Intraday Market Thoughts Archives

See Ashraf this morning at the World Money Show speak at 11:15. He will also be at the City Index booth into the afternoon. bit.ly/SBZg0B - Queen Elizabeth Ctr in Westminster.

German finance minister wants G20 to not focus only on EZ crisis; Spanish manufacturing PMI lower; UK construction sector expands. Focus on employment reports from US and Canada. A new edition of Premium Insights was released yesterday ahead of the NFP. 6 trades hit all targets last week, 3 were stopped out and 4 remain in progress. Please see below.

The greenback is stronger against most majors in the ongoing session. European equities are trading within a narrow range.

The common currency was trading heavy since London open. EURUSD fell to a session low of 1.2864 after German finance minister Wolfgang Schaeuble said that top economies must pursue structural reforms and sustainable fiscal policies. Reuters reports that Schaeuble does not want this weekend's G20 meeting to focus solely on EZ crisis but should also include other issues such as US and Japan's debt problems.

Spanish manufacturing PMI declined in October to 43.5 from previous 44.5 reaching the lowest level since July. However, the 10 year yield is little changed trading around 5.59%. On a positive note, the final results of French, German and Eurozone manufacturing PMIs were revised slightly higher from their initial estimates.

After two months of contraction the UK construction sector expanded as the PMI bested expectations and reached 50.9 from previous 49.5. However, new work dropped for the fifth month and employment declined at the fastest pace since August 2011. GBPUSD trades around 1.6095.

The US session brings the last pre-election labor market data. The NFP report that is due at 8:30 am ET is projected to rise slightly to 123K in October from previous 114K and the unemployment rate is seen marginally higher at 7.9% after declining sharply to 7.8% in September. The last report of this week is factory orders that are expected to rise 4.6% in September after falling 5.2% in August.

Canadian employment is anticipated to drop to 9.7K after soaring 52.1K a month earlier. The unemployment rate is expected to remain unchanged at 7.4%.

Latest Premium Insights: 6 trades hit all targets last week, 3 were stopped out and 4 remain in progress. http://ashraflaidi.com/products/sub01/access/?a=692 Nonsubscribers can click here to join http://ashraflaidi.com/product/sub01/

Parik Urban

Better US economic data boosted risk sentiment but the foreign exchange market remained sideline. Commodity currencies were the exception, making solid gains, while the yen lagged. Markets may be quiet ahead of non-farm payrolls with the BOJ minutes as the lone item on the calendar. A new edition of Premium Insights was released earlier today ahead of the NFP. 6 trades hit all targets last week, 3 were stopped out and 4 remain in progress. Please see below.

The October ADP report showed US employment rising 158K in the month, beating the 135K consensus and adding an upside bias to Fridays non-farm payrolls report. More good news for the jobs market came with initial jobless claims at 363K compared to 370K consensus.

The manufacturing sector also showed unexpected strength with the ISM survey at 51.7K compared to 51.2K expected. The final revision of consumer confidence showed a small tick lower but it was still the best report in more than three years.

The commodity currencies were the chief beneficiaries of the positive reports but neither USD/CAD nor AUD/USD were able to break out of their recent ranges, likely due to apprehension ahead of the US employment report.

The euro rallied to 1.2980 in early US trading but slipped back after a Greek lawmaking unit said Troika-mandated pension law changes may violate the constitution. That sent the euro back to 1.2930.

The S&P 500 gained 1.1% on the day and European stocks posted similar gains but the euro and pound could not take advantage. It may be a sign of underlying weakness.

The calendar is light but features the BOJ minutes at 2350 GMT. At 0030, Australia releases third quarter PPI; expectations are for a +1.2% q/q reading.

Here are the latest Premium Insights ahead of tomorow's US jobs report. 6 trades hit all targets last week, 3 were stopped out and 4 remain in progress. http://ashraflaidi.com/products/sub01/access/?a=692 Nonsubscribers can click here to join http://ashraflaidi.com/product/sub01/

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If you thought last month's webinar had excellent calls, tune in to Thursday's webinar with Ashraf Laidi (FX, metals & S&P500), Fari Hamzei (S&P500, Apple & Google) & George Cavaligos (Bonds & Bunds) previewing Fridays US jobs report and the likely consequences in these seemingly range-bound markets at 16:00 Chicago, 17:00 Eastern Time, 21:00 GMT/London. Click here to Register: https://www1.gotomeeting.com/register/578430593

