insights is found below.

EUR regained the $1.30 figure today on reports that Spain is considering seeking assistance. The USD had been under pressure since yesterday across the board except JPY. GBPUSD broke to a new recent high 1.6309 while other majors strengthened to levels above Wednesday or Thursday highs. European equities are slightly in the green and the relative strength winner is NZD while USD is the weakest.

FT reports that the Spanish government along with the European commission authorities is preparing a set of economic reforms that will be unveiled next week. This would allow Spain to request a bailout which would consequently allow the ECB to start its bond buying program. Spanish 10 year yield is lower today, trading around 5.75%. EURUSD pushed back above the 1.3000 handle.

UK public sector net borrowing was at record high for the month of August as receipts continued to disappoint, MNI reports. Excluding financial sector interventions, borrowing rose to GBP 14.41 bln from GBP 14.36 bln a year ago. EURGBP trades right below the 0.8000 mark.

The SNB quarterly bulletin did not surprise at all as it only contained the usual comments about enforcing the Franc cap, continued downside risks and the readiness of the SNB to take further measures.

The data calendar for the US session is limited to Canadian consumer inflation that is expected to remain steady in August at 1.3% on annual basis. Core figure is seen lower at 1.6% from previous 1.7%.

Markets could also react to Atlanta FED president and FOMC member Dennis Lockhart that will speak about the economic outlook and monetary policy at 12:40 pm. Q&A session will follow after the speech.

See the latest Premium Insights on EURUSD, EURJPY, AUDSD, GBPUSD, CADJPY, gold, silver and oil found here: http://ashraflaidi.com/products/sub01/access/?a=682 Non subscribers can click here: http://ashraflaidi.com/products/sub01/

French manufacturing PMI drops; German and European PMI rose; UK retail sales weakened; Spanish auction. Market turns to jobless claims and Philly FED. Ashraf's latest Premium Insights are out. See final paragraph for direct access.

The greenback was gaining throughout Asia and at the beginning of the London session but it has lost a part of its gains. European equities are losing about 0.75% and the relative strength winner is JPY while EUR lags.

The pressure on the common currency intensified after French manufacturing PMI fell in September to three and a half year low at 42.6 from 46.0. German manufacturing PMI that rose to 47.3 from 44.7 and the Eurozone equivalent that rose to 46.0 from 45.1 could not stop the selling and EURUSD declined to 1.2929.

UK retail sales fell 0.3% in August from a previous flat reading m/m and the annual figure slowed to 3.1% from 3.3%. The Olympics have distorted the data so more releases are needed to gauge the strength of the retail sector. GBPUSD trades around 1.6185 and EURGBP fell to 0.7988.

Spanish auction was solid today as Spain sold bonds totaling EUR 4.799 bln vs. 4.5 bln target. The 2015 bond had average yield 3.845% from 2.798 but January 2022 bond saw a significantly lower yield at 5.666% from 6.647%. The cover was also higher: 2.8 vs. previous 2.4.

The US session begins at 8:30 am ET with jobless claims that are seen lower at 374K from previous 382K followed by the Atlanta FED president and the FOMC member Dennis Lockhart's speech on workforce development at 9:30 am.

Philly fed manufacturing is due at 10:00 am ET and it is expected to improve in September to -4.1 from previous -7.1. Even though the index remained below zero it has shown an improvement over the past three months back to back. The GBP could react to the BOE governor Mervyn King's interview in London that begins at 2:00 pm

Latest Premium Insights on EURUSD, EURJPY, AUDSD, GBPUSD, CADJPY, gold, silver and oil are found here: http://ashraflaidi.com/products/sub01/access/?a=682 Non subscribers can click here: http://ashraflaidi.com/products/sub01/

Oil continued to fall Wednesday and is now down more than 9% from last weeks high. The yen was the top performer on the day, no doubt frustrating the BOJ. The focus shifts to China now with the impending release of the HSBC flash PMI. Ashraf's latest Premium Insights are out. See final paragraph for direct access.

WTI crude continues to plunge after breaking above $100 on Friday. Today, oil fell below $92 due to a large inventory build in the US stockpiles report. Downward momentum added to the move as QE3-based longs get squeezed out.

Over time, lower gasoline prices could be favorable for US customers and global growth. So far, oil also hasnt showed any signs of hurting CAD. That said, it is difficult to imagine a positive scenario where central banks continue to print and oil falls.

