Dealer Comment
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17/05/2012 at 09:56
Spanish bond auction - strong result raising €2.49bn. Total target was €1.5bn-€2.5bn. Average yield 4.375% vs 2.89% on April 4. Bid/cover 4.47 vs 2.41 on April 4. The Euro little changed on the news trading in a narrow 1.2710 to 1.2740 range while EUR/GBP trades around 0.8000. European stock markets led by financials and materials continue to show weakness posting losses of 0.2%
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17/05/2012 at 07:37
The market took a breather from taking off risk overnight (Nikkei +0.86%), although the S&P 500 is down nearly 5% in the last month. The minutes of the US Fed's April FOMC meeting yesterday evening stated that some members thought additional support could be required should the recovery lose momentum; dovish at the margin. Japanese GDP for Q1 was released, with the economy growing 1.0% QoQ as expected.
Eur/Usd (currently $1.2725) is consolidating above $1.27 for now, and with positioning looking stretched a bounce looks likely in the short-term; key support at $1.2625, with resistance on the day at $1.2790. Eur/Gbp (currently £0.8005) rallied after the BoE minutes yesterday, and is consolidating around 80p; support on the day at £0.7980 and £0.7950 below that, with resistance at £0.8020.
No data release of note this morning, with U.S. Leading Indicators at 3pm the highlight.
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16/05/2012 at 09:31
UK April Jobless Claims fall 13,700 vs forecast 5,000 gain. GBP/USD higher on the news trading to 1.5980 while EUR/GBP remains unchanged to 0.7965. Unemployment rate ralls to 8.2% from 8.3% in March
EUR/USD has received some moderate support this morning on rumours of an emergency ECB meeting today - no confirmation. EUR/USD off it's worst levels at 1.2680 trading back to 1.2740
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16/05/2012 at 07:36
Despite some robust data out of the U.S. yesterday, Greece continues to overshadow the market, causing further risk aversion (S&P 500 -0.57%, Nikkei -1.12%). We watch for further updates on the Greek situation, although the BoE Inflation Report out this morning should take the focus away from Athens for an hour or so.
Eur/Usd (currently $1.2695) looks likely to test the YTD support at $1.2625, although its starting to look stretched; resistance on the day at $1.2790. Eur/Gbp (currently £0.7955) is consolidating below 80p, though similar to Eur/Usd it looks oversold; support on the day at £0.7930, with resistance at £0.8010.
Eurozone CPI and the BoE Inflation Report are the pick this morning, out at 10am and 10.30am respectively, with U.S. Housing Starts and Industrial Production in the afternoon.
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15/05/2012 at 14:03
Greek coalition talks fail - EUR/USD trades to new lows 1.2790 with EUR/GBP back to 0.7980. Elections expected to be announced for 17th June. European bond markets taking a hit with Spanish 10 yr yields back to 6.25% and Italy 5.79%.
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15/05/2012 at 13:35
US April Retail Sales rise 0.1%; ex autos 0.1% (vs exp 0.3%). Empire State Manufacturing Index 17.1 up from 8.5. US core CPI rate climbs 0.2% vs est of flat; y/y +2.3%. Data broadly neutral with little impact on currencies. EUR/USD trades to 1.2840 and EUR/GBP holding above 0.8000.
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15/05/2012 at 10:13
Greek auction results: sold €1.3bn of 3 month T-bills. Competitive auction with yield at 4.34% vs 4.20% at auction on April 17. Bid/cover 2.32 vs 2.46 on April 17 - no market impact
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15/05/2012 at 10:02
German ZEW May investor expectations 10.8 vs estimate 19 with ZEW Current Situation 44.1 better than forecasted 39.0. Eurozone Q1 GDP q/q flat vs estimate -0.2. EUR/USD unchanged at 1.2850 while European equity markets have gone into the red after a positive start to the morning post the strong German GDP report. Spanish and Italian bond yields remain at elevated levels with Spanish 10 year yielding 6.21% and Italy 5.69%.
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15/05/2012 at 09:34
UK visible trade balance -£8.56bn vs expectation of -£8.4bn. Non EU trade balance -£4.1bn vs forecast -£4.7bn. Stelring unchanged on the news.
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15/05/2012 at 08:38
German Q1 (provisional) GDP +0.5%q/q, y/y +1.7% - better than expected with the market looking for a print of 0.1% and 0.8%. The surpise rise in German GDP is supporting 'risk; with EUR/USD trading back to 1.2870 and EUR/GBP to 0.8000. Next up for investors is the Greek 91-day bill auction at 10.00pm. Greece to sell €1bn.
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15/05/2012 at 08:07
Markets remain nervous over ongoing Greek worries and further European worries, US Indices performing poorly (S&P -1.11%, Dow -0.98%). Overnight Moody’s Rating Agency downgraded 26 Italian banks citing restricted market funding access, adverse operating conditions and continued earnings pressure. In Greece, President Papoulias will summon party leaders to put forward his proposals for a new government at 11am, headlines following these discussions are likely to drive sentiment for the day.