Here are the latest Premium Insights ahead of tomorow's US jobs report. 6 trades hit all targets last week, 3 were stopped out and 4 remain in progress. http://ashraflaidi.com/products/sub01/access/?a=692 Nonsubscribers can click here to join http://ashraflaidi.com/products/sub01/

UK manufacturing PMI weaker; Swiss retail sales and PMI higher; Spain extends shorting ban. Focus turns to ADP, jobless claims, consumer confidence and ISM manufacturing. A brand new of Premium Insights is due at the start of the US session. Both EURJPY, 1 of 2 EURJPY and 1 USDJPY hit all targets. Find out which remain in progress and stopped out below.

USD mixed in the ongoing session. It is weaker against GBP and NZD, stronger against EUR and unchanged against the rest of the majors. European equities are gaining about 0.5%.

UK Manufacturing sector contracted for the sixth time in a row in October as PMI declined to 47.5 from previous 48.1 which is the lowest level since July. Total new orders fell at an accelerating pace compared to September as domestic demand weakened and export orders from Europe and Asia declined. GBPUSD fell after the release but recovered all losses and trades near session highs around 1.6170. EURGBP trades just a few points above the 0.80 level.

Swiss retail sales bested expectations in September as they grew 5.4% but that was still a decline from previous 6.0% y/y. SVME PMI improved in October to 46.1 from 43.6 but this is still the seventh sub 50 reading back to back.

In other news, Greek manufacturing PMI fell to 41 from previous 42.2, Chinese sovereign wealth fund will buy 10% stake in Heathrow Airport and Spain is to extend ban on short selling till January 31st.

The US session begins at 8:15 am ET with the ADP report that is expected to print 138K in October from September's 162K followed by jobless claims at 8:30 am that are seen higher at 371K from last week's 369K.

Consumer confidence is due at 10:00 am and it is anticipated higher in October at 72.4 from 70.3 while ISM manufacturing that is due at the same time is expected to edge down to 51.2 from 51.5.

For direct access to these Premium trades, please click here:http://www.ashraflaidi.com/products/sub01/access/ ?a=691 Non subscribers, can click on here to join: http://www.ashraflaidi.com/products/sub01/

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If you thought last month's webinar had excellent calls, tune in to Thursday's webinar with Ashraf Laidi (FX, metals & S&P500), Fari Hamzei (S&P500, Apple & Google) & George Cavaligos (Bonds & Bunds) previewing Fridays US jobs report and the likely consequences in these seemingly range-bound markets at 16:00 Chicago, 17:00 Eastern Time, 21:00 GMT/London. Click here to Register: https://www1.gotomeeting.com/register/578430593

The following multi-time frame momentum analysis for the FTSE-100 highlights deteriorating hourly technicals, eyeing the 5800 figure, followed by a possible retest of the October 26 trendline support near 5795-5797. See the 6 Charts & Full Analysis

http://www.cityindex.co.uk/market-analysis/market-news/1550502012/charting-ftse-100-technicals/

EURUSD sees a daily Golden Cross as Ashraf warned last week in Tuesdays Premium Insights. German and French data above expectation; Eurozone and Italian unemployment rate higher; Eurozone CPI lower; German auction. Market awaits Canadian GDP and Chicago PMI. Ashrafs piece on the Canadian dollar on Oct 25. See more below. EURUSD, USDJPY and cable hit all targets. See more below.

USD weakens across the board except JPY in the ongoing session. European equities are gaining about 0.5%. The relative strength winner is CHF along with NZD while JPY is the weakest.

Market sentiment improved at the beginning of the London session after German retail sales surprised to the upside and grew 1.5% in September and French consumer spending rose 0.1% after a 0.8% decline seen in August. EURUSD broke above the 1.30 level but has not seen much follow through. EURJPY pushed higher and continues to trade near session highs around 103.80.

Not all data was positive though - Italian unemployment rate ticked higher in September to 10.8% from previous 10.6% and Eurozone unemployment rate rose to a fresh high of 11.6% from 11.5% leaving nearly 18.5 million people out of work. Eurozone consumer inflation eased to 2.5% from 2.6%.

Germany sold 30 year bond totaling EUR 1.704 bln vs. EUR 2 bln target. The average yield rose to 2.34% from 2.17% but cover rose considerably to 2.69 from 1.5.

