Intraday Market Thoughts Archives

The House of Reps began its procedural vote leading up to the

main vote, which will be the final OK for the stimulus bill. Then Senate follows later in the day before sending it to the White House. Cable drops back near session lows (in line with today's Hot-Chart) while EURGBP likely to rebound further past the 89 pence figure. The Hot-Chart section of the site can only be accessed with a password, which is obtained free of charge at the Hot-Chart section.

The weekend's G7 meeting will be scrutinized for whether JPY will be mentioned in the officical Forex Communique as was the case at the Oct meeting when the communique stated that "recent excessive volaitlity in the exchange rate of the yen and its possible adverse implications for economic and financial stability". If markets were unable to stem yen gains after that meeting, then they're unlikely to do so now. S&P500 5-hour chart dragged in a double head-and-shoulder formation as bears target a close below 820 amid the negative MA cross over between the 5 and day MAs.

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JPY weakness emerges spreads on news of subsidizing troubled US homeowners, a rescued stimulus package in Australia, and rumours of Chinese rate cut. The resulting spurt in risk appetite boosts sterling strength partly by talk of possible demands from Eurozone ministers at the G7 meeting asking UK Chancellor Darling to stabilize GBP weakness, which has exacerbated weak German, French and Italian exports. But the BoEs diagnosis of a deep recession and the Eurozones biggest quarterly growth contraction on record, official communiqu on foreign exchange is unlikely to address any specific currency.

As markets shift attention to Congress' stimulus package away from Geithner's Financial Rescue Plan, there's an emerging perception that markets' attempts to retest the Nov lows could only be delayed (not avoided) by a successful passing of the stimulus package by the House of Reps by tomorrow, Friday 13th. But with House negotiators highly UNlikely to delay such a vote until after the long US weekend, equity indices could be subjected to renewed selling (profit taking before the break).

The role of holiday discounts and usage of gift cards was clearly evidenced the unexpected 1.0% increase in US January retail sales since furniture & home and building materials were the only two major categories not having risen between December and January (atypical destinations of gift card shopping), while the highest percentage increases occurred in electronics and gasoline stores, two sectors typical of holiday spending/sales. Gold cheers the combination of better than exp data and prolonged nervousness in equities, pushing the Gold/Oil ratio to a fresh 10-year high of 27.

JPY rises across the board on a combination of US bond coupon redemptions by Japanese investors and a broad decline in European equities. USD follows behind, dragging EUR and GBP, but EUR gets the best of GBP as the EURGBP triggers a bullish moving average crossover (see more on EURGBP today's Hot-Chart). US retail sales due at 13:30 GMT seen down for 7th straight decline -0.4% from -2.7%, while jobless claims seen largely remaining above the 600K mark. Gold remains above $940 while oil drops to Jan 20 low below $36 per barrel. Today's Hot-Chart coming up next in the Hot-Chart section.

Gold breaks to 7- month high at $947--the 76.4% retracement of the decline from the record high to the $682 low as the rally is accompanied by central banks' race to rush into credit easing, leaving traders (and retail investors) little choice to seek the haven of gold from zero interest rates. Gold's convincingly bullish pattern of posting 1-2 daily losses after each 3-4 daily gains also allowed for a gradual, yet more robust ascent. The fact that the dollar is pushingback to session highs despite gold's highs, reflects a secular rally in the metal. NOK remains best perfomer in line with GBPKOK hot chart.

Sterling's losses inensify across the board after the Bank of England Governor King reiterated that the UK is in deep recession and the BoEs inflation report projected inflation at only 0.5% in its 2-yr forecast period. GBP unable to share in the euros gains after the BoE inflation report further exacerbated sterlings overnight fall, we expect prolonged losses to taper off at $1.4240. EURGBP faces additional upside after breaching above 90 pence. 90.80 stands as the incoming resistance, followed by 91.30 pence.

EUR outperforms GBP, USD and CAD as indicated in previous Intraday Market Thought and today's Hot-Chart. Although EURUSD again dissipates at $1.3030s, further run-up seen looming. GBPNOK drops 300 points today in line with yesterday's HOT-CHART, eyeing the 9.6 target. CADCHF also drops (as all CAD pairs) after Bank of Canada Governor Carney hints at quantitative easing. GOLD quietly gaining past $905 on its way to retesting $940. Remain cautious from potential burst in risk appetite (rise in stocks) in event of weclome reception to Geithner and Bernanke's speeches.

EUR boosted by hawkish ECB remarks as the cen bank aims at curbing prolonged market expectations of policy easing beyond the March meeting. EURUSD & EURGBP pushing higher as GBPUSD ends its 5-day winning streak. $1.2770 and $1.2660 still proving as key support levels, while $1.3030 is likely to be retested later today amid the appearances from Geithner (16:00 & 19:30 GMT) and Bernanke (18:00 GMT). See today's Hot-Chart for EURUSD Techs.

Markets' hesitation reflects a yet-to-be approved stimulus package by the U.S. Senate. Treasury Secretary Geithner will speak again tomorrow at 16:00 GMT to unveil the details of the financial rescue package, which includes the Fed's TALF plan. Aussie gradually emerging from the effect of the fires to post broad gains versus major FX, even outperforming GBP and EUR. CAD starting to lose ground against CHF, while NOK has the upper hand versus all majors, in line with today's HotChart (accessed ia password).

Risk appetite in currency markets (and equities) is likely to remain bolstered ahead of a flurry of testimonies and speeches from US Treasury Secretary Geithner (today 13:45 GMT), President Obama (Tues 1:00 GMT), Geithner (Tuesday 15:00) and Fed Chairman Bernanke (Tuesday 16:00). Markets generally fare well during onslaught of announcements and speeches by policymakers, especially during days of relatively low concentration of economic releases. TODAY's Hot-Chart UPDATED for GBPNOK.

Sterling outperforms major FX and cable its 5th straight daily gain on tronger than expected H2 profits from Barclay's. The Bank of Englands 50-bp rate cut helped initiate sterlings boost on expectations that the pace of rate cuts will slow ahead, especially after the central bank listed rapid inflation slowdown as a major reason to the cut. Cable seen extending gains past $1.4980 and onto $1.5150. Prolonged improvement in risk appetite is seen adding fresh GBP strength against JPY (138.50), CAD (1.845)