US housing data was in focus and showed tentative signs of a picku. Existing home sales rose to a pace of 4.82M from 4.56M expected. Housing starts were slightly below the consensus forecast but building permits were higher.

The Australian dollar twice attempted to break above 1.05 but stalled a few pips short. The Australian press reported on two more smaller-scale coal project cancellations totaling A$6 billion so risks to the Aussie remain to the downside.

AUD will also be in focus in Asian trading with the release of the HSBC flash China PMI at 0230 GMT. The prior reading of 47.6 was surprisingly low and another soft number would confirm a slowdown in Chinese manufacturing and weigh heavily on AUD and risk trades.

The other session highlight comes at 2245 GMT when New Zealand releases second quarter GDP. The consensus is for 0.4% q/q growth. On Friday, NZD/USD touched the highest since March and a strong report could extend the uptrend.

Latest Premium Insights on EURUSD, EURJPY, AUDSD, GBPUSD, CADJPY, gold, silver and oil are found here: http://ashraflaidi.com/products/sub01/access/?a=682 Non subscribers can click here: http://ashraflaidi.com/products/sub01/

-AB

A possible knee-jerk reaction from traders and strategists to the latest increase in the Bank of Japans asset purchases may be to focus on the USD/JPY pair, but a more interesting pair is EUR/JPY. Click here to see those 4 reasons & the 2 relevant charts.

http://www.cityindex.co.uk/market-analysis/market-news/73612012/boj-decision-eurjpy-setup/

The USD strengthened during the London session against all majors. European equities are only slightly in the red and the relative strength winner is USD while EUR lags. A new edition of the Premium Insights will be issued later today.

The JPY fell across the board during Asia after the BOJ surprised the market by increasing the total size of the asset buying program by 10 trillion yen to about 80 trillion from 70 trillion. The governor Shirakawa emphasized that the decision was based on disappointing data and not on the latest FOMC decision. The overnight call rate remained between 0% and 0.1%. USDJPY jumped from 78.60s to 79.22 and currently trades around the 79.00 handle.

The minutes from the September MPC meeting showed that all members unanimously voted to keep rates and QE unchanged. While most members saw the decision as straightforward, some felt that additional stimulus is likely. GBPUSD trades weaker around 1.6230 from today's high 1.6269.

Swiss ZEW economic expectations index declined further in September to -34.9 from previous -33.3. Only 9.3% of respondents see an improvement of the economic situation while 44.2% anticipate the economy to worsen in the next six months. Falling risk trades pushed EURCHF back below 1.21.

Up ahead are the latest data from the real estate market. At 8:30 am ET, the Census bureau will release building permits that are seen lower in August at 0.79M from 0.81M and also housing starts that are expected to rise to 0.77M from 0.75M. Existing homes sales are due at 10:00 am ET and they are seen higher at 4.57M from 4.47M.

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The euro slid lower on Tuesday but remained above 1.3000. On the day, NZD and CAD were the top performers while the euro lagged. The Bank of Japan may expand its quantitative easing program in the upcoming session. See Ashraf's latest HotChart.

Markets chopped sideways for the most part in US trading but the euro continued to give back some of its recent gains. EUR/USD fell as low as 1.3028 but later bounced near 1.3050.

Fundamentals were mildly positive as the NAHB housing market index rose to 40 from 37 a six-year high. The US current account deficit also narrowed by 12% in the second quarter, beating estimates.

Spanish 10-year yields fell 8 basis points to 5.90% after deputy PM Soraya Saenz de Santamaria said the bailout is under consideration, in the strongest hint that they will make a request yet.

Saudi Arabia weighed on oil prices, announcing it will offer customers extra supply through the remainder of the year. Officials said they were hoping to bring Brent down to $100 from current prices near $118/barrel.

The Bank of Japan will announce the result of its policy meeting at approximately 0400 GMT. A Bloomberg survey sees just 5 of 21 economists expecting further asset buying at todays meeting with the remainder saying moves will come in October.

Since the FOMC, the likelihood of BOJ action has increased and the market probably sees a 50/50 chance of a move today. Action would push USD/JPY through 79.00 while no move would stall the recent rally and spark a round of profit taking.

Nikkei news provided a hint about what may come, issuing a report saying the BOJ could ease, without citing a source. Other events on the calendar include comments from the Feds Lacker and Australias Westpac leading index. See latest HotChart.