The US session kicks off at 8:30 am ET with Canadian GDP that is expected to grow 0.2% in August m/m but to slow to 1.7% from 1.9% y/y. Chicago PMI is due at 9:45 am and it is anticipated to rise to 51.4 in October after falling to 49.7.

Markets also await Eurozone finance ministers conference call that will focus on the release of the next tranche of the bailout for Greece. However, no definite decisions are expected today.

1 of 2 EURUSD Premium longs hit all targets, the other in progress. USDJPY sot and GBPUSD long hit all targets. 1 of 2 Gold stopped out. silver and EURGBP in progress, while AUDUSD hit all targets and CADJPY stopped out. For direct access to these Premium trades, please click here:http://www.ashraflaidi.com/products/sub01/access/?a=691 Non subscribers, can click on here to join: http://www.ashraflaidi.com/products/sub01/

Trading slowed to a standstill after Europe closed on Tuesday. On the day, the euro was the best performer while the US dollar lagged. Trading will pick up for the rest of the week as US bond and stock markets reopen on Wednesday to coincide with month-end. EURUSD, EURJPY, cable, gold, silver and EURGBP in progress. More below.

Early US trading carried over the slight risk-positive mood from Europe, sending EUR/USD to 1.2984 but those gains dissipated and the pair fell back to 1.2964. It is difficult to read anything into the moves because participation was so limited.

Wednesday presents another problem because month-end flows could unhinge intermarket correlations.

The lone data point in the session was the US Case-Shiller home price index, which rose 2.0% compared to a 1.9% rise expected. House prices rose in 19 of the 20 cities tracked.

The Asia-Pacific calendar features several highlights including the Japanese manufacturing PMI at 2313 GMT. A 0030 GMT, Australia releases housing credit figures and thirty minutes later the focus remains on the home market with Japanese housing starts.

USDJPY shorts in latest Premium Insights nearing the final target. EURUSD, EURJPY, cable, gold, silver and EURGBP in progress, while AUDUSD hit all targets and CADJPY stopped out. We added 4 charts on EURUSD and gold to dissect the technical complexities for gold (daily and weekly stochastics and MA confluence) as well as euros intermediate trendline and its shifting behavior relative disappointing IFO & PMIs. For direct access to these Premium trades, please click here:http://www.ashraflaidi.com/products/sub01/access/?a=691Non subscribers, can click on here to join:http://www.ashraflaidi.com/products/sub01/

As we approach the release of the final US employment report before the Presidential Elections, much analysis will be made about the recent decline in the unemployment rate and the overall economy. Yet, looking at a more frequently released job figure such as weekly claims of unemployment insurance, it has fallen by 45% from their 2009 peak.

Notably, the APRIL 2000 BOTTOM IN JOBLESS CLAIMS coincided with the APRIL 2000 PEAK IN US EQUITY INDICES, while the January 2006 bottom in claims occurred 21 months ahead of the October 2007 peak in equity indices. Full Chart & Analysis here: http://www.cityindex.co.uk/market-analysis/market-news/1455942012/us-jobless-claims-vs-equities/

US equities to remain closed; BOJ expands asset purchases; German unemployment rose; Eurozone business climate declined; Spanish GDP improved q/q. S&P Case Shiller is next, other US events postponed. USDJPY shorts in latest Premium Insights nearing the final target. EURUSD, EURJPY, cable, gold, silver and EURGBP in progress. More below.

Hurricane Sandy hit the east coast causing a damage that is estimated to exceed USD 50 bln. New York's financial district has been flooded by record tides and rain closing the US markets for the second day in a row. Bloomberg reports that this is the first time in over a century when the weather stopped equity trading for two days.

JPY surged across the board after the BoJ left rates steady between 0% and 0.1% and increased the asset buying programs only by JPY 11T to JPY 91T while some market participants expected a more aggressive increase by JPY 20T. The BOJ said that it would keep easing until 1% CPI is in sight. USDJPY fell from session's high at 80.12 to as low as 79.27. EURJPY declined sharply from 103.39 to 102.17 but recovered to 102.90.

Despite the fact that European data mainly disappointed, EURUSD trades 70+ points above session low of 1.2886. German unemployment rose by 20K in October which was above analysts' expectations but the unemployment rate remained unchanged at 6.9%. Eurozone business climate fell further in October to -1.62 from -1.34 and Spanish Q3 GDP results were mixed as q/q reading improved to -0.3% from -0.4% but on annual basis the economy shrank 1.6% from -1.3%.

