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by Ashraf Laidi
Posted: Feb 20, 2010 5:00
Comments: 30765
Posted: Feb 20, 2010 5:00
Comments: 30765
Forum Topic:
EUR
Discuss EUR in this thread
July 14 (Bloomberg) -- Spanish banks borrowed a record
126.3 billion euros ($161 billion) from the European Central Bank in June as investors shun the debt-ridden nations lenders.
Spanish banks increased borrowing 48 percent from 85.6 billion euros in May, according to daily averages compiled by the Bank of Spain. That compares with a drop of 4 percent to
496.6 billion euros provided to lenders by the ECB in the whole euro area.
Europe
European shares rose early on Wednesday, up for a seventh session, with investor sentiment boosted by forecast-beating results from U.S. chipmaker Intel which helped technology stocks deliver strong gains.
European Union finance ministers remained divided on Tuesday over what data would be published in banks stress tests due in 10 days but pledged to make them as transparent as possible. Like U.S. tests announced in May last year, they are intended to identify which banks need to raise new capital and to restore confidence shaken by the euro zones recent debt woes.
Commodities
Oil
Oil was steady around $77 on Wednesday, holding near two-week highs after a 2.9 % jump the previous day on the back of equities and solid U.S. quarterly earnings. U.S. August crude is $77.00 a barrel at 0753 GMT, just 37 cents away from Tuesdays two-week intraday high, but still $10 lower than a 19-month peak above $87 in early May.
U.S. crude targets $78.50, although resistance is found at $77.52, the 76.4% Fibonacci retracement level on the fall from $79.38 to $71.48, may force a moderate correction to $76.50
Gold
Gold has steadied today after rising nearly 2% the previous day when worries over debt problems in the euro zone bolstered the metals appeal as a haven from risk and a currency alternative, but high price levels may prompt selling. Market players appear to have found a consensus that prices below $1,200 per ounce were a bargain. Investors may be reluctant in the near term to aggressively buy gold at current levels, but worries over the global economy, expectations the Federal Reserve will keep its extremely accommodative monetary policy for some time to come, and concerns over euro zone debt problems spreading are underpinning its price.
Bonds
U.S. Treasuries fell on Tuesday as a stock market rally spurred by stronger-than-expected results from Alcoa drew investors away from safe-haven U.S. government debt.
The results from Alcoa Inc, the top U.S. aluminum producer, drove optimism about the economy and fueled risk appetite, a continuation of the risk-on theme.
The benchmark 10-year note was down 18/32 in late afternoon trade, its yield rising to 3.12% from Mondays close of 3.06%. One consequence of investors tolerance for riskier assets was weaker demand for a $21 billion Treasury auction of 10-year notes, the second of this weeks three auctions worth a total of $69 billion
The 30-year Treasury bond fell nearly a point, down 28/32 in late trade, its yield rising to 4.10% from 4.06% on Monday. 2-year Treasury notes were unchanged, yielding 0.67 percent, anchored at a low level by the Federal Reserves ongoing commitment to keep interest rates near zero for an extended period.
Currency News
EUR/USD: Capped Ahead Of 1.2739 In Asia, Stops Still Topside
EUR/USD rallied from a London low of 1.2522 to as high as 1.2739 in New York overnight on renewed risk-on sentiment. A relatively well-received Greek debt auction helped as did stock market rallies in both Europe and the US. Stellar Intel earnings late in the New York day helped keep risk on in Asia with regional stock market indices all up. However, EUR/USD could not break above its overnight high, trading a relatively tight range from 1.2701-1.2734. Profit-taking was noted at the highs and sales against GBP were noted. On the upside, stops are seen above 1.2740 while on the downside, bidding begins around 1.2700 and trails lower. EUR/USD now trades at 1.2708/15.