-AB

RBA minutes hint cut; UK CPI cools; German and Eurozone ZEW improves; Spanish auction. Current account deficit and TIC data are next.

The greenback trades higher against most majors but is little changed against GBP and JPY. European equities are losing slightly over 1%.

AUDUSD has been under pressure since yesterday. The minutes from the latest RBA meeting showed that there is a scope for a rate cut if growth outlook worsens. The RBA also noted that the AUD is somewhat overvalued. AUDUSD has declined to 1.0416.

UK consumer inflation was in line with expectations at 2.5% in August from previous 2.6% y/y. Core inflation slowed to 2.1% from 2.3%. EURGBP that declined to 0.8034 supports GBPUSD around 1.6240.

German ZEW economic sentiment improved to -18.2 in September from -25.5 in August. This is the first increase after four months of declines. Somewhat surprisingly, the ESM ruling had no impact on the index. The same index for the whole Eurozone improved to -3.8 from -21.2. EURUSD trades around 1.3046

Spain reached a full take up as it sold 12 and 18 month bills totaling EUR 4.576 bln vs. 4.5 bln target. The average yields declined and cover was mixed. Spain is still considering all the conditions tied to the financial aid but mid-October seems likely for the official request. 10 year yield is slightly lower around 5.94%.

The US session begins at 8:30 am ET with current account deficit that is expected to narrow in Q2 to USD 126.6 bln from previous deficit USD 137.3 bln followed by net long term TIC flows that are seen higher in July at USD 37.3 bln from June's USD 9.3 bln.

NY FED president and FOMC member William Dudley delivers two speeches on the economy today one at 11:30 am and the other at 4:30 pm. From a market reaction perspective, Richmond FED president and FOMC member Jeffrey Lacker's speech in New York at 7:45 pm on monetary policy is likely to have higher impact.

Ashraf discusses the secular moves in EURUSD; how Draghi's OMT stand out from other programs, prospects (or lack of) for BoJ action and whatever happened to those Currency Wars? http://youtu.be/raALoVQBLpA

A mysterious drop in oil prices spilled over to risks assets in US trading. The pound was the top performer on the day while the Aussie lagged. The RBA minutes and Chinese housing prices are the highlights of Asia-Pacific trading. Find out which of the 3 premium trades remain in progress and the technical and fundamental rationale laid out for them below.

Trading was choppy to start the week but the moves were by-and-large small. The euro, sterling and USD/JPY all broke their recent highs in US trading.

A soft Empire Fed manufacturing survey and a rumor that Japan checked rates filtered through the market. The NY manufacturing indicator fell to -10.41 compared to -2 expected, in the first sign that the manufacturing slump has extended to September.

European leaders continued to press Spain to accept aid conditions and the market is showing the first signs of worry as Spanish 10-year yields rose back above 6%.

Trading was quiet in late US trading until a sudden drop in Brent oil prices sparked a round of risk aversion. Theories pointed to broken algos, fat fingers or an imminent SPR release. The later was denied and the other theories were also lacking.

The takeaway from the move might have been the lack of a meaningful bounce, suggesting minimal appetite for risk assets.

At 2130 GMT, the RBA releases the minutes of the latest meeting. The statement was less-dovish than the market was expecting and helped to propel the Australian dollar to the recent highs. The minutes may contain more color on risks to the outlook and expand on some of the problems facing China.

At the same time, China releases data on August housing prices.

At 2300 GMT, RBA assistant governor Debelle will be the first Australian central bank to speak since the Fed announced QE3.

From our Pre-Fed Premium Insights, 1 EURUSD hit all targets and the other unfilled. 1 GBPUSD hot all targets, the other in progress. CADJPY hit all targets, 1 gold all done, the other in progress. Both USDJPY positions in progress. Neither US crude not AUDUSD long were filled. Click here to find out the extent to those trades currently in progress and the rational to placing them last week: http://ashraflaidi.com/products/sub01/access/?a=681 Non Subscribers please click here: http://ashraflaidi.com/products/sub01/

-AB

The barrage of bailouts & stimulus packages (fiscal & monetary) delivered since the Lehman collapse four years ago this week, will NOT diminish the importance of the remarkable double-shot from Bernanke & Draghi this month. Find out why with the help of a simple policy.market chart. http://www.cityindex.co.uk/market-analysis/market-news/68072012/4-years-later-still-shocking-awing/

USD attempts some consolidation, while the common currency along with GBP trades within a narrow range not far off Friday's close. European equity indices are losing about 0.5%. Details of Ashraf's Singapore appearances (this week) are below.