UK CBI realized sales surged in October to 30 from previous 6, reaching the highest level since June. GBPUSD trades near session highs around 1.6075.

The US data calendar is limited to S&P Case Shiller index at 9:00 am ET that is seen rising 1.9% in August from previous 1.2%. The consumer confidence report was postponed and the FOMC member William Dudley's speech was cancelled.

CAD traders await RMPI at 8:30 am ET that is expected to slow to 1.2% in September from previous 3.4% and the BOC governor Mark Carney's testimony in Ottawa that begins at 3:30 pm.

USDJPY shorts in latest Premium Insights nearing the final target. EURUSD, EURJPY, cable, gold, silver and EURGBP in progress, while AUDUSD hit all targets and CADJPY stopped out. We added 4 charts on EURUSD and gold to dissect the technical complexities for gold (daily and weekly stochastics and MA confluence) as well as euros intermediate trendline and its shifting behavior relative disappointing IFO & PMIs. For direct access to these Premium trades, please click here: http://www.ashraflaidi.com/products/sub01/access/?a=691 Non subscribers, can click on here to join: http://www.ashraflaidi.com/products/sub01/

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Hurricane Sandy closed stock and bond markets on Monday and slowed FX trading to a crawl. The US dollar was the best performer on modest risk aversion while the pound lagged. The Bank of Japan decision is rife with uncertainty. USDJPY shorts in latest Premium Insights nearing the final target. EURUSD, EURJPY, cable, gold, silver and EURGBP in progress. More below.

Trading was a secondary concern on the US Eastern seaboard with Hurricane Sandy bearing down on a huge part of the Northeast. Flooding already appears to have caused extensive damage in low-lying coastal regions and New York has been essentially shut down.

Stock and bond markets will remain closed on Tuesday but are likely to re-open Wednesday under any conditions in order to facilitate month-end trades. Wednesdays consumer confidence report has been delayed and a speech from the Feds Dudley will be rescheduled.

US-dollar demand at the London fix was the main feature on Monday, boosting USD/JPY to 78.84 and taking cable near 1.6000.

Spain announced the discount provisions for bad bank asset buying and they were steep, sending EUR/USD to a session low of 1.2884.

The lone US data point was the PCE report. Consumer spending rose 0.8% compared to 0.6% expected. This was foreshadowed by the strong consumer element in the GDP report last week. The rise in spending was not accompanied by unexpectedly strong income, so the savings rate declined. Core PCE inflation was in-line with the consensus at +1.7% y/y.

The market turns its attention away from storm coverage to the BOJ, which will announce its latest policy moves at around 0400 GMT.

A number of areas are in focus but the primary question is how much QE will officials add. The consensus is 10 trln yen, which will raise the total to 90T. Last week there was talk of as much as 20T yen but on the weekend there was chatter about less than 10T, which would spark a drop in USD/JPY.

The BOJ is widely expected to lower its inflation forecasts for 2013 and may introduce other creative measures to combat deflation and yen strength.

Overall, we preach caution because trading around BOJ decision can be unorthodox and messy.

USDJPY shorts in latest Premium Insights nearing the final target. EURUSD, EURJPY, cable, gold, silver and EURGBP in progress, while AUDUSD hit all targets and CADJPY stopped out. We added 4 charts on EURUSD and gold to dissect the technical complexities for gold (daily and weekly stochastics and MA confluence) as well as euros intermediate trendline and its shifting behavior relative disappointing IFO & PMIs. For direct access to these Premium trades, please click here: http://www.ashraflaidi.com/products/sub01/access/?a=691 Non subscribers, can click on here to join: http://www.ashraflaidi.com/products/sub01/

-AB

Watch Ashraf's take on BNN earlier today previewing the ADP, NFP, Spain vs Italy Dynamics, Euro, Canadian dollar & Aussie http://watch.bnn.ca/#clip794296

UK mortgage approvals and net consumer credit higher; Spanish retail sales sharply lower; Italian auction. Markets await German CPI; US income and spending rose from prev month. PLEASE NOTE that until the next week, the time difference between London and NY narrowed to 4 hours from the usual 5 hours. US equity markets closed. USDJPY shorts in latest Premium Insights nearing the final target. EURUSD, EURJPY, cable, gold, silver and EURGBP in progress. More below.