Eur/Usd continues to trade below 1.29 (currently $1.2850), $1.2625 YTD support remains the first target for any further downside while previous support at $1.29 now becomes resistance on the day. Eur/Gbp broke support at 80p yesterday afternoon (currently £0.7980) although the pair is now oversold and a short-term retracement looks likely.
Today we have EuroZone GDP and German ZEW Survey at 10am followed by a number of data releases from the US at 1:30 including; CPI, Retail Sales and Empire Manufacturing.
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14/05/2012 at 10:04
Eurozone March Industrial Production down 0.3% vs. estimate 0.4% rise. IP falls 2.2% in year .vs estimate -1.4%. European asset markets continue to weaken with the CAC off 2.6%; DAX -2.25% and IBEX -3.20%. Spanish 10 year bond yields trade at 6.22% (+22bps) with Italy at 5.72% (+24).
EUR/USD remains offered trading at 1.2875 as investros await the outcome of coalition talks in Athens.
EUR/GBP hovers above the key support at 0.8000 with a break below here targeting a move towards 0.7950.
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14/05/2012 at 07:25
A further increase in political risk for the Eurozone on the weekend, as a coalition is yet to be formed in Greece - increasing the likelihood of fresh national elections - and German Chancellor Angela Merkel's CDU party suffered a defeat in the North-Rhine-Westphalia election (Germany's most populous state). The PBoC announced on Saturday that they are to cut Chinese banks’ reserve requirements for the third time in six months after industrial production, new loans and retail sales grew less than forecast last month.
Eur/Usd (currently $1.2895) has broken the support at $1.29 and we look for further support at $1.2850, with the YTD support at $1.2625 the main target; resistance on the day at $1.2960. Eur/Gbp (currently £0.8025) continues to consolidate above 80p and a short-term retracement looks likely; below 80p targets a move to £0.7780 with resistance on the day at £0.8080.
Very little data of note today - Eurozone Industrial Production at 10am the highlight - as the market continues to focus on Greek-related headlines.
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11/05/2012 at 10:19
Positive results from this mornings Italian 364-Day Bill auction. €7bn sold at improved yields and bid cover versus previous auction on April 11. Yield of 2.34% with bid cover x1.79. Euro is trading higher this morning off the new lows reached overnight.
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11/05/2012 at 07:19
JP Morgan's announcement of a $2bn trading loss on synthetic positions grabbed the headlines overnight, compounding the negative tone to markets seen this week. Elsewhere, China's CPI came in as expected at +3.4% YoY in April, down from 3.6% in March.
Eur/Usd (currently $1.2920) is hovering above support at $1.29, a break of which targets a move to YTD support at $1.2625; resistance on the day at $1.3060. Eur/Gbp (currently £0.8020) is also consolidating just above key support at 80p, while a close below here targets £0.7780; resistance on the day at £0.8080.
U.K. and U.S. PPI data, out at 9.30am and 1.30pm respectively, are the data highlights today, with Canadian employment data at 1.30pm closely watched also.
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10/05/2012 at 15:34
Senior EU official states there is no appetite for a Greek Euro exit niether in Greece nor in the 16 other Eurozone countries.
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10/05/2012 at 13:48
US initial jobless claims rise marginally on the week to 367k, just below earlier market expectations of 368k. Eur/Usd holding around 1.2950.
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10/05/2012 at 12:01
Bank of England leaves rates on hold at 0.5% and maintains Asset Purchase plan at £325bn. Sterling firmer on the news with EUR/GBP back to 0.8015 and cable to 1.6140. Decision as expected - EUR/GBP looks set to test the strong support at 0.8000.
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10/05/2012 at 09:20
Markets temporarily switch their attention away from Greece this morning as focus turns to the UK; Industrial Production figures are released at 9:30am and the Bank of England meet later on as investors keep a close eye on any signals of further QE expansion. Overnight, US equities closed marginally in the red (S&P -0.67%, Dow -0.75%) while strong employment figures out of Australia were offset by weaker trade data from China.
Eur/Usd (currently $1.2960) finally managed to close below $1.30 yesterday and is consolidating in a $1.29 - $1.30 range; resistance on the day comes in at $1.3080 with support at $1.2905. Eur/Gbp (currently £0.8035) remains in the 80p/81p range as the market awaits today’s events.
This afternoon we get US Initial Jobless Claims (1:30pm).
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09/05/2012 at 14:08
In counter to recent austerity backlash, Merkel speech in Berlin reiterates their rejection of defecit-fuelled growth... EU countries must uphold fiscal pact and there is no conflict between GDP growth and Budget austerity. Eur/Usd continues lower through reported barrier option support at 1.2950.