In the traditional summer press conference chancellor Merkel confirmed that the ECB bond buying is justified by its mandate and that there is a need for more political coordination in the Eurozone. Regarding Greece Merkel said that Germany is ready to help Greece and it wants Greece to succeed but it must hold onto its commitments.

Reuters reported that president Obama will launch a WTO trade enforcement action against China over auto and auto parts subsidies. The move is seen as political as president Obama is campaigning in Ohio which is a state that relies heavily on the auto industry.

Eurozone current account surplus declined in July to EUR 9.7 bln from previous EUR 14.3 bln and the trade balance surplus rose to EUR 15.6 bln from 13.6 bln. Annual exports grew solid 11% while imports grew only 2%. EURUSD pulled to 1.3092 and currently trades around 1.3110.

The data calendar for the NY session is limited to Empire state manufacturing that is expected to improve in September to -1.9 from previous -5.9 and Canadian foreign securities purchases that are anticipated to rise to CAD 11.3 bln in July after CAD -7.9 bln in June. Both reports are due at 8:30 am ET.

ASHRAF IN SINGAPORE: The first event will start on Tuesday evening. For ALL DETAILS on dates, times & venue, please click on the link http://www.cityindex.com.sg/learn-to-trade/seminars.aspx

QE3 battered the US dollar last week as the Fed shifted towards reducing unemployment as its principal priority over containing any future inflation. On Friday, commodity currencies eased late in the day on signs of softness in US demand. The calendar is light to start Asia-Pacific trading. 4 of last weeks Pre-Fed Premium Insights hit all targets. Find out which of the 3 remain in progress and the technical and fundamental rationale laid out for them below.

The euro rose as high as 1.3169 on Friday but slipped back to a close at 1.3127 on late position squaring. It was the fifth consecutive week of euro gains and marked the first weekly close above the 200-week moving average in nearly a year.

The launch of QE3 makes trading somewhat more straightforward. Poor economic US data will now spark a classic risk aversion trade, hurting risk-sensitive currencies. An example was Friday, as a soft US retail sales report weighed on commodity currencies.

But BOTH GOLD & SILVER gold and silver have made major headway, with GOLD +13% and SILVER +25% YTD, showing signs of 2010 when the cheaper metal doubled over its yellow counterpart.

Better sentiment about China could help the Australian dollar as markets open for the week. The chief economist at Chinas statistical agency forecast GDP growth this year at 7.7-7.8%, higher than the recently-rumoured 7.5%. Chinese President-in-waiting, Xi Jinping also made a public appearance, putting to rest speculation about a dire illness.

GEOPOLITICAL TENSIONS are rising. Persistent rumours of an Israeli strike on Iran have been accompanied by a new buildup of Western naval strength in the Straight of Hormuz. Relations between China and Japan are simmering over disputed island territories. Anti-Japan protestors burned a Toyota dealership and Panasonic factory. Anti-US protests in the Middle East eased on the weekend after a series of mob assaults on embassies Friday.

In Europe, large anti-austerity protests erupted in Spain and Portugal.

The Asia-Pacific calendar doesnt contain any notable releases.

From our Pre-Fed Premium Insights, 1 EURUSD hit all targets and the other unfilled. 1 GBPUSD hot all targets, the other in progress. CADJPY hit all targets, 1 gold all done, the other in progress. Both USDJPY positions in progress. Neither US crude not AUDUSD long were filled. Click here to find out the extent to those trades currently in progress and the rational to placing them last week: http://ashraflaidi.com/products/sub01/access/?a=681 Non Subscribers please click here: http://ashraflaidi.com/products/sub01/

-AB

ما ذا قال أشرف العايدي للقنوات العربية؟

http://www.fxsolutions.com/blog/ae/?p=186

http://www.fxsolutions.com/blog/ae/?p=183

Ashraf is in Singapore. The first event will start on Tuesday evening. For ALL DETAILS on dates, times & venue, please click on the link http://www.cityindex.com.sg/learn-to-trade/seminars.aspx