The greenback is mixed in the ongoing session. It is stronger against EUR, GBP and CHF, weaker against JPY and unchanged against the rest of the majors. European equities are losing nearly 1% and the relative strength winner is JPY while GBP lags.

GBP is losing across the board despite UK mortgage approvals that rose 50K in September after rising 48K the prior month. Furthermore, net consumer credit rose to GBP 1.2 bln from previous -0.1 bln which is the highest level since 2008. GBPUSD trades near session lows around 1.6060 while EURGBP recovered to 0.8035 after falling to 0.8022.

EURUSD declined to 1.2886 after Spanish retail sales dropped more than analysts anticipated. On annual basis sales fell 10.9% in September after falling only 2.1% in August. A VAT hike is blamed for the decline. EURUSD trades around 1.2910.

Italy reached a full take up as it sold EUR 8 bln of 6 month BOT. The average yield was lower at 1.347% from 1.5% while cover rose to 1.52 from 1.39.

US core PCE that is expected to inch higher to 1.7% in September from 1.6% y/y. Sep Personal income rose 0.4% as expected from 0.1% and personal spending rose 0.8% vs expected 0.6% from previous 0.5%. Coe PCE price index edged up 1.7% from 1.6%.

PLEASE NOTE that until the next week, the time difference between London and NY narrowed to 4 hours from the usual 5 hours.

NYSE and Nasdaq will be closed today as the hurricane Sandy approaches New York. Confirmations whether these markets will be closed on Tuesday as well are pending. SIFMA is also recommending that US fixed income markets close at noon.

USDJPY shorts in latest Premium Insights nearing the final target. EURUSD, EURJPY, cable, gold, silver and EURGBP in progress, while AUDUSD hit all targets and CADJPY stopped out. We added 4 charts on EURUSD and gold to dissect the technical complexities for gold (daily and weekly stochastics and MA confluence) as well as euros intermediate trendline and its shifting behavior relative disappointing IFO & PMIs. For direct access to these Premium trades, please click here: http://www.ashraflaidi.com/products/sub01/access/?a=691 Non subscribers, can click on here to join: http://www.ashraflaidi.com/products/sub01/

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US third quarter growth was stronger than expected on resilient consumers and government spending. On Friday, the yen was the top performer as it retraced a portion of the early-week losses. The weekly CFTC positioning data showed a market thats eager to buy USD/JPY. Both EURUSD from last weeks Premium Insights are filled and in progress and so are USDJPY, CADJPY and gold.

US GDP expanded 2.0% in the third quarter, topping the 1.8% consensus estimate. The upside surprise was credited to defense spending and iPhone sales hardly the stuff of a lasting recovery. Forward-looking components like business investment show caution.

USD/JPY slumped on Friday, posting a bearish outside day. Given that risk appetite was generally flat, it was a surprise to see such a large yen move but after gains in 9 of the prior 11 days, a pullback was overdue.

The yen-correlations have been breaking down recently and makes for challenging intermarket analysis conditions. Overall, pairs like EUR/JPY are higher than they normally would be, given the slump in stocks. However, Treasury yields remain high and that indicates USD/JPY may be fairly valued.

The Bank of Japan meeting is on Tuesday and that may bring some clarity. There is speculation the BOJ could unleash 20T in fresh QE, double what analysts were expecting last week.

CFTC Commitments of Traders

EUR -55K vs -53K prior

JPY switches to net short 18K from net long 10K

GDP +18K vs +20K

AUD +46K vs +38K

CAD +86K vs +94K

The reversal in yen positioning is the big story in the data, which is collected at the close every Tuesday. Its the first time in a net short position for the yen since May. The rule of thump with positioning data is to follow the market when it switches.

Both EURUSD from last weeks Premium Insights are filled, with USDJPY, 1 of 2 CADJPY also filled and AUDUSD hitting all targets. 1 of 2 EURGBP was stopped out. We added 4 charts on EURUSD and gold to dissect the technical complexities for gold (daily and weekly sochastics and MA confluence) as well as euros intermediate trendline and its shifting behavior relative disappointing IFO & PMIs. For direct access to these Premium trades, please click here: http://www.ashraflaidi.com/products/sub01/access/?a=691 Non subscribers, can click on here to join: http://www.ashraflaidi.com/products/sub01/