GBP/USD: Resistance Cleared On Route To 1.5260
A two-hour retracement from 1.5243 to 1.5188 had led to a further rebound in Sterling and resistance at 1.5250 has fallen and small stops tripped on route to 1.5257 highs. Offers have surfaced in the 1.5250″s and stalling now seen. Flow talk suggests Middle East accounts have been good buyers of Sterling along with US investment type names. Bids are now touted in the 1.5215-25 area and intraday stops are reportedly building under 1.5180.
USD/JPY, EUR/JPY: On Consolidation After Early Run Up
Both USD/JPY and EUR/JPY have been in consolidation mode following runs-up early in the Asia day, a continuation of moves seen from the New York day. More topside stops are eyed above 89.15 and then the double-top at 89.40-50 from June 28-29. USD/JPY bids look to be in place below from well ahead of 88.50 now.
EUR/JPY, for its part, rallied from a London low of 110.68 to as high as 112.94 in late New York trading. A high of 113.29 was seen before the cross steadied. Bidding interest looks to be in place now from ahead of 112.80. Resistance is seen above 113.50 and 113.43 the high on June 21. EUR/JPY trades 112.77/83 whilst USD/JPY trades 88.80/85 currently.
EUR/CHF: 1.35s Beckon For Euro Rally, USD/CHF Dragged Higher
EUR/CHF has rallied to a 1.3492 high into the European open, with the 1.35s beckoning if the Euro rise can continue. Liquidity in the cross has been an issue amid the recent rise but better supply is touted into and above the figure. Locals are also quick to point out that the SNBs liquidity management will be a key driver of future volatility. USD/CHF has been dragged into the 1.06s by the latest moves in the closely watched cross. 1.0616 hit in the initial pop above the figure. Better offers are seen into 1.0645/50 should the Swiss Franc remain on the defense. However, sustaining gains into the 1.06s will prove the initial challenge.
Stock Market
US
U.S. stocks rallied for a sixth straight day on Tuesday after Alcoas quarterly results heartened investors that had fled to the sidelines on jitters about the sustainability of the economic recovery. Even so, recent low volume suggests the markets longest winning streak since mid-April could be running out of steam, while the cost of protection in the options market against a market drop keeps growing. Many investors still fear deterioration in the economy, and thats why this earnings season is being watched so closely.
After the markets close, Intel Corp, the worlds largest chipmaker, reported quarterly earnings that beat Wall Street estimates and lifted other tech stocks. Intel will likely boost the broad market today.
Dow Jones industrial average was up 1.44 % to 10,363.02.
S&P500 Index was up 1.54% to 1,095.34.
Nasdaq Composite Index was up 1.99%, at 2,242.03.
Asia
Nikkei closes the day up 258.01 points or 2.71% at 9795.24 following a good Greek T-bill auction, while strong earnings from Intel and rises on European indices and Wall Street overnight, it was risk-on from the get-go with the Nikkei gapping up to open at 9707.50. From an early low of 9693.33, it proceeded to rally more to 9807.36 at the end of morning TSE trading. The index has since move off its high but stocks remained very much bid into the Tokyo Stock Exchange close.
Europe
European shares rose early on Wednesday, up for a seventh session, with investor sentiment boosted by forecast-beating results from U.S. chipmaker Intel which helped technology stocks deliver strong gains.
European Union finance ministers remained divided on Tuesday over what data would be published in banks stress tests due in 10 days but pledged to make them as transparent as possible. Like U.S. tests announced in May last year, they are intended to identify which banks need to raise new capital and to restore confidence shaken by the eur
Ashraf
But seriously guys majors vs commodity pairs are and have been very interesting over couple of months now. Most yielding 500 to 1500 points moves in over month in the most easiest predictable form.
Where as commodities are only range traded and you automatically trade commodity vs currency incase another failure happens.
I was holding short yesterday. Didn't take profit at the low today!.
But when the trade figures came out, Eurusd just came at me (lol) i took a small profit on my short and turned long. The rest is history. By the way. 1.2770 there abouts is the 50% resistant line!
Going against the trend had hit me(us) many a times. This time i just follow the trend! GL all!